Aamal Company Q.S.C. CONSOLIDATED FINANCIAL STATEMENTS 31 DECEMBER 2013
Welcome message from author
This document is posted to help you gain knowledge. Please leave a comment to let me know what you think about it! Share it to your friends and learn new things together.
Transcript
Aamal Company QSC
CONSOLIDATED FINANCIAL STATEMENTS
31 DECEMBER 2013
Aamal Company QSC CONSOLIDA TED ~INANCIAL STATEMENTS 31 December 20 13
Cont ents Page(s)
Lndependent auditors report 1-2
Consolidated financi al statements Consolidated statemellt f fiJ)anciai position 3 Consolidated statement f income 4 Consoli dated statement f comprehensive income 5 ConSOlidated statement f casb nows 6 Coosolidsted statement f changes in equity 7 Notes to tile consol idated flJl aocial statements 8-46
I
Tejephcgtr1e 974 4457 6444
Audit Fax +974 4442 5626
2nd Floor WEbsite wwwkpmgcomqa An2a 25 C Ring Road
PO Box 4473 Doha State ot Oatar
KPMG
Independent auditors report
To The Shareholders Aamal Company QSc Doha State of Qatar
Report on the consolidated financial statements We have audited the accompanying consolidated financial statements of Aamal Company QSc (the Company) and its subsidianes (together referred to as the Group) which comprise the consolidated statement of financial position as at 31 December 2013 and tbe consolidated statements of income comprehensive income cash flows and changes in equity for the year then ended and notes comprising a sUnUnUl) of significant accounting policies and other explanatory information
Directors refponsibifify for Ihe consolidated financial statements The directors are responsible for the preparal10n and fair presentation of these consolidated financial statements in accordance with International Financial Reporting Standards and for such internal control as the directors detemlinc is necessary to enable the preparation of consolidated financial statements that are free from material misstatement whether due to fraud or error
A ~Idilors respol1sibilily Our responsibility is to express an opinion on these consolidated financial statements based on our audit We conducted our audit in accordance with International Standards on Auditing Those standards require that we comply with ethical requirements and plan and perfonn the audit to obtain reasonable assurance about whether the consolidated financial statements arc free from material misstatement
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements The procedures selected depend on our judgement including the assessment of the risks of material misstatement of the consolidated finanCial statements whether due to fraud or error In making those risk assessments we consider internal control relevant to the Groupmiddots preparation and fair presentation of the consolidated financial statements in order to design audit procedures that are appropriate in the circumstances but not for the pUlllose of expressing an opinion on the effectiveness of the Groups internal control An audit also includes evaluating the appropriateness of accountmg policies used and the reasonableness of accounting estimates made by the management as well as evaluating the overall presentation of the consolidated financial statements
We beli eve that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion
Oplllion In our opinion the consolidated financial statements present fairly in all material respects the consolidated financial position of the Group as at 31 December 2013 and its consolidated financial performance and consolidated cash flows for the year then ended in accordance with International Financial Reponing Standards
KPM( a~_~ a~_11gtlt gtptG ~~~_WIgt~
t~roj ~alMgt iKMlti 01 bullSws
Report 00 other legal And regulaiory requirements We have obtained all the info rmation and explanations which we consider necessary for the pUipose o f our audit The Group has maintained proper accounting records aod the consolidated financial statements are in agreement therewith and we COllfirOl that the physical count of inventories was carried OUi as per the established principles We have reviewed the accompanying repon o f the Board o f Directors and confinn that the financial infonnation contained therein is in agreement with the books and records o f the Company We are not aware of any violations o f the provisions of Qatar Commercial Companies law No S o f 2002 or the tenns of Article of Association having otttured during the year which might have had a material adverse effect on the business of the Company or its consolidated finiUlcial position as at 31 December 20 13
20 February 20 14 Gopa l Balasubramaniam Doha KPMG State of Qatar Qatar Auditors Regislry Number 251
Independent auditors rep0l1 (continued) - Aamal Company Qsc
Aamal Company QSC CONSOLIDATED STATEMENT OF FINANCIAL POSlTlON AI J I December 2013
ASSETS Current assets
Cash and bank balances Accounts receivable and prepayments Amounts due from related part ies Invento ries
NOD-current lI$sft~ A vuilable-for-sal e investments Equity-accounted illvestees Investment properties Properly plaIU arid equipment
TOTAL ASSETS
LiADILITIES AND EQUITY Curnn Jj~biljtit5
Bank overdrafts ACCOUntS payable and accruals Amounts due 10 related panies Interest bearing loans aM borrowings
Non-Curr(DI liabilities
Interest bearing loans and borrowings Employees end of service benefits
TOlRllitbililits
EQUiTY Share capital Legal reserve Treasury shares Cumului ve ch8llge in fair vlIue Retained earnings
Equity attributable to equ ity holders of the pa rcnt Non-cOnlIOII ing interests
Note
5 6 7 8
9I
5 12 IJ 14
14 15
16 17
203 QR
436136756 510089839 214439950 316699545
I4 77366090
24 983 133106907
6402486000 519970890
70551588780
8532954870
6836280 445046573
48199591 749520820
J2496031264
165384481 19957976
185342 457
143494572 1
6000000000 378132552
(2075865) 4069
526628214
6902688970 1953201 79
2012 QR
36788 129 1 482281 775 171 525363 401 902873
1423 59 1302
18963 12666999 1
611 3347018 449527258
6689563 230
8113154 532
2885090 379119069 49737757
825 568489
1257310405
239276807 18111 763
257388570
1514698975
5445000000 327445101
(207 5865) (416)
638248275
6408617095 189838462
7098009149 659814551557
TOTAL IABIIITIES AND EQUITY 8532954870 811 3154532
Mohammad Rrunah i Chitf Financial Officer
The artaehcd notes I 0 33 fonn an integral pan o f these consolidlIed financial statements
3
COgtSOLIDATED STATEENT OF INCOME For tM year ended 31 Dec-mixr 2013
Not
Revelue lR Diroctcnstb 19
GROSS PROFIT
Other income 20 Markelillg and promotion expenses Geternl MO administrativcent cxpenSs 21 Dvmiation Fine nee CDS 22 Shure of profits of equityltl(COUnleci ~nvestees 9
PROFIT REVORE FAIR VALUE GAINS ON tVfSTnlT PROPERTJES
Net fuil vl1lue gltllns or lnvestne-Ilt prcpc(li~ 10
PROFIT FOR THE YEAJt
Pmiltltributnble to Equit holcefS of tift parent J(jI1~rtroing Inreres
l)3~itand diluted eanlings per share (QR) (RITnoutable 10 cqujry holders of the parerl 23
Jon QR
2122595133 _ (1702139111)
419455956
I 516688 (18995918)
(109981101) (9331061)
(44930877) __~)499901
267233582
245051107
~--~~
5068745(17
_~~ sect4JQ82 ~~Jll4lL
(L85 ~~~--
2012 QR
2(69)36372 J~~~S965i016J
41YJ6SU56
16199921 (J I L66J 47)
(25628J2) (947 3007)
(58063809-]
_~3JA0104
2J572 1006
3R3m183
_-_2d~
594892946
~~~2S14~~ zi~L
049 -~---
The zltached notes j to 33 f01111 an integral part of these tOl50hdared financial S1tltlTWpl$
Aamal Company QSc CONSOLIDATED STATEM ENT OF COMPREHENSIVE INCOME For Ibe year eoded 3 1 December 201 3
2013 QR
Profit for the year 5 12284689
Other comprehensive income Items that are or may be reclassified to profit or loss Unreatised gain on available-for-sale investments 6020
TOTAL COIVIPRpoundHENSIVE INCOME fOR THE YEAR 512290709
TotaJ co mprehensive income attributable to Equi ty holders of the parent 506878992 Non-controUing interests 54117 17
5 12290709
101 1 QR
6245 13489
109582
624623071
59489253 0 2973 0541
62462307 1
The (luached notes I 10 33 form an integral part of these consolidated fin ancial statements
~amal Company QSC
CONSOLDATED STATEMENT OF CASH FLOWS For the year ended 31 December 2013
OPERATING ACTlVlT1ES Profit fot ioc year Adjustment for
Net fuirvalle gaj0i on overncnt properties Dpreciation Provisio~ fOf employlXs end of seevielt benefits Bargac purchaslt gAin Allowance for inp~inueO of trde accomis receIvable (Proritlloss on dJsxgtsel of property piaU( 06 equiprnent Provision fot slow moving Jllvetlories lJlterest nome finance oosts Share of profit of eqUlry-accoumcd inveslces
Operaling profit ooorc working capital changes
JllvtntorifS AU(lIJJltt receiwlbk and prepaymert1S ccoums payabe And accruals ~et l)OVem1t in amounts due from and due to rdmgti panie
Cash from operation Finance coStS pltlid End of SCfVtCe benefits paid
Net Leasb from opcrling 3ctivitilt5
INVEsnXG A(T1TTIfS Xntltresl income raeivcd Proceeds from disposal of property piii1i and equipment Divicieflds reced tTom a j(im venlure Additions to inveslmeul properties Acquisition of subsitlittry net of cush Jzquired Aquisitioll from non-controlling il]tw~st Additions 10 property plant ()nd equipment
Net cash used in invltgtliing Jctivii(lS
FINAClXC ACrlVrnrs rtt moverncl1 in inteftst bearing tiJ41S al1d borrOWings ConlribIH(llS from nonconttohng interests
Net cash tlllied in)ftom hnfCncmg actiV1ies
lNeREMyen IN CASH ANn CASH EQlJlVAUVIS Detrease to casr due to 10~S of crmol of a subsidiary Increase in cash 1t5ulttd in obtaining the conh) of il-n Il$$oile
Cash and caltr quiVlenls at 1 JanuJry
CASH AND (i5iH EQttVALENTS AT 31 DECEMBER 5
NolO
10
15 20 21 20 S
20 22 9
is
20
9 10 4 4
11)13
QR
5122846amp9
(245(51101) 4lA95449
4056969
2294590 (737647)
2380611 (2$24216)
44930$77
_~499901l
34133lno
82822711 (3lH12654) 5312iL387
~82753)
4112788011 (45056522)
_t221Q7S6)
35S52q733
2824116 1274457
119921185 9568U47)
Jl~870))741
_ (141_~3464ol
(149939995) __ ~~__f)~_L
JlplusmnB699~)
643fi4ns
~~Sif99~2U1
~pound2d9M2t
2ul2 QR
6+5~30X9
(388792483) 42540J((1
4205499 (S36)743 J 1361120
178610 2208263
(2Sl4392) 5206389
(234Q350~1
32J ~n2A89 (6[90(304)
(l46739948) 136)0977
_ 62q660
312291614 (58643654)
(432095)
-14932OI5
2894]92 609659
10049971 (72719187)
l 6594 s05) (40A toDOO)
~71~9631
Q4sectS26)Jl
237n(j7n
--1113-0~OO~~__
__ 25c~f)7J33
223251515 (3090 I 7)
5OO(UtOC ~~_6pound~Ag2
64t996~ijl
The atlached iIOle~ to 33 form an integral part of Llese corsokiated financial slUlement$
6
Aamal Company QS C
CONSOUDATED STATEMENT OF CHANGES IN EQU ITY For the year ended 3 I December 20 13
Alfribulable (Q equitY hulders Q[the parent
Cumulative N OII-
Share Legal Treasllry chollgein Retained conrro lfing Tf capilal resenc shares fair value earnings Tolal inereslS equity
QR QR QR QR QR QR QR QR
Balance at 3 December 20 J I 4950000000 267955805 61 4024 670 583 1980475 14 1645505 5973625980
Boougt shares issued (Nole 27) 495000000 (495000000) Profit for the year 594892946 591 892916 2962054) 6245 13489
Other comprehensive income for the year (416) (41 6) 109998 109582
Treasury shares acquired througb business combinati on (2075865) (2075865) (2075865) Adjustmenl due to loss ofcontrol of a subsidiary (983 643) (983643) Derecognition of non-controlling interest due 10 liquicbtion of
a subsidiary 55932 55932
Transfer to legal reserve 59489296 (59489296) Con(ribUlion from non-colllrolling inte rest 59232919 592329 19
Contribution to socia l and sports activi ties fu nd ( 11612837) ( 156 12837) (1561 2837) Non-controlling interest acq uiJed without change ofcontrol (Note 4) (567208) (567208) (39842792) (404 I 00Cl0)
Balmce at 3 1 December 20 12
Bonus shares issued (Nole 27)
Profit for the year Other comprehensive income for the yeM
Transfer to legal reserve
Cootribut ion from non-controlling interest
Contribution to social and sports activities fund
544S00000Q
555000000
32 7445101
5068745 1
(2075865) (4 16)
4485
638248275
(55 5000000)
506874507
(506amp745 1)
( 12807 11 7)
64086 17095
506874507
4485
(12807 11 7)
189838462
54 10 182
15 35
70000
6598455557
512284689
6020
70000
( 128071 122
Ballnce at 31 Decem ber 2013 6000000000 378132551 (2075865) 4069 5266282 14 6901688970 195320 179 7098009149
The a(tached notes 1 to 33 fann an integra pan a fthese consolidated financial slatements
7
2
Aamal Company QSc
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 3 I December 20 13
CORPORATE IN FORMATION AND PRINCIPA L ACTlVIT IES
Aamal was funned on 13 January 2001 as a private shareho lding company with limited liability (W LL) under the COlrunerciaJ Registration Number 23245 in the Slate of Qatar On 12 Ju ly 2007 the private shareholders resolved to transfonn AamaJ into lt) Qaari Shareholding Company (O SC) (the Company) Accordi ngly the Company was listed on Qatar Exchange on 5 December 2007 The Companys registered office is at P O Box 224TI Doha Sttlle of Qatar
The Compaoy is organised inlo a head office (Aamal) cllld branches and operates in the State of Qatar The fo llowing table sets out the principal activi ties of the branches
Brancb Principal aellvities
C ity Center Qatar Branch Leasing the facilities of the re tail outlet complex in Ci ty Cen ter Doha
Aamal Real Estate Branch Residential and commercial real estate investment and property rentaL
Aamal Readymix Branch Production and sale o f readymix concrete
Ebn Sina Medica l Braoch Wholesa le and retail distribution of phannaceulicals aod general consumable products
Aamal Medical Branch Wholesale d istribution of medical eq uipment
Aamal Trading and Dis tributioo Sale of tyres lubricants batleries and home applian~s
Branch
Amnal Servi~s Branch Providing facilitie s management arld cleaning services
Aamal T ravels Branch Operating a travel agency
Aamal fur Indus trial Projects lndusllial investments Branch
Good Life Phannacy Branch Sale of phannaceuticals baby care products medicine and general cOllsumable products
Foot Care Center Branch Sale of footwear clinical activities and general commercial tradillg products
The consolidated financial statements were authorised for issue by the representatives of the B03Id of Direclors of Aamal Corupaoy QSc on 20 February 2014
BASlS OF CONSOLIDATION
The consolidated fioancial statements comprise the fioancial statements of AamaJ Company QS C (the Company) and its subsidiaries and joint controlled entity (together referred to as the Group)
Subsidiaries Subsidiaries are enli ties controlled by tbe Group The Group controls an entity when it is exposed to or has rights 10 variable returns of its involvement with the entity and has the abili ty to affect those returns through its power over tle entity The fi nancial statementS of subsidiaries are induded in the consolidated finarlcial statements ITom the date on which control commences unti l the date on which control ceases When the Group loses control over a subsidiary it dereognises the assets aoo liabilities o f the subsidiary and aoy related non-cootrolliog interest and other components of equity AllY resulting gain or loss is recognised in consolidated statement of income Any interest re ta ined in the fonne r subsidiary is measured 01 f3i r value when control is lost
8
2
Aamal Company QS c
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 31 December 2013
BASIS OF CONSOLfDA TiON (continued)
Subsidiaries (continued) Set oul below are Ihe Group s principal subsidiaries at 3 1 December 2013 Unless oUlenvise slated the subsidiaries as listed below have share capital consisting solely of ordinary shares wh ich are held directly by the group and be proportion of ownership intereSIS held equals 10 the votiug rights held by Group Tbe country of incorporation Of
registration is also their principal place of business
Comp(my name
Aamal Cement Industries W LL
MO Qat1 Company WLL
Senyar Indus tries Qatar Holding WLL
Doho Cables Qaw WlL
EccoGulf Compaoy WLL
Advanced Pipes and Casts eompmy WLL
Johnson Controls Qatar WL L
Country 0 lJCQr por ation
Qator
Qatar
Qatar
Qatar
Q 31ar
Qatar
Principal (lcfi ity
Development and mlUlagement of factori es and the prodllaion or curb sl~ne i llleriook slabs lIId cement bricks
Construction and repai r of power plant es tablislunent and man3gemenl of industrial enterprises aud ac ting as a representative for the imcmatiOllru companies
Management of subsidiaries and associates ovming of palen~ businesses and subleltiug Ulem and provision of investment port fo lio management for Its
subsidiaries and Msocialts UOkr the shareholders agreement signed between the Group and the other
shareholders the Group is able 10 appoint the chai rman and two other members 10 (he Boflrd of Direc tOfS (out of six members) and is able to govern the fin ancial and operating policies of Senyar Industries Qatar Holding WLL Accord ingly ~ company is considered as a subsidiary oCthe Group
Mailltenance and mallllfacture of electric cables equipmelll and lools Doha Cables QalaJ WLL is
91875 (eITectively) owned by Senyar hldush es QaUlr Holding WLL a subsidiary of tllC Group TIIe Group has (he power indi rectly through SenyM [ndus tJi cs Qatar Holding WLL 10 govern fi nancial and opera ting policies of Doha Cables Qatar WLL and accordingly the company was considered IS a subsidiary ofthe Group
OITers professional and bus iness process outsourcing and Cll )] center services
Manufacturing of Wide cement md amplass reinforced pipes systems for infrsslICture (lnd pipeline projects
The Gro up h~ the power 10 govern ~lot financial and opera1 ing policies or Adv3I1ced Pipes and Casts Company WLL by virtue of a sllarchokJers agreemeot TIlus the Company has been cotls ldcrOO as II subsidiary of the Group
Provision of racililies management service5 energy se-rvices md building maimetlaoce and cleanlg services to corporate cl icn1S
PlOporl ion oj
oWPersllip held by the
Non
Group COnroiling interest
99 1
60 40
50 500
459 54 J
5 1 490
50 50
51 49
9
2
Aamal Company QSC
OTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For toe year ended) J December 2013
BASIS OF CONSOUDA nON (continued)
Suhsidiaries (wntiourd)
Cmmffyoj fNgtpvniOil j irniJpvroliin ~__~ampiphdd~~
Nor G)1)Ji contfoifgtg
iMeregt
CmiddotSan TI~ing WLL Sdilamp lYJy1ng renting me Mltcentlopil12 [e~ tSite 30 invimenl w shams rnlilVigemc1t vf real lsta propeItilttl owning ille palent and tradcentmut and tnlding in iXjUiflfIfflt amJ vcilici$ 1he GroClp has tJe pcwer tv goem 6e ~inr8hl and ojJrtltllng
roicie_~ of ClSM by vifcle 0 a shlrcholdcrs 191e~mcentn(
745 25 1~i
nnoV1iv lightinf wmpany Qatar TNriing of Ught 2rrt1nz DiDd lEU Lwpj lmd 7r J) WLL olhT $hlil1g prrltwl
Twdiflg of of4 SiJpplk-s and providll$ prindna and 65 35 laniniltmJ sltrce~
Non-coufroUing illterests Non-controrling intel(SlS are measwed tj tleir propO(hOnile $hue Ot the tcquirees identifiabk net asscl III the JCqUiSlOt1 rote Chuegts in t1e Groups imcest in i $ubsiciwty hat do tot rcmltlo a loss of ~)I1a1)l xc accountd for as equity trnramplclions
Tamil-crions eUminnted on c)lwtidaticu lntngtgroup baiances Jue transactions 00 any unrealised income 1nd expenses ari$tng from intrnwgrOU tranSaOiQlls arc eiimmatcd UfiJeaiiHd gaina arising from ITaUstlclions ttlt equity-lKcoUl11uJ IlVtSlCCS are eliminatd 1gamst the investment 10 the extent oftlle Group interest in the inveMee Umaslised loses are eiiminatd II the same VllY us unrvalised gains hit only to Ille eXfeut that there is 10 evidence ofimpaimcentut
Illttn~ts in jOint arrangements iu)d associates Detais ofeach of ttc Groups Hutilrial Joint venlU)s fujltj assoeime~ at the end of the reponing period are 5 [OHOViS
Cmnirycgt PltJporlion qf Compao name infOjwNiIIO1 ewonlup Qltd
vOingjYwer htld by
tiff GrOlp
[I Sewed Cable QntM Tndllg in ele(mHnechmita CGlJ)ptnefllmd plOvicmg WLL rei) services El SWNed Cables )ilMr WLL is
49 JWoo (Wilt 55 tblre of rrofils (losses) hy StHyar lrdl11(rie~ Qal3t Hodirg WLt e 511b8idimy 0 ~he GOllp However (kw 10 ~ feiBtil shareholdergt agreewli pound ellWY has I~)mc a jOm vent( eTdive trmJ l January 20 wllkh is mC(t511rec Il1de the eqJity ngtU1l
rins $tngtdJBI S~ 1idJgt (law Ertity lS engaged l sled (b[iclli0ls Gf0Jp mtllpoundure Ea LC t11cent fl5sodau under cquhy nlctooo
Aamal Company QS c
NOTES TO THE CONSOLIDATED FlNANClAL STA TEMENTS For the year ended 31 December 2013
3 BASIS OF PREPARATION AND SUMMARY OF SfGNlflCA1T ACCO UNTING POLICIES
31 BASIS OF PREPARATION
The consolidated fi nancial statements have been prepared in accordance with lntema tional Financial Reporting Standards (IFRS) and the appLicable requirements ofQalar Commercial Companies law No5 of 2002
The consolidated financial statements have been presented in Qatari Riyals (QR) which is he Companys floclional and presenUll ion currency and have been rounded to tlle nearest Qatari Riyal TIle consolidated financial statements are prepared lUlder the historical cost convention modified to include he measurement a l fair value o f investment properties and available-for-sale investments
32 CHANGES IN ACCO UNTING POLICI ES
The [lccoWiting policies adopted are consistent wilh Ihose of the previous fi nancial year except for the following standards effe ctive for the annual period beginning on or lfter 1 Jlnuary 20 13 These standards and amendments other tM n the impact of (FRS II - Joint Arrnnge menlS noted below did not have aoy malenal impact to the Group
lAS I (amendment) - Presenfalion of items ofother comprehensive income The amendments to IAS I require that an emity present separate ly the items of ltN her comprehensive income that would be reclassified to profit or loss in the future if certain conditions are met from those that would nC ver be reclass ified to profit or loss
lAS J9 - Employee benefits (201) lAS 19 (201 1) changes the definition of short-tenn and other long-tenn employee benefits to clatify the di stinction between the two
lAS 28 (201 f) - fnvesfmem in Associates and Joint ventires lAS 28 (2011 ) supersedes lAS 28 (2008) lAS 28 (2011) makes the foHowing amendments Associues held for sale JFRS 5 Non-current Assets Held for Sale and Discontinued Operat ions applies 10 an investment or a portion of an investment in an associate or a joint venture that meets the criteria to be classified as held fo r sale For any retained portion of the investment tlwt has not beell classified as beld for sale the entity applies the equity method until disposal o f the portion held for sa l ~ After disposal any re tained interes t is accounted for using the equity method if the re tained interest continues to be an associate or a joint venture and 0 0 cessation of significant influence or jo int conltOl even ifan investment in an associate becomes an investment in a joint venture or vice versa Ihe entity does not fe-measure the retaincd interest
Amendments ft) fFRS 7on ofseftingjil1ancial assels and jinancialliabilities (2011) Disclosures - O ffsetti ng Financial Assets and Financial Liabilities (amendmems to FRS 1) introduces disclosures bout Ihe impact of oetting arrangements on an entity s fin ancial position Based on the new disclosure requirements the Group has to provide inforroation about what amounts have been offset in the consolidated statement of fimmcial position and the nature and extent of rights of set o ff under master netting aITlngements or simi lar a1Tlngernents
fFRS 10 - Consolidate1 financial SIOlemenlS and lAS 17 Separate Fillancial SfalemenS (2011) [FR S 10 introduces a single control model to determine whether an investee should be consolidated FRS 0 replaces the parts of previQlSly exis ting lAS 27 Consolidated and Separate Financial Statements that dealt wi th consolidated fin ancial statements and SIC-12 Consolidation - Special Purpose Entities This new contro l model fo cuses on whether the Group has power over an investee exposure or righlS to variable rerums from its involvement with the in veSlee lnd abili ty to use its power to affect those returns The Group has amended its accounting policy on consolidation in line with requirements of TFR S 10 and has re-assessed its consolidation conclusion
[FRS 12 - Disclosures ofimerests ill other entities IFRS 12 brings together into a single Sfandatd all the disclosure requirements about an enti ty s interests in subsidiaries jo int arrangements associates and unconsolidated structured entities It requires the disclosure of infonnation about the nature risks and financial effects of these interests
II
Aamal Company QSc
NOTES TO THE CONSOLIDATED FTNANClAL STATEMENTS For the year ended 3 1 December 201 3
3 BASIS OF PREPARATION AND SUMMARY Of SIGNIFICANT ACCOUNTrNC POLICIES (continued)
32 CHANGES IN ACCOUNTING POLlc ms (coDtinued)
IFRS IJ Fair ~alue measuremetll TFRS 13 provides a single source of guidance on how fair value is measured and replaces the faif value measurement guidance tha i is currently d ispersed thIo tlghool [FRS It unifies the definiti on of fair va lue as the price that would be received 10 sell an asset or paid to transfer a liability in an orderly transaction between market participants a t the measurement dale It replaces and expands the disclosure reltjuiremenlS about fair value measurements in other IFRSs including TFRS 7
Improvements (0 IFRSs (20 ) Improvements to IFRS issued in 20 11 contained numerous amendments to IFRS that the IASB considers nonshyurgent but necessary Improvements to lFRS comprise amendments that result il) accounting changes to presentation recognition or measurement purposes as well as tennioology or editorial amendments related to a varie) of individuallFRS standards
During the period the Group has adopted the fo llowing new s tandard which became effecti ve for the annual periods beginning on I January 201 3 which had a materi81 impact to ule Group
IFRS II Joint AlTwlgements As a result of adopting IFRS II the GrOlp has changed its ltlccoUJ)ting policy for interests in jo int a rrangemeots Uuder rFRS 11 the Group classifies its interest in jo int arrJngements as e imer j oint operations or joint ventures depending on the Groups rights to the assets and obligations for the liabil ities ofthe arrangements When maldng this assessmenl the group considers the strucltire of the arrangements the legal fonn of any separate vehicles the contrac tual tenns of the arrangements and other fact s and arrangements Previously the structure of tbe a rrangement was the sole foc us of classification The Group has re-evaluated its involve men t in ils o nly joint a rrangement El Sewedy Cables Qatar WLL ltlnd has recla ssified the investment from jointly controlled entity to joint venture Also the Group has discontinued with re rrospective effect the use o f the proportionilte consol idation method and adopted the equity method to account for joint venture in accordance mth IFRS I I
Summary oquulllitative impuct The following tables summarises the materia l impac ts rcsulting from the above change in accounting polic ies on the Groups financ ial position profit o r loss and cash flo ws
Effect of chnnge in 31 Decemb er2012 accounting policy
Cunem assets (278 880441 ) Non-current assets 1295 1346 Total assds (265929095)
Current liabilities (265072694) NonmiddotcWTent liabilities (856401) Total lin bill ties (265929095)
For the year ended 31 December 2012
Profit for the year
Net chflllge in cash and cash equivalents dlUing the year (99696J)
12
Aamal Company QSc
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 3 I December 2013
3 BASIS OF PREPARATION AND SUMMARY OF SlGNlf[CANT ACCOUNTING PO LICI ES (continued)
33 lASB STANDARDS AND lNTERPRETATIONS ISSUED BUT NOT ADOPTED
The following lASB standardsamendments hJve been issued but are not yet mandatory and have 1l0( been etrly adopted by the Group
Standard
Illterpretotion COnem EffeClive dale
TfRS9 Financia l InstrumentS (new standard) I Januruy20 17
IAS 32 Financia l Instruments O ffsetting (amendment) I January 20 14 JAS 36 Financia llnslnnnents Disclosure - non-fi nancial asse ts (amendment) I January 2014
The Group is considering the implications of the above standards and the till1ing (If adoption by the Group
34 SUM MARY OF SIGNIFICAJT ACCOUNTING POLICI ES
Bu siness combinnriO llS The Group accounts for business combinations using the acquisitio n method wben connol is Imasferroo to the Group The consideration ITansrerred n the acquisition is generally measured at fa ir value as are the identifiable net assets acquired Any goodwill that arises is tested annua lly for impairmeot AllYgain on a bargain purchase is recognised in pro fit or loss immediately Transaction COStS arc expensed as incurred except if rehated to the issue of debt or equity securities
The considera tion transferred does nOt include amounts related to the settlement of pre-existing re lationships Such amounts are recognised in profit or loss
Any contingent consideration payable is roeasured at fair va lue at the acquisition date If the contingent consdicrntion is classified as equity then it is oote nmeasured and settlement is accounted for within equity Otherwise subsequent changes in the fa ir value of the contingent consderafion are recognised iu profit or loss
Cash a nd eash equivalen ts For the purpose of the consolidaled statement or cash flo ws cash and cash equivalents consist of cash and bank balaoces ruld short teJTIl bank deposi ts wi th an original marurily of three months or less net of outstanding bank overdrafts
Accounts receivable Accounts receivable are stated at originill invoice amount less an allowance for any uncollectible amounts An estimate for doubttit debts is made when collection of the flilt amount is no longer probable Bad debts are wntlen off when (here is no possibility o f recovery
Inventories Inventories are stated at the lower of cost and net realisable value Costs are those expenses incurred in bringing each product to its present location and condition
Goods ror resalework in progress - Cost of di rect materials aJld labour plus attributable overheads based on a oormallevel ofac1i vity
Raw material and spare pan s PlIlchase cost on a weighted average basis
Net realisable value is based on estimated selling price less any further costs expocted to be incurred to completion and disposal
13
Aama Company QSc
NOTES TO THE CONSOLIDATED FINANC IAL STATEMENTS For tbe year ended 31 December 20 13
3 BASIS OF PREPARATION AND SUMMA RY OF SIGNIFICANT ACCOUNTfNC POLI CIES (contin ued)
34 SUMMARY OF SIGNIFICANT ACCO UNTLNG POLICIES (continued)
Interests in equity-aecoupled inveslecs The Groups interest in equity-accounted investees comprise interest in associates and joint venture
Associates are lhose entities in which the Group has significant influence but not control or joint control over the financia l and operating policies A joint vennu-c is an arrangement in which the Group has jo int ool1lrol whereby the Group has rights to the net assets of the arrangement rather thall rights to its assets and obugations for its liabilities
InlereSIS in associates and the joint venture are accoliDted for using the equity method They are recognised initially tit cost which includes transaction costs Subsequent to ini tial recognition the consolidated financ ial stateme nts ioc lude the Groups shrre of the profit or loss and other comprehensive income of equity-accounted investees unti l the dalc on which significant in Lluence or joint control ceases
The reponing d~les of the equity-accounted investees and the Group are identical and the equi ty-accounted investees accoWlting policies confonn to those used by the Group for like tmnsactions afld events in similar circumstances
Investmefl t properties umd aod buildings are considered as investment properties only when they are being held to earn ren tals or for capital appreciation or fo r both
Investment properties are measured ini tia lly at cost including traosaction costs and borrowing costs that are directty attributable to construc tion o f the 8sseL The carrying alRount includes the cost of replacing part of an existing investment property at the time that cost is incurred jf toe recognition cri teria are mel and excludes the costs of day-to-day servic ing of an investment property Sub~quent to inilial recognition investment propert ies are slated at fa ir value which reOects market conditions at the reporting date Gains or losses arising from changes in the fa ir values of investment properties are included in the consolidated statement of income in the yeltl r in which they arise
Investment properties are derecognised when either they have been disposed off or when the investment property is pennanently withdrawn 1T0m use and no fu ture economic benefit is expected from its disposal Any gains or losses on the retirement or disposa l of aD investment property are recognised in the consolidated statement of income in the year of retiremeOl or disposal
Property under construc tion is dealt with under lAS 40 and rttorded at cost less accumulated impairment losses until either its fair value becomes relia bly detenninable or cons(TUction is completed (whichever is earl ier) At that time it is reclassified as inves tment property and a fa ir value adjustment is recognised in the consolidated statemenlof income
Transfers are made to or fro m in vestment property onl y when there is a change in use For a transfer from investmen propeIT) to ovmer occupied proreIT) the deemed cost for subsequent accounting is the fair value at the date of change in use If owner occupied property ~omes an investment property the difference between the canying value aoo the fair value at the date oflransfer is rttognised as a revaluation reserve in the equity and is released to the consol idated sta tement of income llpon disposal of such propcny
14
Aamal Company QSc
NOTES TO THE CONSOLIDATED FrNANCIAL STATEMENTS For the year eDded 31 December 20 13
3 BASIS OF PREPARATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLI CIES (continued)
304 SUMMARY Of SIGNIFICANT ACCOUNTING POLICIES (continued)
Property plant and equipment Property plant and equipment is stated at cost including borrowing costs that are eligible for capitalisation and excluding the costs of day-to-day servicing less accumu lated depreciation and any imp~innem in value
Depreciation is provided on a straight line basis on all propelT) planl and equi pment The rales of depreciatioo are based upon the following eSImnelt useful lives
Buildings 20 years Leasehold improvements 2-8 years Truck mixers and motor vehicles 4-1 5 years Plant and ITIJchioery 8-2 5 years Furniture fixtures and office equipment 3-5 years Computers and related software 3-5 years Capital work in progress Not depreciated
The carrying amounts are reviewed for impain nellt when events or changes in circumstances indicate that the carrying value may not be recoverable If any such indication exists and where the carrying values exceed tbe estimated recoverable amouot the assets are wri tten down to their recoverable amount being the higher of their fair value less costs to sen and their value in use
Expendirure iocurred lO replace a component of an item of property plaot and equipment that is accotmted for separately is capitalised and the carrying amount of the component that is replaced is written off Other subsequent expenditure is capitalised only when it increases furure economic benefits of the related item of property plant and equiproent Al l other expendirure is recognised in the consolidated statement of income as the expense is Incurred
An item o f property plaot and equipment is dereeognised upon disposal or when no future economic benefi ts are expected from its use or disposal Any gain or loss arising on derecognilloo of the asset is iocluded in the consolidated stalemeot o f income io the year the asset is derecognised
The asset s residual values useful lives and method of depreciation are reviewed and adjusted if appropriate at each rnancial year end
Borrowing costs Borrowing costs direc tly attributable to the acquisition constmction or production of an asset that necessarily takes substalltjal period of time 10 get ready for its intended use or sale are capilalised as pan of the cost o f lhe respective assets All other borrowing costs are expensed in the year they incur BOlTOwiog COSts consist of the interest and other costs that the Group incurs in coomction with the borrowing of fund s
Accounts paytlble and accruBls Liabilities are recognised for amounts to be paid in the fuMe for goods or services received whether billed by the supplier or not
Interest bearing loans Bnd borrowings Interest bearing loaos and borrowings are recognised ini tiaJy at fai r value of the amounts borrowed less direc tly attributable transaction costs Subsequent to initial recognition interest bearing loons and borrowings are measured at amortised COSt using the effecti ve interest method with any differences between the cost and tinal settlement values being recognized in the conso lidated statement of income over the peliod of borrowings Instalments due within one year aI amortised cost are shown as a ctuTentliabiliry
Gains or losses are recogTlised in the consolidated sialement of income when (he liabililies are derecognised Interest relating (0 imerest bearing loans and borrowings is expensed in the year in which it is incWTed e(cept those qualify for capitalisation
15
Aamal Company QSC
NOTES TO THE CONSOLIDATED FfNANClAL STATEMENTS For tbe year eoded 31 December 201 3
J BASIS OF PRpoundPARATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
34 SUMMARY Of)SIGNIFICAtlT ACCOUNTING POLICI ES (continued)
TClaot deposits Tenant deposit liabilities are initially recognised at fair value and subsequently measured at amortised cost where material Any di fference between the initial fair vllue and the oominal amount is [eluded as a component of rental income and rocognised on a straight-line basis over the lease term
Derecognition or fiolocial nsstls and liabilities
a) Financial assets
A fi nanCIal asset (or w~re apphcabJe a part of a fin ancial asset or part of a group of SImilar financIal assets) IS derecogmsed where J bull The n ghts to receIve [5h flo ws from the asset have expIred bull The Group has trans f rred Its rights to receive cash flows from the ass or has assumed an obhg811On to pay the
reltelved cash flows I full Wlthout mfl tenal delay to a third party under a pass-through arrangement and elther (3) the Group has Ira sferred substantially aIthe nsKs and rewards of the asset or (b) Ihe Group has neuher transferred nor relain substantially ai the n sks and rewards of the asset but has tnlnsferred control of the asset
When the Group has tTa~fened its rights 10 receive cash flo ws from an asset or has entered into a pass-waugh arrangement and has nejlher trmsferred nor reta ined substantially all of the risks and rewards of the asset nor trnnsferred control of the asset the asset is recogoised to the extent of the Groups cOlilinuing involvement in Ihe
In that case the Group at 0 recognises an associmed liability The mnsferred asset and ihe associaled liabi lity are measured 00 a basis thai flects Ihe rights lnd obligations that the Group has retained Continuing involvement that takes the form of a guara tee over the transferred asset is measured at the lower of the original canying amount of Ihe asset and fbe maxim amoun o f consideration that the Groop could be required to repay
b) Financialliabiliti
A financial liabili ty is defogniSed when the obligation under the liabil ity is discharged or cancelled or expires Where an existing fio8 1lci I liability is replaced by another from the same lender on substantia ll y d ifferent lenns or the terms of an existin liabili ty are substantia lly modified such an exchange or modification is treated as a derecognition of the orig~al liabili ty and the recog1Jitioil of a new liability and the dirference io the respective carrying amounts is reco ised in the consolidated Slatement o f income
Impalr meot ood uncollec ibility of fina ncial assets An assessment is made al each repon ing date to determine whether there is objective evidence that a speci fic financial asset may be impaired If such evidence exists allY impainneOl loss is recogoised in the consolidated statement of income ImT t is detemtined as fo llows
(a) For assets earned a t fair value impainnellt is tbe difference between cost and fair va lue (b) For asseamp carried at COSt impairment is the difference between cost and lIle present value of future
cash flo1S discounted at lhe current market rate of rdurn for a simi lar finan cial asset (0) For asseq carried al amortised COSt impainneot is the difference between canying arnOWll and lhe
present Value of future cash flO M discowlled at the original effective iDlerest rate
Provisions Provisions are rewgnised hen the Group has an obl igation (legal or COnslnlctive) aris ing fro m a past event and the costs to settle the obl igalio are both probable and able to be reliably measured
16
Aamal Company QSc
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 31 December 2013
3 BAses OF PR EPARATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICI ES (colltinued)
34 SUMMARY OF S IGNIFICANT ACCOUNTING POLICIES (continued)
Employees eod of service benefits The Group provides end of service benefits to all employees in accordance wi th employment contracts and Qatar Labour Law The entitlement to these benefits is based upon the employees final salary aocl length of service subject to the completion of a minimum service period The expected costs of these benefits are accrued over the period ofemployment
Revenue Revenue is recognised to the extent thal it is probable that the economic benefits will flow to the Group and the revenue call be reliably measured Revenue is measured al the fair value of the consideration received excluding discoWlIS rebates and duty The following spec ific recognition criteria must also be met before revenue is recognised
Sale ofgoods Sales are recognised whcn significant risks and rewards of ownership of the goods have passed to the boyer and the amount of revenue cao be me3sured rcli3bly
Rental income Rental incorne from investment properties is accoWlted for on a time proportion basis over the period of tenancy Incentives for leases to enter into lease agreements are spread evenly over the lease teon even if the payments are not made 0 0 such basis Income arising Tom expenses recharged to tenants is recogn ised in the year in which the expenses can be contrac tually recei ved Service charges aud other such receipts are includcd gross o f related cosls in revenues as the Group acts as principal io this regard Premiwns received to terminate leases arc recognised in the consolidated statement of income when they arise
Service income Service income is recognised when the service is rendered and the outCQrne of the transactions can be estimated reliably
COlimission Commission is accounted for on an accrual basis when the right 10 receive the income is established
become on tra~el agencies [ncome on travel agencies is accounted for in the year in which the airline tickets are sold
IIIeresr income Joterest income is recognised as the interest accrues using the effective interest Clle method
Foreign currencies Transactions in foreign currencies ate recorded al tbe rale ruling at the date of the transaction Monetary assets and liabi lities dcoomioated io foreign currencies ace retranslated ill the raLe of exchange ruling at the reponing date All differences are recognised in the Statement ofinconlC
Use of estimates The preparation of (he Groups consolidated financial sta temenls in CQnfonnity with Intemltional Financial Reponing Standards ([fRS) requires management 10 rnake estimates and assumptions that affect the reponed amounts of assets and liabilities and disclosure of contingent asscts and liabili ties at the rcporting date and the reported amoUlils of revenues and expenses during Ihe reponing period Although these estimates are based on managements best knowtedge of current events nnd actions acnm results may ul timately differ fro m those estimates (Significant asswnptions nccounting judgments and estimates used in preparing these coosolidated fina ncial sta temenlS are disclosed in Note 31)
The estimates and underlying assumptions are reviewed regularly Revisions to accounting estimlIes are recognised in (he period in which the estimate is revised if the revision affects only that period or in th~ period of the revision and future periods if the revision affects both current and fu ture periods
17
Aamal Company QSC
NOTES TO THE CONSOLlDA TED FINANCIAL STATEMENTS For tbe year cnded 31 December 2013
3 BASI S OF PREPARATION AND SUMMARY OF SrGNIFICANT ACCOUNTING POLICIES (continued)
34 SUMMARY or SIGNIFICANT ACCOUNTING POLI CIES (continued)
Fair va lues A number of Groups accounting policies and disclosures require tJ1 C measurement of fair values for both financial and non-financial assets and liabil ities The Group has an established control framework with respect to the measuremeot of fair values When measuring the fair value of an asset or a liabili ly the Group uses market observable data for (be valuatiOD Fair values are categorised into different levels in a fair value hierarchy baCd on the inputs used in the valuation lechniques as follows
i) Leve l I - Unadjosted quoted prices io active markets for identica l assets and liabilities ji) Level 2 - Otheqobservable inputs not included within level 1 of the fair value hierarchy ii i) Level 3 - Unobtervable inputs (including enti ty s own data which are adjusted if necessary to retlect the
assumptions market participnllts would use in the circumstances) The Group recognises tralnSfers between levels of the fair value hierarchy at the end ofthe reporting period during which the change has ocdWTed_
Treasury shares When share capitl recognized in equity is repUIchased (by the Company or any of its subsidiaries) the amount of the consideration paid which includes direa ly altributable COSIS is recognized lIS a deduction from equity Wheo treasury shares are sold or reissued subsequently the amount received is recognized as no increase in equity and the resulting surplus or deficit on the transaction is presented io share premium
18
4
Aamal Company iQSc
NOTES TO THE ONSOLlDATED FINANCIAL STATEMENTS For the year ended 31 ecember 201 3
BUSINESS CO~BlNAnON
Acquisition o f Culf ROks Company VLL On 1 January 2012 the roup acquired 51 oflhe voting shares of Gulf Rocks Company WLL (Gul f Rocks) a limited Iiabiliry campan incorporated in Qatar and registered UJKier conunercial registration number 2249) The acquisition was made thT ugh Ci-San Trading WL L a subsidiary which is 50 owned by Aamal Group
I
The fai r val ue of lbe ideltifiable assets and liabilit ies of Gulf Rocks Co mpany WLL based on purchase price allocation exercise condlcd by tbe management as at the date of acquisition WJ S as follows
Fair value recognized on
acquisition QR
Assets I Cash and bank balances 14005495 ACC QUOiS receivable and wePayments I 749383 Amouots due from related plrties I
I oveotones
48311 190 5124 270
Available for sale investm~nlS 1985245 Plant and equipment 6769 17
81852500
Liabilit ies Accounts payable aJld accll1als 4724446 Amounts due to related parties 385070 Employees end of serviccibenefits (Note 15) 349272
5458788
Total identifiable net a5sellf
Purchase consideration trasferred Non-controll ing intereSt az-ising on business combination Bargain purcha5c gain rc~u ting from the tcquisilion
Allalysis ojcash flows OIl acquisition Net cash acquire11 Nith the subsidiary 14005495 Cash paid (30600000)
(16594505)
On I September 20 12 the Company acquired the balance 49 nfthe equiry of Gulf Rocks Accordingly the Group has 74 5 effective holdin4 in Gulf Rocks as at the reporting dale The excess nfthe purchase cons ideration over Ihe fair value o f net assets of GuJf Rocks acqui red from the nnn-controlHng interest has been recorded directly in the retained earnings of tbe Gr6up as at 31 December 201 2
QR Purchase consideration 404 10000 Less fuir value of oet asset~ acquiroo from the non-controlling Interest holder (39842792) EXce5s of purchllse cons idf ration over the fair value of net assets a(q uired 567208
19
5
Aamal Company QSC
NOTES TO THE (WNSOLlDATED FfNANClAL STATEMENTS For the year eoded 3 ) December 2013
CASH AND CASH EQUIVALENTS
For the pmvose of consolidated statement of cash flows cash and cash equivalents comprise the fo llowing balances
lon 2012 QR QR
Cash and bank accounts 330333904 282272895 Short lenn bank deposits 105802852 85608396 Cash and bank balances 436136756 367881 291
Bank overdrafts (6836280) (2885090)
Cash and cash equivalents 429300 476 364996120 1
The short tenn bank deposits are made for varying periods between one day aod three months depeoding on Ibe immedifltc cash requirements of the Group and earn interest at the respective short term deposit ra tes
6 ACCOUNTS RECEfVABLE AND PREPAYMENTS
2013 2012 QR QR
Trade aCColUlts receivable 411 011 567 345260657 Advances 0 suppliers and prepayments 50787921 629389J 5 Retention receivables 36217081 56943030 Other receivables 12073270 17 139173
5tO089839 4 82 28 1775
As at 31 December 2013 trade accountS receivoble amoWlting to QR 2690 1412 (201 2 OR 24984025) were impaired Movements in the allowance for impairment of trade aCColmts receivable were as follows
2013 202 QR QR
At 1 January 24984025 1 877085 Charge for [he year (Note 21) 2294590 13613 120 Amounts wriuen off (19949) (117368) Unused amotmts reversed (357254) (388812)
At 3 t December 26901412 24984025
20
6
1
lamal CompanyQSC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMEltS For the year ended 3 J December 2013
ACCotNTS RECEIVABLpound AND PREPAYMpoundNTS (contillued)
As at -1 I Dtcemxt the ageirg of unimpaired (ltlde accounb iltcivabk was as follows
P(HI duo
nor Up to 30 31-60 61middot90 Yi-jSj gt flO Tota impoirlt-fl days days days day doys
QR QR QR QR QR QR QR
1l13 411OJl$67 25l981960 32312165 2140966 19351fi43 16f)76888 60148545 2012 345260657 1695159B6 493lt)8566 2356$954 19494369 16908414 66374363
1JJJirtpai~ed receivable are expected no th bil5tS of past experienn) 10 be fully fcCi)evbc H is not the pngtctlce ofthcent Group to oblum collaleral over recejvablcI_
AMOLNTS DUE FROyl REL-TEO PARTIES
Name
AI ~aisnl Holding Company V_LL E Seweo Cabtes Qatn WL L Cnild -ftt Cvmlllny Al hz Retll E$vt rWesnnim Company WLL~ AllaZi Real Estale BrAnch EI Sewedy Electric Egypt WLL MuincrDJ1Ce Mwagmvont Group Qat3r W LL Good fe Cheffilt - The Pcarl
BuderPhtrnacy Al Faisallnlemadonal Tnl(i and Investment Company WLL AI-rabia Land Trnr~PQltit1g Company rLL ro Sewedy CabLes - Kuwuit Gcentttco hlttrnJmJilI Frijns StHytural Steel Middle East WLl Winer Wunderand Company WLL Al FtOH1H for Investment amp llllemtiOl1a Trading COntpAny WJ_L Q)lar Bahrain lmerOlnionai Cnero3 WLL Gulf EngJisb Sltl-Qo] Al Rayyao Tourism lve$lrnent Company W LL Other relater purties
2013 2012 QR QR
15412-1064 ll941Y70 34644615 ~li96858l
[()0405 14-45012 51 59197 9538116 15514113 4014727 236824$
1867526 LSOfd22
8(1012 10435r 311650 746395
15023 204450 459829
2iYHi 244940 186750
152170 143440 33500 7768(1
6259 1459lt) 758962-1
__2~61g~~_ 1~95Ji
bull 214109950 171525363
--__ shy
7
8
9
Aamal Company QSc
NOTES TO THE CONSOLIDATED FfNANClAL STATEMENTS For the year ended 3 1 December 2013
At10(JNTS DUE FROM RELATED PA RTIES (continued)
NO les (i) Transactions witll related parties are eam ed out through open account and Directors do not consider any
receivables to be past due or impaired
(ii) Related party transactions ore disclosed ill Note 26
INVENTORIES
Goods for rew le Raw materials and spare pans Work in pTOgresS Goods in transit
Less Provision fOI obsolete and slow moving invenlories
1013 QR
165499699 38388307 19944678 9671 8553
320551237 (3851692)
31 6699545
Movements in the provision for obsolete and slow moving inventories were as follov~
At I January Charge for the year (Note 19) Reversals Amounts wri tten off
At 31 December
E QUITY-ACCOUNTED INVESTEES
TIle Group has the followiog invesllnenfs in equity-accounted investees
Interests in joint venrure Interests in associa tes
At 31 December
G roup s snare of profits fr om the equity-ncco unted iovcstees arc AS follows
Profit share from in vestment iojotnt venture Profit share from investment in associates
202 QR
232597650 36608394 30622960
10521 9695
405048699 Q 145826)
40 I902873
203 QR
3145826 1 380617 (535695)
( 1139056)
385 1692
20 12 QR
2795992 2208263 (137995)
( 1720434)
3 145826
2013 QR
2012 QR
129462184 3644723
124124803 2545188
133106907 12666999 1
17330368 22869454 1169533 534050
18499901 23403504
22
10
Aama Company QSC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 31 December 201 3
9 EQUITY-ACCOUNTED INVESTEES (continued)
Counlry of incorportllion
Relationship Proportion ofownership and lotilfg power held by the Group
203 2012
EI S~wedy Cables Qatar W LL Frij ns Structural S teel Middle East WLL Al Ftfazdaq Company WLL
Qat~
Qatar Qatar
loint venture Associate Associate
55 20
55 20 35
Note With effect from 1 January 20 13 the mlnagemeot of the Group has reclassified the investment in Al Farazdaq Company W L-L from investment in associate to investment in subsidiary This is based on the transfer of share holding by the other shareholder whereby the conlroi o f AI FOl razdaq Company W LL bas been assigned 10 tbe Company
INVESTM ENT PROPERTIES
a) Reconciliation of carry ing amounl 2013 202 QR QR
AI I January 611334701 8 555 1835348 Additions 9568047 1727191 87 Transferred from property plant and equipment (Note II ) 34519828 Net gain iTo m fa if value adjlls tment 245051107 388792483
At 31 December 6402486000 6 11334701 8
b) Measurement of fair value
The fair values of the Groups inveS hnent properties as at 31 December 201 3 and 3 1 December 2012 have been arrived al on the basis of valuations carried Ollt on the respective dates by professionally qualified independent valuers not related to the Group The independent valuers have appropriate qUlli ficatioos and (eceJ11 experience in the valuation of properties in fhe relevant locations The fa ir value WltlS determined based on market comparable approach that reflocl s recent transaction prices for simillt1r properties and discounted cash flo w and income approach techniques
Details of the Group s iovestment properties and infonnation about the fa ir vn lue hierarchy as at ) I December 20 I J are as fo llows
IIvestment propenies
Level 3 fair vallie
Al I Janu ary 6 [ 13347018 Additions and trans fers from property plant and equipment 44087875
Gain included iu prom and loss Net gain from fair value lt1djuslmem 245051 107
AI J I December
The Group recognizes transfers between levels of fair value hierarchy as o f the end of the reponing period during whicb the transfer has occurred There were no transfers between the fai r va lue hierarchy during the year
23
10
Aamal Company QSc
NOTES TO THE ONSOLlDA TED FINANCIAL STATEMENTS For the year ended 3 I ecember 201 3
LNVESTM ENT ROPERTIES (contin ued)
b) Measuremen t 0 (air value (conti nued)
Vau t ion technique an significant unobservable in puts
The valuer has applied t e income capitali zation discounted cash flow and comparab le methods to detennine the market value of the lnve tment propen ies Significant unobservable inputs used included expected market rental growth rates (an average 425) occupancy rates (approximately 90 to 95) and risk adjusted discount rates (approximately 5 to 7 0) M y significant change in these inputs can impact lhe fair valuation of investment propcnies
24
Aamal Company QS c
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For che year ended 31 December 2013
11 PROPERTY PLAi~T AND EQUIPMENT
FumilUre Truck mixers fIXtures and Complllers
Leasehold and maor Plum (fd office and relaed eapiowork Buidings improvements vehicles machinery eqllipmcni sofMore in progmiddotcss Total
QR QR QR QR QR QR QJl QR
At I January 2013 137870126 371 88 132 9595813 1 262536261 19 580954 14864 385 561 32447 6241 30436 Additions 948)65 2618 100 5367399 859061 111 5268 137147581 148055774
Relating to d isposalswrite-off (1042642) (4390496) (77157L) (589150) ( 184075) (6977934) Transfer from capilal work in progress 1505 310 164 336 3601776 ( 150000) 1182741 (6304 163) Transrer to investment properlies (Note (0) (345 19828) (345 19828)
At J I Dttember 201 J 139375436 J7 258~ ~1 85735 270733865 19700865 169783 19 152456037 _73068~448
Depreciation AI I January 2013 16133915 J6902 529 49087707 68783 065 11 980009 tl71 595 3 174603 178 Charge for the year 7059805 3237150 5390767 12249797 2849162 1768823 42555504 Relating 10 disposalsJvri te-off (664709) (4 3 1716 1) (724322) (552939) ( 18 1993) (6441 124)
At 31 December 201 3 23193 720 19474 9 70 50161 313 90303540 14276232 13302783 2 107 17558
Net carrying amounts At 31 December 2013 116181J16 _17783221 44024422 180415325 5424633 3675536 __l2456O37 JJ9970~890
Notes (i) Depreciation charge for the year amounting 10 QR 33 164382 (201 1 QR 3303091 6) is included in tbe direct costs and an amount of QR 60055 (20 12 QR 36939)
has been capiulised under capital work in progress
(ii) The capital work in progress includes capitalised borrowing costs amounting to QR 125645 (20 12 QR 15358)
(ii i) The buildings are constructed on a plot ofland taken on a loog term operating lease
25
Aamal Company QS c
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 31 December 201 3
II PROPERTY PLANT AND EQUIPM ENT (continued)
C05I~
At 1 January 2012 Additions Acquired through business combinations (Note 4) Relating to d isposalswrite-off Transfer from capital work in progress Transfers
Buildings QR
137434400 435726
Leasehold improvemellls
QR
38137377 446J 04
144 103 ( 1539452)
Truck mLCers and molO
velricles QR
83427661 11464679
1697609 (631824)
Plant and machinery
QR
249335437 97264 85
35 14 132 (99498)
59705
Furniture fir ures and
office equipmem
QR
22845309 667586
192042 (3696457)
98000 (525526)
Computers and related
software
QR
158 19519 87 14 14
141837 (266 1733)
908078 (2 l4730)
Capitol work in progress
QR
12104889 451 53265
( 1065783) (59924)
Total (JR
55910459 8 68765259
5689723 (862 8964)
(800180)
AI 31 Dttember 2012 137870) 26 371881 32 95958 13 1 262536261 19580954 14864385 56132447 624 130436
Depreciation AI Jaouary2012 Charge for the year Acquired wough business combinations (Note 4) Relating to disposalswrite-off Transfers
9144666 6989249
)4 3 16620 3410618
144103
(96 812)
42558404 548 1613
1671942 (6242 52)
44555 290 2 1398849
2890797 (6 187 1)
12392584 3 182899
169005 (3558466)
(206013 )
12235266 2077633
136959 (2627283)
(J 0662)
135202830 42540861
5012806 (7840684)
(312635)
At 3 L December 201 2 161339J5 16902529 49087701 68783065 11 980009 11715953 174603 178
Nel canying amoWlts
At 31 December 201 2 12 173 6211 2028560 3 46870424 193753 196 7600945 3148432 56132447 449527258
26
12
13
Aamal Company QSC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 31 December 20 13
ACCOUNTS PA YABLE AND ACCRUALS
Trade accouots payable Advances from customers and tenants Accmals Social and sports activities levy Other payables
AJIOUNTS DUE TO RELATED PARTIES
Name
Arab Compaey for Fiber Products EI Sewedy EIC( lric Ho lding Egypiasl Egypt Egyptlech Egypt United Industri es Company WLL Johnson Controls Air condi tioning aod Refrigeration Qatar WLL pound1 Sewedy Cables Egypt Johnson Controls Air conditioning and Refrigeration rNC Dubai United Wire Company WL L Gelteo Company W LL - Gelteo Refr igera tion and Airconditioo ing CampC Lightway nc AI Shaab Group of Companies Other related pruties
NO M Related party transactio l)s a re disclosed in Note 26
2013 QR
320017657 30486837 26924669 41 761 843 25855567
445046573
2013 QR
18517474
4902528
6531231 6404578 3215821
2825884 75 7825
3467288 263715
1313247
48199591
2011 QR
26716268 1 27410234 222575 76 28954726 33)33852
379119069
2012 QR
18380528 91458 82 54 13849 1 11 6 135 5374039 35291 2020359 1693323 1064744
670 179
11 0873 12 18650
49737757
27
14
Aamal Company QSC
NOTES TO THE CONSOLIDATED f fNANCIAL STATEMENTS For the year ended 31 December 201 3
INTEREST BEARING LOANS AND BORROWINGS
NOles Malilrify
2013 QR
2012 QR
CoMl Loan 2 Loan ) Loac4 Loan 5 Loan 6 Loan 7 CoMB Loan 9 Bills discounted
(0 (ii) (iii) (iv) (v) (vi) (vii) (viii) ( ix) (x)
lune2014 Seplember2014 January 2015 November 2016 December 20 16 November 2017 Jllne20 l J December 20 7 OClober 20 19
172070387 440000000 50544000 40261 621 81387109 19920036
6] 43890 62626967 42522794
915676804
298324180 440000000 10 J088000 57955030
100 168750 2 1300492
407728 1 782871 1
35000000
1065742444
Less Defe rred finatlcing cost (771 503) (897148)
914905301 1064845296
Presented in the consolidated statement of financial positioo as fo llows 20)3 QR
201 2 QR
Current ponion Non-current ponion
749520820 165384481
825568489 239276807
914905301 1064845296
The dete rred financing costs consSt of arrangement fees The movements m the deferred financing costs were as fo llows
203 2012 QR QR
At I January 897148 332 661 Addjtions during the year 1 062565 912506 Amortised during the year (218amp210) (34801 9)
At 3 1 December 771503 89 7148
28
Aamal Company QS C
NOTES TO THE CONSOUDATED FlNANCIAL STATEMENTS For tbe year ended 31 December 2013
14 INTEREST BEARING LOANS AND BORROWINGS (continued)
Nolec
(i) Loao I i USD 93000000 impon 10n moi lily obtoined to refimnee he Icne~ of edit The 10 IT interest at commercial fate and the interest is paid at monthly intervals The fucility is repayable within ISO days including the usage period under letter ofc redits
(ii) Loan 2 is a secured bridge loan obtained to settle an existing loan and working capital requirements of the Company The loan carries interest al coOlJllercial rates and interest is 10 be paid on quarterly basis
(iii) Loan 3 was obtained for the pWpOse of financing capital ependiture and direct payment to suppliers contractors and 5ub-controctors The 10011 CMries interest at commercial rate and the inte rest is to be paid q Uar1erly The fac ility is repayable in IS quarterly iostallmenls starting I July 20 11 and ending I January 2015
(iv) Loan 4 was obla ined for conSlruclion o r an inveslmenl property The loan is seclJed by 0 primary mortgage over the some property and corporate guarantee of the Aamal Company QSC Tbe loan carries interest at commercial marke t rate and is payable in quarterly instalments
(v) Loan 5 represents a loan fOlcility obtained in two sepnrole tranches amounting to QR 309 825 000 (USD 85 million) for the purpose of refurbi shment and construction of fociJities io one of the investment properties The loan is repayable In 16 equal quanerly instalmcnlS for individua l tranche commencing from March 20 1J The loan carries interest at conunercial rJtes
(vi) Loan 6 represents secured loans obtained ffom a commercial bank in the previous periods for the purchase of heavy equipment and machines and were merged on 15 November 20 12 as a comb ined loan This loan is payable by 59 equal instalments of QR 426000 with (I last inSlalment of OR 438 326 with effect fro m 01 October 201 3 The loan carries interest at commercial market ra tes
(vii) Loan 7 is il tmst receipt banking facility obtained for the purchase of inventories This carried interest at conunercial market rates This loan was full y settled during the year
(vii i) Loan 8 represents secured loans obuined from a commercial bank in the previous periods for the purchase of delivery trucks and machinery and were merged on 22 October 2012 as a combined loan The loan carries inte rest at commercial market Tates and is payable by 59 equal insta lments o rQR 160000 with a last inSlOlmem ofQ R 128000 with effect from 3 1 December 2012
(ix) Loan 9 is an Islamic Financi ng Arrangement obtained for construction o f a manufacturing plam and as o f yearend ba lance represents partially drawn amount out of totil1 facility of QR 655 68000 The loan is secured by joint corvorate guarantee by the shareholders The loan carries profit at Islamic Financing rates and re-payable in quarterly instalments starting from the end of the 24 months gmce period from the date of loan drawn
(x) Bi ll discounting is a loan fac ility from banks The purpose of the arrangement is to discount bills locally and carries interest at current commercia l filte
15 EM PLOYEES END OF SERVICE BENEFITS
Movements in the provision reHectelt in the consolidated SLo1tement of financia l position were as fo llows 2013 201] QR QR
At I Jan uary 18111 763 17877937 Provision made during the year 4056969 4205499 Acquirelt through business combinations (Note 4) 349272 End of service benefits paid during the year (2210756) (4320945)
At 3 1 December 19957976 18 111763
29
Aamal Company Q5C
NOTES TO THE CONSOLIDATED FINANCIAL STATEMETS For tile y~ar ended 31 Dee~mber 2013
16 SHARE CAPITAL
2013 2012 QR Qq
AtI1l1)nud 60000)000 (20 2 544500JJOfn shares ofQR iii Cilch 60i)iQOOlOO 54450lt)0000
21)13 2012 Numher of
siMtS QR shares QR Issued Mtldfully paM At lJamld) 544SfWllOfJ 5445(100001) 495000000 49500000)0 1511C ofbonus S1i1-C ___ 5550~OOO 555000000 49SGOOOO 495000000
At 31 Decenef 6(OOampQllf1(1 ---14450O000 544~OOOOOO
All ampates m~ of a110 clss and caL equal voting rights
17 LEGAL Reuro5ERVE
As required by Qatar Comnertai COfrp7lnies Lav No5 of 2002 lOfp of the profit for the ye1J as a rru1imllli silould be mmsfened to legal re~erve The reserve is lot normay [lytiabe tor distribution except ill he cixcuJUstllrtUS stipulated m the above ~lemi0ntd GIW
IS HEVE1TE
2013 l)n QR QR
Sale of goods 1726893265 i709057~(iO
Renlal income UiO362322 133117509 S-ice income 858695 33940731 CornrrusslOlL Incentives and agency fces 44695S1 422~_632
212259$)33
19 DIRECT COSTS
2013 2)i2 QR
C 051 of inven(feS recognisedlIS an exptns 1522929956 497210830 Dind sL1ries lmd wages 601 [1336 5137856-8 Operating eXpenses on nml estate p~opet1les 36)711316 3041H504 fJepreciatiort (Kate I J) 33164382 B03091pound Operators marhgerrt6nt fees 14508588 li667989 Provisicn Qr obsolete and skwlt moving mvenlories (K)tc 8) 2380617 2208263 Other operating ilxpenses _31~3982 _ 3674946
1702139171 JS9653OI tgt
Aamal Compall-yQSC________________
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For lthe year ended 31 December 20 11
2G OTHER NeOiI
2013 20J3 QR QR
Interest mcume 2824216 2)314392 Profiv( loss) 00 disposal of property plant aoe eqUlpmem 737647 (l7362G) Eargain ptmnJse gain (Kote t) 8360793 MIsceJlaneous income 5723356
2013 2012 QR QR
ManllgetnUI hrQ empl(yees ws 55170302 55lt035middot1 Rent 23596799 2594915 Allowance for impaimlcot oUrsue aCQl1ot$ rc(Xjvalle (Nole 6) 129459(i 11613120 flBumcce ane profcampiitmJI fees 2IU9263 209J902 Corununication OOtHS 1935123 1649155 Trllining tid ouSfjt$s developmccl 950476 L095764 Re]X1in and mainle-nilnce 21)11SflS 2)2 I Poslag-c prjnting acri stationery 610299 541159shyvllsltdlancous expenses _~~~664 1lt2
-~~~ 125162812
22 fIN~lCE COSTS
2013 2amp2 QR QR
Inleres epen~ 42866312 5773U4B Am(vtisJliorgt ofdefcentrred financiog coStS __ 2l)tl26~~ gt3661
44930877----=
58063009
23 BASIC A~n nHUfED EARilNGS PER SHARi~
Basic trdTJogs per hue is caculatid 0y llividing the pwfill0( Ihc year attriouiabk (0- equity roldc-5 of the parent by lhi w~iglwxi avrage number of ordinary shares 0JstandirJg dulting tht_ year During Ihe year lil~ Conpmy i-sued and CBpii3lzed bonus shares lnd awmJingl) me previously ~eportod earnings per shac have blOM restatc(i
20i3 2012
Profit feT the year auributable to Cluity holderlt of the- paren (QR)
Weighted aVCTage number ofshares outstanding during the year (i)
Basic Jd diluted earnings per share (QR) 085
59985U413 shy
~~--~~~~- ~------J 1
23
Aamal Company QSc
NOTES TO THE CONSO LIDATED FfNANC[AL STATEMENTS For tbe year ended 3 l December 2013
BASIC AND DILUTED poundARNINCS PER SHARE (continued)
NOles (i) Th wigh d m nlg urnb of hres foc h P of lruling ~migs pee share h bee kulated
as follows 2013 20J2
QU3lifying shrues allhe begi ll1ling of the year 544500000 544500000 Effect of bonus shares issued and capitalised 55500000 55500000
600000000 600000000
Less T reasury shares (149587) (i357SI)
Weighted average number of shares at the end of the year 599850413 599864249
(ii) There were no potentia lly dilutiw shares outstanding at any time during tbe year and hence the diluted earnings per share is equal to the basic earnings per share
24 COItIMITMENTS
20 1] 2012 QR QR
Estimated capital expenditure approved and contracted for at the year eod but not provided for
Investment properties 2964000 8 139063 Property plant and equipment 16386500 63759762
19350500 71 898825
Operating lease commiIOlenlS under noncancellable lease agreemenlS
Payable wilhin one year 990806 702000
990806 702000
25 CONTINGENT UABILITlES
The Group had the following contingent liabi lities from which it is anticipated thai no malerial liabilities will arise
2013 2012 QR QR
Letters of guaramee 474551239 394255203
Letters of credit 7678499 194299384
NQles
(i) leHlaquogt of gu indud penonmnlaquo tend nd bid bonds d pymenlt g gi to suppliers and contractors by the Group in the ordina ry course of bus iness which will matme within twelve months fro m the reporting da te
(i i) Letters o f credit are provided by lodging documents to the bank tor purchase of trading goods fro m foreign suppliers wruch will maMC within thJee to six months from the date or tile Iransaclion
J2
26
Aamal Company QSc
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year eoded 31 December 2013
RELATED PARTY DISCLOSURES
Related party transactions Related parties represent major shareholders directors and key management persortOei of the Group and entities controlled joimly controlled or signjficamly innueoced by such parties Pricing policies md tenns of these tnlOSaclions are approved by the Group s management
Transactions with related parties induded in the consolidated financial stalemenls were as follows
20lJ 2012 QR QR
Sale o f goods and SClVices 419034048 415225221
Rental income 1980473 2069386
Purchase of goods and services 1591 38018 300835596
Rental expense 21 780G78 23397334
Bargain purchase gain 8360793
Net assets acquired 78803585
Relat ed party bal nnces AmountS due from and due to re lated parties are disclosed in Notes 7 and 13 respectively These balances do oot carry interest and are repayable OIl mulUlUy agreed dates generally within one year
The Group did not record any impairment of receivables reJatiog to amounts due from related pat1ies in either year This assessment is undertaken each fina ncial year through examining the ftnanc ial position of the related party and the market in which the related patty operates
Parent The Groups ultimate parent is Al Faisal Ho lding Company WLL
Compensa tion or key management personn el The remuneration of key management dming the year was as fullows
2013 2012 QR QR
Short-term benefi ts 7904794 1079595 Employees end of service benefits 408934 439776
8313 728 11235727
33
AamaJ Company QSC
NOTES TO THE CONSOLIDATED FINANCIAL 5T ATEMENTS For the year ended t Decernber 2013
Dilling the year 1he Group issued a XHlUS share of 10 928 of the paid tiP share capilal hdd ilS at 31 DiX2mber 2(JJ 2 mnmuning to OR 555000000 using retamed earnings as of3 December 2012 (20l2 Doe share for every ten shues held as of 31 Dcember Oll amuunting 10 QR 495OO()OOO ling reta1ned earmrgs 28 or 31 Decencer 2D II Jshy
18 SEGMENT INFORMATION
For J)iloogement PUIpltJM rhe Group i organised into business unit bused On LlJeir nature of Acttvitics lud nas fonY reportable segments and the Head Oftklt as bllow$
Propert Tbe segntn cOlists of City C~nler Qlta~ Brunch and Aamal Rea Esmte Branch whicb ll[c invoived in lampIiiog the faJ1ities of retail outlet conpex red e5ttlte nve(mltn$ and property remal buines~s
Trading mld distrib-wion The segmeul Involves wholesalB andlor rBtail distribution of phamlaceutlcai and consunable i1ems hume Epplianccs medica equimenl t-Tes ill1d lubricmtlaquo and II1UllitnEl printing The scgn(rtt includes 6c following entities
Eotl Sina Medical Branch
Aaen Medical Braudt
Amcill Troding and DistoolltlqO Branch bull Foot Care (erier HRnd) Good llre Pbannacy Bf4Uch bull Al FllfJdaq COllpafY wJ~L
InduSNol manuacturing TIle s0groent IOvolves Ulahuactrumg whole~we aliaor rewi dimibUlioti of dccnc cables lid tools ggregJ1es_ ready-IUx connole and cement bI0C~ lI1d provi$ion of servlCcent$ in rdation to iODllltroa Itvestment repair aJ-d Gonstruction of power plwts liiiding of LED ilgluitlg products und management of industnl enterpnses The segment ircludes be folloVting centntitis
bull Aam1 Cemert Industries LL AuraJ Redy1Yl(A BrQTlch
bull Doha Cables Qawf lLL Senyaf IoolJic1es Qatar Holding W LL Advanced Pipes ard Casfs CompQTly WJ L bull GuJfRoch Coroany WLL Ci~San Trading Company WLL hmovafive Lighting Compary WLL
Managed services le segment inyolvc~ provisloH of hOllseiltecpmg mi cleaning services fucditics n-anagemerJ services C1egy s(tvices ttl centfe sltrvicf)s buildiqg lnaintemHlelt aml acting as travel gens The 5cgnltnt includes the foUowing cnti(lcents
An13 ServJce Branch
amli TnlVeJa l5tmh
f-eco Gulf Co W LL
Jolinson Controls Qattl WJL
28
Aamal Company QSc
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended ) L December 20 13
SEGMENT INFORMATION (Co ntinued)
Head Office It provides corporate services to the branches and subsidiaries of the Group
The managiog d irector of the Group monitors the operating results o f its business units separately for the purpose of making decisions about resource allocation and perfonnance assessment Segment perfonnance is evaluated based Oil operating profit or loss of these segments Transfer pricing between operating segments are on anns length basis in a manoec similar to Iraosactions with third parties
Aamal Company QSC
NOTES TO THE CONSOLIDATED FINAN CIAL STATEMENTS For the year ended 3 1 December 20 13
28 SEGMENT INFORl1ATlON (continued)
Operating segments The operat ing segment after elimination or ioter-bra nch and inter-co mpany lrnnsaclioos is presented as follows
Trading (nd Industrial Managed For fh e year elided 31 December 2013 Properly disirjblli ioll manujocljlring services
QR QR QR QR Revenues
- h lemal parties 260360172 578909983 1231522768 S l802210 - Inter segments 1253914 6843 11 8 29639873 3445052 1
Heat Office QR
Eliminoions QR
(n187426) II
Tolal
QR
2J22595133
261614086 585753 lOI 126116264 1 8625273 1 (721 87426) 2122595133
Opera ti ng results Fair vallie gains
Profit I (loss) ror the year
Depreciotion
200811944
245051 107
445863051
2066290
86492834
86492834
4345438
22636250
22636250
33049 089
5157436
5157436
1760305
(47864882)
(47864882)
1334382
267233582
245051107
512 284689
42555504
36
Aamal Company QS
NOTES TO Tl CONSOLIDATED FfNANClAL STATEMENTS For the yeM ended 31 December 20 13
28 SEGMENf INFORMAnON (c)tltioucd)
FOf the yearrnrkti J f DccemOer 2(J12 QR
Revellues - ExlcmlJ partiel 2331 17 509 bull Inter segmcI11S 1168935
-- 234236434 --~- -~--
Openning results 18S2367t Fmt value gains J8S79-4~G
pront LOllS) for the rear 570616154
gt3659
No(
lnlermiddotgment revenues are eliminated on tQHs)idntiOH_
Tadiug ftfid disl d)Ntion
QR
S2S3l7661
324 j
5335493114 ~ -~-----
51384831
54384338
4J9R71(i
Indus idi mamfmturing
QR
1255694537
129U25lS4
56727059
56727059
32752742
slnltic(s QR
55216665 2939H31
S46lOJ96
7427414
7437
[908067
ilfild ()jice QR
(64(41976
Elimination QR
(74tHi2oJ Iii
Totul QR
206936372
2069336372
235721
(64641
131 f613
6245
42541)861
Amnal Company Q$l
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Por tnt yeartndeJ 31 De~embcr 2013
28 SEGMENT JNFORMATlON (contiutlld
Assc-ts and labilities
Tng alld lndtrstfw At31 December 2(113 distnbllrior manufacturIng senices HeadOJJicc EliminatioilS lola1
QR QR QR QR QR
Cumnl 3tS 227552338 620807979 61349 j 415 S()6)86922 (301636995) 1477366090 Noolucrcnt DSeIS 6411868160 12604763 622386238 4348876 (i624548 __p2438051 780
fotal asstl$ 6639420498 1194 1243194217 65698291 513Ql1470 ==-lt03H8l~O()) 853295-870 -~----~ ~---~ -
CUIT)llliabilitics 280995335 1(3511J60 6344(12777 2l0708lJ2 496261185 (3CH636995) 1249603264 Non-current iiatJlitics 7l70L5V2 8008485 HlDi16~43_ 3181668 t433799 ____ ilj534_~57 __ --Totul liahililics 353696897 ___~4159~4~ 734419720 ~4976~~~~~ 1434945711
---~~--~ -~-~~ - _2~~~4~~ (~~~~9~
C1pild expcndimn HI) WO743OOj 1397742_~471l2~--~50 ~51 ~1~623821~~1~_ -~----~------ -~
3amp
28
Aamal Company Q SC
NOTES TO THE CONSOLIDATED FfNANClAL STATEMENTS For the year ended 31 December 20 13
SEGMFNT INFORMATION (continued)
Assets and liabilities (continued)
AI 31 December 2012 Properly QR
Trading and d iSfriblllion
QR
Indusrial manufacfuring
QR
Managed senices QR
Currenl assels
Non-current assets
146491 186
6121 864484
2964425 12 903 7264
73468 1258
549267235
51387098 471 1439
Tolal assets 6268355670 305479776 1283948493 56098537
Head Office QR
468325024
6713643
475038667
Currentliabil iies
Non-current liabiLities 273444 748 1 J10 15024
86054583 7434286
669214261 1288 14977
2 1938953
287 1199
480393637 1253084
Totil lliabiliti cs 390459772 93488869 798029238 248 10 152 48J64672 1
Capila expendirure (ltII L 72865 878 1281254 6647 J356 7169 13 149045
Notes
(i)
(Ii)
Inter-segmeot balances are e limioafed 00 consolidatio n
Capi tal expendiTU res consist of additions 10 propeny plant and equip ment and iovestmenl properties
Eliminations QR
To wl QR
(273735776) (i )
(20308351(i)
1423591302
6689563230
(27576661 1) 8 113154532
(273135777) (i) 12573 10405
257388570
(273735177) 15 14698975
24 1484446
39
29
Aamal Company QSC
NOTES TO THE CONSOLIDATED FrNANCIAL STATEMENTS For the year ended 31 Dcltmber 1013
Fr-A]~ClAL RISK MANAGpoundMamp1H
Objccthes and policies fe Groups principal )uaucill liabilities comprise imltresl bctmllg loons and IxmowHgs baRlt ovetda1s amounts due to fclaled par1ies and tracte accounts payable The main pUlJXSi of thesc financial liabilities is 4J mise firmne or 610 Grmps operations The G0JP bas various fimmcial assets such as ttadc accounts receivable lInlOlmts due from related parties bark balances tltCntion receivable and other receivables which arisgt directly fran its cperuoonamp
The maiH ri~ks an3ing Joru (be Groups UnariCJlll illslrumenls jle market risk cretiJt nsk and hmdity risk Til BoarD ofDtrcctO$ reviews end agrees policies for mzrAgbg Caltt f hespound ri~k ihkh arc summariscd beloW
VIarktt risk yenfatket risk is the risk Um changes in market prices $Uch as intfcst rates and hreig lttmeocy ect14nge rilles Vltl1 affect the Groups profit eqwty Dr value tf its hoJdiI15 of financial instrl[Thnls rile objecivpoundj of marke1 risk mUnllgcrlcnt is to manage uld 1~ontr(ll tho tr))rket risk expo-sure vithir acceptable parfI-etcJ$ while optimising rerUID
Equit) price risk ampjuity prtce risk is the risk hilt the Group ampearnings will be affected as a rcmt (If luctttltions in fm vdue of ~qui-gt
mstwnents Eqlliry price risk arises from availabtetor~sale inv2strnems However the Groups exposure to eqmty price risk IS minima as II doesn hold sitl)iftrmt ailableAor-511le inYestrmmrs
[merest rate risk The Groups fimiruial poundS5ot ampId liaojlilies (at Rl $uJject to int~~ rate mk compnse brmk depoils interst bearing loans and bOITQwjags and bank overdr-afts At the reponwg dalt tbe [merest rale pronle of Ill Goups intexst bearing fbi4rdd instruments as fliows
11113 20i3 QR QR
Fued liIeryS refc insfrvrnellts
Fmmcial assets 113035962 111913394 FrOltwial liabilities --1~203712l) 1252t43~1
9)OI~ (13350972)
Fhlllting inireSI rate ns1lmlttrs Fanctl~ Isseis 127024345 ID43848o Fllllocial liabilities _-(i~9347~ (94))48926)
(836)64116)
The Groups exposure to t~ ris of changes in marXet interest fltltes relztes primariiy to the Groups financial assets and lizbitdic$ with t1Oltttirg interest mte~
lhe loEowing able demonstrates the ampmitivity nf the eonsolidattXI statemen1 of income 1) caonaly possible chonges in in1jfgtst rmes by 25 basis points with all othe vari)ble3 hdc umstant The sensitivity of the CooiK~ljclatid statement of inc(me $ the eft(ct of tb assumed changes in lnterdt rales for one year bf1sec on the floating rate financial assets and fimmcial hablhw$ held at 31 f~r The effect of deae-ascs in interest ral~ is cXp0Ctct to be equal and opposite to the effect oHlle increases sllQvro
Changes it Eftx OIl
00513 [oms profit QR
2013 Floating mterest Hlte instruments ----2$ bp (1649776)
2012 Flv-ating irkfiSt rale instrumenls +25 bp (209[9(1))
~--------- -~~ 40-middot------ _ _ shy
29
Aamal Company QSC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 3 1 December 2013
FINANCIAL RISK MANAGEMENT (continued)
Foreign currency risk Foreign currency risk is the risk lhilt the value of lhe fi nancial instruments will fluctuate due 10 changes in fore ign exchange rates
T rade aCcOlmts payable and accrued expenses include amounts due in foreign currencies mliniy US Dollars UAB Dirhams Great Britain Pounds (GB P) and Euros of which the Group has a currency risk primruily on the baJmces payable in Euros and GBP amoWlting 10 QR 14400634 (2012 QR 17214046)
The Group does not hedge its foreign currency exposure As both Qatari Riyal and UAE Dirhams are pegged to the US Dollar balances in US Dollars and UAE Dirhams are not considered to represent significant currency ris k to the Group
The table below indicates the Group s fore ign c urrency exposure on its monetary assets a nd liabilities The analysis calculates the effect o f a reasonably poss ib le move ment of the QR curre nc y rale against the Euro and GBP with all other variables held constant on the consolidated slate menl o f income (due to the fa ir va lue of currency sensitive monetary asse ts a nd liabilities) The e ffect o f decreases in fo reign c urre ncy exchange rates is expected to he equal and opposile 10 the e ffect of the increases shown
Incramp1se ill
f oreign cUlrency rate
0
the QR
Ellecl on profil
QR
2013 +5 (720032)
20 12 +5 (860 702)
C redit Tisk Credit risk is the risk that one party to a financial instrume nt wi ll fa il to discharge an obligation and cause the other party to incur a financial loss TIle Groups exposure to credit risk is indica ted by the carrying amoWlt o f its financia l asse ts whic h consist principally oftmde accollilts receivable retention receivable amounts due from related parties othe r receivables and bank baLances
The Group sells its products and prov ides services to vario us panies It is the G ro ups policy that all customers who wish to obtain on credit lerms are subject to credit verificalion procedures to ensure c redit Ilonhiness Each new customer is analysed individually for creditworthiness before the de livery o f products Of services Custo mm tbat fai l to met t the credi tworthiness may transact with the Group only o n prepayme nt basis Property rentals are mostl y received in ad vtnce or conlrlCled wi th post dated cheques 10 additio n receivable balances are monitored on an ongoing basis a nd the purchase limils are established for each c redit custoroer which are reviewed reguJarly based on the level o f past transactions and senlement The Groups max im wn exposure with regard to trade aCCOWlts receivab le net ofa llowance re nected allhe reporting date was ilS fo llows
2013 2012
Business SJgmelll QR QR
Property 15478832 19386326 Trading and distributio n 194343 597 179748274 Industrial ma nufac turing 183119753 131578668 Managed services 18069385 14547389
411 011 567 345260657
41
29
Aamal Company QSc
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For tbe year eoded 3 J December 20 13
FlNAJICIAL RISK MANAG EMENT (c-o Dtinued)
Credit risk (continued) With respect to credit risk arising from the other financi31 assets of the Group the Groups exposure to credit risk arises from default of the counterparty with a maximum exposure equal 10 the canying amount of these instruments as follows
2013 QR
202
QR
Bank balances Amounts due from related parties Retention and other receivables
436136756 214439950 48290351
36788129 t 171525363 74082203
698867057 613488857
The group reduces the expoSltre of credit risk arising from other financial assets by maintaining bank accounts in reputed banks and providing services only to creditworthy re lated parties
The management cons iders the bank balances and a mQUIIIS due from related parties as high grade fi nancial assets and lfade accounls receivable and other receivables as sundard grade financial assets When a finltmcial asset is identified 10 be impaired the managemoot downgrades such assets to impaired category and provides adequate allowances
Liquidity risk Liquidity risk is the risk that the Group will not be able to meet its fmancial obligations as they fu ll due The Groups 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 nonnal and stressed conditiom without incurring unacceptable losses or risking damage to the Groups reputa tion and is to maintain a balance belWeen continuity of fuoding and f1eilibility through the use of bank overdrafts and bank loans and borrowings
The Group monitors its risk to a shortage o f funds using a recuning liquidity plaOfling 1001 TIllS tool considers the manuiry o f financial assets (eg accounts receivable) and projected cash flows from operations The Groups teons ofsales or services require arooUIlts to be paid within 30-90 days from the invoiced dale
42
29
Aamal Company QSc
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For tbe year ended 3 1 December 2013
FrNANClAL ruSK MANAGEMENT (contiQued)
Uqujdity risk (continued) The table below summarises the ruaruriJy profile of the Groups financial 1iabililies a t 31 December based on contractual undiscountcd paymeots
2013 Interest bearing loans and borrowings Bank overdrafts Trade accowus payable Other payables Amounl~ due (0 related panles
201l Interest bearing loans and borrowings
Baok overdrafts Trade accounts payable Other payables Amounts due to related parties
On demand
QR
6836280
6836280
011 demand QR
2885090
2885090
Less than 3 months
QR
521324473
303638792
47406830
2530~480
898675575
Less thall 3
months
QR
469839033
10754JJIO 37543236
1964504 1
634568620
3 10 J2 mOlllh$
QR
239333328
16378865 20210580
2289~11l
298816884
3 to 12 monlhs
QR
365476972
159621 37 J 24745342
30092716
579936401
1to 5 years
QR
J 60092748
160092148
1 to 5 years
QR
248472226
248472226
gt 5 years
QR
25261598
25261 598
gt 5 years
QR
7648000
7648000
TOlaf
QR
947012147 6836280
320017657
67617410 48199591
1389681085
Tota
QR
109 1436231
1885090 267162681
622 88578
49737757
14735 10337
43
30
Aamal Company QSltc NOTES TO THE CONSOLIDATED FlANCIAL STATEMETS For the year ended 31 December 20 t3
21 F~ANClAL RlSK MAiAGEMElT (continued)
Capital management The Boards policy is to maintain a strong cepit1 base so as to rnainmin investor creditor and market ronfoonee and to SUSWlJ) fumre dcltclonnent Gf the buinest The Board of Directors rronitortl the tapital whkh tbe Group defines as wlal $parcloders equity excluding nonmiddotcornroliing imerests and the level of dividends to orrunury srarellOJdcfS
The Board also reeks to ITIaimain a balance between the higher (ctums (hat might be fA-~$ihle With higher leves of borrnwings end Lle edvnrJages and security named Sy it sOMd Cilpitai posi[ion The GfCup~ k1rget is to achievfl a return on slureholders equity (exclJding aonwurrolJiug iorcf(sts) greater lll(ll1 he wcighlcd average inres exxmse on mrerest bearing Ivens and oorrowing
The (lf0t-p nl)nDg-e ils cnpital structure and makes adjustneal lOll in light ofchang2s in economic nd bttincss cordjlons and shareholders expe1ationJo chmges veremiddot maCo HI Lleuro objecttves polilCS or proCCSSC3 during the years erded 31 D~mber 2013md 31 Dtccmlxr2Ql2
The Group monitors the capit2J using a gClting fatio which IS dep divided by caplla plus debL The GtOwgts policy is to keep ttJe ge-anng rmio bclew 40 Tbe Group iLdtdes withb debt imete-51 beagting loans ard ~OITORlngs less cash and cash equtVaknts Capltal includes eqmty attributable 10 the equity tolders oft~e parcrt
2013 QR
2(i2 QR
fmerest bearing loans and borrowings lcss- Cash and cas ltYJUvalcnts
9i4lJ05301 _~ (429JfJl4761
1004845296 (649)6201)
Net debt
Toa capital
Capita and net debt
699849045
~ringrttio
FAIR VALtES OF Fl~ANOAL f~STRUMETS
Finarcial iostrumenL~ cOlnprise tina~lctal assetS carl finailcialliabilities
Fmancial assets colJist of bank balance) short 1Cm bank dcposis amounL dve dom rc)ltted partilt)$ rekntion and other receivables and ttade accolmis rceivabe Finatlclll habiilics cgtmsist of banilt ovcrdratls jnerest bearing lOil1S and bOrowings amounts due (0 nliled partiG~ ane trade x-ounls payable
The- fair values of hese financial inStrumen1S except Jo-- imCfest bearing loam lHld bOlToving aproKimate lhdr cMryinJ vlhes due to the Slort temt mzrutiiles or these instrument
Tllc faiT value of iotcnst beating Nns and borrowin2s ae estimate( based on discoumed ltash flows twin int(s rale- cune-ntly nvailagtk fur tilt debt or sinuiar tetnlS an-a rell1lmng matunties
31
Aamal Company~Q=-ScC ______________~______
~OTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For fhe year ended 31 December 20 t3
SlGNIFICANT ASUMPTIONS ACCOUJTING JUDGElE1TS AND F8TIMATFS
impairment (If accoonts receivable n etrnwe of lhe collectible anoun of trade accounlgt reccvable is made when collection of the full lHl1OUt i~ nO looger probabk FOI nCividualty significitIl amounts this estimation is p~rformed on an indh-idllai a$[$ Amomts wHcb arc not indivldl11Uy significant but wluch are past due ZTe tsscssed collectively and an aJlQwaccc applied ucc()r~Jng to the length of lime past due based oc histnncal recovery nlJes
hnpalrment of inHntnries lavenoncs are held at tho lower of col and nol realisable value InIOn inventoncent$ becone old or 0-~amplete an estilTJte is mate of their net j alisable vulue For indiviolhlUy significant amountS this cstinaunrt is performec all aD lndividwl osis Amotlnts whieh are fl0t individually significan( btll which ltIre old at obsolete wx LltSessed wllecivdy md a provisior is applied sccnrding to the invenrory type and be dep)ee of ageing 0 cDsolescc1ce based on anticipUled selling prices
Classifigt1ltion of El Sew(gtdy Cable Qatar WLI ali a j(lint vwture pound1 Sovedy Cables Qatar is a limited hability company whose kgal fum confers SCprm11ior bernten tbe jXliiies 10 ~he jomi lfranpement Snd the Company Itself FurthenrlOre then IS no oontractua] arrmgelTeot or any oibe aus aod circumstriliCe$ that iocik41to tht he putic5 [0 the joint flJTIlrgernelit bave rights to the ssetl and obligrtdons fo~ the liabilities of the joint ilrrongement Acoordingly El Sewed- C[jbl~s Qamr WLL is dassifiecl 7S a joiut enrtrr of he GWtp
impairment of goodwill G0oovj)1 embedded in th~ cot 0 aquisitior of subsidiaries and eqmtj-iccounled iflV(stees ire teswt for irl1jXlirmnt aHuaily Tbe calculations of value [n use fO( cfish gecj~r)lilg units (loring to real nte projecg are rtost sensitive to tin IDHowing assumpti015
Grosgt i1wginmiddot Gross Ilmrgins arc lmsed on avrage values tuhje0d in (he [Xrioo preeedhli (e siaM of the budge xnod T1esC at( mcreased over the budgel period for mticipatltX efficiency Hnprovemots
DisC)unr r(es Discount rotes represent th cl1tent mark as~ssmetlt of the risks specific te ech cash geocroting unit regarding lhe time value of money ilnd mdividu)l risks of he tmtieriyilg assets whICh have not been inwrport1eti it the Citik flow estimates The dj~(OUrl flte tlkulation is based on the speclfte circurnsthLCes of lile Group and its opltllatJng segn)~nts (md derived (ff)rC it weighted avaage (XSt 0f apilaJ (WACC) Tb fACe (akw into uoount both deb and equity The 0$1 of equity is denved from dlC expected return 01 investmenl by the Groups investors TJc Gos10( deb is based on l1e borrvwings the Gmup IS obllsxl to service SC~lletllmiddotspecific r5k IS incorxt4too by applying individual bera facto The betn mctors ire evauatcentd annuaHy bhseci on pubJicly aVflllabe murked earn
Fair value ()fnHstmeni proputies The fuit laHe 0 nvestmel~ propertis is deltrrnlnzd b cxterrwl indepzfldell property valuers laving appr0priate recognised professional quabfiillions and recenl xperience H1 the localjl)n and G-tegory 0 the oroperty being valued
Useful hes of PfQPcrly plmr (llld zqulpment The Groups management detennints th estiunted useful jives Df It~ property plan and equipmnl fix calnurjng depreciation Thi5 e~timJte is 6lermind after cinsidring 1b expeelcd usage (1f the a5sclt [hysical l101t and (eas tedmiltal Dr com~ercia obsolesccnce
Gotlg Qncen
ibe Groups mangerncnt UiS made aJ assessmeot cf the 011115 ability (0 COllllOUC liS a going conct11l Imd is satsl1ed hat me Group ms the resources to contmue in business for he foreseeable fu1urc he1hennort he management is no aware oC lny material Hncertainties that lray CH~t signinchnt doubt tlPDfl the Groups ability 10 continue as a going umcem Therefore titpound lotlsolidatcd finilllcij stftemeols comirme to be prepltd on li g0ing concern basis
Aamal Company QSc
NOTES TO THE CONSOLIDATED FlNANC[AL STATEMENTS For the year ended 3 1 December 20 13
32 INCOME TAX
Certa in subsidiaries of the Group which have non-GCe ownership are subject to income tax under Qatar Income Tax Law No 2 1 of2009 The iocome tax is charged on the share of profits attributable to non-GCe shareholders For the purpose of these conso lidated fi nancial statements the income tax liability oftbe foreign shareholders has been excluded given that the non-GCe shareholders have agreed under the shareholder agreements signed with the Group to bear the fh lliiability and make necessary payments
33 COMPARATIVE INFORMATION
Certain comparative figw-es of the previous year have been reclassified 0 coofonn to the current years presentation However such reclassifications are oat materia and do not have an impact on tbe previously reported net profit other comprehensive income or the total equity for the comparative year
The impact from the resta tement of comparative infonnalion as a resuh of adoption of IFRS I I - Joint arrangements is detailed in Note 32 Changes in aCCQu(lting policies
46
Aamal Company QSC CONSOLIDA TED ~INANCIAL STATEMENTS 31 December 20 13
Cont ents Page(s)
Lndependent auditors report 1-2
Consolidated financi al statements Consolidated statemellt f fiJ)anciai position 3 Consolidated statement f income 4 Consoli dated statement f comprehensive income 5 ConSOlidated statement f casb nows 6 Coosolidsted statement f changes in equity 7 Notes to tile consol idated flJl aocial statements 8-46
I
Tejephcgtr1e 974 4457 6444
Audit Fax +974 4442 5626
2nd Floor WEbsite wwwkpmgcomqa An2a 25 C Ring Road
PO Box 4473 Doha State ot Oatar
KPMG
Independent auditors report
To The Shareholders Aamal Company QSc Doha State of Qatar
Report on the consolidated financial statements We have audited the accompanying consolidated financial statements of Aamal Company QSc (the Company) and its subsidianes (together referred to as the Group) which comprise the consolidated statement of financial position as at 31 December 2013 and tbe consolidated statements of income comprehensive income cash flows and changes in equity for the year then ended and notes comprising a sUnUnUl) of significant accounting policies and other explanatory information
Directors refponsibifify for Ihe consolidated financial statements The directors are responsible for the preparal10n and fair presentation of these consolidated financial statements in accordance with International Financial Reporting Standards and for such internal control as the directors detemlinc is necessary to enable the preparation of consolidated financial statements that are free from material misstatement whether due to fraud or error
A ~Idilors respol1sibilily Our responsibility is to express an opinion on these consolidated financial statements based on our audit We conducted our audit in accordance with International Standards on Auditing Those standards require that we comply with ethical requirements and plan and perfonn the audit to obtain reasonable assurance about whether the consolidated financial statements arc free from material misstatement
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements The procedures selected depend on our judgement including the assessment of the risks of material misstatement of the consolidated finanCial statements whether due to fraud or error In making those risk assessments we consider internal control relevant to the Groupmiddots preparation and fair presentation of the consolidated financial statements in order to design audit procedures that are appropriate in the circumstances but not for the pUlllose of expressing an opinion on the effectiveness of the Groups internal control An audit also includes evaluating the appropriateness of accountmg policies used and the reasonableness of accounting estimates made by the management as well as evaluating the overall presentation of the consolidated financial statements
We beli eve that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion
Oplllion In our opinion the consolidated financial statements present fairly in all material respects the consolidated financial position of the Group as at 31 December 2013 and its consolidated financial performance and consolidated cash flows for the year then ended in accordance with International Financial Reponing Standards
KPM( a~_~ a~_11gtlt gtptG ~~~_WIgt~
t~roj ~alMgt iKMlti 01 bullSws
Report 00 other legal And regulaiory requirements We have obtained all the info rmation and explanations which we consider necessary for the pUipose o f our audit The Group has maintained proper accounting records aod the consolidated financial statements are in agreement therewith and we COllfirOl that the physical count of inventories was carried OUi as per the established principles We have reviewed the accompanying repon o f the Board o f Directors and confinn that the financial infonnation contained therein is in agreement with the books and records o f the Company We are not aware of any violations o f the provisions of Qatar Commercial Companies law No S o f 2002 or the tenns of Article of Association having otttured during the year which might have had a material adverse effect on the business of the Company or its consolidated finiUlcial position as at 31 December 20 13
20 February 20 14 Gopa l Balasubramaniam Doha KPMG State of Qatar Qatar Auditors Regislry Number 251
Independent auditors rep0l1 (continued) - Aamal Company Qsc
Aamal Company QSC CONSOLIDATED STATEMENT OF FINANCIAL POSlTlON AI J I December 2013
ASSETS Current assets
Cash and bank balances Accounts receivable and prepayments Amounts due from related part ies Invento ries
NOD-current lI$sft~ A vuilable-for-sal e investments Equity-accounted illvestees Investment properties Properly plaIU arid equipment
TOTAL ASSETS
LiADILITIES AND EQUITY Curnn Jj~biljtit5
Bank overdrafts ACCOUntS payable and accruals Amounts due 10 related panies Interest bearing loans aM borrowings
Non-Curr(DI liabilities
Interest bearing loans and borrowings Employees end of service benefits
TOlRllitbililits
EQUiTY Share capital Legal reserve Treasury shares Cumului ve ch8llge in fair vlIue Retained earnings
Equity attributable to equ ity holders of the pa rcnt Non-cOnlIOII ing interests
Note
5 6 7 8
9I
5 12 IJ 14
14 15
16 17
203 QR
436136756 510089839 214439950 316699545
I4 77366090
24 983 133106907
6402486000 519970890
70551588780
8532954870
6836280 445046573
48199591 749520820
J2496031264
165384481 19957976
185342 457
143494572 1
6000000000 378132552
(2075865) 4069
526628214
6902688970 1953201 79
2012 QR
36788 129 1 482281 775 171 525363 401 902873
1423 59 1302
18963 12666999 1
611 3347018 449527258
6689563 230
8113154 532
2885090 379119069 49737757
825 568489
1257310405
239276807 18111 763
257388570
1514698975
5445000000 327445101
(207 5865) (416)
638248275
6408617095 189838462
7098009149 659814551557
TOTAL IABIIITIES AND EQUITY 8532954870 811 3154532
Mohammad Rrunah i Chitf Financial Officer
The artaehcd notes I 0 33 fonn an integral pan o f these consolidlIed financial statements
3
COgtSOLIDATED STATEENT OF INCOME For tM year ended 31 Dec-mixr 2013
Not
Revelue lR Diroctcnstb 19
GROSS PROFIT
Other income 20 Markelillg and promotion expenses Geternl MO administrativcent cxpenSs 21 Dvmiation Fine nee CDS 22 Shure of profits of equityltl(COUnleci ~nvestees 9
PROFIT REVORE FAIR VALUE GAINS ON tVfSTnlT PROPERTJES
Net fuil vl1lue gltllns or lnvestne-Ilt prcpc(li~ 10
PROFIT FOR THE YEAJt
Pmiltltributnble to Equit holcefS of tift parent J(jI1~rtroing Inreres
l)3~itand diluted eanlings per share (QR) (RITnoutable 10 cqujry holders of the parerl 23
Jon QR
2122595133 _ (1702139111)
419455956
I 516688 (18995918)
(109981101) (9331061)
(44930877) __~)499901
267233582
245051107
~--~~
5068745(17
_~~ sect4JQ82 ~~Jll4lL
(L85 ~~~--
2012 QR
2(69)36372 J~~~S965i016J
41YJ6SU56
16199921 (J I L66J 47)
(25628J2) (947 3007)
(58063809-]
_~3JA0104
2J572 1006
3R3m183
_-_2d~
594892946
~~~2S14~~ zi~L
049 -~---
The zltached notes j to 33 f01111 an integral part of these tOl50hdared financial S1tltlTWpl$
Aamal Company QSc CONSOLIDATED STATEM ENT OF COMPREHENSIVE INCOME For Ibe year eoded 3 1 December 201 3
2013 QR
Profit for the year 5 12284689
Other comprehensive income Items that are or may be reclassified to profit or loss Unreatised gain on available-for-sale investments 6020
TOTAL COIVIPRpoundHENSIVE INCOME fOR THE YEAR 512290709
TotaJ co mprehensive income attributable to Equi ty holders of the parent 506878992 Non-controUing interests 54117 17
5 12290709
101 1 QR
6245 13489
109582
624623071
59489253 0 2973 0541
62462307 1
The (luached notes I 10 33 form an integral part of these consolidated fin ancial statements
~amal Company QSC
CONSOLDATED STATEMENT OF CASH FLOWS For the year ended 31 December 2013
OPERATING ACTlVlT1ES Profit fot ioc year Adjustment for
Net fuirvalle gaj0i on overncnt properties Dpreciation Provisio~ fOf employlXs end of seevielt benefits Bargac purchaslt gAin Allowance for inp~inueO of trde accomis receIvable (Proritlloss on dJsxgtsel of property piaU( 06 equiprnent Provision fot slow moving Jllvetlories lJlterest nome finance oosts Share of profit of eqUlry-accoumcd inveslces
Operaling profit ooorc working capital changes
JllvtntorifS AU(lIJJltt receiwlbk and prepaymert1S ccoums payabe And accruals ~et l)OVem1t in amounts due from and due to rdmgti panie
Cash from operation Finance coStS pltlid End of SCfVtCe benefits paid
Net Leasb from opcrling 3ctivitilt5
INVEsnXG A(T1TTIfS Xntltresl income raeivcd Proceeds from disposal of property piii1i and equipment Divicieflds reced tTom a j(im venlure Additions to inveslmeul properties Acquisition of subsitlittry net of cush Jzquired Aquisitioll from non-controlling il]tw~st Additions 10 property plant ()nd equipment
Net cash used in invltgtliing Jctivii(lS
FINAClXC ACrlVrnrs rtt moverncl1 in inteftst bearing tiJ41S al1d borrOWings ConlribIH(llS from nonconttohng interests
Net cash tlllied in)ftom hnfCncmg actiV1ies
lNeREMyen IN CASH ANn CASH EQlJlVAUVIS Detrease to casr due to 10~S of crmol of a subsidiary Increase in cash 1t5ulttd in obtaining the conh) of il-n Il$$oile
Cash and caltr quiVlenls at 1 JanuJry
CASH AND (i5iH EQttVALENTS AT 31 DECEMBER 5
NolO
10
15 20 21 20 S
20 22 9
is
20
9 10 4 4
11)13
QR
5122846amp9
(245(51101) 4lA95449
4056969
2294590 (737647)
2380611 (2$24216)
44930$77
_~499901l
34133lno
82822711 (3lH12654) 5312iL387
~82753)
4112788011 (45056522)
_t221Q7S6)
35S52q733
2824116 1274457
119921185 9568U47)
Jl~870))741
_ (141_~3464ol
(149939995) __ ~~__f)~_L
JlplusmnB699~)
643fi4ns
~~Sif99~2U1
~pound2d9M2t
2ul2 QR
6+5~30X9
(388792483) 42540J((1
4205499 (S36)743 J 1361120
178610 2208263
(2Sl4392) 5206389
(234Q350~1
32J ~n2A89 (6[90(304)
(l46739948) 136)0977
_ 62q660
312291614 (58643654)
(432095)
-14932OI5
2894]92 609659
10049971 (72719187)
l 6594 s05) (40A toDOO)
~71~9631
Q4sectS26)Jl
237n(j7n
--1113-0~OO~~__
__ 25c~f)7J33
223251515 (3090 I 7)
5OO(UtOC ~~_6pound~Ag2
64t996~ijl
The atlached iIOle~ to 33 form an integral part of Llese corsokiated financial slUlement$
6
Aamal Company QS C
CONSOUDATED STATEMENT OF CHANGES IN EQU ITY For the year ended 3 I December 20 13
Alfribulable (Q equitY hulders Q[the parent
Cumulative N OII-
Share Legal Treasllry chollgein Retained conrro lfing Tf capilal resenc shares fair value earnings Tolal inereslS equity
QR QR QR QR QR QR QR QR
Balance at 3 December 20 J I 4950000000 267955805 61 4024 670 583 1980475 14 1645505 5973625980
Boougt shares issued (Nole 27) 495000000 (495000000) Profit for the year 594892946 591 892916 2962054) 6245 13489
Other comprehensive income for the year (416) (41 6) 109998 109582
Treasury shares acquired througb business combinati on (2075865) (2075865) (2075865) Adjustmenl due to loss ofcontrol of a subsidiary (983 643) (983643) Derecognition of non-controlling interest due 10 liquicbtion of
a subsidiary 55932 55932
Transfer to legal reserve 59489296 (59489296) Con(ribUlion from non-colllrolling inte rest 59232919 592329 19
Contribution to socia l and sports activi ties fu nd ( 11612837) ( 156 12837) (1561 2837) Non-controlling interest acq uiJed without change ofcontrol (Note 4) (567208) (567208) (39842792) (404 I 00Cl0)
Balmce at 3 1 December 20 12
Bonus shares issued (Nole 27)
Profit for the year Other comprehensive income for the yeM
Transfer to legal reserve
Cootribut ion from non-controlling interest
Contribution to social and sports activities fund
544S00000Q
555000000
32 7445101
5068745 1
(2075865) (4 16)
4485
638248275
(55 5000000)
506874507
(506amp745 1)
( 12807 11 7)
64086 17095
506874507
4485
(12807 11 7)
189838462
54 10 182
15 35
70000
6598455557
512284689
6020
70000
( 128071 122
Ballnce at 31 Decem ber 2013 6000000000 378132551 (2075865) 4069 5266282 14 6901688970 195320 179 7098009149
The a(tached notes 1 to 33 fann an integra pan a fthese consolidated financial slatements
7
2
Aamal Company QSc
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 3 I December 20 13
CORPORATE IN FORMATION AND PRINCIPA L ACTlVIT IES
Aamal was funned on 13 January 2001 as a private shareho lding company with limited liability (W LL) under the COlrunerciaJ Registration Number 23245 in the Slate of Qatar On 12 Ju ly 2007 the private shareholders resolved to transfonn AamaJ into lt) Qaari Shareholding Company (O SC) (the Company) Accordi ngly the Company was listed on Qatar Exchange on 5 December 2007 The Companys registered office is at P O Box 224TI Doha Sttlle of Qatar
The Compaoy is organised inlo a head office (Aamal) cllld branches and operates in the State of Qatar The fo llowing table sets out the principal activi ties of the branches
Brancb Principal aellvities
C ity Center Qatar Branch Leasing the facilities of the re tail outlet complex in Ci ty Cen ter Doha
Aamal Real Estate Branch Residential and commercial real estate investment and property rentaL
Aamal Readymix Branch Production and sale o f readymix concrete
Ebn Sina Medica l Braoch Wholesa le and retail distribution of phannaceulicals aod general consumable products
Aamal Medical Branch Wholesale d istribution of medical eq uipment
Aamal Trading and Dis tributioo Sale of tyres lubricants batleries and home applian~s
Branch
Amnal Servi~s Branch Providing facilitie s management arld cleaning services
Aamal T ravels Branch Operating a travel agency
Aamal fur Indus trial Projects lndusllial investments Branch
Good Life Phannacy Branch Sale of phannaceuticals baby care products medicine and general cOllsumable products
Foot Care Center Branch Sale of footwear clinical activities and general commercial tradillg products
The consolidated financial statements were authorised for issue by the representatives of the B03Id of Direclors of Aamal Corupaoy QSc on 20 February 2014
BASlS OF CONSOLIDATION
The consolidated fioancial statements comprise the fioancial statements of AamaJ Company QS C (the Company) and its subsidiaries and joint controlled entity (together referred to as the Group)
Subsidiaries Subsidiaries are enli ties controlled by tbe Group The Group controls an entity when it is exposed to or has rights 10 variable returns of its involvement with the entity and has the abili ty to affect those returns through its power over tle entity The fi nancial statementS of subsidiaries are induded in the consolidated finarlcial statements ITom the date on which control commences unti l the date on which control ceases When the Group loses control over a subsidiary it dereognises the assets aoo liabilities o f the subsidiary and aoy related non-cootrolliog interest and other components of equity AllY resulting gain or loss is recognised in consolidated statement of income Any interest re ta ined in the fonne r subsidiary is measured 01 f3i r value when control is lost
8
2
Aamal Company QS c
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 31 December 2013
BASIS OF CONSOLfDA TiON (continued)
Subsidiaries (continued) Set oul below are Ihe Group s principal subsidiaries at 3 1 December 2013 Unless oUlenvise slated the subsidiaries as listed below have share capital consisting solely of ordinary shares wh ich are held directly by the group and be proportion of ownership intereSIS held equals 10 the votiug rights held by Group Tbe country of incorporation Of
registration is also their principal place of business
Comp(my name
Aamal Cement Industries W LL
MO Qat1 Company WLL
Senyar Indus tries Qatar Holding WLL
Doho Cables Qaw WlL
EccoGulf Compaoy WLL
Advanced Pipes and Casts eompmy WLL
Johnson Controls Qatar WL L
Country 0 lJCQr por ation
Qator
Qatar
Qatar
Qatar
Q 31ar
Qatar
Principal (lcfi ity
Development and mlUlagement of factori es and the prodllaion or curb sl~ne i llleriook slabs lIId cement bricks
Construction and repai r of power plant es tablislunent and man3gemenl of industrial enterprises aud ac ting as a representative for the imcmatiOllru companies
Management of subsidiaries and associates ovming of palen~ businesses and subleltiug Ulem and provision of investment port fo lio management for Its
subsidiaries and Msocialts UOkr the shareholders agreement signed between the Group and the other
shareholders the Group is able 10 appoint the chai rman and two other members 10 (he Boflrd of Direc tOfS (out of six members) and is able to govern the fin ancial and operating policies of Senyar Industries Qatar Holding WLL Accord ingly ~ company is considered as a subsidiary oCthe Group
Mailltenance and mallllfacture of electric cables equipmelll and lools Doha Cables QalaJ WLL is
91875 (eITectively) owned by Senyar hldush es QaUlr Holding WLL a subsidiary of tllC Group TIIe Group has (he power indi rectly through SenyM [ndus tJi cs Qatar Holding WLL 10 govern fi nancial and opera ting policies of Doha Cables Qatar WLL and accordingly the company was considered IS a subsidiary ofthe Group
OITers professional and bus iness process outsourcing and Cll )] center services
Manufacturing of Wide cement md amplass reinforced pipes systems for infrsslICture (lnd pipeline projects
The Gro up h~ the power 10 govern ~lot financial and opera1 ing policies or Adv3I1ced Pipes and Casts Company WLL by virtue of a sllarchokJers agreemeot TIlus the Company has been cotls ldcrOO as II subsidiary of the Group
Provision of racililies management service5 energy se-rvices md building maimetlaoce and cleanlg services to corporate cl icn1S
PlOporl ion oj
oWPersllip held by the
Non
Group COnroiling interest
99 1
60 40
50 500
459 54 J
5 1 490
50 50
51 49
9
2
Aamal Company QSC
OTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For toe year ended) J December 2013
BASIS OF CONSOUDA nON (continued)
Suhsidiaries (wntiourd)
Cmmffyoj fNgtpvniOil j irniJpvroliin ~__~ampiphdd~~
Nor G)1)Ji contfoifgtg
iMeregt
CmiddotSan TI~ing WLL Sdilamp lYJy1ng renting me Mltcentlopil12 [e~ tSite 30 invimenl w shams rnlilVigemc1t vf real lsta propeItilttl owning ille palent and tradcentmut and tnlding in iXjUiflfIfflt amJ vcilici$ 1he GroClp has tJe pcwer tv goem 6e ~inr8hl and ojJrtltllng
roicie_~ of ClSM by vifcle 0 a shlrcholdcrs 191e~mcentn(
745 25 1~i
nnoV1iv lightinf wmpany Qatar TNriing of Ught 2rrt1nz DiDd lEU Lwpj lmd 7r J) WLL olhT $hlil1g prrltwl
Twdiflg of of4 SiJpplk-s and providll$ prindna and 65 35 laniniltmJ sltrce~
Non-coufroUing illterests Non-controrling intel(SlS are measwed tj tleir propO(hOnile $hue Ot the tcquirees identifiabk net asscl III the JCqUiSlOt1 rote Chuegts in t1e Groups imcest in i $ubsiciwty hat do tot rcmltlo a loss of ~)I1a1)l xc accountd for as equity trnramplclions
Tamil-crions eUminnted on c)lwtidaticu lntngtgroup baiances Jue transactions 00 any unrealised income 1nd expenses ari$tng from intrnwgrOU tranSaOiQlls arc eiimmatcd UfiJeaiiHd gaina arising from ITaUstlclions ttlt equity-lKcoUl11uJ IlVtSlCCS are eliminatd 1gamst the investment 10 the extent oftlle Group interest in the inveMee Umaslised loses are eiiminatd II the same VllY us unrvalised gains hit only to Ille eXfeut that there is 10 evidence ofimpaimcentut
Illttn~ts in jOint arrangements iu)d associates Detais ofeach of ttc Groups Hutilrial Joint venlU)s fujltj assoeime~ at the end of the reponing period are 5 [OHOViS
Cmnirycgt PltJporlion qf Compao name infOjwNiIIO1 ewonlup Qltd
vOingjYwer htld by
tiff GrOlp
[I Sewed Cable QntM Tndllg in ele(mHnechmita CGlJ)ptnefllmd plOvicmg WLL rei) services El SWNed Cables )ilMr WLL is
49 JWoo (Wilt 55 tblre of rrofils (losses) hy StHyar lrdl11(rie~ Qal3t Hodirg WLt e 511b8idimy 0 ~he GOllp However (kw 10 ~ feiBtil shareholdergt agreewli pound ellWY has I~)mc a jOm vent( eTdive trmJ l January 20 wllkh is mC(t511rec Il1de the eqJity ngtU1l
rins $tngtdJBI S~ 1idJgt (law Ertity lS engaged l sled (b[iclli0ls Gf0Jp mtllpoundure Ea LC t11cent fl5sodau under cquhy nlctooo
Aamal Company QS c
NOTES TO THE CONSOLIDATED FlNANClAL STA TEMENTS For the year ended 31 December 2013
3 BASIS OF PREPARATION AND SUMMARY OF SfGNlflCA1T ACCO UNTING POLICIES
31 BASIS OF PREPARATION
The consolidated fi nancial statements have been prepared in accordance with lntema tional Financial Reporting Standards (IFRS) and the appLicable requirements ofQalar Commercial Companies law No5 of 2002
The consolidated financial statements have been presented in Qatari Riyals (QR) which is he Companys floclional and presenUll ion currency and have been rounded to tlle nearest Qatari Riyal TIle consolidated financial statements are prepared lUlder the historical cost convention modified to include he measurement a l fair value o f investment properties and available-for-sale investments
32 CHANGES IN ACCO UNTING POLICI ES
The [lccoWiting policies adopted are consistent wilh Ihose of the previous fi nancial year except for the following standards effe ctive for the annual period beginning on or lfter 1 Jlnuary 20 13 These standards and amendments other tM n the impact of (FRS II - Joint Arrnnge menlS noted below did not have aoy malenal impact to the Group
lAS I (amendment) - Presenfalion of items ofother comprehensive income The amendments to IAS I require that an emity present separate ly the items of ltN her comprehensive income that would be reclassified to profit or loss in the future if certain conditions are met from those that would nC ver be reclass ified to profit or loss
lAS J9 - Employee benefits (201) lAS 19 (201 1) changes the definition of short-tenn and other long-tenn employee benefits to clatify the di stinction between the two
lAS 28 (201 f) - fnvesfmem in Associates and Joint ventires lAS 28 (2011 ) supersedes lAS 28 (2008) lAS 28 (2011) makes the foHowing amendments Associues held for sale JFRS 5 Non-current Assets Held for Sale and Discontinued Operat ions applies 10 an investment or a portion of an investment in an associate or a joint venture that meets the criteria to be classified as held fo r sale For any retained portion of the investment tlwt has not beell classified as beld for sale the entity applies the equity method until disposal o f the portion held for sa l ~ After disposal any re tained interes t is accounted for using the equity method if the re tained interest continues to be an associate or a joint venture and 0 0 cessation of significant influence or jo int conltOl even ifan investment in an associate becomes an investment in a joint venture or vice versa Ihe entity does not fe-measure the retaincd interest
Amendments ft) fFRS 7on ofseftingjil1ancial assels and jinancialliabilities (2011) Disclosures - O ffsetti ng Financial Assets and Financial Liabilities (amendmems to FRS 1) introduces disclosures bout Ihe impact of oetting arrangements on an entity s fin ancial position Based on the new disclosure requirements the Group has to provide inforroation about what amounts have been offset in the consolidated statement of fimmcial position and the nature and extent of rights of set o ff under master netting aITlngements or simi lar a1Tlngernents
fFRS 10 - Consolidate1 financial SIOlemenlS and lAS 17 Separate Fillancial SfalemenS (2011) [FR S 10 introduces a single control model to determine whether an investee should be consolidated FRS 0 replaces the parts of previQlSly exis ting lAS 27 Consolidated and Separate Financial Statements that dealt wi th consolidated fin ancial statements and SIC-12 Consolidation - Special Purpose Entities This new contro l model fo cuses on whether the Group has power over an investee exposure or righlS to variable rerums from its involvement with the in veSlee lnd abili ty to use its power to affect those returns The Group has amended its accounting policy on consolidation in line with requirements of TFR S 10 and has re-assessed its consolidation conclusion
[FRS 12 - Disclosures ofimerests ill other entities IFRS 12 brings together into a single Sfandatd all the disclosure requirements about an enti ty s interests in subsidiaries jo int arrangements associates and unconsolidated structured entities It requires the disclosure of infonnation about the nature risks and financial effects of these interests
II
Aamal Company QSc
NOTES TO THE CONSOLIDATED FTNANClAL STATEMENTS For the year ended 3 1 December 201 3
3 BASIS OF PREPARATION AND SUMMARY Of SIGNIFICANT ACCOUNTrNC POLICIES (continued)
32 CHANGES IN ACCOUNTING POLlc ms (coDtinued)
IFRS IJ Fair ~alue measuremetll TFRS 13 provides a single source of guidance on how fair value is measured and replaces the faif value measurement guidance tha i is currently d ispersed thIo tlghool [FRS It unifies the definiti on of fair va lue as the price that would be received 10 sell an asset or paid to transfer a liability in an orderly transaction between market participants a t the measurement dale It replaces and expands the disclosure reltjuiremenlS about fair value measurements in other IFRSs including TFRS 7
Improvements (0 IFRSs (20 ) Improvements to IFRS issued in 20 11 contained numerous amendments to IFRS that the IASB considers nonshyurgent but necessary Improvements to lFRS comprise amendments that result il) accounting changes to presentation recognition or measurement purposes as well as tennioology or editorial amendments related to a varie) of individuallFRS standards
During the period the Group has adopted the fo llowing new s tandard which became effecti ve for the annual periods beginning on I January 201 3 which had a materi81 impact to ule Group
IFRS II Joint AlTwlgements As a result of adopting IFRS II the GrOlp has changed its ltlccoUJ)ting policy for interests in jo int a rrangemeots Uuder rFRS 11 the Group classifies its interest in jo int arrJngements as e imer j oint operations or joint ventures depending on the Groups rights to the assets and obligations for the liabil ities ofthe arrangements When maldng this assessmenl the group considers the strucltire of the arrangements the legal fonn of any separate vehicles the contrac tual tenns of the arrangements and other fact s and arrangements Previously the structure of tbe a rrangement was the sole foc us of classification The Group has re-evaluated its involve men t in ils o nly joint a rrangement El Sewedy Cables Qatar WLL ltlnd has recla ssified the investment from jointly controlled entity to joint venture Also the Group has discontinued with re rrospective effect the use o f the proportionilte consol idation method and adopted the equity method to account for joint venture in accordance mth IFRS I I
Summary oquulllitative impuct The following tables summarises the materia l impac ts rcsulting from the above change in accounting polic ies on the Groups financ ial position profit o r loss and cash flo ws
Effect of chnnge in 31 Decemb er2012 accounting policy
Cunem assets (278 880441 ) Non-current assets 1295 1346 Total assds (265929095)
Current liabilities (265072694) NonmiddotcWTent liabilities (856401) Total lin bill ties (265929095)
For the year ended 31 December 2012
Profit for the year
Net chflllge in cash and cash equivalents dlUing the year (99696J)
12
Aamal Company QSc
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 3 I December 2013
3 BASIS OF PREPARATION AND SUMMARY OF SlGNlf[CANT ACCOUNTING PO LICI ES (continued)
33 lASB STANDARDS AND lNTERPRETATIONS ISSUED BUT NOT ADOPTED
The following lASB standardsamendments hJve been issued but are not yet mandatory and have 1l0( been etrly adopted by the Group
Standard
Illterpretotion COnem EffeClive dale
TfRS9 Financia l InstrumentS (new standard) I Januruy20 17
IAS 32 Financia l Instruments O ffsetting (amendment) I January 20 14 JAS 36 Financia llnslnnnents Disclosure - non-fi nancial asse ts (amendment) I January 2014
The Group is considering the implications of the above standards and the till1ing (If adoption by the Group
34 SUM MARY OF SIGNIFICAJT ACCOUNTING POLICI ES
Bu siness combinnriO llS The Group accounts for business combinations using the acquisitio n method wben connol is Imasferroo to the Group The consideration ITansrerred n the acquisition is generally measured at fa ir value as are the identifiable net assets acquired Any goodwill that arises is tested annua lly for impairmeot AllYgain on a bargain purchase is recognised in pro fit or loss immediately Transaction COStS arc expensed as incurred except if rehated to the issue of debt or equity securities
The considera tion transferred does nOt include amounts related to the settlement of pre-existing re lationships Such amounts are recognised in profit or loss
Any contingent consideration payable is roeasured at fair va lue at the acquisition date If the contingent consdicrntion is classified as equity then it is oote nmeasured and settlement is accounted for within equity Otherwise subsequent changes in the fa ir value of the contingent consderafion are recognised iu profit or loss
Cash a nd eash equivalen ts For the purpose of the consolidaled statement or cash flo ws cash and cash equivalents consist of cash and bank balaoces ruld short teJTIl bank deposi ts wi th an original marurily of three months or less net of outstanding bank overdrafts
Accounts receivable Accounts receivable are stated at originill invoice amount less an allowance for any uncollectible amounts An estimate for doubttit debts is made when collection of the flilt amount is no longer probable Bad debts are wntlen off when (here is no possibility o f recovery
Inventories Inventories are stated at the lower of cost and net realisable value Costs are those expenses incurred in bringing each product to its present location and condition
Goods ror resalework in progress - Cost of di rect materials aJld labour plus attributable overheads based on a oormallevel ofac1i vity
Raw material and spare pan s PlIlchase cost on a weighted average basis
Net realisable value is based on estimated selling price less any further costs expocted to be incurred to completion and disposal
13
Aama Company QSc
NOTES TO THE CONSOLIDATED FINANC IAL STATEMENTS For tbe year ended 31 December 20 13
3 BASIS OF PREPARATION AND SUMMA RY OF SIGNIFICANT ACCOUNTfNC POLI CIES (contin ued)
34 SUMMARY OF SIGNIFICANT ACCO UNTLNG POLICIES (continued)
Interests in equity-aecoupled inveslecs The Groups interest in equity-accounted investees comprise interest in associates and joint venture
Associates are lhose entities in which the Group has significant influence but not control or joint control over the financia l and operating policies A joint vennu-c is an arrangement in which the Group has jo int ool1lrol whereby the Group has rights to the net assets of the arrangement rather thall rights to its assets and obugations for its liabilities
InlereSIS in associates and the joint venture are accoliDted for using the equity method They are recognised initially tit cost which includes transaction costs Subsequent to ini tial recognition the consolidated financ ial stateme nts ioc lude the Groups shrre of the profit or loss and other comprehensive income of equity-accounted investees unti l the dalc on which significant in Lluence or joint control ceases
The reponing d~les of the equity-accounted investees and the Group are identical and the equi ty-accounted investees accoWlting policies confonn to those used by the Group for like tmnsactions afld events in similar circumstances
Investmefl t properties umd aod buildings are considered as investment properties only when they are being held to earn ren tals or for capital appreciation or fo r both
Investment properties are measured ini tia lly at cost including traosaction costs and borrowing costs that are directty attributable to construc tion o f the 8sseL The carrying alRount includes the cost of replacing part of an existing investment property at the time that cost is incurred jf toe recognition cri teria are mel and excludes the costs of day-to-day servic ing of an investment property Sub~quent to inilial recognition investment propert ies are slated at fa ir value which reOects market conditions at the reporting date Gains or losses arising from changes in the fa ir values of investment properties are included in the consolidated statement of income in the yeltl r in which they arise
Investment properties are derecognised when either they have been disposed off or when the investment property is pennanently withdrawn 1T0m use and no fu ture economic benefit is expected from its disposal Any gains or losses on the retirement or disposa l of aD investment property are recognised in the consolidated statement of income in the year of retiremeOl or disposal
Property under construc tion is dealt with under lAS 40 and rttorded at cost less accumulated impairment losses until either its fair value becomes relia bly detenninable or cons(TUction is completed (whichever is earl ier) At that time it is reclassified as inves tment property and a fa ir value adjustment is recognised in the consolidated statemenlof income
Transfers are made to or fro m in vestment property onl y when there is a change in use For a transfer from investmen propeIT) to ovmer occupied proreIT) the deemed cost for subsequent accounting is the fair value at the date of change in use If owner occupied property ~omes an investment property the difference between the canying value aoo the fair value at the date oflransfer is rttognised as a revaluation reserve in the equity and is released to the consol idated sta tement of income llpon disposal of such propcny
14
Aamal Company QSc
NOTES TO THE CONSOLIDATED FrNANCIAL STATEMENTS For the year eDded 31 December 20 13
3 BASIS OF PREPARATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLI CIES (continued)
304 SUMMARY Of SIGNIFICANT ACCOUNTING POLICIES (continued)
Property plant and equipment Property plant and equipment is stated at cost including borrowing costs that are eligible for capitalisation and excluding the costs of day-to-day servicing less accumu lated depreciation and any imp~innem in value
Depreciation is provided on a straight line basis on all propelT) planl and equi pment The rales of depreciatioo are based upon the following eSImnelt useful lives
Buildings 20 years Leasehold improvements 2-8 years Truck mixers and motor vehicles 4-1 5 years Plant and ITIJchioery 8-2 5 years Furniture fixtures and office equipment 3-5 years Computers and related software 3-5 years Capital work in progress Not depreciated
The carrying amounts are reviewed for impain nellt when events or changes in circumstances indicate that the carrying value may not be recoverable If any such indication exists and where the carrying values exceed tbe estimated recoverable amouot the assets are wri tten down to their recoverable amount being the higher of their fair value less costs to sen and their value in use
Expendirure iocurred lO replace a component of an item of property plaot and equipment that is accotmted for separately is capitalised and the carrying amount of the component that is replaced is written off Other subsequent expenditure is capitalised only when it increases furure economic benefits of the related item of property plant and equiproent Al l other expendirure is recognised in the consolidated statement of income as the expense is Incurred
An item o f property plaot and equipment is dereeognised upon disposal or when no future economic benefi ts are expected from its use or disposal Any gain or loss arising on derecognilloo of the asset is iocluded in the consolidated stalemeot o f income io the year the asset is derecognised
The asset s residual values useful lives and method of depreciation are reviewed and adjusted if appropriate at each rnancial year end
Borrowing costs Borrowing costs direc tly attributable to the acquisition constmction or production of an asset that necessarily takes substalltjal period of time 10 get ready for its intended use or sale are capilalised as pan of the cost o f lhe respective assets All other borrowing costs are expensed in the year they incur BOlTOwiog COSts consist of the interest and other costs that the Group incurs in coomction with the borrowing of fund s
Accounts paytlble and accruBls Liabilities are recognised for amounts to be paid in the fuMe for goods or services received whether billed by the supplier or not
Interest bearing loans Bnd borrowings Interest bearing loaos and borrowings are recognised ini tiaJy at fai r value of the amounts borrowed less direc tly attributable transaction costs Subsequent to initial recognition interest bearing loons and borrowings are measured at amortised COSt using the effecti ve interest method with any differences between the cost and tinal settlement values being recognized in the conso lidated statement of income over the peliod of borrowings Instalments due within one year aI amortised cost are shown as a ctuTentliabiliry
Gains or losses are recogTlised in the consolidated sialement of income when (he liabililies are derecognised Interest relating (0 imerest bearing loans and borrowings is expensed in the year in which it is incWTed e(cept those qualify for capitalisation
15
Aamal Company QSC
NOTES TO THE CONSOLIDATED FfNANClAL STATEMENTS For tbe year eoded 31 December 201 3
J BASIS OF PRpoundPARATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
34 SUMMARY Of)SIGNIFICAtlT ACCOUNTING POLICI ES (continued)
TClaot deposits Tenant deposit liabilities are initially recognised at fair value and subsequently measured at amortised cost where material Any di fference between the initial fair vllue and the oominal amount is [eluded as a component of rental income and rocognised on a straight-line basis over the lease term
Derecognition or fiolocial nsstls and liabilities
a) Financial assets
A fi nanCIal asset (or w~re apphcabJe a part of a fin ancial asset or part of a group of SImilar financIal assets) IS derecogmsed where J bull The n ghts to receIve [5h flo ws from the asset have expIred bull The Group has trans f rred Its rights to receive cash flows from the ass or has assumed an obhg811On to pay the
reltelved cash flows I full Wlthout mfl tenal delay to a third party under a pass-through arrangement and elther (3) the Group has Ira sferred substantially aIthe nsKs and rewards of the asset or (b) Ihe Group has neuher transferred nor relain substantially ai the n sks and rewards of the asset but has tnlnsferred control of the asset
When the Group has tTa~fened its rights 10 receive cash flo ws from an asset or has entered into a pass-waugh arrangement and has nejlher trmsferred nor reta ined substantially all of the risks and rewards of the asset nor trnnsferred control of the asset the asset is recogoised to the extent of the Groups cOlilinuing involvement in Ihe
In that case the Group at 0 recognises an associmed liability The mnsferred asset and ihe associaled liabi lity are measured 00 a basis thai flects Ihe rights lnd obligations that the Group has retained Continuing involvement that takes the form of a guara tee over the transferred asset is measured at the lower of the original canying amount of Ihe asset and fbe maxim amoun o f consideration that the Groop could be required to repay
b) Financialliabiliti
A financial liabili ty is defogniSed when the obligation under the liabil ity is discharged or cancelled or expires Where an existing fio8 1lci I liability is replaced by another from the same lender on substantia ll y d ifferent lenns or the terms of an existin liabili ty are substantia lly modified such an exchange or modification is treated as a derecognition of the orig~al liabili ty and the recog1Jitioil of a new liability and the dirference io the respective carrying amounts is reco ised in the consolidated Slatement o f income
Impalr meot ood uncollec ibility of fina ncial assets An assessment is made al each repon ing date to determine whether there is objective evidence that a speci fic financial asset may be impaired If such evidence exists allY impainneOl loss is recogoised in the consolidated statement of income ImT t is detemtined as fo llows
(a) For assets earned a t fair value impainnellt is tbe difference between cost and fair va lue (b) For asseamp carried at COSt impairment is the difference between cost and lIle present value of future
cash flo1S discounted at lhe current market rate of rdurn for a simi lar finan cial asset (0) For asseq carried al amortised COSt impainneot is the difference between canying arnOWll and lhe
present Value of future cash flO M discowlled at the original effective iDlerest rate
Provisions Provisions are rewgnised hen the Group has an obl igation (legal or COnslnlctive) aris ing fro m a past event and the costs to settle the obl igalio are both probable and able to be reliably measured
16
Aamal Company QSc
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 31 December 2013
3 BAses OF PR EPARATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICI ES (colltinued)
34 SUMMARY OF S IGNIFICANT ACCOUNTING POLICIES (continued)
Employees eod of service benefits The Group provides end of service benefits to all employees in accordance wi th employment contracts and Qatar Labour Law The entitlement to these benefits is based upon the employees final salary aocl length of service subject to the completion of a minimum service period The expected costs of these benefits are accrued over the period ofemployment
Revenue Revenue is recognised to the extent thal it is probable that the economic benefits will flow to the Group and the revenue call be reliably measured Revenue is measured al the fair value of the consideration received excluding discoWlIS rebates and duty The following spec ific recognition criteria must also be met before revenue is recognised
Sale ofgoods Sales are recognised whcn significant risks and rewards of ownership of the goods have passed to the boyer and the amount of revenue cao be me3sured rcli3bly
Rental income Rental incorne from investment properties is accoWlted for on a time proportion basis over the period of tenancy Incentives for leases to enter into lease agreements are spread evenly over the lease teon even if the payments are not made 0 0 such basis Income arising Tom expenses recharged to tenants is recogn ised in the year in which the expenses can be contrac tually recei ved Service charges aud other such receipts are includcd gross o f related cosls in revenues as the Group acts as principal io this regard Premiwns received to terminate leases arc recognised in the consolidated statement of income when they arise
Service income Service income is recognised when the service is rendered and the outCQrne of the transactions can be estimated reliably
COlimission Commission is accounted for on an accrual basis when the right 10 receive the income is established
become on tra~el agencies [ncome on travel agencies is accounted for in the year in which the airline tickets are sold
IIIeresr income Joterest income is recognised as the interest accrues using the effective interest Clle method
Foreign currencies Transactions in foreign currencies ate recorded al tbe rale ruling at the date of the transaction Monetary assets and liabi lities dcoomioated io foreign currencies ace retranslated ill the raLe of exchange ruling at the reponing date All differences are recognised in the Statement ofinconlC
Use of estimates The preparation of (he Groups consolidated financial sta temenls in CQnfonnity with Intemltional Financial Reponing Standards ([fRS) requires management 10 rnake estimates and assumptions that affect the reponed amounts of assets and liabilities and disclosure of contingent asscts and liabili ties at the rcporting date and the reported amoUlils of revenues and expenses during Ihe reponing period Although these estimates are based on managements best knowtedge of current events nnd actions acnm results may ul timately differ fro m those estimates (Significant asswnptions nccounting judgments and estimates used in preparing these coosolidated fina ncial sta temenlS are disclosed in Note 31)
The estimates and underlying assumptions are reviewed regularly Revisions to accounting estimlIes are recognised in (he period in which the estimate is revised if the revision affects only that period or in th~ period of the revision and future periods if the revision affects both current and fu ture periods
17
Aamal Company QSC
NOTES TO THE CONSOLlDA TED FINANCIAL STATEMENTS For tbe year cnded 31 December 2013
3 BASI S OF PREPARATION AND SUMMARY OF SrGNIFICANT ACCOUNTING POLICIES (continued)
34 SUMMARY or SIGNIFICANT ACCOUNTING POLI CIES (continued)
Fair va lues A number of Groups accounting policies and disclosures require tJ1 C measurement of fair values for both financial and non-financial assets and liabil ities The Group has an established control framework with respect to the measuremeot of fair values When measuring the fair value of an asset or a liabili ly the Group uses market observable data for (be valuatiOD Fair values are categorised into different levels in a fair value hierarchy baCd on the inputs used in the valuation lechniques as follows
i) Leve l I - Unadjosted quoted prices io active markets for identica l assets and liabilities ji) Level 2 - Otheqobservable inputs not included within level 1 of the fair value hierarchy ii i) Level 3 - Unobtervable inputs (including enti ty s own data which are adjusted if necessary to retlect the
assumptions market participnllts would use in the circumstances) The Group recognises tralnSfers between levels of the fair value hierarchy at the end ofthe reporting period during which the change has ocdWTed_
Treasury shares When share capitl recognized in equity is repUIchased (by the Company or any of its subsidiaries) the amount of the consideration paid which includes direa ly altributable COSIS is recognized lIS a deduction from equity Wheo treasury shares are sold or reissued subsequently the amount received is recognized as no increase in equity and the resulting surplus or deficit on the transaction is presented io share premium
18
4
Aamal Company iQSc
NOTES TO THE ONSOLlDATED FINANCIAL STATEMENTS For the year ended 31 ecember 201 3
BUSINESS CO~BlNAnON
Acquisition o f Culf ROks Company VLL On 1 January 2012 the roup acquired 51 oflhe voting shares of Gulf Rocks Company WLL (Gul f Rocks) a limited Iiabiliry campan incorporated in Qatar and registered UJKier conunercial registration number 2249) The acquisition was made thT ugh Ci-San Trading WL L a subsidiary which is 50 owned by Aamal Group
I
The fai r val ue of lbe ideltifiable assets and liabilit ies of Gulf Rocks Co mpany WLL based on purchase price allocation exercise condlcd by tbe management as at the date of acquisition WJ S as follows
Fair value recognized on
acquisition QR
Assets I Cash and bank balances 14005495 ACC QUOiS receivable and wePayments I 749383 Amouots due from related plrties I
I oveotones
48311 190 5124 270
Available for sale investm~nlS 1985245 Plant and equipment 6769 17
81852500
Liabilit ies Accounts payable aJld accll1als 4724446 Amounts due to related parties 385070 Employees end of serviccibenefits (Note 15) 349272
5458788
Total identifiable net a5sellf
Purchase consideration trasferred Non-controll ing intereSt az-ising on business combination Bargain purcha5c gain rc~u ting from the tcquisilion
Allalysis ojcash flows OIl acquisition Net cash acquire11 Nith the subsidiary 14005495 Cash paid (30600000)
(16594505)
On I September 20 12 the Company acquired the balance 49 nfthe equiry of Gulf Rocks Accordingly the Group has 74 5 effective holdin4 in Gulf Rocks as at the reporting dale The excess nfthe purchase cons ideration over Ihe fair value o f net assets of GuJf Rocks acqui red from the nnn-controlHng interest has been recorded directly in the retained earnings of tbe Gr6up as at 31 December 201 2
QR Purchase consideration 404 10000 Less fuir value of oet asset~ acquiroo from the non-controlling Interest holder (39842792) EXce5s of purchllse cons idf ration over the fair value of net assets a(q uired 567208
19
5
Aamal Company QSC
NOTES TO THE (WNSOLlDATED FfNANClAL STATEMENTS For the year eoded 3 ) December 2013
CASH AND CASH EQUIVALENTS
For the pmvose of consolidated statement of cash flows cash and cash equivalents comprise the fo llowing balances
lon 2012 QR QR
Cash and bank accounts 330333904 282272895 Short lenn bank deposits 105802852 85608396 Cash and bank balances 436136756 367881 291
Bank overdrafts (6836280) (2885090)
Cash and cash equivalents 429300 476 364996120 1
The short tenn bank deposits are made for varying periods between one day aod three months depeoding on Ibe immedifltc cash requirements of the Group and earn interest at the respective short term deposit ra tes
6 ACCOUNTS RECEfVABLE AND PREPAYMENTS
2013 2012 QR QR
Trade aCColUlts receivable 411 011 567 345260657 Advances 0 suppliers and prepayments 50787921 629389J 5 Retention receivables 36217081 56943030 Other receivables 12073270 17 139173
5tO089839 4 82 28 1775
As at 31 December 2013 trade accountS receivoble amoWlting to QR 2690 1412 (201 2 OR 24984025) were impaired Movements in the allowance for impairment of trade aCColmts receivable were as follows
2013 202 QR QR
At 1 January 24984025 1 877085 Charge for [he year (Note 21) 2294590 13613 120 Amounts wriuen off (19949) (117368) Unused amotmts reversed (357254) (388812)
At 3 t December 26901412 24984025
20
6
1
lamal CompanyQSC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMEltS For the year ended 3 J December 2013
ACCotNTS RECEIVABLpound AND PREPAYMpoundNTS (contillued)
As at -1 I Dtcemxt the ageirg of unimpaired (ltlde accounb iltcivabk was as follows
P(HI duo
nor Up to 30 31-60 61middot90 Yi-jSj gt flO Tota impoirlt-fl days days days day doys
QR QR QR QR QR QR QR
1l13 411OJl$67 25l981960 32312165 2140966 19351fi43 16f)76888 60148545 2012 345260657 1695159B6 493lt)8566 2356$954 19494369 16908414 66374363
1JJJirtpai~ed receivable are expected no th bil5tS of past experienn) 10 be fully fcCi)evbc H is not the pngtctlce ofthcent Group to oblum collaleral over recejvablcI_
AMOLNTS DUE FROyl REL-TEO PARTIES
Name
AI ~aisnl Holding Company V_LL E Seweo Cabtes Qatn WL L Cnild -ftt Cvmlllny Al hz Retll E$vt rWesnnim Company WLL~ AllaZi Real Estale BrAnch EI Sewedy Electric Egypt WLL MuincrDJ1Ce Mwagmvont Group Qat3r W LL Good fe Cheffilt - The Pcarl
BuderPhtrnacy Al Faisallnlemadonal Tnl(i and Investment Company WLL AI-rabia Land Trnr~PQltit1g Company rLL ro Sewedy CabLes - Kuwuit Gcentttco hlttrnJmJilI Frijns StHytural Steel Middle East WLl Winer Wunderand Company WLL Al FtOH1H for Investment amp llllemtiOl1a Trading COntpAny WJ_L Q)lar Bahrain lmerOlnionai Cnero3 WLL Gulf EngJisb Sltl-Qo] Al Rayyao Tourism lve$lrnent Company W LL Other relater purties
2013 2012 QR QR
15412-1064 ll941Y70 34644615 ~li96858l
[()0405 14-45012 51 59197 9538116 15514113 4014727 236824$
1867526 LSOfd22
8(1012 10435r 311650 746395
15023 204450 459829
2iYHi 244940 186750
152170 143440 33500 7768(1
6259 1459lt) 758962-1
__2~61g~~_ 1~95Ji
bull 214109950 171525363
--__ shy
7
8
9
Aamal Company QSc
NOTES TO THE CONSOLIDATED FfNANClAL STATEMENTS For the year ended 3 1 December 2013
At10(JNTS DUE FROM RELATED PA RTIES (continued)
NO les (i) Transactions witll related parties are eam ed out through open account and Directors do not consider any
receivables to be past due or impaired
(ii) Related party transactions ore disclosed ill Note 26
INVENTORIES
Goods for rew le Raw materials and spare pans Work in pTOgresS Goods in transit
Less Provision fOI obsolete and slow moving invenlories
1013 QR
165499699 38388307 19944678 9671 8553
320551237 (3851692)
31 6699545
Movements in the provision for obsolete and slow moving inventories were as follov~
At I January Charge for the year (Note 19) Reversals Amounts wri tten off
At 31 December
E QUITY-ACCOUNTED INVESTEES
TIle Group has the followiog invesllnenfs in equity-accounted investees
Interests in joint venrure Interests in associa tes
At 31 December
G roup s snare of profits fr om the equity-ncco unted iovcstees arc AS follows
Profit share from in vestment iojotnt venture Profit share from investment in associates
202 QR
232597650 36608394 30622960
10521 9695
405048699 Q 145826)
40 I902873
203 QR
3145826 1 380617 (535695)
( 1139056)
385 1692
20 12 QR
2795992 2208263 (137995)
( 1720434)
3 145826
2013 QR
2012 QR
129462184 3644723
124124803 2545188
133106907 12666999 1
17330368 22869454 1169533 534050
18499901 23403504
22
10
Aama Company QSC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 31 December 201 3
9 EQUITY-ACCOUNTED INVESTEES (continued)
Counlry of incorportllion
Relationship Proportion ofownership and lotilfg power held by the Group
203 2012
EI S~wedy Cables Qatar W LL Frij ns Structural S teel Middle East WLL Al Ftfazdaq Company WLL
Qat~
Qatar Qatar
loint venture Associate Associate
55 20
55 20 35
Note With effect from 1 January 20 13 the mlnagemeot of the Group has reclassified the investment in Al Farazdaq Company W L-L from investment in associate to investment in subsidiary This is based on the transfer of share holding by the other shareholder whereby the conlroi o f AI FOl razdaq Company W LL bas been assigned 10 tbe Company
INVESTM ENT PROPERTIES
a) Reconciliation of carry ing amounl 2013 202 QR QR
AI I January 611334701 8 555 1835348 Additions 9568047 1727191 87 Transferred from property plant and equipment (Note II ) 34519828 Net gain iTo m fa if value adjlls tment 245051107 388792483
At 31 December 6402486000 6 11334701 8
b) Measurement of fair value
The fair values of the Groups inveS hnent properties as at 31 December 201 3 and 3 1 December 2012 have been arrived al on the basis of valuations carried Ollt on the respective dates by professionally qualified independent valuers not related to the Group The independent valuers have appropriate qUlli ficatioos and (eceJ11 experience in the valuation of properties in fhe relevant locations The fa ir value WltlS determined based on market comparable approach that reflocl s recent transaction prices for simillt1r properties and discounted cash flo w and income approach techniques
Details of the Group s iovestment properties and infonnation about the fa ir vn lue hierarchy as at ) I December 20 I J are as fo llows
IIvestment propenies
Level 3 fair vallie
Al I Janu ary 6 [ 13347018 Additions and trans fers from property plant and equipment 44087875
Gain included iu prom and loss Net gain from fair value lt1djuslmem 245051 107
AI J I December
The Group recognizes transfers between levels of fair value hierarchy as o f the end of the reponing period during whicb the transfer has occurred There were no transfers between the fai r va lue hierarchy during the year
23
10
Aamal Company QSc
NOTES TO THE ONSOLlDA TED FINANCIAL STATEMENTS For the year ended 3 I ecember 201 3
LNVESTM ENT ROPERTIES (contin ued)
b) Measuremen t 0 (air value (conti nued)
Vau t ion technique an significant unobservable in puts
The valuer has applied t e income capitali zation discounted cash flow and comparab le methods to detennine the market value of the lnve tment propen ies Significant unobservable inputs used included expected market rental growth rates (an average 425) occupancy rates (approximately 90 to 95) and risk adjusted discount rates (approximately 5 to 7 0) M y significant change in these inputs can impact lhe fair valuation of investment propcnies
24
Aamal Company QS c
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For che year ended 31 December 2013
11 PROPERTY PLAi~T AND EQUIPMENT
FumilUre Truck mixers fIXtures and Complllers
Leasehold and maor Plum (fd office and relaed eapiowork Buidings improvements vehicles machinery eqllipmcni sofMore in progmiddotcss Total
QR QR QR QR QR QR QJl QR
At I January 2013 137870126 371 88 132 9595813 1 262536261 19 580954 14864 385 561 32447 6241 30436 Additions 948)65 2618 100 5367399 859061 111 5268 137147581 148055774
Relating to d isposalswrite-off (1042642) (4390496) (77157L) (589150) ( 184075) (6977934) Transfer from capilal work in progress 1505 310 164 336 3601776 ( 150000) 1182741 (6304 163) Transrer to investment properlies (Note (0) (345 19828) (345 19828)
At J I Dttember 201 J 139375436 J7 258~ ~1 85735 270733865 19700865 169783 19 152456037 _73068~448
Depreciation AI I January 2013 16133915 J6902 529 49087707 68783 065 11 980009 tl71 595 3 174603 178 Charge for the year 7059805 3237150 5390767 12249797 2849162 1768823 42555504 Relating 10 disposalsJvri te-off (664709) (4 3 1716 1) (724322) (552939) ( 18 1993) (6441 124)
At 31 December 201 3 23193 720 19474 9 70 50161 313 90303540 14276232 13302783 2 107 17558
Net carrying amounts At 31 December 2013 116181J16 _17783221 44024422 180415325 5424633 3675536 __l2456O37 JJ9970~890
Notes (i) Depreciation charge for the year amounting 10 QR 33 164382 (201 1 QR 3303091 6) is included in tbe direct costs and an amount of QR 60055 (20 12 QR 36939)
has been capiulised under capital work in progress
(ii) The capital work in progress includes capitalised borrowing costs amounting to QR 125645 (20 12 QR 15358)
(ii i) The buildings are constructed on a plot ofland taken on a loog term operating lease
25
Aamal Company QS c
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 31 December 201 3
II PROPERTY PLANT AND EQUIPM ENT (continued)
C05I~
At 1 January 2012 Additions Acquired through business combinations (Note 4) Relating to d isposalswrite-off Transfer from capital work in progress Transfers
Buildings QR
137434400 435726
Leasehold improvemellls
QR
38137377 446J 04
144 103 ( 1539452)
Truck mLCers and molO
velricles QR
83427661 11464679
1697609 (631824)
Plant and machinery
QR
249335437 97264 85
35 14 132 (99498)
59705
Furniture fir ures and
office equipmem
QR
22845309 667586
192042 (3696457)
98000 (525526)
Computers and related
software
QR
158 19519 87 14 14
141837 (266 1733)
908078 (2 l4730)
Capitol work in progress
QR
12104889 451 53265
( 1065783) (59924)
Total (JR
55910459 8 68765259
5689723 (862 8964)
(800180)
AI 31 Dttember 2012 137870) 26 371881 32 95958 13 1 262536261 19580954 14864385 56132447 624 130436
Depreciation AI Jaouary2012 Charge for the year Acquired wough business combinations (Note 4) Relating to disposalswrite-off Transfers
9144666 6989249
)4 3 16620 3410618
144103
(96 812)
42558404 548 1613
1671942 (6242 52)
44555 290 2 1398849
2890797 (6 187 1)
12392584 3 182899
169005 (3558466)
(206013 )
12235266 2077633
136959 (2627283)
(J 0662)
135202830 42540861
5012806 (7840684)
(312635)
At 3 L December 201 2 161339J5 16902529 49087701 68783065 11 980009 11715953 174603 178
Nel canying amoWlts
At 31 December 201 2 12 173 6211 2028560 3 46870424 193753 196 7600945 3148432 56132447 449527258
26
12
13
Aamal Company QSC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 31 December 20 13
ACCOUNTS PA YABLE AND ACCRUALS
Trade accouots payable Advances from customers and tenants Accmals Social and sports activities levy Other payables
AJIOUNTS DUE TO RELATED PARTIES
Name
Arab Compaey for Fiber Products EI Sewedy EIC( lric Ho lding Egypiasl Egypt Egyptlech Egypt United Industri es Company WLL Johnson Controls Air condi tioning aod Refrigeration Qatar WLL pound1 Sewedy Cables Egypt Johnson Controls Air conditioning and Refrigeration rNC Dubai United Wire Company WL L Gelteo Company W LL - Gelteo Refr igera tion and Airconditioo ing CampC Lightway nc AI Shaab Group of Companies Other related pruties
NO M Related party transactio l)s a re disclosed in Note 26
2013 QR
320017657 30486837 26924669 41 761 843 25855567
445046573
2013 QR
18517474
4902528
6531231 6404578 3215821
2825884 75 7825
3467288 263715
1313247
48199591
2011 QR
26716268 1 27410234 222575 76 28954726 33)33852
379119069
2012 QR
18380528 91458 82 54 13849 1 11 6 135 5374039 35291 2020359 1693323 1064744
670 179
11 0873 12 18650
49737757
27
14
Aamal Company QSC
NOTES TO THE CONSOLIDATED f fNANCIAL STATEMENTS For the year ended 31 December 201 3
INTEREST BEARING LOANS AND BORROWINGS
NOles Malilrify
2013 QR
2012 QR
CoMl Loan 2 Loan ) Loac4 Loan 5 Loan 6 Loan 7 CoMB Loan 9 Bills discounted
(0 (ii) (iii) (iv) (v) (vi) (vii) (viii) ( ix) (x)
lune2014 Seplember2014 January 2015 November 2016 December 20 16 November 2017 Jllne20 l J December 20 7 OClober 20 19
172070387 440000000 50544000 40261 621 81387109 19920036
6] 43890 62626967 42522794
915676804
298324180 440000000 10 J088000 57955030
100 168750 2 1300492
407728 1 782871 1
35000000
1065742444
Less Defe rred finatlcing cost (771 503) (897148)
914905301 1064845296
Presented in the consolidated statement of financial positioo as fo llows 20)3 QR
201 2 QR
Current ponion Non-current ponion
749520820 165384481
825568489 239276807
914905301 1064845296
The dete rred financing costs consSt of arrangement fees The movements m the deferred financing costs were as fo llows
203 2012 QR QR
At I January 897148 332 661 Addjtions during the year 1 062565 912506 Amortised during the year (218amp210) (34801 9)
At 3 1 December 771503 89 7148
28
Aamal Company QS C
NOTES TO THE CONSOUDATED FlNANCIAL STATEMENTS For tbe year ended 31 December 2013
14 INTEREST BEARING LOANS AND BORROWINGS (continued)
Nolec
(i) Loao I i USD 93000000 impon 10n moi lily obtoined to refimnee he Icne~ of edit The 10 IT interest at commercial fate and the interest is paid at monthly intervals The fucility is repayable within ISO days including the usage period under letter ofc redits
(ii) Loan 2 is a secured bridge loan obtained to settle an existing loan and working capital requirements of the Company The loan carries interest al coOlJllercial rates and interest is 10 be paid on quarterly basis
(iii) Loan 3 was obtained for the pWpOse of financing capital ependiture and direct payment to suppliers contractors and 5ub-controctors The 10011 CMries interest at commercial rate and the inte rest is to be paid q Uar1erly The fac ility is repayable in IS quarterly iostallmenls starting I July 20 11 and ending I January 2015
(iv) Loan 4 was obla ined for conSlruclion o r an inveslmenl property The loan is seclJed by 0 primary mortgage over the some property and corporate guarantee of the Aamal Company QSC Tbe loan carries interest at commercial marke t rate and is payable in quarterly instalments
(v) Loan 5 represents a loan fOlcility obtained in two sepnrole tranches amounting to QR 309 825 000 (USD 85 million) for the purpose of refurbi shment and construction of fociJities io one of the investment properties The loan is repayable In 16 equal quanerly instalmcnlS for individua l tranche commencing from March 20 1J The loan carries interest at conunercial rJtes
(vi) Loan 6 represents secured loans obtained ffom a commercial bank in the previous periods for the purchase of heavy equipment and machines and were merged on 15 November 20 12 as a comb ined loan This loan is payable by 59 equal instalments of QR 426000 with (I last inSlalment of OR 438 326 with effect fro m 01 October 201 3 The loan carries interest at commercial market ra tes
(vii) Loan 7 is il tmst receipt banking facility obtained for the purchase of inventories This carried interest at conunercial market rates This loan was full y settled during the year
(vii i) Loan 8 represents secured loans obuined from a commercial bank in the previous periods for the purchase of delivery trucks and machinery and were merged on 22 October 2012 as a combined loan The loan carries inte rest at commercial market Tates and is payable by 59 equal insta lments o rQR 160000 with a last inSlOlmem ofQ R 128000 with effect from 3 1 December 2012
(ix) Loan 9 is an Islamic Financi ng Arrangement obtained for construction o f a manufacturing plam and as o f yearend ba lance represents partially drawn amount out of totil1 facility of QR 655 68000 The loan is secured by joint corvorate guarantee by the shareholders The loan carries profit at Islamic Financing rates and re-payable in quarterly instalments starting from the end of the 24 months gmce period from the date of loan drawn
(x) Bi ll discounting is a loan fac ility from banks The purpose of the arrangement is to discount bills locally and carries interest at current commercia l filte
15 EM PLOYEES END OF SERVICE BENEFITS
Movements in the provision reHectelt in the consolidated SLo1tement of financia l position were as fo llows 2013 201] QR QR
At I Jan uary 18111 763 17877937 Provision made during the year 4056969 4205499 Acquirelt through business combinations (Note 4) 349272 End of service benefits paid during the year (2210756) (4320945)
At 3 1 December 19957976 18 111763
29
Aamal Company Q5C
NOTES TO THE CONSOLIDATED FINANCIAL STATEMETS For tile y~ar ended 31 Dee~mber 2013
16 SHARE CAPITAL
2013 2012 QR Qq
AtI1l1)nud 60000)000 (20 2 544500JJOfn shares ofQR iii Cilch 60i)iQOOlOO 54450lt)0000
21)13 2012 Numher of
siMtS QR shares QR Issued Mtldfully paM At lJamld) 544SfWllOfJ 5445(100001) 495000000 49500000)0 1511C ofbonus S1i1-C ___ 5550~OOO 555000000 49SGOOOO 495000000
At 31 Decenef 6(OOampQllf1(1 ---14450O000 544~OOOOOO
All ampates m~ of a110 clss and caL equal voting rights
17 LEGAL Reuro5ERVE
As required by Qatar Comnertai COfrp7lnies Lav No5 of 2002 lOfp of the profit for the ye1J as a rru1imllli silould be mmsfened to legal re~erve The reserve is lot normay [lytiabe tor distribution except ill he cixcuJUstllrtUS stipulated m the above ~lemi0ntd GIW
IS HEVE1TE
2013 l)n QR QR
Sale of goods 1726893265 i709057~(iO
Renlal income UiO362322 133117509 S-ice income 858695 33940731 CornrrusslOlL Incentives and agency fces 44695S1 422~_632
212259$)33
19 DIRECT COSTS
2013 2)i2 QR
C 051 of inven(feS recognisedlIS an exptns 1522929956 497210830 Dind sL1ries lmd wages 601 [1336 5137856-8 Operating eXpenses on nml estate p~opet1les 36)711316 3041H504 fJepreciatiort (Kate I J) 33164382 B03091pound Operators marhgerrt6nt fees 14508588 li667989 Provisicn Qr obsolete and skwlt moving mvenlories (K)tc 8) 2380617 2208263 Other operating ilxpenses _31~3982 _ 3674946
1702139171 JS9653OI tgt
Aamal Compall-yQSC________________
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For lthe year ended 31 December 20 11
2G OTHER NeOiI
2013 20J3 QR QR
Interest mcume 2824216 2)314392 Profiv( loss) 00 disposal of property plant aoe eqUlpmem 737647 (l7362G) Eargain ptmnJse gain (Kote t) 8360793 MIsceJlaneous income 5723356
2013 2012 QR QR
ManllgetnUI hrQ empl(yees ws 55170302 55lt035middot1 Rent 23596799 2594915 Allowance for impaimlcot oUrsue aCQl1ot$ rc(Xjvalle (Nole 6) 129459(i 11613120 flBumcce ane profcampiitmJI fees 2IU9263 209J902 Corununication OOtHS 1935123 1649155 Trllining tid ouSfjt$s developmccl 950476 L095764 Re]X1in and mainle-nilnce 21)11SflS 2)2 I Poslag-c prjnting acri stationery 610299 541159shyvllsltdlancous expenses _~~~664 1lt2
-~~~ 125162812
22 fIN~lCE COSTS
2013 2amp2 QR QR
Inleres epen~ 42866312 5773U4B Am(vtisJliorgt ofdefcentrred financiog coStS __ 2l)tl26~~ gt3661
44930877----=
58063009
23 BASIC A~n nHUfED EARilNGS PER SHARi~
Basic trdTJogs per hue is caculatid 0y llividing the pwfill0( Ihc year attriouiabk (0- equity roldc-5 of the parent by lhi w~iglwxi avrage number of ordinary shares 0JstandirJg dulting tht_ year During Ihe year lil~ Conpmy i-sued and CBpii3lzed bonus shares lnd awmJingl) me previously ~eportod earnings per shac have blOM restatc(i
20i3 2012
Profit feT the year auributable to Cluity holderlt of the- paren (QR)
Weighted aVCTage number ofshares outstanding during the year (i)
Basic Jd diluted earnings per share (QR) 085
59985U413 shy
~~--~~~~- ~------J 1
23
Aamal Company QSc
NOTES TO THE CONSO LIDATED FfNANC[AL STATEMENTS For tbe year ended 3 l December 2013
BASIC AND DILUTED poundARNINCS PER SHARE (continued)
NOles (i) Th wigh d m nlg urnb of hres foc h P of lruling ~migs pee share h bee kulated
as follows 2013 20J2
QU3lifying shrues allhe begi ll1ling of the year 544500000 544500000 Effect of bonus shares issued and capitalised 55500000 55500000
600000000 600000000
Less T reasury shares (149587) (i357SI)
Weighted average number of shares at the end of the year 599850413 599864249
(ii) There were no potentia lly dilutiw shares outstanding at any time during tbe year and hence the diluted earnings per share is equal to the basic earnings per share
24 COItIMITMENTS
20 1] 2012 QR QR
Estimated capital expenditure approved and contracted for at the year eod but not provided for
Investment properties 2964000 8 139063 Property plant and equipment 16386500 63759762
19350500 71 898825
Operating lease commiIOlenlS under noncancellable lease agreemenlS
Payable wilhin one year 990806 702000
990806 702000
25 CONTINGENT UABILITlES
The Group had the following contingent liabi lities from which it is anticipated thai no malerial liabilities will arise
2013 2012 QR QR
Letters of guaramee 474551239 394255203
Letters of credit 7678499 194299384
NQles
(i) leHlaquogt of gu indud penonmnlaquo tend nd bid bonds d pymenlt g gi to suppliers and contractors by the Group in the ordina ry course of bus iness which will matme within twelve months fro m the reporting da te
(i i) Letters o f credit are provided by lodging documents to the bank tor purchase of trading goods fro m foreign suppliers wruch will maMC within thJee to six months from the date or tile Iransaclion
J2
26
Aamal Company QSc
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year eoded 31 December 2013
RELATED PARTY DISCLOSURES
Related party transactions Related parties represent major shareholders directors and key management persortOei of the Group and entities controlled joimly controlled or signjficamly innueoced by such parties Pricing policies md tenns of these tnlOSaclions are approved by the Group s management
Transactions with related parties induded in the consolidated financial stalemenls were as follows
20lJ 2012 QR QR
Sale o f goods and SClVices 419034048 415225221
Rental income 1980473 2069386
Purchase of goods and services 1591 38018 300835596
Rental expense 21 780G78 23397334
Bargain purchase gain 8360793
Net assets acquired 78803585
Relat ed party bal nnces AmountS due from and due to re lated parties are disclosed in Notes 7 and 13 respectively These balances do oot carry interest and are repayable OIl mulUlUy agreed dates generally within one year
The Group did not record any impairment of receivables reJatiog to amounts due from related pat1ies in either year This assessment is undertaken each fina ncial year through examining the ftnanc ial position of the related party and the market in which the related patty operates
Parent The Groups ultimate parent is Al Faisal Ho lding Company WLL
Compensa tion or key management personn el The remuneration of key management dming the year was as fullows
2013 2012 QR QR
Short-term benefi ts 7904794 1079595 Employees end of service benefits 408934 439776
8313 728 11235727
33
AamaJ Company QSC
NOTES TO THE CONSOLIDATED FINANCIAL 5T ATEMENTS For the year ended t Decernber 2013
Dilling the year 1he Group issued a XHlUS share of 10 928 of the paid tiP share capilal hdd ilS at 31 DiX2mber 2(JJ 2 mnmuning to OR 555000000 using retamed earnings as of3 December 2012 (20l2 Doe share for every ten shues held as of 31 Dcember Oll amuunting 10 QR 495OO()OOO ling reta1ned earmrgs 28 or 31 Decencer 2D II Jshy
18 SEGMENT INFORMATION
For J)iloogement PUIpltJM rhe Group i organised into business unit bused On LlJeir nature of Acttvitics lud nas fonY reportable segments and the Head Oftklt as bllow$
Propert Tbe segntn cOlists of City C~nler Qlta~ Brunch and Aamal Rea Esmte Branch whicb ll[c invoived in lampIiiog the faJ1ities of retail outlet conpex red e5ttlte nve(mltn$ and property remal buines~s
Trading mld distrib-wion The segmeul Involves wholesalB andlor rBtail distribution of phamlaceutlcai and consunable i1ems hume Epplianccs medica equimenl t-Tes ill1d lubricmtlaquo and II1UllitnEl printing The scgn(rtt includes 6c following entities
Eotl Sina Medical Branch
Aaen Medical Braudt
Amcill Troding and DistoolltlqO Branch bull Foot Care (erier HRnd) Good llre Pbannacy Bf4Uch bull Al FllfJdaq COllpafY wJ~L
InduSNol manuacturing TIle s0groent IOvolves Ulahuactrumg whole~we aliaor rewi dimibUlioti of dccnc cables lid tools ggregJ1es_ ready-IUx connole and cement bI0C~ lI1d provi$ion of servlCcent$ in rdation to iODllltroa Itvestment repair aJ-d Gonstruction of power plwts liiiding of LED ilgluitlg products und management of industnl enterpnses The segment ircludes be folloVting centntitis
bull Aam1 Cemert Industries LL AuraJ Redy1Yl(A BrQTlch
bull Doha Cables Qawf lLL Senyaf IoolJic1es Qatar Holding W LL Advanced Pipes ard Casfs CompQTly WJ L bull GuJfRoch Coroany WLL Ci~San Trading Company WLL hmovafive Lighting Compary WLL
Managed services le segment inyolvc~ provisloH of hOllseiltecpmg mi cleaning services fucditics n-anagemerJ services C1egy s(tvices ttl centfe sltrvicf)s buildiqg lnaintemHlelt aml acting as travel gens The 5cgnltnt includes the foUowing cnti(lcents
An13 ServJce Branch
amli TnlVeJa l5tmh
f-eco Gulf Co W LL
Jolinson Controls Qattl WJL
28
Aamal Company QSc
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended ) L December 20 13
SEGMENT INFORMATION (Co ntinued)
Head Office It provides corporate services to the branches and subsidiaries of the Group
The managiog d irector of the Group monitors the operating results o f its business units separately for the purpose of making decisions about resource allocation and perfonnance assessment Segment perfonnance is evaluated based Oil operating profit or loss of these segments Transfer pricing between operating segments are on anns length basis in a manoec similar to Iraosactions with third parties
Aamal Company QSC
NOTES TO THE CONSOLIDATED FINAN CIAL STATEMENTS For the year ended 3 1 December 20 13
28 SEGMENT INFORl1ATlON (continued)
Operating segments The operat ing segment after elimination or ioter-bra nch and inter-co mpany lrnnsaclioos is presented as follows
Trading (nd Industrial Managed For fh e year elided 31 December 2013 Properly disirjblli ioll manujocljlring services
QR QR QR QR Revenues
- h lemal parties 260360172 578909983 1231522768 S l802210 - Inter segments 1253914 6843 11 8 29639873 3445052 1
Heat Office QR
Eliminoions QR
(n187426) II
Tolal
QR
2J22595133
261614086 585753 lOI 126116264 1 8625273 1 (721 87426) 2122595133
Opera ti ng results Fair vallie gains
Profit I (loss) ror the year
Depreciotion
200811944
245051 107
445863051
2066290
86492834
86492834
4345438
22636250
22636250
33049 089
5157436
5157436
1760305
(47864882)
(47864882)
1334382
267233582
245051107
512 284689
42555504
36
Aamal Company QS
NOTES TO Tl CONSOLIDATED FfNANClAL STATEMENTS For the yeM ended 31 December 20 13
28 SEGMENf INFORMAnON (c)tltioucd)
FOf the yearrnrkti J f DccemOer 2(J12 QR
Revellues - ExlcmlJ partiel 2331 17 509 bull Inter segmcI11S 1168935
-- 234236434 --~- -~--
Openning results 18S2367t Fmt value gains J8S79-4~G
pront LOllS) for the rear 570616154
gt3659
No(
lnlermiddotgment revenues are eliminated on tQHs)idntiOH_
Tadiug ftfid disl d)Ntion
QR
S2S3l7661
324 j
5335493114 ~ -~-----
51384831
54384338
4J9R71(i
Indus idi mamfmturing
QR
1255694537
129U25lS4
56727059
56727059
32752742
slnltic(s QR
55216665 2939H31
S46lOJ96
7427414
7437
[908067
ilfild ()jice QR
(64(41976
Elimination QR
(74tHi2oJ Iii
Totul QR
206936372
2069336372
235721
(64641
131 f613
6245
42541)861
Amnal Company Q$l
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Por tnt yeartndeJ 31 De~embcr 2013
28 SEGMENT JNFORMATlON (contiutlld
Assc-ts and labilities
Tng alld lndtrstfw At31 December 2(113 distnbllrior manufacturIng senices HeadOJJicc EliminatioilS lola1
QR QR QR QR QR
Cumnl 3tS 227552338 620807979 61349 j 415 S()6)86922 (301636995) 1477366090 Noolucrcnt DSeIS 6411868160 12604763 622386238 4348876 (i624548 __p2438051 780
fotal asstl$ 6639420498 1194 1243194217 65698291 513Ql1470 ==-lt03H8l~O()) 853295-870 -~----~ ~---~ -
CUIT)llliabilitics 280995335 1(3511J60 6344(12777 2l0708lJ2 496261185 (3CH636995) 1249603264 Non-current iiatJlitics 7l70L5V2 8008485 HlDi16~43_ 3181668 t433799 ____ ilj534_~57 __ --Totul liahililics 353696897 ___~4159~4~ 734419720 ~4976~~~~~ 1434945711
---~~--~ -~-~~ - _2~~~4~~ (~~~~9~
C1pild expcndimn HI) WO743OOj 1397742_~471l2~--~50 ~51 ~1~623821~~1~_ -~----~------ -~
3amp
28
Aamal Company Q SC
NOTES TO THE CONSOLIDATED FfNANClAL STATEMENTS For the year ended 31 December 20 13
SEGMFNT INFORMATION (continued)
Assets and liabilities (continued)
AI 31 December 2012 Properly QR
Trading and d iSfriblllion
QR
Indusrial manufacfuring
QR
Managed senices QR
Currenl assels
Non-current assets
146491 186
6121 864484
2964425 12 903 7264
73468 1258
549267235
51387098 471 1439
Tolal assets 6268355670 305479776 1283948493 56098537
Head Office QR
468325024
6713643
475038667
Currentliabil iies
Non-current liabiLities 273444 748 1 J10 15024
86054583 7434286
669214261 1288 14977
2 1938953
287 1199
480393637 1253084
Totil lliabiliti cs 390459772 93488869 798029238 248 10 152 48J64672 1
Capila expendirure (ltII L 72865 878 1281254 6647 J356 7169 13 149045
Notes
(i)
(Ii)
Inter-segmeot balances are e limioafed 00 consolidatio n
Capi tal expendiTU res consist of additions 10 propeny plant and equip ment and iovestmenl properties
Eliminations QR
To wl QR
(273735776) (i )
(20308351(i)
1423591302
6689563230
(27576661 1) 8 113154532
(273135777) (i) 12573 10405
257388570
(273735177) 15 14698975
24 1484446
39
29
Aamal Company QSC
NOTES TO THE CONSOLIDATED FrNANCIAL STATEMENTS For the year ended 31 Dcltmber 1013
Fr-A]~ClAL RISK MANAGpoundMamp1H
Objccthes and policies fe Groups principal )uaucill liabilities comprise imltresl bctmllg loons and IxmowHgs baRlt ovetda1s amounts due to fclaled par1ies and tracte accounts payable The main pUlJXSi of thesc financial liabilities is 4J mise firmne or 610 Grmps operations The G0JP bas various fimmcial assets such as ttadc accounts receivable lInlOlmts due from related parties bark balances tltCntion receivable and other receivables which arisgt directly fran its cperuoonamp
The maiH ri~ks an3ing Joru (be Groups UnariCJlll illslrumenls jle market risk cretiJt nsk and hmdity risk Til BoarD ofDtrcctO$ reviews end agrees policies for mzrAgbg Caltt f hespound ri~k ihkh arc summariscd beloW
VIarktt risk yenfatket risk is the risk Um changes in market prices $Uch as intfcst rates and hreig lttmeocy ect14nge rilles Vltl1 affect the Groups profit eqwty Dr value tf its hoJdiI15 of financial instrl[Thnls rile objecivpoundj of marke1 risk mUnllgcrlcnt is to manage uld 1~ontr(ll tho tr))rket risk expo-sure vithir acceptable parfI-etcJ$ while optimising rerUID
Equit) price risk ampjuity prtce risk is the risk hilt the Group ampearnings will be affected as a rcmt (If luctttltions in fm vdue of ~qui-gt
mstwnents Eqlliry price risk arises from availabtetor~sale inv2strnems However the Groups exposure to eqmty price risk IS minima as II doesn hold sitl)iftrmt ailableAor-511le inYestrmmrs
[merest rate risk The Groups fimiruial poundS5ot ampId liaojlilies (at Rl $uJject to int~~ rate mk compnse brmk depoils interst bearing loans and bOITQwjags and bank overdr-afts At the reponwg dalt tbe [merest rale pronle of Ill Goups intexst bearing fbi4rdd instruments as fliows
11113 20i3 QR QR
Fued liIeryS refc insfrvrnellts
Fmmcial assets 113035962 111913394 FrOltwial liabilities --1~203712l) 1252t43~1
9)OI~ (13350972)
Fhlllting inireSI rate ns1lmlttrs Fanctl~ Isseis 127024345 ID43848o Fllllocial liabilities _-(i~9347~ (94))48926)
(836)64116)
The Groups exposure to t~ ris of changes in marXet interest fltltes relztes primariiy to the Groups financial assets and lizbitdic$ with t1Oltttirg interest mte~
lhe loEowing able demonstrates the ampmitivity nf the eonsolidattXI statemen1 of income 1) caonaly possible chonges in in1jfgtst rmes by 25 basis points with all othe vari)ble3 hdc umstant The sensitivity of the CooiK~ljclatid statement of inc(me $ the eft(ct of tb assumed changes in lnterdt rales for one year bf1sec on the floating rate financial assets and fimmcial hablhw$ held at 31 f~r The effect of deae-ascs in interest ral~ is cXp0Ctct to be equal and opposite to the effect oHlle increases sllQvro
Changes it Eftx OIl
00513 [oms profit QR
2013 Floating mterest Hlte instruments ----2$ bp (1649776)
2012 Flv-ating irkfiSt rale instrumenls +25 bp (209[9(1))
~--------- -~~ 40-middot------ _ _ shy
29
Aamal Company QSC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 3 1 December 2013
FINANCIAL RISK MANAGEMENT (continued)
Foreign currency risk Foreign currency risk is the risk lhilt the value of lhe fi nancial instruments will fluctuate due 10 changes in fore ign exchange rates
T rade aCcOlmts payable and accrued expenses include amounts due in foreign currencies mliniy US Dollars UAB Dirhams Great Britain Pounds (GB P) and Euros of which the Group has a currency risk primruily on the baJmces payable in Euros and GBP amoWlting 10 QR 14400634 (2012 QR 17214046)
The Group does not hedge its foreign currency exposure As both Qatari Riyal and UAE Dirhams are pegged to the US Dollar balances in US Dollars and UAE Dirhams are not considered to represent significant currency ris k to the Group
The table below indicates the Group s fore ign c urrency exposure on its monetary assets a nd liabilities The analysis calculates the effect o f a reasonably poss ib le move ment of the QR curre nc y rale against the Euro and GBP with all other variables held constant on the consolidated slate menl o f income (due to the fa ir va lue of currency sensitive monetary asse ts a nd liabilities) The e ffect o f decreases in fo reign c urre ncy exchange rates is expected to he equal and opposile 10 the e ffect of the increases shown
Incramp1se ill
f oreign cUlrency rate
0
the QR
Ellecl on profil
QR
2013 +5 (720032)
20 12 +5 (860 702)
C redit Tisk Credit risk is the risk that one party to a financial instrume nt wi ll fa il to discharge an obligation and cause the other party to incur a financial loss TIle Groups exposure to credit risk is indica ted by the carrying amoWlt o f its financia l asse ts whic h consist principally oftmde accollilts receivable retention receivable amounts due from related parties othe r receivables and bank baLances
The Group sells its products and prov ides services to vario us panies It is the G ro ups policy that all customers who wish to obtain on credit lerms are subject to credit verificalion procedures to ensure c redit Ilonhiness Each new customer is analysed individually for creditworthiness before the de livery o f products Of services Custo mm tbat fai l to met t the credi tworthiness may transact with the Group only o n prepayme nt basis Property rentals are mostl y received in ad vtnce or conlrlCled wi th post dated cheques 10 additio n receivable balances are monitored on an ongoing basis a nd the purchase limils are established for each c redit custoroer which are reviewed reguJarly based on the level o f past transactions and senlement The Groups max im wn exposure with regard to trade aCCOWlts receivab le net ofa llowance re nected allhe reporting date was ilS fo llows
2013 2012
Business SJgmelll QR QR
Property 15478832 19386326 Trading and distributio n 194343 597 179748274 Industrial ma nufac turing 183119753 131578668 Managed services 18069385 14547389
411 011 567 345260657
41
29
Aamal Company QSc
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For tbe year eoded 3 J December 20 13
FlNAJICIAL RISK MANAG EMENT (c-o Dtinued)
Credit risk (continued) With respect to credit risk arising from the other financi31 assets of the Group the Groups exposure to credit risk arises from default of the counterparty with a maximum exposure equal 10 the canying amount of these instruments as follows
2013 QR
202
QR
Bank balances Amounts due from related parties Retention and other receivables
436136756 214439950 48290351
36788129 t 171525363 74082203
698867057 613488857
The group reduces the expoSltre of credit risk arising from other financial assets by maintaining bank accounts in reputed banks and providing services only to creditworthy re lated parties
The management cons iders the bank balances and a mQUIIIS due from related parties as high grade fi nancial assets and lfade accounls receivable and other receivables as sundard grade financial assets When a finltmcial asset is identified 10 be impaired the managemoot downgrades such assets to impaired category and provides adequate allowances
Liquidity risk Liquidity risk is the risk that the Group will not be able to meet its fmancial obligations as they fu ll due The Groups 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 nonnal and stressed conditiom without incurring unacceptable losses or risking damage to the Groups reputa tion and is to maintain a balance belWeen continuity of fuoding and f1eilibility through the use of bank overdrafts and bank loans and borrowings
The Group monitors its risk to a shortage o f funds using a recuning liquidity plaOfling 1001 TIllS tool considers the manuiry o f financial assets (eg accounts receivable) and projected cash flows from operations The Groups teons ofsales or services require arooUIlts to be paid within 30-90 days from the invoiced dale
42
29
Aamal Company QSc
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For tbe year ended 3 1 December 2013
FrNANClAL ruSK MANAGEMENT (contiQued)
Uqujdity risk (continued) The table below summarises the ruaruriJy profile of the Groups financial 1iabililies a t 31 December based on contractual undiscountcd paymeots
2013 Interest bearing loans and borrowings Bank overdrafts Trade accowus payable Other payables Amounl~ due (0 related panles
201l Interest bearing loans and borrowings
Baok overdrafts Trade accounts payable Other payables Amounts due to related parties
On demand
QR
6836280
6836280
011 demand QR
2885090
2885090
Less than 3 months
QR
521324473
303638792
47406830
2530~480
898675575
Less thall 3
months
QR
469839033
10754JJIO 37543236
1964504 1
634568620
3 10 J2 mOlllh$
QR
239333328
16378865 20210580
2289~11l
298816884
3 to 12 monlhs
QR
365476972
159621 37 J 24745342
30092716
579936401
1to 5 years
QR
J 60092748
160092148
1 to 5 years
QR
248472226
248472226
gt 5 years
QR
25261598
25261 598
gt 5 years
QR
7648000
7648000
TOlaf
QR
947012147 6836280
320017657
67617410 48199591
1389681085
Tota
QR
109 1436231
1885090 267162681
622 88578
49737757
14735 10337
43
30
Aamal Company QSltc NOTES TO THE CONSOLIDATED FlANCIAL STATEMETS For the year ended 31 December 20 t3
21 F~ANClAL RlSK MAiAGEMElT (continued)
Capital management The Boards policy is to maintain a strong cepit1 base so as to rnainmin investor creditor and market ronfoonee and to SUSWlJ) fumre dcltclonnent Gf the buinest The Board of Directors rronitortl the tapital whkh tbe Group defines as wlal $parcloders equity excluding nonmiddotcornroliing imerests and the level of dividends to orrunury srarellOJdcfS
The Board also reeks to ITIaimain a balance between the higher (ctums (hat might be fA-~$ihle With higher leves of borrnwings end Lle edvnrJages and security named Sy it sOMd Cilpitai posi[ion The GfCup~ k1rget is to achievfl a return on slureholders equity (exclJding aonwurrolJiug iorcf(sts) greater lll(ll1 he wcighlcd average inres exxmse on mrerest bearing Ivens and oorrowing
The (lf0t-p nl)nDg-e ils cnpital structure and makes adjustneal lOll in light ofchang2s in economic nd bttincss cordjlons and shareholders expe1ationJo chmges veremiddot maCo HI Lleuro objecttves polilCS or proCCSSC3 during the years erded 31 D~mber 2013md 31 Dtccmlxr2Ql2
The Group monitors the capit2J using a gClting fatio which IS dep divided by caplla plus debL The GtOwgts policy is to keep ttJe ge-anng rmio bclew 40 Tbe Group iLdtdes withb debt imete-51 beagting loans ard ~OITORlngs less cash and cash equtVaknts Capltal includes eqmty attributable 10 the equity tolders oft~e parcrt
2013 QR
2(i2 QR
fmerest bearing loans and borrowings lcss- Cash and cas ltYJUvalcnts
9i4lJ05301 _~ (429JfJl4761
1004845296 (649)6201)
Net debt
Toa capital
Capita and net debt
699849045
~ringrttio
FAIR VALtES OF Fl~ANOAL f~STRUMETS
Finarcial iostrumenL~ cOlnprise tina~lctal assetS carl finailcialliabilities
Fmancial assets colJist of bank balance) short 1Cm bank dcposis amounL dve dom rc)ltted partilt)$ rekntion and other receivables and ttade accolmis rceivabe Finatlclll habiilics cgtmsist of banilt ovcrdratls jnerest bearing lOil1S and bOrowings amounts due (0 nliled partiG~ ane trade x-ounls payable
The- fair values of hese financial inStrumen1S except Jo-- imCfest bearing loam lHld bOlToving aproKimate lhdr cMryinJ vlhes due to the Slort temt mzrutiiles or these instrument
Tllc faiT value of iotcnst beating Nns and borrowin2s ae estimate( based on discoumed ltash flows twin int(s rale- cune-ntly nvailagtk fur tilt debt or sinuiar tetnlS an-a rell1lmng matunties
31
Aamal Company~Q=-ScC ______________~______
~OTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For fhe year ended 31 December 20 t3
SlGNIFICANT ASUMPTIONS ACCOUJTING JUDGElE1TS AND F8TIMATFS
impairment (If accoonts receivable n etrnwe of lhe collectible anoun of trade accounlgt reccvable is made when collection of the full lHl1OUt i~ nO looger probabk FOI nCividualty significitIl amounts this estimation is p~rformed on an indh-idllai a$[$ Amomts wHcb arc not indivldl11Uy significant but wluch are past due ZTe tsscssed collectively and an aJlQwaccc applied ucc()r~Jng to the length of lime past due based oc histnncal recovery nlJes
hnpalrment of inHntnries lavenoncs are held at tho lower of col and nol realisable value InIOn inventoncent$ becone old or 0-~amplete an estilTJte is mate of their net j alisable vulue For indiviolhlUy significant amountS this cstinaunrt is performec all aD lndividwl osis Amotlnts whieh are fl0t individually significan( btll which ltIre old at obsolete wx LltSessed wllecivdy md a provisior is applied sccnrding to the invenrory type and be dep)ee of ageing 0 cDsolescc1ce based on anticipUled selling prices
Classifigt1ltion of El Sew(gtdy Cable Qatar WLI ali a j(lint vwture pound1 Sovedy Cables Qatar is a limited hability company whose kgal fum confers SCprm11ior bernten tbe jXliiies 10 ~he jomi lfranpement Snd the Company Itself FurthenrlOre then IS no oontractua] arrmgelTeot or any oibe aus aod circumstriliCe$ that iocik41to tht he putic5 [0 the joint flJTIlrgernelit bave rights to the ssetl and obligrtdons fo~ the liabilities of the joint ilrrongement Acoordingly El Sewed- C[jbl~s Qamr WLL is dassifiecl 7S a joiut enrtrr of he GWtp
impairment of goodwill G0oovj)1 embedded in th~ cot 0 aquisitior of subsidiaries and eqmtj-iccounled iflV(stees ire teswt for irl1jXlirmnt aHuaily Tbe calculations of value [n use fO( cfish gecj~r)lilg units (loring to real nte projecg are rtost sensitive to tin IDHowing assumpti015
Grosgt i1wginmiddot Gross Ilmrgins arc lmsed on avrage values tuhje0d in (he [Xrioo preeedhli (e siaM of the budge xnod T1esC at( mcreased over the budgel period for mticipatltX efficiency Hnprovemots
DisC)unr r(es Discount rotes represent th cl1tent mark as~ssmetlt of the risks specific te ech cash geocroting unit regarding lhe time value of money ilnd mdividu)l risks of he tmtieriyilg assets whICh have not been inwrport1eti it the Citik flow estimates The dj~(OUrl flte tlkulation is based on the speclfte circurnsthLCes of lile Group and its opltllatJng segn)~nts (md derived (ff)rC it weighted avaage (XSt 0f apilaJ (WACC) Tb fACe (akw into uoount both deb and equity The 0$1 of equity is denved from dlC expected return 01 investmenl by the Groups investors TJc Gos10( deb is based on l1e borrvwings the Gmup IS obllsxl to service SC~lletllmiddotspecific r5k IS incorxt4too by applying individual bera facto The betn mctors ire evauatcentd annuaHy bhseci on pubJicly aVflllabe murked earn
Fair value ()fnHstmeni proputies The fuit laHe 0 nvestmel~ propertis is deltrrnlnzd b cxterrwl indepzfldell property valuers laving appr0priate recognised professional quabfiillions and recenl xperience H1 the localjl)n and G-tegory 0 the oroperty being valued
Useful hes of PfQPcrly plmr (llld zqulpment The Groups management detennints th estiunted useful jives Df It~ property plan and equipmnl fix calnurjng depreciation Thi5 e~timJte is 6lermind after cinsidring 1b expeelcd usage (1f the a5sclt [hysical l101t and (eas tedmiltal Dr com~ercia obsolesccnce
Gotlg Qncen
ibe Groups mangerncnt UiS made aJ assessmeot cf the 011115 ability (0 COllllOUC liS a going conct11l Imd is satsl1ed hat me Group ms the resources to contmue in business for he foreseeable fu1urc he1hennort he management is no aware oC lny material Hncertainties that lray CH~t signinchnt doubt tlPDfl the Groups ability 10 continue as a going umcem Therefore titpound lotlsolidatcd finilllcij stftemeols comirme to be prepltd on li g0ing concern basis
Aamal Company QSc
NOTES TO THE CONSOLIDATED FlNANC[AL STATEMENTS For the year ended 3 1 December 20 13
32 INCOME TAX
Certa in subsidiaries of the Group which have non-GCe ownership are subject to income tax under Qatar Income Tax Law No 2 1 of2009 The iocome tax is charged on the share of profits attributable to non-GCe shareholders For the purpose of these conso lidated fi nancial statements the income tax liability oftbe foreign shareholders has been excluded given that the non-GCe shareholders have agreed under the shareholder agreements signed with the Group to bear the fh lliiability and make necessary payments
33 COMPARATIVE INFORMATION
Certain comparative figw-es of the previous year have been reclassified 0 coofonn to the current years presentation However such reclassifications are oat materia and do not have an impact on tbe previously reported net profit other comprehensive income or the total equity for the comparative year
The impact from the resta tement of comparative infonnalion as a resuh of adoption of IFRS I I - Joint arrangements is detailed in Note 32 Changes in aCCQu(lting policies
46
Tejephcgtr1e 974 4457 6444
Audit Fax +974 4442 5626
2nd Floor WEbsite wwwkpmgcomqa An2a 25 C Ring Road
PO Box 4473 Doha State ot Oatar
KPMG
Independent auditors report
To The Shareholders Aamal Company QSc Doha State of Qatar
Report on the consolidated financial statements We have audited the accompanying consolidated financial statements of Aamal Company QSc (the Company) and its subsidianes (together referred to as the Group) which comprise the consolidated statement of financial position as at 31 December 2013 and tbe consolidated statements of income comprehensive income cash flows and changes in equity for the year then ended and notes comprising a sUnUnUl) of significant accounting policies and other explanatory information
Directors refponsibifify for Ihe consolidated financial statements The directors are responsible for the preparal10n and fair presentation of these consolidated financial statements in accordance with International Financial Reporting Standards and for such internal control as the directors detemlinc is necessary to enable the preparation of consolidated financial statements that are free from material misstatement whether due to fraud or error
A ~Idilors respol1sibilily Our responsibility is to express an opinion on these consolidated financial statements based on our audit We conducted our audit in accordance with International Standards on Auditing Those standards require that we comply with ethical requirements and plan and perfonn the audit to obtain reasonable assurance about whether the consolidated financial statements arc free from material misstatement
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements The procedures selected depend on our judgement including the assessment of the risks of material misstatement of the consolidated finanCial statements whether due to fraud or error In making those risk assessments we consider internal control relevant to the Groupmiddots preparation and fair presentation of the consolidated financial statements in order to design audit procedures that are appropriate in the circumstances but not for the pUlllose of expressing an opinion on the effectiveness of the Groups internal control An audit also includes evaluating the appropriateness of accountmg policies used and the reasonableness of accounting estimates made by the management as well as evaluating the overall presentation of the consolidated financial statements
We beli eve that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion
Oplllion In our opinion the consolidated financial statements present fairly in all material respects the consolidated financial position of the Group as at 31 December 2013 and its consolidated financial performance and consolidated cash flows for the year then ended in accordance with International Financial Reponing Standards
KPM( a~_~ a~_11gtlt gtptG ~~~_WIgt~
t~roj ~alMgt iKMlti 01 bullSws
Report 00 other legal And regulaiory requirements We have obtained all the info rmation and explanations which we consider necessary for the pUipose o f our audit The Group has maintained proper accounting records aod the consolidated financial statements are in agreement therewith and we COllfirOl that the physical count of inventories was carried OUi as per the established principles We have reviewed the accompanying repon o f the Board o f Directors and confinn that the financial infonnation contained therein is in agreement with the books and records o f the Company We are not aware of any violations o f the provisions of Qatar Commercial Companies law No S o f 2002 or the tenns of Article of Association having otttured during the year which might have had a material adverse effect on the business of the Company or its consolidated finiUlcial position as at 31 December 20 13
20 February 20 14 Gopa l Balasubramaniam Doha KPMG State of Qatar Qatar Auditors Regislry Number 251
Independent auditors rep0l1 (continued) - Aamal Company Qsc
Aamal Company QSC CONSOLIDATED STATEMENT OF FINANCIAL POSlTlON AI J I December 2013
ASSETS Current assets
Cash and bank balances Accounts receivable and prepayments Amounts due from related part ies Invento ries
NOD-current lI$sft~ A vuilable-for-sal e investments Equity-accounted illvestees Investment properties Properly plaIU arid equipment
TOTAL ASSETS
LiADILITIES AND EQUITY Curnn Jj~biljtit5
Bank overdrafts ACCOUntS payable and accruals Amounts due 10 related panies Interest bearing loans aM borrowings
Non-Curr(DI liabilities
Interest bearing loans and borrowings Employees end of service benefits
TOlRllitbililits
EQUiTY Share capital Legal reserve Treasury shares Cumului ve ch8llge in fair vlIue Retained earnings
Equity attributable to equ ity holders of the pa rcnt Non-cOnlIOII ing interests
Note
5 6 7 8
9I
5 12 IJ 14
14 15
16 17
203 QR
436136756 510089839 214439950 316699545
I4 77366090
24 983 133106907
6402486000 519970890
70551588780
8532954870
6836280 445046573
48199591 749520820
J2496031264
165384481 19957976
185342 457
143494572 1
6000000000 378132552
(2075865) 4069
526628214
6902688970 1953201 79
2012 QR
36788 129 1 482281 775 171 525363 401 902873
1423 59 1302
18963 12666999 1
611 3347018 449527258
6689563 230
8113154 532
2885090 379119069 49737757
825 568489
1257310405
239276807 18111 763
257388570
1514698975
5445000000 327445101
(207 5865) (416)
638248275
6408617095 189838462
7098009149 659814551557
TOTAL IABIIITIES AND EQUITY 8532954870 811 3154532
Mohammad Rrunah i Chitf Financial Officer
The artaehcd notes I 0 33 fonn an integral pan o f these consolidlIed financial statements
3
COgtSOLIDATED STATEENT OF INCOME For tM year ended 31 Dec-mixr 2013
Not
Revelue lR Diroctcnstb 19
GROSS PROFIT
Other income 20 Markelillg and promotion expenses Geternl MO administrativcent cxpenSs 21 Dvmiation Fine nee CDS 22 Shure of profits of equityltl(COUnleci ~nvestees 9
PROFIT REVORE FAIR VALUE GAINS ON tVfSTnlT PROPERTJES
Net fuil vl1lue gltllns or lnvestne-Ilt prcpc(li~ 10
PROFIT FOR THE YEAJt
Pmiltltributnble to Equit holcefS of tift parent J(jI1~rtroing Inreres
l)3~itand diluted eanlings per share (QR) (RITnoutable 10 cqujry holders of the parerl 23
Jon QR
2122595133 _ (1702139111)
419455956
I 516688 (18995918)
(109981101) (9331061)
(44930877) __~)499901
267233582
245051107
~--~~
5068745(17
_~~ sect4JQ82 ~~Jll4lL
(L85 ~~~--
2012 QR
2(69)36372 J~~~S965i016J
41YJ6SU56
16199921 (J I L66J 47)
(25628J2) (947 3007)
(58063809-]
_~3JA0104
2J572 1006
3R3m183
_-_2d~
594892946
~~~2S14~~ zi~L
049 -~---
The zltached notes j to 33 f01111 an integral part of these tOl50hdared financial S1tltlTWpl$
Aamal Company QSc CONSOLIDATED STATEM ENT OF COMPREHENSIVE INCOME For Ibe year eoded 3 1 December 201 3
2013 QR
Profit for the year 5 12284689
Other comprehensive income Items that are or may be reclassified to profit or loss Unreatised gain on available-for-sale investments 6020
TOTAL COIVIPRpoundHENSIVE INCOME fOR THE YEAR 512290709
TotaJ co mprehensive income attributable to Equi ty holders of the parent 506878992 Non-controUing interests 54117 17
5 12290709
101 1 QR
6245 13489
109582
624623071
59489253 0 2973 0541
62462307 1
The (luached notes I 10 33 form an integral part of these consolidated fin ancial statements
~amal Company QSC
CONSOLDATED STATEMENT OF CASH FLOWS For the year ended 31 December 2013
OPERATING ACTlVlT1ES Profit fot ioc year Adjustment for
Net fuirvalle gaj0i on overncnt properties Dpreciation Provisio~ fOf employlXs end of seevielt benefits Bargac purchaslt gAin Allowance for inp~inueO of trde accomis receIvable (Proritlloss on dJsxgtsel of property piaU( 06 equiprnent Provision fot slow moving Jllvetlories lJlterest nome finance oosts Share of profit of eqUlry-accoumcd inveslces
Operaling profit ooorc working capital changes
JllvtntorifS AU(lIJJltt receiwlbk and prepaymert1S ccoums payabe And accruals ~et l)OVem1t in amounts due from and due to rdmgti panie
Cash from operation Finance coStS pltlid End of SCfVtCe benefits paid
Net Leasb from opcrling 3ctivitilt5
INVEsnXG A(T1TTIfS Xntltresl income raeivcd Proceeds from disposal of property piii1i and equipment Divicieflds reced tTom a j(im venlure Additions to inveslmeul properties Acquisition of subsitlittry net of cush Jzquired Aquisitioll from non-controlling il]tw~st Additions 10 property plant ()nd equipment
Net cash used in invltgtliing Jctivii(lS
FINAClXC ACrlVrnrs rtt moverncl1 in inteftst bearing tiJ41S al1d borrOWings ConlribIH(llS from nonconttohng interests
Net cash tlllied in)ftom hnfCncmg actiV1ies
lNeREMyen IN CASH ANn CASH EQlJlVAUVIS Detrease to casr due to 10~S of crmol of a subsidiary Increase in cash 1t5ulttd in obtaining the conh) of il-n Il$$oile
Cash and caltr quiVlenls at 1 JanuJry
CASH AND (i5iH EQttVALENTS AT 31 DECEMBER 5
NolO
10
15 20 21 20 S
20 22 9
is
20
9 10 4 4
11)13
QR
5122846amp9
(245(51101) 4lA95449
4056969
2294590 (737647)
2380611 (2$24216)
44930$77
_~499901l
34133lno
82822711 (3lH12654) 5312iL387
~82753)
4112788011 (45056522)
_t221Q7S6)
35S52q733
2824116 1274457
119921185 9568U47)
Jl~870))741
_ (141_~3464ol
(149939995) __ ~~__f)~_L
JlplusmnB699~)
643fi4ns
~~Sif99~2U1
~pound2d9M2t
2ul2 QR
6+5~30X9
(388792483) 42540J((1
4205499 (S36)743 J 1361120
178610 2208263
(2Sl4392) 5206389
(234Q350~1
32J ~n2A89 (6[90(304)
(l46739948) 136)0977
_ 62q660
312291614 (58643654)
(432095)
-14932OI5
2894]92 609659
10049971 (72719187)
l 6594 s05) (40A toDOO)
~71~9631
Q4sectS26)Jl
237n(j7n
--1113-0~OO~~__
__ 25c~f)7J33
223251515 (3090 I 7)
5OO(UtOC ~~_6pound~Ag2
64t996~ijl
The atlached iIOle~ to 33 form an integral part of Llese corsokiated financial slUlement$
6
Aamal Company QS C
CONSOUDATED STATEMENT OF CHANGES IN EQU ITY For the year ended 3 I December 20 13
Alfribulable (Q equitY hulders Q[the parent
Cumulative N OII-
Share Legal Treasllry chollgein Retained conrro lfing Tf capilal resenc shares fair value earnings Tolal inereslS equity
QR QR QR QR QR QR QR QR
Balance at 3 December 20 J I 4950000000 267955805 61 4024 670 583 1980475 14 1645505 5973625980
Boougt shares issued (Nole 27) 495000000 (495000000) Profit for the year 594892946 591 892916 2962054) 6245 13489
Other comprehensive income for the year (416) (41 6) 109998 109582
Treasury shares acquired througb business combinati on (2075865) (2075865) (2075865) Adjustmenl due to loss ofcontrol of a subsidiary (983 643) (983643) Derecognition of non-controlling interest due 10 liquicbtion of
a subsidiary 55932 55932
Transfer to legal reserve 59489296 (59489296) Con(ribUlion from non-colllrolling inte rest 59232919 592329 19
Contribution to socia l and sports activi ties fu nd ( 11612837) ( 156 12837) (1561 2837) Non-controlling interest acq uiJed without change ofcontrol (Note 4) (567208) (567208) (39842792) (404 I 00Cl0)
Balmce at 3 1 December 20 12
Bonus shares issued (Nole 27)
Profit for the year Other comprehensive income for the yeM
Transfer to legal reserve
Cootribut ion from non-controlling interest
Contribution to social and sports activities fund
544S00000Q
555000000
32 7445101
5068745 1
(2075865) (4 16)
4485
638248275
(55 5000000)
506874507
(506amp745 1)
( 12807 11 7)
64086 17095
506874507
4485
(12807 11 7)
189838462
54 10 182
15 35
70000
6598455557
512284689
6020
70000
( 128071 122
Ballnce at 31 Decem ber 2013 6000000000 378132551 (2075865) 4069 5266282 14 6901688970 195320 179 7098009149
The a(tached notes 1 to 33 fann an integra pan a fthese consolidated financial slatements
7
2
Aamal Company QSc
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 3 I December 20 13
CORPORATE IN FORMATION AND PRINCIPA L ACTlVIT IES
Aamal was funned on 13 January 2001 as a private shareho lding company with limited liability (W LL) under the COlrunerciaJ Registration Number 23245 in the Slate of Qatar On 12 Ju ly 2007 the private shareholders resolved to transfonn AamaJ into lt) Qaari Shareholding Company (O SC) (the Company) Accordi ngly the Company was listed on Qatar Exchange on 5 December 2007 The Companys registered office is at P O Box 224TI Doha Sttlle of Qatar
The Compaoy is organised inlo a head office (Aamal) cllld branches and operates in the State of Qatar The fo llowing table sets out the principal activi ties of the branches
Brancb Principal aellvities
C ity Center Qatar Branch Leasing the facilities of the re tail outlet complex in Ci ty Cen ter Doha
Aamal Real Estate Branch Residential and commercial real estate investment and property rentaL
Aamal Readymix Branch Production and sale o f readymix concrete
Ebn Sina Medica l Braoch Wholesa le and retail distribution of phannaceulicals aod general consumable products
Aamal Medical Branch Wholesale d istribution of medical eq uipment
Aamal Trading and Dis tributioo Sale of tyres lubricants batleries and home applian~s
Branch
Amnal Servi~s Branch Providing facilitie s management arld cleaning services
Aamal T ravels Branch Operating a travel agency
Aamal fur Indus trial Projects lndusllial investments Branch
Good Life Phannacy Branch Sale of phannaceuticals baby care products medicine and general cOllsumable products
Foot Care Center Branch Sale of footwear clinical activities and general commercial tradillg products
The consolidated financial statements were authorised for issue by the representatives of the B03Id of Direclors of Aamal Corupaoy QSc on 20 February 2014
BASlS OF CONSOLIDATION
The consolidated fioancial statements comprise the fioancial statements of AamaJ Company QS C (the Company) and its subsidiaries and joint controlled entity (together referred to as the Group)
Subsidiaries Subsidiaries are enli ties controlled by tbe Group The Group controls an entity when it is exposed to or has rights 10 variable returns of its involvement with the entity and has the abili ty to affect those returns through its power over tle entity The fi nancial statementS of subsidiaries are induded in the consolidated finarlcial statements ITom the date on which control commences unti l the date on which control ceases When the Group loses control over a subsidiary it dereognises the assets aoo liabilities o f the subsidiary and aoy related non-cootrolliog interest and other components of equity AllY resulting gain or loss is recognised in consolidated statement of income Any interest re ta ined in the fonne r subsidiary is measured 01 f3i r value when control is lost
8
2
Aamal Company QS c
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 31 December 2013
BASIS OF CONSOLfDA TiON (continued)
Subsidiaries (continued) Set oul below are Ihe Group s principal subsidiaries at 3 1 December 2013 Unless oUlenvise slated the subsidiaries as listed below have share capital consisting solely of ordinary shares wh ich are held directly by the group and be proportion of ownership intereSIS held equals 10 the votiug rights held by Group Tbe country of incorporation Of
registration is also their principal place of business
Comp(my name
Aamal Cement Industries W LL
MO Qat1 Company WLL
Senyar Indus tries Qatar Holding WLL
Doho Cables Qaw WlL
EccoGulf Compaoy WLL
Advanced Pipes and Casts eompmy WLL
Johnson Controls Qatar WL L
Country 0 lJCQr por ation
Qator
Qatar
Qatar
Qatar
Q 31ar
Qatar
Principal (lcfi ity
Development and mlUlagement of factori es and the prodllaion or curb sl~ne i llleriook slabs lIId cement bricks
Construction and repai r of power plant es tablislunent and man3gemenl of industrial enterprises aud ac ting as a representative for the imcmatiOllru companies
Management of subsidiaries and associates ovming of palen~ businesses and subleltiug Ulem and provision of investment port fo lio management for Its
subsidiaries and Msocialts UOkr the shareholders agreement signed between the Group and the other
shareholders the Group is able 10 appoint the chai rman and two other members 10 (he Boflrd of Direc tOfS (out of six members) and is able to govern the fin ancial and operating policies of Senyar Industries Qatar Holding WLL Accord ingly ~ company is considered as a subsidiary oCthe Group
Mailltenance and mallllfacture of electric cables equipmelll and lools Doha Cables QalaJ WLL is
91875 (eITectively) owned by Senyar hldush es QaUlr Holding WLL a subsidiary of tllC Group TIIe Group has (he power indi rectly through SenyM [ndus tJi cs Qatar Holding WLL 10 govern fi nancial and opera ting policies of Doha Cables Qatar WLL and accordingly the company was considered IS a subsidiary ofthe Group
OITers professional and bus iness process outsourcing and Cll )] center services
Manufacturing of Wide cement md amplass reinforced pipes systems for infrsslICture (lnd pipeline projects
The Gro up h~ the power 10 govern ~lot financial and opera1 ing policies or Adv3I1ced Pipes and Casts Company WLL by virtue of a sllarchokJers agreemeot TIlus the Company has been cotls ldcrOO as II subsidiary of the Group
Provision of racililies management service5 energy se-rvices md building maimetlaoce and cleanlg services to corporate cl icn1S
PlOporl ion oj
oWPersllip held by the
Non
Group COnroiling interest
99 1
60 40
50 500
459 54 J
5 1 490
50 50
51 49
9
2
Aamal Company QSC
OTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For toe year ended) J December 2013
BASIS OF CONSOUDA nON (continued)
Suhsidiaries (wntiourd)
Cmmffyoj fNgtpvniOil j irniJpvroliin ~__~ampiphdd~~
Nor G)1)Ji contfoifgtg
iMeregt
CmiddotSan TI~ing WLL Sdilamp lYJy1ng renting me Mltcentlopil12 [e~ tSite 30 invimenl w shams rnlilVigemc1t vf real lsta propeItilttl owning ille palent and tradcentmut and tnlding in iXjUiflfIfflt amJ vcilici$ 1he GroClp has tJe pcwer tv goem 6e ~inr8hl and ojJrtltllng
roicie_~ of ClSM by vifcle 0 a shlrcholdcrs 191e~mcentn(
745 25 1~i
nnoV1iv lightinf wmpany Qatar TNriing of Ught 2rrt1nz DiDd lEU Lwpj lmd 7r J) WLL olhT $hlil1g prrltwl
Twdiflg of of4 SiJpplk-s and providll$ prindna and 65 35 laniniltmJ sltrce~
Non-coufroUing illterests Non-controrling intel(SlS are measwed tj tleir propO(hOnile $hue Ot the tcquirees identifiabk net asscl III the JCqUiSlOt1 rote Chuegts in t1e Groups imcest in i $ubsiciwty hat do tot rcmltlo a loss of ~)I1a1)l xc accountd for as equity trnramplclions
Tamil-crions eUminnted on c)lwtidaticu lntngtgroup baiances Jue transactions 00 any unrealised income 1nd expenses ari$tng from intrnwgrOU tranSaOiQlls arc eiimmatcd UfiJeaiiHd gaina arising from ITaUstlclions ttlt equity-lKcoUl11uJ IlVtSlCCS are eliminatd 1gamst the investment 10 the extent oftlle Group interest in the inveMee Umaslised loses are eiiminatd II the same VllY us unrvalised gains hit only to Ille eXfeut that there is 10 evidence ofimpaimcentut
Illttn~ts in jOint arrangements iu)d associates Detais ofeach of ttc Groups Hutilrial Joint venlU)s fujltj assoeime~ at the end of the reponing period are 5 [OHOViS
Cmnirycgt PltJporlion qf Compao name infOjwNiIIO1 ewonlup Qltd
vOingjYwer htld by
tiff GrOlp
[I Sewed Cable QntM Tndllg in ele(mHnechmita CGlJ)ptnefllmd plOvicmg WLL rei) services El SWNed Cables )ilMr WLL is
49 JWoo (Wilt 55 tblre of rrofils (losses) hy StHyar lrdl11(rie~ Qal3t Hodirg WLt e 511b8idimy 0 ~he GOllp However (kw 10 ~ feiBtil shareholdergt agreewli pound ellWY has I~)mc a jOm vent( eTdive trmJ l January 20 wllkh is mC(t511rec Il1de the eqJity ngtU1l
rins $tngtdJBI S~ 1idJgt (law Ertity lS engaged l sled (b[iclli0ls Gf0Jp mtllpoundure Ea LC t11cent fl5sodau under cquhy nlctooo
Aamal Company QS c
NOTES TO THE CONSOLIDATED FlNANClAL STA TEMENTS For the year ended 31 December 2013
3 BASIS OF PREPARATION AND SUMMARY OF SfGNlflCA1T ACCO UNTING POLICIES
31 BASIS OF PREPARATION
The consolidated fi nancial statements have been prepared in accordance with lntema tional Financial Reporting Standards (IFRS) and the appLicable requirements ofQalar Commercial Companies law No5 of 2002
The consolidated financial statements have been presented in Qatari Riyals (QR) which is he Companys floclional and presenUll ion currency and have been rounded to tlle nearest Qatari Riyal TIle consolidated financial statements are prepared lUlder the historical cost convention modified to include he measurement a l fair value o f investment properties and available-for-sale investments
32 CHANGES IN ACCO UNTING POLICI ES
The [lccoWiting policies adopted are consistent wilh Ihose of the previous fi nancial year except for the following standards effe ctive for the annual period beginning on or lfter 1 Jlnuary 20 13 These standards and amendments other tM n the impact of (FRS II - Joint Arrnnge menlS noted below did not have aoy malenal impact to the Group
lAS I (amendment) - Presenfalion of items ofother comprehensive income The amendments to IAS I require that an emity present separate ly the items of ltN her comprehensive income that would be reclassified to profit or loss in the future if certain conditions are met from those that would nC ver be reclass ified to profit or loss
lAS J9 - Employee benefits (201) lAS 19 (201 1) changes the definition of short-tenn and other long-tenn employee benefits to clatify the di stinction between the two
lAS 28 (201 f) - fnvesfmem in Associates and Joint ventires lAS 28 (2011 ) supersedes lAS 28 (2008) lAS 28 (2011) makes the foHowing amendments Associues held for sale JFRS 5 Non-current Assets Held for Sale and Discontinued Operat ions applies 10 an investment or a portion of an investment in an associate or a joint venture that meets the criteria to be classified as held fo r sale For any retained portion of the investment tlwt has not beell classified as beld for sale the entity applies the equity method until disposal o f the portion held for sa l ~ After disposal any re tained interes t is accounted for using the equity method if the re tained interest continues to be an associate or a joint venture and 0 0 cessation of significant influence or jo int conltOl even ifan investment in an associate becomes an investment in a joint venture or vice versa Ihe entity does not fe-measure the retaincd interest
Amendments ft) fFRS 7on ofseftingjil1ancial assels and jinancialliabilities (2011) Disclosures - O ffsetti ng Financial Assets and Financial Liabilities (amendmems to FRS 1) introduces disclosures bout Ihe impact of oetting arrangements on an entity s fin ancial position Based on the new disclosure requirements the Group has to provide inforroation about what amounts have been offset in the consolidated statement of fimmcial position and the nature and extent of rights of set o ff under master netting aITlngements or simi lar a1Tlngernents
fFRS 10 - Consolidate1 financial SIOlemenlS and lAS 17 Separate Fillancial SfalemenS (2011) [FR S 10 introduces a single control model to determine whether an investee should be consolidated FRS 0 replaces the parts of previQlSly exis ting lAS 27 Consolidated and Separate Financial Statements that dealt wi th consolidated fin ancial statements and SIC-12 Consolidation - Special Purpose Entities This new contro l model fo cuses on whether the Group has power over an investee exposure or righlS to variable rerums from its involvement with the in veSlee lnd abili ty to use its power to affect those returns The Group has amended its accounting policy on consolidation in line with requirements of TFR S 10 and has re-assessed its consolidation conclusion
[FRS 12 - Disclosures ofimerests ill other entities IFRS 12 brings together into a single Sfandatd all the disclosure requirements about an enti ty s interests in subsidiaries jo int arrangements associates and unconsolidated structured entities It requires the disclosure of infonnation about the nature risks and financial effects of these interests
II
Aamal Company QSc
NOTES TO THE CONSOLIDATED FTNANClAL STATEMENTS For the year ended 3 1 December 201 3
3 BASIS OF PREPARATION AND SUMMARY Of SIGNIFICANT ACCOUNTrNC POLICIES (continued)
32 CHANGES IN ACCOUNTING POLlc ms (coDtinued)
IFRS IJ Fair ~alue measuremetll TFRS 13 provides a single source of guidance on how fair value is measured and replaces the faif value measurement guidance tha i is currently d ispersed thIo tlghool [FRS It unifies the definiti on of fair va lue as the price that would be received 10 sell an asset or paid to transfer a liability in an orderly transaction between market participants a t the measurement dale It replaces and expands the disclosure reltjuiremenlS about fair value measurements in other IFRSs including TFRS 7
Improvements (0 IFRSs (20 ) Improvements to IFRS issued in 20 11 contained numerous amendments to IFRS that the IASB considers nonshyurgent but necessary Improvements to lFRS comprise amendments that result il) accounting changes to presentation recognition or measurement purposes as well as tennioology or editorial amendments related to a varie) of individuallFRS standards
During the period the Group has adopted the fo llowing new s tandard which became effecti ve for the annual periods beginning on I January 201 3 which had a materi81 impact to ule Group
IFRS II Joint AlTwlgements As a result of adopting IFRS II the GrOlp has changed its ltlccoUJ)ting policy for interests in jo int a rrangemeots Uuder rFRS 11 the Group classifies its interest in jo int arrJngements as e imer j oint operations or joint ventures depending on the Groups rights to the assets and obligations for the liabil ities ofthe arrangements When maldng this assessmenl the group considers the strucltire of the arrangements the legal fonn of any separate vehicles the contrac tual tenns of the arrangements and other fact s and arrangements Previously the structure of tbe a rrangement was the sole foc us of classification The Group has re-evaluated its involve men t in ils o nly joint a rrangement El Sewedy Cables Qatar WLL ltlnd has recla ssified the investment from jointly controlled entity to joint venture Also the Group has discontinued with re rrospective effect the use o f the proportionilte consol idation method and adopted the equity method to account for joint venture in accordance mth IFRS I I
Summary oquulllitative impuct The following tables summarises the materia l impac ts rcsulting from the above change in accounting polic ies on the Groups financ ial position profit o r loss and cash flo ws
Effect of chnnge in 31 Decemb er2012 accounting policy
Cunem assets (278 880441 ) Non-current assets 1295 1346 Total assds (265929095)
Current liabilities (265072694) NonmiddotcWTent liabilities (856401) Total lin bill ties (265929095)
For the year ended 31 December 2012
Profit for the year
Net chflllge in cash and cash equivalents dlUing the year (99696J)
12
Aamal Company QSc
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 3 I December 2013
3 BASIS OF PREPARATION AND SUMMARY OF SlGNlf[CANT ACCOUNTING PO LICI ES (continued)
33 lASB STANDARDS AND lNTERPRETATIONS ISSUED BUT NOT ADOPTED
The following lASB standardsamendments hJve been issued but are not yet mandatory and have 1l0( been etrly adopted by the Group
Standard
Illterpretotion COnem EffeClive dale
TfRS9 Financia l InstrumentS (new standard) I Januruy20 17
IAS 32 Financia l Instruments O ffsetting (amendment) I January 20 14 JAS 36 Financia llnslnnnents Disclosure - non-fi nancial asse ts (amendment) I January 2014
The Group is considering the implications of the above standards and the till1ing (If adoption by the Group
34 SUM MARY OF SIGNIFICAJT ACCOUNTING POLICI ES
Bu siness combinnriO llS The Group accounts for business combinations using the acquisitio n method wben connol is Imasferroo to the Group The consideration ITansrerred n the acquisition is generally measured at fa ir value as are the identifiable net assets acquired Any goodwill that arises is tested annua lly for impairmeot AllYgain on a bargain purchase is recognised in pro fit or loss immediately Transaction COStS arc expensed as incurred except if rehated to the issue of debt or equity securities
The considera tion transferred does nOt include amounts related to the settlement of pre-existing re lationships Such amounts are recognised in profit or loss
Any contingent consideration payable is roeasured at fair va lue at the acquisition date If the contingent consdicrntion is classified as equity then it is oote nmeasured and settlement is accounted for within equity Otherwise subsequent changes in the fa ir value of the contingent consderafion are recognised iu profit or loss
Cash a nd eash equivalen ts For the purpose of the consolidaled statement or cash flo ws cash and cash equivalents consist of cash and bank balaoces ruld short teJTIl bank deposi ts wi th an original marurily of three months or less net of outstanding bank overdrafts
Accounts receivable Accounts receivable are stated at originill invoice amount less an allowance for any uncollectible amounts An estimate for doubttit debts is made when collection of the flilt amount is no longer probable Bad debts are wntlen off when (here is no possibility o f recovery
Inventories Inventories are stated at the lower of cost and net realisable value Costs are those expenses incurred in bringing each product to its present location and condition
Goods ror resalework in progress - Cost of di rect materials aJld labour plus attributable overheads based on a oormallevel ofac1i vity
Raw material and spare pan s PlIlchase cost on a weighted average basis
Net realisable value is based on estimated selling price less any further costs expocted to be incurred to completion and disposal
13
Aama Company QSc
NOTES TO THE CONSOLIDATED FINANC IAL STATEMENTS For tbe year ended 31 December 20 13
3 BASIS OF PREPARATION AND SUMMA RY OF SIGNIFICANT ACCOUNTfNC POLI CIES (contin ued)
34 SUMMARY OF SIGNIFICANT ACCO UNTLNG POLICIES (continued)
Interests in equity-aecoupled inveslecs The Groups interest in equity-accounted investees comprise interest in associates and joint venture
Associates are lhose entities in which the Group has significant influence but not control or joint control over the financia l and operating policies A joint vennu-c is an arrangement in which the Group has jo int ool1lrol whereby the Group has rights to the net assets of the arrangement rather thall rights to its assets and obugations for its liabilities
InlereSIS in associates and the joint venture are accoliDted for using the equity method They are recognised initially tit cost which includes transaction costs Subsequent to ini tial recognition the consolidated financ ial stateme nts ioc lude the Groups shrre of the profit or loss and other comprehensive income of equity-accounted investees unti l the dalc on which significant in Lluence or joint control ceases
The reponing d~les of the equity-accounted investees and the Group are identical and the equi ty-accounted investees accoWlting policies confonn to those used by the Group for like tmnsactions afld events in similar circumstances
Investmefl t properties umd aod buildings are considered as investment properties only when they are being held to earn ren tals or for capital appreciation or fo r both
Investment properties are measured ini tia lly at cost including traosaction costs and borrowing costs that are directty attributable to construc tion o f the 8sseL The carrying alRount includes the cost of replacing part of an existing investment property at the time that cost is incurred jf toe recognition cri teria are mel and excludes the costs of day-to-day servic ing of an investment property Sub~quent to inilial recognition investment propert ies are slated at fa ir value which reOects market conditions at the reporting date Gains or losses arising from changes in the fa ir values of investment properties are included in the consolidated statement of income in the yeltl r in which they arise
Investment properties are derecognised when either they have been disposed off or when the investment property is pennanently withdrawn 1T0m use and no fu ture economic benefit is expected from its disposal Any gains or losses on the retirement or disposa l of aD investment property are recognised in the consolidated statement of income in the year of retiremeOl or disposal
Property under construc tion is dealt with under lAS 40 and rttorded at cost less accumulated impairment losses until either its fair value becomes relia bly detenninable or cons(TUction is completed (whichever is earl ier) At that time it is reclassified as inves tment property and a fa ir value adjustment is recognised in the consolidated statemenlof income
Transfers are made to or fro m in vestment property onl y when there is a change in use For a transfer from investmen propeIT) to ovmer occupied proreIT) the deemed cost for subsequent accounting is the fair value at the date of change in use If owner occupied property ~omes an investment property the difference between the canying value aoo the fair value at the date oflransfer is rttognised as a revaluation reserve in the equity and is released to the consol idated sta tement of income llpon disposal of such propcny
14
Aamal Company QSc
NOTES TO THE CONSOLIDATED FrNANCIAL STATEMENTS For the year eDded 31 December 20 13
3 BASIS OF PREPARATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLI CIES (continued)
304 SUMMARY Of SIGNIFICANT ACCOUNTING POLICIES (continued)
Property plant and equipment Property plant and equipment is stated at cost including borrowing costs that are eligible for capitalisation and excluding the costs of day-to-day servicing less accumu lated depreciation and any imp~innem in value
Depreciation is provided on a straight line basis on all propelT) planl and equi pment The rales of depreciatioo are based upon the following eSImnelt useful lives
Buildings 20 years Leasehold improvements 2-8 years Truck mixers and motor vehicles 4-1 5 years Plant and ITIJchioery 8-2 5 years Furniture fixtures and office equipment 3-5 years Computers and related software 3-5 years Capital work in progress Not depreciated
The carrying amounts are reviewed for impain nellt when events or changes in circumstances indicate that the carrying value may not be recoverable If any such indication exists and where the carrying values exceed tbe estimated recoverable amouot the assets are wri tten down to their recoverable amount being the higher of their fair value less costs to sen and their value in use
Expendirure iocurred lO replace a component of an item of property plaot and equipment that is accotmted for separately is capitalised and the carrying amount of the component that is replaced is written off Other subsequent expenditure is capitalised only when it increases furure economic benefits of the related item of property plant and equiproent Al l other expendirure is recognised in the consolidated statement of income as the expense is Incurred
An item o f property plaot and equipment is dereeognised upon disposal or when no future economic benefi ts are expected from its use or disposal Any gain or loss arising on derecognilloo of the asset is iocluded in the consolidated stalemeot o f income io the year the asset is derecognised
The asset s residual values useful lives and method of depreciation are reviewed and adjusted if appropriate at each rnancial year end
Borrowing costs Borrowing costs direc tly attributable to the acquisition constmction or production of an asset that necessarily takes substalltjal period of time 10 get ready for its intended use or sale are capilalised as pan of the cost o f lhe respective assets All other borrowing costs are expensed in the year they incur BOlTOwiog COSts consist of the interest and other costs that the Group incurs in coomction with the borrowing of fund s
Accounts paytlble and accruBls Liabilities are recognised for amounts to be paid in the fuMe for goods or services received whether billed by the supplier or not
Interest bearing loans Bnd borrowings Interest bearing loaos and borrowings are recognised ini tiaJy at fai r value of the amounts borrowed less direc tly attributable transaction costs Subsequent to initial recognition interest bearing loons and borrowings are measured at amortised COSt using the effecti ve interest method with any differences between the cost and tinal settlement values being recognized in the conso lidated statement of income over the peliod of borrowings Instalments due within one year aI amortised cost are shown as a ctuTentliabiliry
Gains or losses are recogTlised in the consolidated sialement of income when (he liabililies are derecognised Interest relating (0 imerest bearing loans and borrowings is expensed in the year in which it is incWTed e(cept those qualify for capitalisation
15
Aamal Company QSC
NOTES TO THE CONSOLIDATED FfNANClAL STATEMENTS For tbe year eoded 31 December 201 3
J BASIS OF PRpoundPARATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
34 SUMMARY Of)SIGNIFICAtlT ACCOUNTING POLICI ES (continued)
TClaot deposits Tenant deposit liabilities are initially recognised at fair value and subsequently measured at amortised cost where material Any di fference between the initial fair vllue and the oominal amount is [eluded as a component of rental income and rocognised on a straight-line basis over the lease term
Derecognition or fiolocial nsstls and liabilities
a) Financial assets
A fi nanCIal asset (or w~re apphcabJe a part of a fin ancial asset or part of a group of SImilar financIal assets) IS derecogmsed where J bull The n ghts to receIve [5h flo ws from the asset have expIred bull The Group has trans f rred Its rights to receive cash flows from the ass or has assumed an obhg811On to pay the
reltelved cash flows I full Wlthout mfl tenal delay to a third party under a pass-through arrangement and elther (3) the Group has Ira sferred substantially aIthe nsKs and rewards of the asset or (b) Ihe Group has neuher transferred nor relain substantially ai the n sks and rewards of the asset but has tnlnsferred control of the asset
When the Group has tTa~fened its rights 10 receive cash flo ws from an asset or has entered into a pass-waugh arrangement and has nejlher trmsferred nor reta ined substantially all of the risks and rewards of the asset nor trnnsferred control of the asset the asset is recogoised to the extent of the Groups cOlilinuing involvement in Ihe
In that case the Group at 0 recognises an associmed liability The mnsferred asset and ihe associaled liabi lity are measured 00 a basis thai flects Ihe rights lnd obligations that the Group has retained Continuing involvement that takes the form of a guara tee over the transferred asset is measured at the lower of the original canying amount of Ihe asset and fbe maxim amoun o f consideration that the Groop could be required to repay
b) Financialliabiliti
A financial liabili ty is defogniSed when the obligation under the liabil ity is discharged or cancelled or expires Where an existing fio8 1lci I liability is replaced by another from the same lender on substantia ll y d ifferent lenns or the terms of an existin liabili ty are substantia lly modified such an exchange or modification is treated as a derecognition of the orig~al liabili ty and the recog1Jitioil of a new liability and the dirference io the respective carrying amounts is reco ised in the consolidated Slatement o f income
Impalr meot ood uncollec ibility of fina ncial assets An assessment is made al each repon ing date to determine whether there is objective evidence that a speci fic financial asset may be impaired If such evidence exists allY impainneOl loss is recogoised in the consolidated statement of income ImT t is detemtined as fo llows
(a) For assets earned a t fair value impainnellt is tbe difference between cost and fair va lue (b) For asseamp carried at COSt impairment is the difference between cost and lIle present value of future
cash flo1S discounted at lhe current market rate of rdurn for a simi lar finan cial asset (0) For asseq carried al amortised COSt impainneot is the difference between canying arnOWll and lhe
present Value of future cash flO M discowlled at the original effective iDlerest rate
Provisions Provisions are rewgnised hen the Group has an obl igation (legal or COnslnlctive) aris ing fro m a past event and the costs to settle the obl igalio are both probable and able to be reliably measured
16
Aamal Company QSc
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 31 December 2013
3 BAses OF PR EPARATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICI ES (colltinued)
34 SUMMARY OF S IGNIFICANT ACCOUNTING POLICIES (continued)
Employees eod of service benefits The Group provides end of service benefits to all employees in accordance wi th employment contracts and Qatar Labour Law The entitlement to these benefits is based upon the employees final salary aocl length of service subject to the completion of a minimum service period The expected costs of these benefits are accrued over the period ofemployment
Revenue Revenue is recognised to the extent thal it is probable that the economic benefits will flow to the Group and the revenue call be reliably measured Revenue is measured al the fair value of the consideration received excluding discoWlIS rebates and duty The following spec ific recognition criteria must also be met before revenue is recognised
Sale ofgoods Sales are recognised whcn significant risks and rewards of ownership of the goods have passed to the boyer and the amount of revenue cao be me3sured rcli3bly
Rental income Rental incorne from investment properties is accoWlted for on a time proportion basis over the period of tenancy Incentives for leases to enter into lease agreements are spread evenly over the lease teon even if the payments are not made 0 0 such basis Income arising Tom expenses recharged to tenants is recogn ised in the year in which the expenses can be contrac tually recei ved Service charges aud other such receipts are includcd gross o f related cosls in revenues as the Group acts as principal io this regard Premiwns received to terminate leases arc recognised in the consolidated statement of income when they arise
Service income Service income is recognised when the service is rendered and the outCQrne of the transactions can be estimated reliably
COlimission Commission is accounted for on an accrual basis when the right 10 receive the income is established
become on tra~el agencies [ncome on travel agencies is accounted for in the year in which the airline tickets are sold
IIIeresr income Joterest income is recognised as the interest accrues using the effective interest Clle method
Foreign currencies Transactions in foreign currencies ate recorded al tbe rale ruling at the date of the transaction Monetary assets and liabi lities dcoomioated io foreign currencies ace retranslated ill the raLe of exchange ruling at the reponing date All differences are recognised in the Statement ofinconlC
Use of estimates The preparation of (he Groups consolidated financial sta temenls in CQnfonnity with Intemltional Financial Reponing Standards ([fRS) requires management 10 rnake estimates and assumptions that affect the reponed amounts of assets and liabilities and disclosure of contingent asscts and liabili ties at the rcporting date and the reported amoUlils of revenues and expenses during Ihe reponing period Although these estimates are based on managements best knowtedge of current events nnd actions acnm results may ul timately differ fro m those estimates (Significant asswnptions nccounting judgments and estimates used in preparing these coosolidated fina ncial sta temenlS are disclosed in Note 31)
The estimates and underlying assumptions are reviewed regularly Revisions to accounting estimlIes are recognised in (he period in which the estimate is revised if the revision affects only that period or in th~ period of the revision and future periods if the revision affects both current and fu ture periods
17
Aamal Company QSC
NOTES TO THE CONSOLlDA TED FINANCIAL STATEMENTS For tbe year cnded 31 December 2013
3 BASI S OF PREPARATION AND SUMMARY OF SrGNIFICANT ACCOUNTING POLICIES (continued)
34 SUMMARY or SIGNIFICANT ACCOUNTING POLI CIES (continued)
Fair va lues A number of Groups accounting policies and disclosures require tJ1 C measurement of fair values for both financial and non-financial assets and liabil ities The Group has an established control framework with respect to the measuremeot of fair values When measuring the fair value of an asset or a liabili ly the Group uses market observable data for (be valuatiOD Fair values are categorised into different levels in a fair value hierarchy baCd on the inputs used in the valuation lechniques as follows
i) Leve l I - Unadjosted quoted prices io active markets for identica l assets and liabilities ji) Level 2 - Otheqobservable inputs not included within level 1 of the fair value hierarchy ii i) Level 3 - Unobtervable inputs (including enti ty s own data which are adjusted if necessary to retlect the
assumptions market participnllts would use in the circumstances) The Group recognises tralnSfers between levels of the fair value hierarchy at the end ofthe reporting period during which the change has ocdWTed_
Treasury shares When share capitl recognized in equity is repUIchased (by the Company or any of its subsidiaries) the amount of the consideration paid which includes direa ly altributable COSIS is recognized lIS a deduction from equity Wheo treasury shares are sold or reissued subsequently the amount received is recognized as no increase in equity and the resulting surplus or deficit on the transaction is presented io share premium
18
4
Aamal Company iQSc
NOTES TO THE ONSOLlDATED FINANCIAL STATEMENTS For the year ended 31 ecember 201 3
BUSINESS CO~BlNAnON
Acquisition o f Culf ROks Company VLL On 1 January 2012 the roup acquired 51 oflhe voting shares of Gulf Rocks Company WLL (Gul f Rocks) a limited Iiabiliry campan incorporated in Qatar and registered UJKier conunercial registration number 2249) The acquisition was made thT ugh Ci-San Trading WL L a subsidiary which is 50 owned by Aamal Group
I
The fai r val ue of lbe ideltifiable assets and liabilit ies of Gulf Rocks Co mpany WLL based on purchase price allocation exercise condlcd by tbe management as at the date of acquisition WJ S as follows
Fair value recognized on
acquisition QR
Assets I Cash and bank balances 14005495 ACC QUOiS receivable and wePayments I 749383 Amouots due from related plrties I
I oveotones
48311 190 5124 270
Available for sale investm~nlS 1985245 Plant and equipment 6769 17
81852500
Liabilit ies Accounts payable aJld accll1als 4724446 Amounts due to related parties 385070 Employees end of serviccibenefits (Note 15) 349272
5458788
Total identifiable net a5sellf
Purchase consideration trasferred Non-controll ing intereSt az-ising on business combination Bargain purcha5c gain rc~u ting from the tcquisilion
Allalysis ojcash flows OIl acquisition Net cash acquire11 Nith the subsidiary 14005495 Cash paid (30600000)
(16594505)
On I September 20 12 the Company acquired the balance 49 nfthe equiry of Gulf Rocks Accordingly the Group has 74 5 effective holdin4 in Gulf Rocks as at the reporting dale The excess nfthe purchase cons ideration over Ihe fair value o f net assets of GuJf Rocks acqui red from the nnn-controlHng interest has been recorded directly in the retained earnings of tbe Gr6up as at 31 December 201 2
QR Purchase consideration 404 10000 Less fuir value of oet asset~ acquiroo from the non-controlling Interest holder (39842792) EXce5s of purchllse cons idf ration over the fair value of net assets a(q uired 567208
19
5
Aamal Company QSC
NOTES TO THE (WNSOLlDATED FfNANClAL STATEMENTS For the year eoded 3 ) December 2013
CASH AND CASH EQUIVALENTS
For the pmvose of consolidated statement of cash flows cash and cash equivalents comprise the fo llowing balances
lon 2012 QR QR
Cash and bank accounts 330333904 282272895 Short lenn bank deposits 105802852 85608396 Cash and bank balances 436136756 367881 291
Bank overdrafts (6836280) (2885090)
Cash and cash equivalents 429300 476 364996120 1
The short tenn bank deposits are made for varying periods between one day aod three months depeoding on Ibe immedifltc cash requirements of the Group and earn interest at the respective short term deposit ra tes
6 ACCOUNTS RECEfVABLE AND PREPAYMENTS
2013 2012 QR QR
Trade aCColUlts receivable 411 011 567 345260657 Advances 0 suppliers and prepayments 50787921 629389J 5 Retention receivables 36217081 56943030 Other receivables 12073270 17 139173
5tO089839 4 82 28 1775
As at 31 December 2013 trade accountS receivoble amoWlting to QR 2690 1412 (201 2 OR 24984025) were impaired Movements in the allowance for impairment of trade aCColmts receivable were as follows
2013 202 QR QR
At 1 January 24984025 1 877085 Charge for [he year (Note 21) 2294590 13613 120 Amounts wriuen off (19949) (117368) Unused amotmts reversed (357254) (388812)
At 3 t December 26901412 24984025
20
6
1
lamal CompanyQSC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMEltS For the year ended 3 J December 2013
ACCotNTS RECEIVABLpound AND PREPAYMpoundNTS (contillued)
As at -1 I Dtcemxt the ageirg of unimpaired (ltlde accounb iltcivabk was as follows
P(HI duo
nor Up to 30 31-60 61middot90 Yi-jSj gt flO Tota impoirlt-fl days days days day doys
QR QR QR QR QR QR QR
1l13 411OJl$67 25l981960 32312165 2140966 19351fi43 16f)76888 60148545 2012 345260657 1695159B6 493lt)8566 2356$954 19494369 16908414 66374363
1JJJirtpai~ed receivable are expected no th bil5tS of past experienn) 10 be fully fcCi)evbc H is not the pngtctlce ofthcent Group to oblum collaleral over recejvablcI_
AMOLNTS DUE FROyl REL-TEO PARTIES
Name
AI ~aisnl Holding Company V_LL E Seweo Cabtes Qatn WL L Cnild -ftt Cvmlllny Al hz Retll E$vt rWesnnim Company WLL~ AllaZi Real Estale BrAnch EI Sewedy Electric Egypt WLL MuincrDJ1Ce Mwagmvont Group Qat3r W LL Good fe Cheffilt - The Pcarl
BuderPhtrnacy Al Faisallnlemadonal Tnl(i and Investment Company WLL AI-rabia Land Trnr~PQltit1g Company rLL ro Sewedy CabLes - Kuwuit Gcentttco hlttrnJmJilI Frijns StHytural Steel Middle East WLl Winer Wunderand Company WLL Al FtOH1H for Investment amp llllemtiOl1a Trading COntpAny WJ_L Q)lar Bahrain lmerOlnionai Cnero3 WLL Gulf EngJisb Sltl-Qo] Al Rayyao Tourism lve$lrnent Company W LL Other relater purties
2013 2012 QR QR
15412-1064 ll941Y70 34644615 ~li96858l
[()0405 14-45012 51 59197 9538116 15514113 4014727 236824$
1867526 LSOfd22
8(1012 10435r 311650 746395
15023 204450 459829
2iYHi 244940 186750
152170 143440 33500 7768(1
6259 1459lt) 758962-1
__2~61g~~_ 1~95Ji
bull 214109950 171525363
--__ shy
7
8
9
Aamal Company QSc
NOTES TO THE CONSOLIDATED FfNANClAL STATEMENTS For the year ended 3 1 December 2013
At10(JNTS DUE FROM RELATED PA RTIES (continued)
NO les (i) Transactions witll related parties are eam ed out through open account and Directors do not consider any
receivables to be past due or impaired
(ii) Related party transactions ore disclosed ill Note 26
INVENTORIES
Goods for rew le Raw materials and spare pans Work in pTOgresS Goods in transit
Less Provision fOI obsolete and slow moving invenlories
1013 QR
165499699 38388307 19944678 9671 8553
320551237 (3851692)
31 6699545
Movements in the provision for obsolete and slow moving inventories were as follov~
At I January Charge for the year (Note 19) Reversals Amounts wri tten off
At 31 December
E QUITY-ACCOUNTED INVESTEES
TIle Group has the followiog invesllnenfs in equity-accounted investees
Interests in joint venrure Interests in associa tes
At 31 December
G roup s snare of profits fr om the equity-ncco unted iovcstees arc AS follows
Profit share from in vestment iojotnt venture Profit share from investment in associates
202 QR
232597650 36608394 30622960
10521 9695
405048699 Q 145826)
40 I902873
203 QR
3145826 1 380617 (535695)
( 1139056)
385 1692
20 12 QR
2795992 2208263 (137995)
( 1720434)
3 145826
2013 QR
2012 QR
129462184 3644723
124124803 2545188
133106907 12666999 1
17330368 22869454 1169533 534050
18499901 23403504
22
10
Aama Company QSC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 31 December 201 3
9 EQUITY-ACCOUNTED INVESTEES (continued)
Counlry of incorportllion
Relationship Proportion ofownership and lotilfg power held by the Group
203 2012
EI S~wedy Cables Qatar W LL Frij ns Structural S teel Middle East WLL Al Ftfazdaq Company WLL
Qat~
Qatar Qatar
loint venture Associate Associate
55 20
55 20 35
Note With effect from 1 January 20 13 the mlnagemeot of the Group has reclassified the investment in Al Farazdaq Company W L-L from investment in associate to investment in subsidiary This is based on the transfer of share holding by the other shareholder whereby the conlroi o f AI FOl razdaq Company W LL bas been assigned 10 tbe Company
INVESTM ENT PROPERTIES
a) Reconciliation of carry ing amounl 2013 202 QR QR
AI I January 611334701 8 555 1835348 Additions 9568047 1727191 87 Transferred from property plant and equipment (Note II ) 34519828 Net gain iTo m fa if value adjlls tment 245051107 388792483
At 31 December 6402486000 6 11334701 8
b) Measurement of fair value
The fair values of the Groups inveS hnent properties as at 31 December 201 3 and 3 1 December 2012 have been arrived al on the basis of valuations carried Ollt on the respective dates by professionally qualified independent valuers not related to the Group The independent valuers have appropriate qUlli ficatioos and (eceJ11 experience in the valuation of properties in fhe relevant locations The fa ir value WltlS determined based on market comparable approach that reflocl s recent transaction prices for simillt1r properties and discounted cash flo w and income approach techniques
Details of the Group s iovestment properties and infonnation about the fa ir vn lue hierarchy as at ) I December 20 I J are as fo llows
IIvestment propenies
Level 3 fair vallie
Al I Janu ary 6 [ 13347018 Additions and trans fers from property plant and equipment 44087875
Gain included iu prom and loss Net gain from fair value lt1djuslmem 245051 107
AI J I December
The Group recognizes transfers between levels of fair value hierarchy as o f the end of the reponing period during whicb the transfer has occurred There were no transfers between the fai r va lue hierarchy during the year
23
10
Aamal Company QSc
NOTES TO THE ONSOLlDA TED FINANCIAL STATEMENTS For the year ended 3 I ecember 201 3
LNVESTM ENT ROPERTIES (contin ued)
b) Measuremen t 0 (air value (conti nued)
Vau t ion technique an significant unobservable in puts
The valuer has applied t e income capitali zation discounted cash flow and comparab le methods to detennine the market value of the lnve tment propen ies Significant unobservable inputs used included expected market rental growth rates (an average 425) occupancy rates (approximately 90 to 95) and risk adjusted discount rates (approximately 5 to 7 0) M y significant change in these inputs can impact lhe fair valuation of investment propcnies
24
Aamal Company QS c
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For che year ended 31 December 2013
11 PROPERTY PLAi~T AND EQUIPMENT
FumilUre Truck mixers fIXtures and Complllers
Leasehold and maor Plum (fd office and relaed eapiowork Buidings improvements vehicles machinery eqllipmcni sofMore in progmiddotcss Total
QR QR QR QR QR QR QJl QR
At I January 2013 137870126 371 88 132 9595813 1 262536261 19 580954 14864 385 561 32447 6241 30436 Additions 948)65 2618 100 5367399 859061 111 5268 137147581 148055774
Relating to d isposalswrite-off (1042642) (4390496) (77157L) (589150) ( 184075) (6977934) Transfer from capilal work in progress 1505 310 164 336 3601776 ( 150000) 1182741 (6304 163) Transrer to investment properlies (Note (0) (345 19828) (345 19828)
At J I Dttember 201 J 139375436 J7 258~ ~1 85735 270733865 19700865 169783 19 152456037 _73068~448
Depreciation AI I January 2013 16133915 J6902 529 49087707 68783 065 11 980009 tl71 595 3 174603 178 Charge for the year 7059805 3237150 5390767 12249797 2849162 1768823 42555504 Relating 10 disposalsJvri te-off (664709) (4 3 1716 1) (724322) (552939) ( 18 1993) (6441 124)
At 31 December 201 3 23193 720 19474 9 70 50161 313 90303540 14276232 13302783 2 107 17558
Net carrying amounts At 31 December 2013 116181J16 _17783221 44024422 180415325 5424633 3675536 __l2456O37 JJ9970~890
Notes (i) Depreciation charge for the year amounting 10 QR 33 164382 (201 1 QR 3303091 6) is included in tbe direct costs and an amount of QR 60055 (20 12 QR 36939)
has been capiulised under capital work in progress
(ii) The capital work in progress includes capitalised borrowing costs amounting to QR 125645 (20 12 QR 15358)
(ii i) The buildings are constructed on a plot ofland taken on a loog term operating lease
25
Aamal Company QS c
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 31 December 201 3
II PROPERTY PLANT AND EQUIPM ENT (continued)
C05I~
At 1 January 2012 Additions Acquired through business combinations (Note 4) Relating to d isposalswrite-off Transfer from capital work in progress Transfers
Buildings QR
137434400 435726
Leasehold improvemellls
QR
38137377 446J 04
144 103 ( 1539452)
Truck mLCers and molO
velricles QR
83427661 11464679
1697609 (631824)
Plant and machinery
QR
249335437 97264 85
35 14 132 (99498)
59705
Furniture fir ures and
office equipmem
QR
22845309 667586
192042 (3696457)
98000 (525526)
Computers and related
software
QR
158 19519 87 14 14
141837 (266 1733)
908078 (2 l4730)
Capitol work in progress
QR
12104889 451 53265
( 1065783) (59924)
Total (JR
55910459 8 68765259
5689723 (862 8964)
(800180)
AI 31 Dttember 2012 137870) 26 371881 32 95958 13 1 262536261 19580954 14864385 56132447 624 130436
Depreciation AI Jaouary2012 Charge for the year Acquired wough business combinations (Note 4) Relating to disposalswrite-off Transfers
9144666 6989249
)4 3 16620 3410618
144103
(96 812)
42558404 548 1613
1671942 (6242 52)
44555 290 2 1398849
2890797 (6 187 1)
12392584 3 182899
169005 (3558466)
(206013 )
12235266 2077633
136959 (2627283)
(J 0662)
135202830 42540861
5012806 (7840684)
(312635)
At 3 L December 201 2 161339J5 16902529 49087701 68783065 11 980009 11715953 174603 178
Nel canying amoWlts
At 31 December 201 2 12 173 6211 2028560 3 46870424 193753 196 7600945 3148432 56132447 449527258
26
12
13
Aamal Company QSC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 31 December 20 13
ACCOUNTS PA YABLE AND ACCRUALS
Trade accouots payable Advances from customers and tenants Accmals Social and sports activities levy Other payables
AJIOUNTS DUE TO RELATED PARTIES
Name
Arab Compaey for Fiber Products EI Sewedy EIC( lric Ho lding Egypiasl Egypt Egyptlech Egypt United Industri es Company WLL Johnson Controls Air condi tioning aod Refrigeration Qatar WLL pound1 Sewedy Cables Egypt Johnson Controls Air conditioning and Refrigeration rNC Dubai United Wire Company WL L Gelteo Company W LL - Gelteo Refr igera tion and Airconditioo ing CampC Lightway nc AI Shaab Group of Companies Other related pruties
NO M Related party transactio l)s a re disclosed in Note 26
2013 QR
320017657 30486837 26924669 41 761 843 25855567
445046573
2013 QR
18517474
4902528
6531231 6404578 3215821
2825884 75 7825
3467288 263715
1313247
48199591
2011 QR
26716268 1 27410234 222575 76 28954726 33)33852
379119069
2012 QR
18380528 91458 82 54 13849 1 11 6 135 5374039 35291 2020359 1693323 1064744
670 179
11 0873 12 18650
49737757
27
14
Aamal Company QSC
NOTES TO THE CONSOLIDATED f fNANCIAL STATEMENTS For the year ended 31 December 201 3
INTEREST BEARING LOANS AND BORROWINGS
NOles Malilrify
2013 QR
2012 QR
CoMl Loan 2 Loan ) Loac4 Loan 5 Loan 6 Loan 7 CoMB Loan 9 Bills discounted
(0 (ii) (iii) (iv) (v) (vi) (vii) (viii) ( ix) (x)
lune2014 Seplember2014 January 2015 November 2016 December 20 16 November 2017 Jllne20 l J December 20 7 OClober 20 19
172070387 440000000 50544000 40261 621 81387109 19920036
6] 43890 62626967 42522794
915676804
298324180 440000000 10 J088000 57955030
100 168750 2 1300492
407728 1 782871 1
35000000
1065742444
Less Defe rred finatlcing cost (771 503) (897148)
914905301 1064845296
Presented in the consolidated statement of financial positioo as fo llows 20)3 QR
201 2 QR
Current ponion Non-current ponion
749520820 165384481
825568489 239276807
914905301 1064845296
The dete rred financing costs consSt of arrangement fees The movements m the deferred financing costs were as fo llows
203 2012 QR QR
At I January 897148 332 661 Addjtions during the year 1 062565 912506 Amortised during the year (218amp210) (34801 9)
At 3 1 December 771503 89 7148
28
Aamal Company QS C
NOTES TO THE CONSOUDATED FlNANCIAL STATEMENTS For tbe year ended 31 December 2013
14 INTEREST BEARING LOANS AND BORROWINGS (continued)
Nolec
(i) Loao I i USD 93000000 impon 10n moi lily obtoined to refimnee he Icne~ of edit The 10 IT interest at commercial fate and the interest is paid at monthly intervals The fucility is repayable within ISO days including the usage period under letter ofc redits
(ii) Loan 2 is a secured bridge loan obtained to settle an existing loan and working capital requirements of the Company The loan carries interest al coOlJllercial rates and interest is 10 be paid on quarterly basis
(iii) Loan 3 was obtained for the pWpOse of financing capital ependiture and direct payment to suppliers contractors and 5ub-controctors The 10011 CMries interest at commercial rate and the inte rest is to be paid q Uar1erly The fac ility is repayable in IS quarterly iostallmenls starting I July 20 11 and ending I January 2015
(iv) Loan 4 was obla ined for conSlruclion o r an inveslmenl property The loan is seclJed by 0 primary mortgage over the some property and corporate guarantee of the Aamal Company QSC Tbe loan carries interest at commercial marke t rate and is payable in quarterly instalments
(v) Loan 5 represents a loan fOlcility obtained in two sepnrole tranches amounting to QR 309 825 000 (USD 85 million) for the purpose of refurbi shment and construction of fociJities io one of the investment properties The loan is repayable In 16 equal quanerly instalmcnlS for individua l tranche commencing from March 20 1J The loan carries interest at conunercial rJtes
(vi) Loan 6 represents secured loans obtained ffom a commercial bank in the previous periods for the purchase of heavy equipment and machines and were merged on 15 November 20 12 as a comb ined loan This loan is payable by 59 equal instalments of QR 426000 with (I last inSlalment of OR 438 326 with effect fro m 01 October 201 3 The loan carries interest at commercial market ra tes
(vii) Loan 7 is il tmst receipt banking facility obtained for the purchase of inventories This carried interest at conunercial market rates This loan was full y settled during the year
(vii i) Loan 8 represents secured loans obuined from a commercial bank in the previous periods for the purchase of delivery trucks and machinery and were merged on 22 October 2012 as a combined loan The loan carries inte rest at commercial market Tates and is payable by 59 equal insta lments o rQR 160000 with a last inSlOlmem ofQ R 128000 with effect from 3 1 December 2012
(ix) Loan 9 is an Islamic Financi ng Arrangement obtained for construction o f a manufacturing plam and as o f yearend ba lance represents partially drawn amount out of totil1 facility of QR 655 68000 The loan is secured by joint corvorate guarantee by the shareholders The loan carries profit at Islamic Financing rates and re-payable in quarterly instalments starting from the end of the 24 months gmce period from the date of loan drawn
(x) Bi ll discounting is a loan fac ility from banks The purpose of the arrangement is to discount bills locally and carries interest at current commercia l filte
15 EM PLOYEES END OF SERVICE BENEFITS
Movements in the provision reHectelt in the consolidated SLo1tement of financia l position were as fo llows 2013 201] QR QR
At I Jan uary 18111 763 17877937 Provision made during the year 4056969 4205499 Acquirelt through business combinations (Note 4) 349272 End of service benefits paid during the year (2210756) (4320945)
At 3 1 December 19957976 18 111763
29
Aamal Company Q5C
NOTES TO THE CONSOLIDATED FINANCIAL STATEMETS For tile y~ar ended 31 Dee~mber 2013
16 SHARE CAPITAL
2013 2012 QR Qq
AtI1l1)nud 60000)000 (20 2 544500JJOfn shares ofQR iii Cilch 60i)iQOOlOO 54450lt)0000
21)13 2012 Numher of
siMtS QR shares QR Issued Mtldfully paM At lJamld) 544SfWllOfJ 5445(100001) 495000000 49500000)0 1511C ofbonus S1i1-C ___ 5550~OOO 555000000 49SGOOOO 495000000
At 31 Decenef 6(OOampQllf1(1 ---14450O000 544~OOOOOO
All ampates m~ of a110 clss and caL equal voting rights
17 LEGAL Reuro5ERVE
As required by Qatar Comnertai COfrp7lnies Lav No5 of 2002 lOfp of the profit for the ye1J as a rru1imllli silould be mmsfened to legal re~erve The reserve is lot normay [lytiabe tor distribution except ill he cixcuJUstllrtUS stipulated m the above ~lemi0ntd GIW
IS HEVE1TE
2013 l)n QR QR
Sale of goods 1726893265 i709057~(iO
Renlal income UiO362322 133117509 S-ice income 858695 33940731 CornrrusslOlL Incentives and agency fces 44695S1 422~_632
212259$)33
19 DIRECT COSTS
2013 2)i2 QR
C 051 of inven(feS recognisedlIS an exptns 1522929956 497210830 Dind sL1ries lmd wages 601 [1336 5137856-8 Operating eXpenses on nml estate p~opet1les 36)711316 3041H504 fJepreciatiort (Kate I J) 33164382 B03091pound Operators marhgerrt6nt fees 14508588 li667989 Provisicn Qr obsolete and skwlt moving mvenlories (K)tc 8) 2380617 2208263 Other operating ilxpenses _31~3982 _ 3674946
1702139171 JS9653OI tgt
Aamal Compall-yQSC________________
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For lthe year ended 31 December 20 11
2G OTHER NeOiI
2013 20J3 QR QR
Interest mcume 2824216 2)314392 Profiv( loss) 00 disposal of property plant aoe eqUlpmem 737647 (l7362G) Eargain ptmnJse gain (Kote t) 8360793 MIsceJlaneous income 5723356
2013 2012 QR QR
ManllgetnUI hrQ empl(yees ws 55170302 55lt035middot1 Rent 23596799 2594915 Allowance for impaimlcot oUrsue aCQl1ot$ rc(Xjvalle (Nole 6) 129459(i 11613120 flBumcce ane profcampiitmJI fees 2IU9263 209J902 Corununication OOtHS 1935123 1649155 Trllining tid ouSfjt$s developmccl 950476 L095764 Re]X1in and mainle-nilnce 21)11SflS 2)2 I Poslag-c prjnting acri stationery 610299 541159shyvllsltdlancous expenses _~~~664 1lt2
-~~~ 125162812
22 fIN~lCE COSTS
2013 2amp2 QR QR
Inleres epen~ 42866312 5773U4B Am(vtisJliorgt ofdefcentrred financiog coStS __ 2l)tl26~~ gt3661
44930877----=
58063009
23 BASIC A~n nHUfED EARilNGS PER SHARi~
Basic trdTJogs per hue is caculatid 0y llividing the pwfill0( Ihc year attriouiabk (0- equity roldc-5 of the parent by lhi w~iglwxi avrage number of ordinary shares 0JstandirJg dulting tht_ year During Ihe year lil~ Conpmy i-sued and CBpii3lzed bonus shares lnd awmJingl) me previously ~eportod earnings per shac have blOM restatc(i
20i3 2012
Profit feT the year auributable to Cluity holderlt of the- paren (QR)
Weighted aVCTage number ofshares outstanding during the year (i)
Basic Jd diluted earnings per share (QR) 085
59985U413 shy
~~--~~~~- ~------J 1
23
Aamal Company QSc
NOTES TO THE CONSO LIDATED FfNANC[AL STATEMENTS For tbe year ended 3 l December 2013
BASIC AND DILUTED poundARNINCS PER SHARE (continued)
NOles (i) Th wigh d m nlg urnb of hres foc h P of lruling ~migs pee share h bee kulated
as follows 2013 20J2
QU3lifying shrues allhe begi ll1ling of the year 544500000 544500000 Effect of bonus shares issued and capitalised 55500000 55500000
600000000 600000000
Less T reasury shares (149587) (i357SI)
Weighted average number of shares at the end of the year 599850413 599864249
(ii) There were no potentia lly dilutiw shares outstanding at any time during tbe year and hence the diluted earnings per share is equal to the basic earnings per share
24 COItIMITMENTS
20 1] 2012 QR QR
Estimated capital expenditure approved and contracted for at the year eod but not provided for
Investment properties 2964000 8 139063 Property plant and equipment 16386500 63759762
19350500 71 898825
Operating lease commiIOlenlS under noncancellable lease agreemenlS
Payable wilhin one year 990806 702000
990806 702000
25 CONTINGENT UABILITlES
The Group had the following contingent liabi lities from which it is anticipated thai no malerial liabilities will arise
2013 2012 QR QR
Letters of guaramee 474551239 394255203
Letters of credit 7678499 194299384
NQles
(i) leHlaquogt of gu indud penonmnlaquo tend nd bid bonds d pymenlt g gi to suppliers and contractors by the Group in the ordina ry course of bus iness which will matme within twelve months fro m the reporting da te
(i i) Letters o f credit are provided by lodging documents to the bank tor purchase of trading goods fro m foreign suppliers wruch will maMC within thJee to six months from the date or tile Iransaclion
J2
26
Aamal Company QSc
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year eoded 31 December 2013
RELATED PARTY DISCLOSURES
Related party transactions Related parties represent major shareholders directors and key management persortOei of the Group and entities controlled joimly controlled or signjficamly innueoced by such parties Pricing policies md tenns of these tnlOSaclions are approved by the Group s management
Transactions with related parties induded in the consolidated financial stalemenls were as follows
20lJ 2012 QR QR
Sale o f goods and SClVices 419034048 415225221
Rental income 1980473 2069386
Purchase of goods and services 1591 38018 300835596
Rental expense 21 780G78 23397334
Bargain purchase gain 8360793
Net assets acquired 78803585
Relat ed party bal nnces AmountS due from and due to re lated parties are disclosed in Notes 7 and 13 respectively These balances do oot carry interest and are repayable OIl mulUlUy agreed dates generally within one year
The Group did not record any impairment of receivables reJatiog to amounts due from related pat1ies in either year This assessment is undertaken each fina ncial year through examining the ftnanc ial position of the related party and the market in which the related patty operates
Parent The Groups ultimate parent is Al Faisal Ho lding Company WLL
Compensa tion or key management personn el The remuneration of key management dming the year was as fullows
2013 2012 QR QR
Short-term benefi ts 7904794 1079595 Employees end of service benefits 408934 439776
8313 728 11235727
33
AamaJ Company QSC
NOTES TO THE CONSOLIDATED FINANCIAL 5T ATEMENTS For the year ended t Decernber 2013
Dilling the year 1he Group issued a XHlUS share of 10 928 of the paid tiP share capilal hdd ilS at 31 DiX2mber 2(JJ 2 mnmuning to OR 555000000 using retamed earnings as of3 December 2012 (20l2 Doe share for every ten shues held as of 31 Dcember Oll amuunting 10 QR 495OO()OOO ling reta1ned earmrgs 28 or 31 Decencer 2D II Jshy
18 SEGMENT INFORMATION
For J)iloogement PUIpltJM rhe Group i organised into business unit bused On LlJeir nature of Acttvitics lud nas fonY reportable segments and the Head Oftklt as bllow$
Propert Tbe segntn cOlists of City C~nler Qlta~ Brunch and Aamal Rea Esmte Branch whicb ll[c invoived in lampIiiog the faJ1ities of retail outlet conpex red e5ttlte nve(mltn$ and property remal buines~s
Trading mld distrib-wion The segmeul Involves wholesalB andlor rBtail distribution of phamlaceutlcai and consunable i1ems hume Epplianccs medica equimenl t-Tes ill1d lubricmtlaquo and II1UllitnEl printing The scgn(rtt includes 6c following entities
Eotl Sina Medical Branch
Aaen Medical Braudt
Amcill Troding and DistoolltlqO Branch bull Foot Care (erier HRnd) Good llre Pbannacy Bf4Uch bull Al FllfJdaq COllpafY wJ~L
InduSNol manuacturing TIle s0groent IOvolves Ulahuactrumg whole~we aliaor rewi dimibUlioti of dccnc cables lid tools ggregJ1es_ ready-IUx connole and cement bI0C~ lI1d provi$ion of servlCcent$ in rdation to iODllltroa Itvestment repair aJ-d Gonstruction of power plwts liiiding of LED ilgluitlg products und management of industnl enterpnses The segment ircludes be folloVting centntitis
bull Aam1 Cemert Industries LL AuraJ Redy1Yl(A BrQTlch
bull Doha Cables Qawf lLL Senyaf IoolJic1es Qatar Holding W LL Advanced Pipes ard Casfs CompQTly WJ L bull GuJfRoch Coroany WLL Ci~San Trading Company WLL hmovafive Lighting Compary WLL
Managed services le segment inyolvc~ provisloH of hOllseiltecpmg mi cleaning services fucditics n-anagemerJ services C1egy s(tvices ttl centfe sltrvicf)s buildiqg lnaintemHlelt aml acting as travel gens The 5cgnltnt includes the foUowing cnti(lcents
An13 ServJce Branch
amli TnlVeJa l5tmh
f-eco Gulf Co W LL
Jolinson Controls Qattl WJL
28
Aamal Company QSc
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended ) L December 20 13
SEGMENT INFORMATION (Co ntinued)
Head Office It provides corporate services to the branches and subsidiaries of the Group
The managiog d irector of the Group monitors the operating results o f its business units separately for the purpose of making decisions about resource allocation and perfonnance assessment Segment perfonnance is evaluated based Oil operating profit or loss of these segments Transfer pricing between operating segments are on anns length basis in a manoec similar to Iraosactions with third parties
Aamal Company QSC
NOTES TO THE CONSOLIDATED FINAN CIAL STATEMENTS For the year ended 3 1 December 20 13
28 SEGMENT INFORl1ATlON (continued)
Operating segments The operat ing segment after elimination or ioter-bra nch and inter-co mpany lrnnsaclioos is presented as follows
Trading (nd Industrial Managed For fh e year elided 31 December 2013 Properly disirjblli ioll manujocljlring services
QR QR QR QR Revenues
- h lemal parties 260360172 578909983 1231522768 S l802210 - Inter segments 1253914 6843 11 8 29639873 3445052 1
Heat Office QR
Eliminoions QR
(n187426) II
Tolal
QR
2J22595133
261614086 585753 lOI 126116264 1 8625273 1 (721 87426) 2122595133
Opera ti ng results Fair vallie gains
Profit I (loss) ror the year
Depreciotion
200811944
245051 107
445863051
2066290
86492834
86492834
4345438
22636250
22636250
33049 089
5157436
5157436
1760305
(47864882)
(47864882)
1334382
267233582
245051107
512 284689
42555504
36
Aamal Company QS
NOTES TO Tl CONSOLIDATED FfNANClAL STATEMENTS For the yeM ended 31 December 20 13
28 SEGMENf INFORMAnON (c)tltioucd)
FOf the yearrnrkti J f DccemOer 2(J12 QR
Revellues - ExlcmlJ partiel 2331 17 509 bull Inter segmcI11S 1168935
-- 234236434 --~- -~--
Openning results 18S2367t Fmt value gains J8S79-4~G
pront LOllS) for the rear 570616154
gt3659
No(
lnlermiddotgment revenues are eliminated on tQHs)idntiOH_
Tadiug ftfid disl d)Ntion
QR
S2S3l7661
324 j
5335493114 ~ -~-----
51384831
54384338
4J9R71(i
Indus idi mamfmturing
QR
1255694537
129U25lS4
56727059
56727059
32752742
slnltic(s QR
55216665 2939H31
S46lOJ96
7427414
7437
[908067
ilfild ()jice QR
(64(41976
Elimination QR
(74tHi2oJ Iii
Totul QR
206936372
2069336372
235721
(64641
131 f613
6245
42541)861
Amnal Company Q$l
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Por tnt yeartndeJ 31 De~embcr 2013
28 SEGMENT JNFORMATlON (contiutlld
Assc-ts and labilities
Tng alld lndtrstfw At31 December 2(113 distnbllrior manufacturIng senices HeadOJJicc EliminatioilS lola1
QR QR QR QR QR
Cumnl 3tS 227552338 620807979 61349 j 415 S()6)86922 (301636995) 1477366090 Noolucrcnt DSeIS 6411868160 12604763 622386238 4348876 (i624548 __p2438051 780
fotal asstl$ 6639420498 1194 1243194217 65698291 513Ql1470 ==-lt03H8l~O()) 853295-870 -~----~ ~---~ -
CUIT)llliabilitics 280995335 1(3511J60 6344(12777 2l0708lJ2 496261185 (3CH636995) 1249603264 Non-current iiatJlitics 7l70L5V2 8008485 HlDi16~43_ 3181668 t433799 ____ ilj534_~57 __ --Totul liahililics 353696897 ___~4159~4~ 734419720 ~4976~~~~~ 1434945711
---~~--~ -~-~~ - _2~~~4~~ (~~~~9~
C1pild expcndimn HI) WO743OOj 1397742_~471l2~--~50 ~51 ~1~623821~~1~_ -~----~------ -~
3amp
28
Aamal Company Q SC
NOTES TO THE CONSOLIDATED FfNANClAL STATEMENTS For the year ended 31 December 20 13
SEGMFNT INFORMATION (continued)
Assets and liabilities (continued)
AI 31 December 2012 Properly QR
Trading and d iSfriblllion
QR
Indusrial manufacfuring
QR
Managed senices QR
Currenl assels
Non-current assets
146491 186
6121 864484
2964425 12 903 7264
73468 1258
549267235
51387098 471 1439
Tolal assets 6268355670 305479776 1283948493 56098537
Head Office QR
468325024
6713643
475038667
Currentliabil iies
Non-current liabiLities 273444 748 1 J10 15024
86054583 7434286
669214261 1288 14977
2 1938953
287 1199
480393637 1253084
Totil lliabiliti cs 390459772 93488869 798029238 248 10 152 48J64672 1
Capila expendirure (ltII L 72865 878 1281254 6647 J356 7169 13 149045
Notes
(i)
(Ii)
Inter-segmeot balances are e limioafed 00 consolidatio n
Capi tal expendiTU res consist of additions 10 propeny plant and equip ment and iovestmenl properties
Eliminations QR
To wl QR
(273735776) (i )
(20308351(i)
1423591302
6689563230
(27576661 1) 8 113154532
(273135777) (i) 12573 10405
257388570
(273735177) 15 14698975
24 1484446
39
29
Aamal Company QSC
NOTES TO THE CONSOLIDATED FrNANCIAL STATEMENTS For the year ended 31 Dcltmber 1013
Fr-A]~ClAL RISK MANAGpoundMamp1H
Objccthes and policies fe Groups principal )uaucill liabilities comprise imltresl bctmllg loons and IxmowHgs baRlt ovetda1s amounts due to fclaled par1ies and tracte accounts payable The main pUlJXSi of thesc financial liabilities is 4J mise firmne or 610 Grmps operations The G0JP bas various fimmcial assets such as ttadc accounts receivable lInlOlmts due from related parties bark balances tltCntion receivable and other receivables which arisgt directly fran its cperuoonamp
The maiH ri~ks an3ing Joru (be Groups UnariCJlll illslrumenls jle market risk cretiJt nsk and hmdity risk Til BoarD ofDtrcctO$ reviews end agrees policies for mzrAgbg Caltt f hespound ri~k ihkh arc summariscd beloW
VIarktt risk yenfatket risk is the risk Um changes in market prices $Uch as intfcst rates and hreig lttmeocy ect14nge rilles Vltl1 affect the Groups profit eqwty Dr value tf its hoJdiI15 of financial instrl[Thnls rile objecivpoundj of marke1 risk mUnllgcrlcnt is to manage uld 1~ontr(ll tho tr))rket risk expo-sure vithir acceptable parfI-etcJ$ while optimising rerUID
Equit) price risk ampjuity prtce risk is the risk hilt the Group ampearnings will be affected as a rcmt (If luctttltions in fm vdue of ~qui-gt
mstwnents Eqlliry price risk arises from availabtetor~sale inv2strnems However the Groups exposure to eqmty price risk IS minima as II doesn hold sitl)iftrmt ailableAor-511le inYestrmmrs
[merest rate risk The Groups fimiruial poundS5ot ampId liaojlilies (at Rl $uJject to int~~ rate mk compnse brmk depoils interst bearing loans and bOITQwjags and bank overdr-afts At the reponwg dalt tbe [merest rale pronle of Ill Goups intexst bearing fbi4rdd instruments as fliows
11113 20i3 QR QR
Fued liIeryS refc insfrvrnellts
Fmmcial assets 113035962 111913394 FrOltwial liabilities --1~203712l) 1252t43~1
9)OI~ (13350972)
Fhlllting inireSI rate ns1lmlttrs Fanctl~ Isseis 127024345 ID43848o Fllllocial liabilities _-(i~9347~ (94))48926)
(836)64116)
The Groups exposure to t~ ris of changes in marXet interest fltltes relztes primariiy to the Groups financial assets and lizbitdic$ with t1Oltttirg interest mte~
lhe loEowing able demonstrates the ampmitivity nf the eonsolidattXI statemen1 of income 1) caonaly possible chonges in in1jfgtst rmes by 25 basis points with all othe vari)ble3 hdc umstant The sensitivity of the CooiK~ljclatid statement of inc(me $ the eft(ct of tb assumed changes in lnterdt rales for one year bf1sec on the floating rate financial assets and fimmcial hablhw$ held at 31 f~r The effect of deae-ascs in interest ral~ is cXp0Ctct to be equal and opposite to the effect oHlle increases sllQvro
Changes it Eftx OIl
00513 [oms profit QR
2013 Floating mterest Hlte instruments ----2$ bp (1649776)
2012 Flv-ating irkfiSt rale instrumenls +25 bp (209[9(1))
~--------- -~~ 40-middot------ _ _ shy
29
Aamal Company QSC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 3 1 December 2013
FINANCIAL RISK MANAGEMENT (continued)
Foreign currency risk Foreign currency risk is the risk lhilt the value of lhe fi nancial instruments will fluctuate due 10 changes in fore ign exchange rates
T rade aCcOlmts payable and accrued expenses include amounts due in foreign currencies mliniy US Dollars UAB Dirhams Great Britain Pounds (GB P) and Euros of which the Group has a currency risk primruily on the baJmces payable in Euros and GBP amoWlting 10 QR 14400634 (2012 QR 17214046)
The Group does not hedge its foreign currency exposure As both Qatari Riyal and UAE Dirhams are pegged to the US Dollar balances in US Dollars and UAE Dirhams are not considered to represent significant currency ris k to the Group
The table below indicates the Group s fore ign c urrency exposure on its monetary assets a nd liabilities The analysis calculates the effect o f a reasonably poss ib le move ment of the QR curre nc y rale against the Euro and GBP with all other variables held constant on the consolidated slate menl o f income (due to the fa ir va lue of currency sensitive monetary asse ts a nd liabilities) The e ffect o f decreases in fo reign c urre ncy exchange rates is expected to he equal and opposile 10 the e ffect of the increases shown
Incramp1se ill
f oreign cUlrency rate
0
the QR
Ellecl on profil
QR
2013 +5 (720032)
20 12 +5 (860 702)
C redit Tisk Credit risk is the risk that one party to a financial instrume nt wi ll fa il to discharge an obligation and cause the other party to incur a financial loss TIle Groups exposure to credit risk is indica ted by the carrying amoWlt o f its financia l asse ts whic h consist principally oftmde accollilts receivable retention receivable amounts due from related parties othe r receivables and bank baLances
The Group sells its products and prov ides services to vario us panies It is the G ro ups policy that all customers who wish to obtain on credit lerms are subject to credit verificalion procedures to ensure c redit Ilonhiness Each new customer is analysed individually for creditworthiness before the de livery o f products Of services Custo mm tbat fai l to met t the credi tworthiness may transact with the Group only o n prepayme nt basis Property rentals are mostl y received in ad vtnce or conlrlCled wi th post dated cheques 10 additio n receivable balances are monitored on an ongoing basis a nd the purchase limils are established for each c redit custoroer which are reviewed reguJarly based on the level o f past transactions and senlement The Groups max im wn exposure with regard to trade aCCOWlts receivab le net ofa llowance re nected allhe reporting date was ilS fo llows
2013 2012
Business SJgmelll QR QR
Property 15478832 19386326 Trading and distributio n 194343 597 179748274 Industrial ma nufac turing 183119753 131578668 Managed services 18069385 14547389
411 011 567 345260657
41
29
Aamal Company QSc
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For tbe year eoded 3 J December 20 13
FlNAJICIAL RISK MANAG EMENT (c-o Dtinued)
Credit risk (continued) With respect to credit risk arising from the other financi31 assets of the Group the Groups exposure to credit risk arises from default of the counterparty with a maximum exposure equal 10 the canying amount of these instruments as follows
2013 QR
202
QR
Bank balances Amounts due from related parties Retention and other receivables
436136756 214439950 48290351
36788129 t 171525363 74082203
698867057 613488857
The group reduces the expoSltre of credit risk arising from other financial assets by maintaining bank accounts in reputed banks and providing services only to creditworthy re lated parties
The management cons iders the bank balances and a mQUIIIS due from related parties as high grade fi nancial assets and lfade accounls receivable and other receivables as sundard grade financial assets When a finltmcial asset is identified 10 be impaired the managemoot downgrades such assets to impaired category and provides adequate allowances
Liquidity risk Liquidity risk is the risk that the Group will not be able to meet its fmancial obligations as they fu ll due The Groups 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 nonnal and stressed conditiom without incurring unacceptable losses or risking damage to the Groups reputa tion and is to maintain a balance belWeen continuity of fuoding and f1eilibility through the use of bank overdrafts and bank loans and borrowings
The Group monitors its risk to a shortage o f funds using a recuning liquidity plaOfling 1001 TIllS tool considers the manuiry o f financial assets (eg accounts receivable) and projected cash flows from operations The Groups teons ofsales or services require arooUIlts to be paid within 30-90 days from the invoiced dale
42
29
Aamal Company QSc
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For tbe year ended 3 1 December 2013
FrNANClAL ruSK MANAGEMENT (contiQued)
Uqujdity risk (continued) The table below summarises the ruaruriJy profile of the Groups financial 1iabililies a t 31 December based on contractual undiscountcd paymeots
2013 Interest bearing loans and borrowings Bank overdrafts Trade accowus payable Other payables Amounl~ due (0 related panles
201l Interest bearing loans and borrowings
Baok overdrafts Trade accounts payable Other payables Amounts due to related parties
On demand
QR
6836280
6836280
011 demand QR
2885090
2885090
Less than 3 months
QR
521324473
303638792
47406830
2530~480
898675575
Less thall 3
months
QR
469839033
10754JJIO 37543236
1964504 1
634568620
3 10 J2 mOlllh$
QR
239333328
16378865 20210580
2289~11l
298816884
3 to 12 monlhs
QR
365476972
159621 37 J 24745342
30092716
579936401
1to 5 years
QR
J 60092748
160092148
1 to 5 years
QR
248472226
248472226
gt 5 years
QR
25261598
25261 598
gt 5 years
QR
7648000
7648000
TOlaf
QR
947012147 6836280
320017657
67617410 48199591
1389681085
Tota
QR
109 1436231
1885090 267162681
622 88578
49737757
14735 10337
43
30
Aamal Company QSltc NOTES TO THE CONSOLIDATED FlANCIAL STATEMETS For the year ended 31 December 20 t3
21 F~ANClAL RlSK MAiAGEMElT (continued)
Capital management The Boards policy is to maintain a strong cepit1 base so as to rnainmin investor creditor and market ronfoonee and to SUSWlJ) fumre dcltclonnent Gf the buinest The Board of Directors rronitortl the tapital whkh tbe Group defines as wlal $parcloders equity excluding nonmiddotcornroliing imerests and the level of dividends to orrunury srarellOJdcfS
The Board also reeks to ITIaimain a balance between the higher (ctums (hat might be fA-~$ihle With higher leves of borrnwings end Lle edvnrJages and security named Sy it sOMd Cilpitai posi[ion The GfCup~ k1rget is to achievfl a return on slureholders equity (exclJding aonwurrolJiug iorcf(sts) greater lll(ll1 he wcighlcd average inres exxmse on mrerest bearing Ivens and oorrowing
The (lf0t-p nl)nDg-e ils cnpital structure and makes adjustneal lOll in light ofchang2s in economic nd bttincss cordjlons and shareholders expe1ationJo chmges veremiddot maCo HI Lleuro objecttves polilCS or proCCSSC3 during the years erded 31 D~mber 2013md 31 Dtccmlxr2Ql2
The Group monitors the capit2J using a gClting fatio which IS dep divided by caplla plus debL The GtOwgts policy is to keep ttJe ge-anng rmio bclew 40 Tbe Group iLdtdes withb debt imete-51 beagting loans ard ~OITORlngs less cash and cash equtVaknts Capltal includes eqmty attributable 10 the equity tolders oft~e parcrt
2013 QR
2(i2 QR
fmerest bearing loans and borrowings lcss- Cash and cas ltYJUvalcnts
9i4lJ05301 _~ (429JfJl4761
1004845296 (649)6201)
Net debt
Toa capital
Capita and net debt
699849045
~ringrttio
FAIR VALtES OF Fl~ANOAL f~STRUMETS
Finarcial iostrumenL~ cOlnprise tina~lctal assetS carl finailcialliabilities
Fmancial assets colJist of bank balance) short 1Cm bank dcposis amounL dve dom rc)ltted partilt)$ rekntion and other receivables and ttade accolmis rceivabe Finatlclll habiilics cgtmsist of banilt ovcrdratls jnerest bearing lOil1S and bOrowings amounts due (0 nliled partiG~ ane trade x-ounls payable
The- fair values of hese financial inStrumen1S except Jo-- imCfest bearing loam lHld bOlToving aproKimate lhdr cMryinJ vlhes due to the Slort temt mzrutiiles or these instrument
Tllc faiT value of iotcnst beating Nns and borrowin2s ae estimate( based on discoumed ltash flows twin int(s rale- cune-ntly nvailagtk fur tilt debt or sinuiar tetnlS an-a rell1lmng matunties
31
Aamal Company~Q=-ScC ______________~______
~OTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For fhe year ended 31 December 20 t3
SlGNIFICANT ASUMPTIONS ACCOUJTING JUDGElE1TS AND F8TIMATFS
impairment (If accoonts receivable n etrnwe of lhe collectible anoun of trade accounlgt reccvable is made when collection of the full lHl1OUt i~ nO looger probabk FOI nCividualty significitIl amounts this estimation is p~rformed on an indh-idllai a$[$ Amomts wHcb arc not indivldl11Uy significant but wluch are past due ZTe tsscssed collectively and an aJlQwaccc applied ucc()r~Jng to the length of lime past due based oc histnncal recovery nlJes
hnpalrment of inHntnries lavenoncs are held at tho lower of col and nol realisable value InIOn inventoncent$ becone old or 0-~amplete an estilTJte is mate of their net j alisable vulue For indiviolhlUy significant amountS this cstinaunrt is performec all aD lndividwl osis Amotlnts whieh are fl0t individually significan( btll which ltIre old at obsolete wx LltSessed wllecivdy md a provisior is applied sccnrding to the invenrory type and be dep)ee of ageing 0 cDsolescc1ce based on anticipUled selling prices
Classifigt1ltion of El Sew(gtdy Cable Qatar WLI ali a j(lint vwture pound1 Sovedy Cables Qatar is a limited hability company whose kgal fum confers SCprm11ior bernten tbe jXliiies 10 ~he jomi lfranpement Snd the Company Itself FurthenrlOre then IS no oontractua] arrmgelTeot or any oibe aus aod circumstriliCe$ that iocik41to tht he putic5 [0 the joint flJTIlrgernelit bave rights to the ssetl and obligrtdons fo~ the liabilities of the joint ilrrongement Acoordingly El Sewed- C[jbl~s Qamr WLL is dassifiecl 7S a joiut enrtrr of he GWtp
impairment of goodwill G0oovj)1 embedded in th~ cot 0 aquisitior of subsidiaries and eqmtj-iccounled iflV(stees ire teswt for irl1jXlirmnt aHuaily Tbe calculations of value [n use fO( cfish gecj~r)lilg units (loring to real nte projecg are rtost sensitive to tin IDHowing assumpti015
Grosgt i1wginmiddot Gross Ilmrgins arc lmsed on avrage values tuhje0d in (he [Xrioo preeedhli (e siaM of the budge xnod T1esC at( mcreased over the budgel period for mticipatltX efficiency Hnprovemots
DisC)unr r(es Discount rotes represent th cl1tent mark as~ssmetlt of the risks specific te ech cash geocroting unit regarding lhe time value of money ilnd mdividu)l risks of he tmtieriyilg assets whICh have not been inwrport1eti it the Citik flow estimates The dj~(OUrl flte tlkulation is based on the speclfte circurnsthLCes of lile Group and its opltllatJng segn)~nts (md derived (ff)rC it weighted avaage (XSt 0f apilaJ (WACC) Tb fACe (akw into uoount both deb and equity The 0$1 of equity is denved from dlC expected return 01 investmenl by the Groups investors TJc Gos10( deb is based on l1e borrvwings the Gmup IS obllsxl to service SC~lletllmiddotspecific r5k IS incorxt4too by applying individual bera facto The betn mctors ire evauatcentd annuaHy bhseci on pubJicly aVflllabe murked earn
Fair value ()fnHstmeni proputies The fuit laHe 0 nvestmel~ propertis is deltrrnlnzd b cxterrwl indepzfldell property valuers laving appr0priate recognised professional quabfiillions and recenl xperience H1 the localjl)n and G-tegory 0 the oroperty being valued
Useful hes of PfQPcrly plmr (llld zqulpment The Groups management detennints th estiunted useful jives Df It~ property plan and equipmnl fix calnurjng depreciation Thi5 e~timJte is 6lermind after cinsidring 1b expeelcd usage (1f the a5sclt [hysical l101t and (eas tedmiltal Dr com~ercia obsolesccnce
Gotlg Qncen
ibe Groups mangerncnt UiS made aJ assessmeot cf the 011115 ability (0 COllllOUC liS a going conct11l Imd is satsl1ed hat me Group ms the resources to contmue in business for he foreseeable fu1urc he1hennort he management is no aware oC lny material Hncertainties that lray CH~t signinchnt doubt tlPDfl the Groups ability 10 continue as a going umcem Therefore titpound lotlsolidatcd finilllcij stftemeols comirme to be prepltd on li g0ing concern basis
Aamal Company QSc
NOTES TO THE CONSOLIDATED FlNANC[AL STATEMENTS For the year ended 3 1 December 20 13
32 INCOME TAX
Certa in subsidiaries of the Group which have non-GCe ownership are subject to income tax under Qatar Income Tax Law No 2 1 of2009 The iocome tax is charged on the share of profits attributable to non-GCe shareholders For the purpose of these conso lidated fi nancial statements the income tax liability oftbe foreign shareholders has been excluded given that the non-GCe shareholders have agreed under the shareholder agreements signed with the Group to bear the fh lliiability and make necessary payments
33 COMPARATIVE INFORMATION
Certain comparative figw-es of the previous year have been reclassified 0 coofonn to the current years presentation However such reclassifications are oat materia and do not have an impact on tbe previously reported net profit other comprehensive income or the total equity for the comparative year
The impact from the resta tement of comparative infonnalion as a resuh of adoption of IFRS I I - Joint arrangements is detailed in Note 32 Changes in aCCQu(lting policies
46
Report 00 other legal And regulaiory requirements We have obtained all the info rmation and explanations which we consider necessary for the pUipose o f our audit The Group has maintained proper accounting records aod the consolidated financial statements are in agreement therewith and we COllfirOl that the physical count of inventories was carried OUi as per the established principles We have reviewed the accompanying repon o f the Board o f Directors and confinn that the financial infonnation contained therein is in agreement with the books and records o f the Company We are not aware of any violations o f the provisions of Qatar Commercial Companies law No S o f 2002 or the tenns of Article of Association having otttured during the year which might have had a material adverse effect on the business of the Company or its consolidated finiUlcial position as at 31 December 20 13
20 February 20 14 Gopa l Balasubramaniam Doha KPMG State of Qatar Qatar Auditors Regislry Number 251
Independent auditors rep0l1 (continued) - Aamal Company Qsc
Aamal Company QSC CONSOLIDATED STATEMENT OF FINANCIAL POSlTlON AI J I December 2013
ASSETS Current assets
Cash and bank balances Accounts receivable and prepayments Amounts due from related part ies Invento ries
NOD-current lI$sft~ A vuilable-for-sal e investments Equity-accounted illvestees Investment properties Properly plaIU arid equipment
TOTAL ASSETS
LiADILITIES AND EQUITY Curnn Jj~biljtit5
Bank overdrafts ACCOUntS payable and accruals Amounts due 10 related panies Interest bearing loans aM borrowings
Non-Curr(DI liabilities
Interest bearing loans and borrowings Employees end of service benefits
TOlRllitbililits
EQUiTY Share capital Legal reserve Treasury shares Cumului ve ch8llge in fair vlIue Retained earnings
Equity attributable to equ ity holders of the pa rcnt Non-cOnlIOII ing interests
Note
5 6 7 8
9I
5 12 IJ 14
14 15
16 17
203 QR
436136756 510089839 214439950 316699545
I4 77366090
24 983 133106907
6402486000 519970890
70551588780
8532954870
6836280 445046573
48199591 749520820
J2496031264
165384481 19957976
185342 457
143494572 1
6000000000 378132552
(2075865) 4069
526628214
6902688970 1953201 79
2012 QR
36788 129 1 482281 775 171 525363 401 902873
1423 59 1302
18963 12666999 1
611 3347018 449527258
6689563 230
8113154 532
2885090 379119069 49737757
825 568489
1257310405
239276807 18111 763
257388570
1514698975
5445000000 327445101
(207 5865) (416)
638248275
6408617095 189838462
7098009149 659814551557
TOTAL IABIIITIES AND EQUITY 8532954870 811 3154532
Mohammad Rrunah i Chitf Financial Officer
The artaehcd notes I 0 33 fonn an integral pan o f these consolidlIed financial statements
3
COgtSOLIDATED STATEENT OF INCOME For tM year ended 31 Dec-mixr 2013
Not
Revelue lR Diroctcnstb 19
GROSS PROFIT
Other income 20 Markelillg and promotion expenses Geternl MO administrativcent cxpenSs 21 Dvmiation Fine nee CDS 22 Shure of profits of equityltl(COUnleci ~nvestees 9
PROFIT REVORE FAIR VALUE GAINS ON tVfSTnlT PROPERTJES
Net fuil vl1lue gltllns or lnvestne-Ilt prcpc(li~ 10
PROFIT FOR THE YEAJt
Pmiltltributnble to Equit holcefS of tift parent J(jI1~rtroing Inreres
l)3~itand diluted eanlings per share (QR) (RITnoutable 10 cqujry holders of the parerl 23
Jon QR
2122595133 _ (1702139111)
419455956
I 516688 (18995918)
(109981101) (9331061)
(44930877) __~)499901
267233582
245051107
~--~~
5068745(17
_~~ sect4JQ82 ~~Jll4lL
(L85 ~~~--
2012 QR
2(69)36372 J~~~S965i016J
41YJ6SU56
16199921 (J I L66J 47)
(25628J2) (947 3007)
(58063809-]
_~3JA0104
2J572 1006
3R3m183
_-_2d~
594892946
~~~2S14~~ zi~L
049 -~---
The zltached notes j to 33 f01111 an integral part of these tOl50hdared financial S1tltlTWpl$
Aamal Company QSc CONSOLIDATED STATEM ENT OF COMPREHENSIVE INCOME For Ibe year eoded 3 1 December 201 3
2013 QR
Profit for the year 5 12284689
Other comprehensive income Items that are or may be reclassified to profit or loss Unreatised gain on available-for-sale investments 6020
TOTAL COIVIPRpoundHENSIVE INCOME fOR THE YEAR 512290709
TotaJ co mprehensive income attributable to Equi ty holders of the parent 506878992 Non-controUing interests 54117 17
5 12290709
101 1 QR
6245 13489
109582
624623071
59489253 0 2973 0541
62462307 1
The (luached notes I 10 33 form an integral part of these consolidated fin ancial statements
~amal Company QSC
CONSOLDATED STATEMENT OF CASH FLOWS For the year ended 31 December 2013
OPERATING ACTlVlT1ES Profit fot ioc year Adjustment for
Net fuirvalle gaj0i on overncnt properties Dpreciation Provisio~ fOf employlXs end of seevielt benefits Bargac purchaslt gAin Allowance for inp~inueO of trde accomis receIvable (Proritlloss on dJsxgtsel of property piaU( 06 equiprnent Provision fot slow moving Jllvetlories lJlterest nome finance oosts Share of profit of eqUlry-accoumcd inveslces
Operaling profit ooorc working capital changes
JllvtntorifS AU(lIJJltt receiwlbk and prepaymert1S ccoums payabe And accruals ~et l)OVem1t in amounts due from and due to rdmgti panie
Cash from operation Finance coStS pltlid End of SCfVtCe benefits paid
Net Leasb from opcrling 3ctivitilt5
INVEsnXG A(T1TTIfS Xntltresl income raeivcd Proceeds from disposal of property piii1i and equipment Divicieflds reced tTom a j(im venlure Additions to inveslmeul properties Acquisition of subsitlittry net of cush Jzquired Aquisitioll from non-controlling il]tw~st Additions 10 property plant ()nd equipment
Net cash used in invltgtliing Jctivii(lS
FINAClXC ACrlVrnrs rtt moverncl1 in inteftst bearing tiJ41S al1d borrOWings ConlribIH(llS from nonconttohng interests
Net cash tlllied in)ftom hnfCncmg actiV1ies
lNeREMyen IN CASH ANn CASH EQlJlVAUVIS Detrease to casr due to 10~S of crmol of a subsidiary Increase in cash 1t5ulttd in obtaining the conh) of il-n Il$$oile
Cash and caltr quiVlenls at 1 JanuJry
CASH AND (i5iH EQttVALENTS AT 31 DECEMBER 5
NolO
10
15 20 21 20 S
20 22 9
is
20
9 10 4 4
11)13
QR
5122846amp9
(245(51101) 4lA95449
4056969
2294590 (737647)
2380611 (2$24216)
44930$77
_~499901l
34133lno
82822711 (3lH12654) 5312iL387
~82753)
4112788011 (45056522)
_t221Q7S6)
35S52q733
2824116 1274457
119921185 9568U47)
Jl~870))741
_ (141_~3464ol
(149939995) __ ~~__f)~_L
JlplusmnB699~)
643fi4ns
~~Sif99~2U1
~pound2d9M2t
2ul2 QR
6+5~30X9
(388792483) 42540J((1
4205499 (S36)743 J 1361120
178610 2208263
(2Sl4392) 5206389
(234Q350~1
32J ~n2A89 (6[90(304)
(l46739948) 136)0977
_ 62q660
312291614 (58643654)
(432095)
-14932OI5
2894]92 609659
10049971 (72719187)
l 6594 s05) (40A toDOO)
~71~9631
Q4sectS26)Jl
237n(j7n
--1113-0~OO~~__
__ 25c~f)7J33
223251515 (3090 I 7)
5OO(UtOC ~~_6pound~Ag2
64t996~ijl
The atlached iIOle~ to 33 form an integral part of Llese corsokiated financial slUlement$
6
Aamal Company QS C
CONSOUDATED STATEMENT OF CHANGES IN EQU ITY For the year ended 3 I December 20 13
Alfribulable (Q equitY hulders Q[the parent
Cumulative N OII-
Share Legal Treasllry chollgein Retained conrro lfing Tf capilal resenc shares fair value earnings Tolal inereslS equity
QR QR QR QR QR QR QR QR
Balance at 3 December 20 J I 4950000000 267955805 61 4024 670 583 1980475 14 1645505 5973625980
Boougt shares issued (Nole 27) 495000000 (495000000) Profit for the year 594892946 591 892916 2962054) 6245 13489
Other comprehensive income for the year (416) (41 6) 109998 109582
Treasury shares acquired througb business combinati on (2075865) (2075865) (2075865) Adjustmenl due to loss ofcontrol of a subsidiary (983 643) (983643) Derecognition of non-controlling interest due 10 liquicbtion of
a subsidiary 55932 55932
Transfer to legal reserve 59489296 (59489296) Con(ribUlion from non-colllrolling inte rest 59232919 592329 19
Contribution to socia l and sports activi ties fu nd ( 11612837) ( 156 12837) (1561 2837) Non-controlling interest acq uiJed without change ofcontrol (Note 4) (567208) (567208) (39842792) (404 I 00Cl0)
Balmce at 3 1 December 20 12
Bonus shares issued (Nole 27)
Profit for the year Other comprehensive income for the yeM
Transfer to legal reserve
Cootribut ion from non-controlling interest
Contribution to social and sports activities fund
544S00000Q
555000000
32 7445101
5068745 1
(2075865) (4 16)
4485
638248275
(55 5000000)
506874507
(506amp745 1)
( 12807 11 7)
64086 17095
506874507
4485
(12807 11 7)
189838462
54 10 182
15 35
70000
6598455557
512284689
6020
70000
( 128071 122
Ballnce at 31 Decem ber 2013 6000000000 378132551 (2075865) 4069 5266282 14 6901688970 195320 179 7098009149
The a(tached notes 1 to 33 fann an integra pan a fthese consolidated financial slatements
7
2
Aamal Company QSc
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 3 I December 20 13
CORPORATE IN FORMATION AND PRINCIPA L ACTlVIT IES
Aamal was funned on 13 January 2001 as a private shareho lding company with limited liability (W LL) under the COlrunerciaJ Registration Number 23245 in the Slate of Qatar On 12 Ju ly 2007 the private shareholders resolved to transfonn AamaJ into lt) Qaari Shareholding Company (O SC) (the Company) Accordi ngly the Company was listed on Qatar Exchange on 5 December 2007 The Companys registered office is at P O Box 224TI Doha Sttlle of Qatar
The Compaoy is organised inlo a head office (Aamal) cllld branches and operates in the State of Qatar The fo llowing table sets out the principal activi ties of the branches
Brancb Principal aellvities
C ity Center Qatar Branch Leasing the facilities of the re tail outlet complex in Ci ty Cen ter Doha
Aamal Real Estate Branch Residential and commercial real estate investment and property rentaL
Aamal Readymix Branch Production and sale o f readymix concrete
Ebn Sina Medica l Braoch Wholesa le and retail distribution of phannaceulicals aod general consumable products
Aamal Medical Branch Wholesale d istribution of medical eq uipment
Aamal Trading and Dis tributioo Sale of tyres lubricants batleries and home applian~s
Branch
Amnal Servi~s Branch Providing facilitie s management arld cleaning services
Aamal T ravels Branch Operating a travel agency
Aamal fur Indus trial Projects lndusllial investments Branch
Good Life Phannacy Branch Sale of phannaceuticals baby care products medicine and general cOllsumable products
Foot Care Center Branch Sale of footwear clinical activities and general commercial tradillg products
The consolidated financial statements were authorised for issue by the representatives of the B03Id of Direclors of Aamal Corupaoy QSc on 20 February 2014
BASlS OF CONSOLIDATION
The consolidated fioancial statements comprise the fioancial statements of AamaJ Company QS C (the Company) and its subsidiaries and joint controlled entity (together referred to as the Group)
Subsidiaries Subsidiaries are enli ties controlled by tbe Group The Group controls an entity when it is exposed to or has rights 10 variable returns of its involvement with the entity and has the abili ty to affect those returns through its power over tle entity The fi nancial statementS of subsidiaries are induded in the consolidated finarlcial statements ITom the date on which control commences unti l the date on which control ceases When the Group loses control over a subsidiary it dereognises the assets aoo liabilities o f the subsidiary and aoy related non-cootrolliog interest and other components of equity AllY resulting gain or loss is recognised in consolidated statement of income Any interest re ta ined in the fonne r subsidiary is measured 01 f3i r value when control is lost
8
2
Aamal Company QS c
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 31 December 2013
BASIS OF CONSOLfDA TiON (continued)
Subsidiaries (continued) Set oul below are Ihe Group s principal subsidiaries at 3 1 December 2013 Unless oUlenvise slated the subsidiaries as listed below have share capital consisting solely of ordinary shares wh ich are held directly by the group and be proportion of ownership intereSIS held equals 10 the votiug rights held by Group Tbe country of incorporation Of
registration is also their principal place of business
Comp(my name
Aamal Cement Industries W LL
MO Qat1 Company WLL
Senyar Indus tries Qatar Holding WLL
Doho Cables Qaw WlL
EccoGulf Compaoy WLL
Advanced Pipes and Casts eompmy WLL
Johnson Controls Qatar WL L
Country 0 lJCQr por ation
Qator
Qatar
Qatar
Qatar
Q 31ar
Qatar
Principal (lcfi ity
Development and mlUlagement of factori es and the prodllaion or curb sl~ne i llleriook slabs lIId cement bricks
Construction and repai r of power plant es tablislunent and man3gemenl of industrial enterprises aud ac ting as a representative for the imcmatiOllru companies
Management of subsidiaries and associates ovming of palen~ businesses and subleltiug Ulem and provision of investment port fo lio management for Its
subsidiaries and Msocialts UOkr the shareholders agreement signed between the Group and the other
shareholders the Group is able 10 appoint the chai rman and two other members 10 (he Boflrd of Direc tOfS (out of six members) and is able to govern the fin ancial and operating policies of Senyar Industries Qatar Holding WLL Accord ingly ~ company is considered as a subsidiary oCthe Group
Mailltenance and mallllfacture of electric cables equipmelll and lools Doha Cables QalaJ WLL is
91875 (eITectively) owned by Senyar hldush es QaUlr Holding WLL a subsidiary of tllC Group TIIe Group has (he power indi rectly through SenyM [ndus tJi cs Qatar Holding WLL 10 govern fi nancial and opera ting policies of Doha Cables Qatar WLL and accordingly the company was considered IS a subsidiary ofthe Group
OITers professional and bus iness process outsourcing and Cll )] center services
Manufacturing of Wide cement md amplass reinforced pipes systems for infrsslICture (lnd pipeline projects
The Gro up h~ the power 10 govern ~lot financial and opera1 ing policies or Adv3I1ced Pipes and Casts Company WLL by virtue of a sllarchokJers agreemeot TIlus the Company has been cotls ldcrOO as II subsidiary of the Group
Provision of racililies management service5 energy se-rvices md building maimetlaoce and cleanlg services to corporate cl icn1S
PlOporl ion oj
oWPersllip held by the
Non
Group COnroiling interest
99 1
60 40
50 500
459 54 J
5 1 490
50 50
51 49
9
2
Aamal Company QSC
OTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For toe year ended) J December 2013
BASIS OF CONSOUDA nON (continued)
Suhsidiaries (wntiourd)
Cmmffyoj fNgtpvniOil j irniJpvroliin ~__~ampiphdd~~
Nor G)1)Ji contfoifgtg
iMeregt
CmiddotSan TI~ing WLL Sdilamp lYJy1ng renting me Mltcentlopil12 [e~ tSite 30 invimenl w shams rnlilVigemc1t vf real lsta propeItilttl owning ille palent and tradcentmut and tnlding in iXjUiflfIfflt amJ vcilici$ 1he GroClp has tJe pcwer tv goem 6e ~inr8hl and ojJrtltllng
roicie_~ of ClSM by vifcle 0 a shlrcholdcrs 191e~mcentn(
745 25 1~i
nnoV1iv lightinf wmpany Qatar TNriing of Ught 2rrt1nz DiDd lEU Lwpj lmd 7r J) WLL olhT $hlil1g prrltwl
Twdiflg of of4 SiJpplk-s and providll$ prindna and 65 35 laniniltmJ sltrce~
Non-coufroUing illterests Non-controrling intel(SlS are measwed tj tleir propO(hOnile $hue Ot the tcquirees identifiabk net asscl III the JCqUiSlOt1 rote Chuegts in t1e Groups imcest in i $ubsiciwty hat do tot rcmltlo a loss of ~)I1a1)l xc accountd for as equity trnramplclions
Tamil-crions eUminnted on c)lwtidaticu lntngtgroup baiances Jue transactions 00 any unrealised income 1nd expenses ari$tng from intrnwgrOU tranSaOiQlls arc eiimmatcd UfiJeaiiHd gaina arising from ITaUstlclions ttlt equity-lKcoUl11uJ IlVtSlCCS are eliminatd 1gamst the investment 10 the extent oftlle Group interest in the inveMee Umaslised loses are eiiminatd II the same VllY us unrvalised gains hit only to Ille eXfeut that there is 10 evidence ofimpaimcentut
Illttn~ts in jOint arrangements iu)d associates Detais ofeach of ttc Groups Hutilrial Joint venlU)s fujltj assoeime~ at the end of the reponing period are 5 [OHOViS
Cmnirycgt PltJporlion qf Compao name infOjwNiIIO1 ewonlup Qltd
vOingjYwer htld by
tiff GrOlp
[I Sewed Cable QntM Tndllg in ele(mHnechmita CGlJ)ptnefllmd plOvicmg WLL rei) services El SWNed Cables )ilMr WLL is
49 JWoo (Wilt 55 tblre of rrofils (losses) hy StHyar lrdl11(rie~ Qal3t Hodirg WLt e 511b8idimy 0 ~he GOllp However (kw 10 ~ feiBtil shareholdergt agreewli pound ellWY has I~)mc a jOm vent( eTdive trmJ l January 20 wllkh is mC(t511rec Il1de the eqJity ngtU1l
rins $tngtdJBI S~ 1idJgt (law Ertity lS engaged l sled (b[iclli0ls Gf0Jp mtllpoundure Ea LC t11cent fl5sodau under cquhy nlctooo
Aamal Company QS c
NOTES TO THE CONSOLIDATED FlNANClAL STA TEMENTS For the year ended 31 December 2013
3 BASIS OF PREPARATION AND SUMMARY OF SfGNlflCA1T ACCO UNTING POLICIES
31 BASIS OF PREPARATION
The consolidated fi nancial statements have been prepared in accordance with lntema tional Financial Reporting Standards (IFRS) and the appLicable requirements ofQalar Commercial Companies law No5 of 2002
The consolidated financial statements have been presented in Qatari Riyals (QR) which is he Companys floclional and presenUll ion currency and have been rounded to tlle nearest Qatari Riyal TIle consolidated financial statements are prepared lUlder the historical cost convention modified to include he measurement a l fair value o f investment properties and available-for-sale investments
32 CHANGES IN ACCO UNTING POLICI ES
The [lccoWiting policies adopted are consistent wilh Ihose of the previous fi nancial year except for the following standards effe ctive for the annual period beginning on or lfter 1 Jlnuary 20 13 These standards and amendments other tM n the impact of (FRS II - Joint Arrnnge menlS noted below did not have aoy malenal impact to the Group
lAS I (amendment) - Presenfalion of items ofother comprehensive income The amendments to IAS I require that an emity present separate ly the items of ltN her comprehensive income that would be reclassified to profit or loss in the future if certain conditions are met from those that would nC ver be reclass ified to profit or loss
lAS J9 - Employee benefits (201) lAS 19 (201 1) changes the definition of short-tenn and other long-tenn employee benefits to clatify the di stinction between the two
lAS 28 (201 f) - fnvesfmem in Associates and Joint ventires lAS 28 (2011 ) supersedes lAS 28 (2008) lAS 28 (2011) makes the foHowing amendments Associues held for sale JFRS 5 Non-current Assets Held for Sale and Discontinued Operat ions applies 10 an investment or a portion of an investment in an associate or a joint venture that meets the criteria to be classified as held fo r sale For any retained portion of the investment tlwt has not beell classified as beld for sale the entity applies the equity method until disposal o f the portion held for sa l ~ After disposal any re tained interes t is accounted for using the equity method if the re tained interest continues to be an associate or a joint venture and 0 0 cessation of significant influence or jo int conltOl even ifan investment in an associate becomes an investment in a joint venture or vice versa Ihe entity does not fe-measure the retaincd interest
Amendments ft) fFRS 7on ofseftingjil1ancial assels and jinancialliabilities (2011) Disclosures - O ffsetti ng Financial Assets and Financial Liabilities (amendmems to FRS 1) introduces disclosures bout Ihe impact of oetting arrangements on an entity s fin ancial position Based on the new disclosure requirements the Group has to provide inforroation about what amounts have been offset in the consolidated statement of fimmcial position and the nature and extent of rights of set o ff under master netting aITlngements or simi lar a1Tlngernents
fFRS 10 - Consolidate1 financial SIOlemenlS and lAS 17 Separate Fillancial SfalemenS (2011) [FR S 10 introduces a single control model to determine whether an investee should be consolidated FRS 0 replaces the parts of previQlSly exis ting lAS 27 Consolidated and Separate Financial Statements that dealt wi th consolidated fin ancial statements and SIC-12 Consolidation - Special Purpose Entities This new contro l model fo cuses on whether the Group has power over an investee exposure or righlS to variable rerums from its involvement with the in veSlee lnd abili ty to use its power to affect those returns The Group has amended its accounting policy on consolidation in line with requirements of TFR S 10 and has re-assessed its consolidation conclusion
[FRS 12 - Disclosures ofimerests ill other entities IFRS 12 brings together into a single Sfandatd all the disclosure requirements about an enti ty s interests in subsidiaries jo int arrangements associates and unconsolidated structured entities It requires the disclosure of infonnation about the nature risks and financial effects of these interests
II
Aamal Company QSc
NOTES TO THE CONSOLIDATED FTNANClAL STATEMENTS For the year ended 3 1 December 201 3
3 BASIS OF PREPARATION AND SUMMARY Of SIGNIFICANT ACCOUNTrNC POLICIES (continued)
32 CHANGES IN ACCOUNTING POLlc ms (coDtinued)
IFRS IJ Fair ~alue measuremetll TFRS 13 provides a single source of guidance on how fair value is measured and replaces the faif value measurement guidance tha i is currently d ispersed thIo tlghool [FRS It unifies the definiti on of fair va lue as the price that would be received 10 sell an asset or paid to transfer a liability in an orderly transaction between market participants a t the measurement dale It replaces and expands the disclosure reltjuiremenlS about fair value measurements in other IFRSs including TFRS 7
Improvements (0 IFRSs (20 ) Improvements to IFRS issued in 20 11 contained numerous amendments to IFRS that the IASB considers nonshyurgent but necessary Improvements to lFRS comprise amendments that result il) accounting changes to presentation recognition or measurement purposes as well as tennioology or editorial amendments related to a varie) of individuallFRS standards
During the period the Group has adopted the fo llowing new s tandard which became effecti ve for the annual periods beginning on I January 201 3 which had a materi81 impact to ule Group
IFRS II Joint AlTwlgements As a result of adopting IFRS II the GrOlp has changed its ltlccoUJ)ting policy for interests in jo int a rrangemeots Uuder rFRS 11 the Group classifies its interest in jo int arrJngements as e imer j oint operations or joint ventures depending on the Groups rights to the assets and obligations for the liabil ities ofthe arrangements When maldng this assessmenl the group considers the strucltire of the arrangements the legal fonn of any separate vehicles the contrac tual tenns of the arrangements and other fact s and arrangements Previously the structure of tbe a rrangement was the sole foc us of classification The Group has re-evaluated its involve men t in ils o nly joint a rrangement El Sewedy Cables Qatar WLL ltlnd has recla ssified the investment from jointly controlled entity to joint venture Also the Group has discontinued with re rrospective effect the use o f the proportionilte consol idation method and adopted the equity method to account for joint venture in accordance mth IFRS I I
Summary oquulllitative impuct The following tables summarises the materia l impac ts rcsulting from the above change in accounting polic ies on the Groups financ ial position profit o r loss and cash flo ws
Effect of chnnge in 31 Decemb er2012 accounting policy
Cunem assets (278 880441 ) Non-current assets 1295 1346 Total assds (265929095)
Current liabilities (265072694) NonmiddotcWTent liabilities (856401) Total lin bill ties (265929095)
For the year ended 31 December 2012
Profit for the year
Net chflllge in cash and cash equivalents dlUing the year (99696J)
12
Aamal Company QSc
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 3 I December 2013
3 BASIS OF PREPARATION AND SUMMARY OF SlGNlf[CANT ACCOUNTING PO LICI ES (continued)
33 lASB STANDARDS AND lNTERPRETATIONS ISSUED BUT NOT ADOPTED
The following lASB standardsamendments hJve been issued but are not yet mandatory and have 1l0( been etrly adopted by the Group
Standard
Illterpretotion COnem EffeClive dale
TfRS9 Financia l InstrumentS (new standard) I Januruy20 17
IAS 32 Financia l Instruments O ffsetting (amendment) I January 20 14 JAS 36 Financia llnslnnnents Disclosure - non-fi nancial asse ts (amendment) I January 2014
The Group is considering the implications of the above standards and the till1ing (If adoption by the Group
34 SUM MARY OF SIGNIFICAJT ACCOUNTING POLICI ES
Bu siness combinnriO llS The Group accounts for business combinations using the acquisitio n method wben connol is Imasferroo to the Group The consideration ITansrerred n the acquisition is generally measured at fa ir value as are the identifiable net assets acquired Any goodwill that arises is tested annua lly for impairmeot AllYgain on a bargain purchase is recognised in pro fit or loss immediately Transaction COStS arc expensed as incurred except if rehated to the issue of debt or equity securities
The considera tion transferred does nOt include amounts related to the settlement of pre-existing re lationships Such amounts are recognised in profit or loss
Any contingent consideration payable is roeasured at fair va lue at the acquisition date If the contingent consdicrntion is classified as equity then it is oote nmeasured and settlement is accounted for within equity Otherwise subsequent changes in the fa ir value of the contingent consderafion are recognised iu profit or loss
Cash a nd eash equivalen ts For the purpose of the consolidaled statement or cash flo ws cash and cash equivalents consist of cash and bank balaoces ruld short teJTIl bank deposi ts wi th an original marurily of three months or less net of outstanding bank overdrafts
Accounts receivable Accounts receivable are stated at originill invoice amount less an allowance for any uncollectible amounts An estimate for doubttit debts is made when collection of the flilt amount is no longer probable Bad debts are wntlen off when (here is no possibility o f recovery
Inventories Inventories are stated at the lower of cost and net realisable value Costs are those expenses incurred in bringing each product to its present location and condition
Goods ror resalework in progress - Cost of di rect materials aJld labour plus attributable overheads based on a oormallevel ofac1i vity
Raw material and spare pan s PlIlchase cost on a weighted average basis
Net realisable value is based on estimated selling price less any further costs expocted to be incurred to completion and disposal
13
Aama Company QSc
NOTES TO THE CONSOLIDATED FINANC IAL STATEMENTS For tbe year ended 31 December 20 13
3 BASIS OF PREPARATION AND SUMMA RY OF SIGNIFICANT ACCOUNTfNC POLI CIES (contin ued)
34 SUMMARY OF SIGNIFICANT ACCO UNTLNG POLICIES (continued)
Interests in equity-aecoupled inveslecs The Groups interest in equity-accounted investees comprise interest in associates and joint venture
Associates are lhose entities in which the Group has significant influence but not control or joint control over the financia l and operating policies A joint vennu-c is an arrangement in which the Group has jo int ool1lrol whereby the Group has rights to the net assets of the arrangement rather thall rights to its assets and obugations for its liabilities
InlereSIS in associates and the joint venture are accoliDted for using the equity method They are recognised initially tit cost which includes transaction costs Subsequent to ini tial recognition the consolidated financ ial stateme nts ioc lude the Groups shrre of the profit or loss and other comprehensive income of equity-accounted investees unti l the dalc on which significant in Lluence or joint control ceases
The reponing d~les of the equity-accounted investees and the Group are identical and the equi ty-accounted investees accoWlting policies confonn to those used by the Group for like tmnsactions afld events in similar circumstances
Investmefl t properties umd aod buildings are considered as investment properties only when they are being held to earn ren tals or for capital appreciation or fo r both
Investment properties are measured ini tia lly at cost including traosaction costs and borrowing costs that are directty attributable to construc tion o f the 8sseL The carrying alRount includes the cost of replacing part of an existing investment property at the time that cost is incurred jf toe recognition cri teria are mel and excludes the costs of day-to-day servic ing of an investment property Sub~quent to inilial recognition investment propert ies are slated at fa ir value which reOects market conditions at the reporting date Gains or losses arising from changes in the fa ir values of investment properties are included in the consolidated statement of income in the yeltl r in which they arise
Investment properties are derecognised when either they have been disposed off or when the investment property is pennanently withdrawn 1T0m use and no fu ture economic benefit is expected from its disposal Any gains or losses on the retirement or disposa l of aD investment property are recognised in the consolidated statement of income in the year of retiremeOl or disposal
Property under construc tion is dealt with under lAS 40 and rttorded at cost less accumulated impairment losses until either its fair value becomes relia bly detenninable or cons(TUction is completed (whichever is earl ier) At that time it is reclassified as inves tment property and a fa ir value adjustment is recognised in the consolidated statemenlof income
Transfers are made to or fro m in vestment property onl y when there is a change in use For a transfer from investmen propeIT) to ovmer occupied proreIT) the deemed cost for subsequent accounting is the fair value at the date of change in use If owner occupied property ~omes an investment property the difference between the canying value aoo the fair value at the date oflransfer is rttognised as a revaluation reserve in the equity and is released to the consol idated sta tement of income llpon disposal of such propcny
14
Aamal Company QSc
NOTES TO THE CONSOLIDATED FrNANCIAL STATEMENTS For the year eDded 31 December 20 13
3 BASIS OF PREPARATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLI CIES (continued)
304 SUMMARY Of SIGNIFICANT ACCOUNTING POLICIES (continued)
Property plant and equipment Property plant and equipment is stated at cost including borrowing costs that are eligible for capitalisation and excluding the costs of day-to-day servicing less accumu lated depreciation and any imp~innem in value
Depreciation is provided on a straight line basis on all propelT) planl and equi pment The rales of depreciatioo are based upon the following eSImnelt useful lives
Buildings 20 years Leasehold improvements 2-8 years Truck mixers and motor vehicles 4-1 5 years Plant and ITIJchioery 8-2 5 years Furniture fixtures and office equipment 3-5 years Computers and related software 3-5 years Capital work in progress Not depreciated
The carrying amounts are reviewed for impain nellt when events or changes in circumstances indicate that the carrying value may not be recoverable If any such indication exists and where the carrying values exceed tbe estimated recoverable amouot the assets are wri tten down to their recoverable amount being the higher of their fair value less costs to sen and their value in use
Expendirure iocurred lO replace a component of an item of property plaot and equipment that is accotmted for separately is capitalised and the carrying amount of the component that is replaced is written off Other subsequent expenditure is capitalised only when it increases furure economic benefits of the related item of property plant and equiproent Al l other expendirure is recognised in the consolidated statement of income as the expense is Incurred
An item o f property plaot and equipment is dereeognised upon disposal or when no future economic benefi ts are expected from its use or disposal Any gain or loss arising on derecognilloo of the asset is iocluded in the consolidated stalemeot o f income io the year the asset is derecognised
The asset s residual values useful lives and method of depreciation are reviewed and adjusted if appropriate at each rnancial year end
Borrowing costs Borrowing costs direc tly attributable to the acquisition constmction or production of an asset that necessarily takes substalltjal period of time 10 get ready for its intended use or sale are capilalised as pan of the cost o f lhe respective assets All other borrowing costs are expensed in the year they incur BOlTOwiog COSts consist of the interest and other costs that the Group incurs in coomction with the borrowing of fund s
Accounts paytlble and accruBls Liabilities are recognised for amounts to be paid in the fuMe for goods or services received whether billed by the supplier or not
Interest bearing loans Bnd borrowings Interest bearing loaos and borrowings are recognised ini tiaJy at fai r value of the amounts borrowed less direc tly attributable transaction costs Subsequent to initial recognition interest bearing loons and borrowings are measured at amortised COSt using the effecti ve interest method with any differences between the cost and tinal settlement values being recognized in the conso lidated statement of income over the peliod of borrowings Instalments due within one year aI amortised cost are shown as a ctuTentliabiliry
Gains or losses are recogTlised in the consolidated sialement of income when (he liabililies are derecognised Interest relating (0 imerest bearing loans and borrowings is expensed in the year in which it is incWTed e(cept those qualify for capitalisation
15
Aamal Company QSC
NOTES TO THE CONSOLIDATED FfNANClAL STATEMENTS For tbe year eoded 31 December 201 3
J BASIS OF PRpoundPARATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
34 SUMMARY Of)SIGNIFICAtlT ACCOUNTING POLICI ES (continued)
TClaot deposits Tenant deposit liabilities are initially recognised at fair value and subsequently measured at amortised cost where material Any di fference between the initial fair vllue and the oominal amount is [eluded as a component of rental income and rocognised on a straight-line basis over the lease term
Derecognition or fiolocial nsstls and liabilities
a) Financial assets
A fi nanCIal asset (or w~re apphcabJe a part of a fin ancial asset or part of a group of SImilar financIal assets) IS derecogmsed where J bull The n ghts to receIve [5h flo ws from the asset have expIred bull The Group has trans f rred Its rights to receive cash flows from the ass or has assumed an obhg811On to pay the
reltelved cash flows I full Wlthout mfl tenal delay to a third party under a pass-through arrangement and elther (3) the Group has Ira sferred substantially aIthe nsKs and rewards of the asset or (b) Ihe Group has neuher transferred nor relain substantially ai the n sks and rewards of the asset but has tnlnsferred control of the asset
When the Group has tTa~fened its rights 10 receive cash flo ws from an asset or has entered into a pass-waugh arrangement and has nejlher trmsferred nor reta ined substantially all of the risks and rewards of the asset nor trnnsferred control of the asset the asset is recogoised to the extent of the Groups cOlilinuing involvement in Ihe
In that case the Group at 0 recognises an associmed liability The mnsferred asset and ihe associaled liabi lity are measured 00 a basis thai flects Ihe rights lnd obligations that the Group has retained Continuing involvement that takes the form of a guara tee over the transferred asset is measured at the lower of the original canying amount of Ihe asset and fbe maxim amoun o f consideration that the Groop could be required to repay
b) Financialliabiliti
A financial liabili ty is defogniSed when the obligation under the liabil ity is discharged or cancelled or expires Where an existing fio8 1lci I liability is replaced by another from the same lender on substantia ll y d ifferent lenns or the terms of an existin liabili ty are substantia lly modified such an exchange or modification is treated as a derecognition of the orig~al liabili ty and the recog1Jitioil of a new liability and the dirference io the respective carrying amounts is reco ised in the consolidated Slatement o f income
Impalr meot ood uncollec ibility of fina ncial assets An assessment is made al each repon ing date to determine whether there is objective evidence that a speci fic financial asset may be impaired If such evidence exists allY impainneOl loss is recogoised in the consolidated statement of income ImT t is detemtined as fo llows
(a) For assets earned a t fair value impainnellt is tbe difference between cost and fair va lue (b) For asseamp carried at COSt impairment is the difference between cost and lIle present value of future
cash flo1S discounted at lhe current market rate of rdurn for a simi lar finan cial asset (0) For asseq carried al amortised COSt impainneot is the difference between canying arnOWll and lhe
present Value of future cash flO M discowlled at the original effective iDlerest rate
Provisions Provisions are rewgnised hen the Group has an obl igation (legal or COnslnlctive) aris ing fro m a past event and the costs to settle the obl igalio are both probable and able to be reliably measured
16
Aamal Company QSc
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 31 December 2013
3 BAses OF PR EPARATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICI ES (colltinued)
34 SUMMARY OF S IGNIFICANT ACCOUNTING POLICIES (continued)
Employees eod of service benefits The Group provides end of service benefits to all employees in accordance wi th employment contracts and Qatar Labour Law The entitlement to these benefits is based upon the employees final salary aocl length of service subject to the completion of a minimum service period The expected costs of these benefits are accrued over the period ofemployment
Revenue Revenue is recognised to the extent thal it is probable that the economic benefits will flow to the Group and the revenue call be reliably measured Revenue is measured al the fair value of the consideration received excluding discoWlIS rebates and duty The following spec ific recognition criteria must also be met before revenue is recognised
Sale ofgoods Sales are recognised whcn significant risks and rewards of ownership of the goods have passed to the boyer and the amount of revenue cao be me3sured rcli3bly
Rental income Rental incorne from investment properties is accoWlted for on a time proportion basis over the period of tenancy Incentives for leases to enter into lease agreements are spread evenly over the lease teon even if the payments are not made 0 0 such basis Income arising Tom expenses recharged to tenants is recogn ised in the year in which the expenses can be contrac tually recei ved Service charges aud other such receipts are includcd gross o f related cosls in revenues as the Group acts as principal io this regard Premiwns received to terminate leases arc recognised in the consolidated statement of income when they arise
Service income Service income is recognised when the service is rendered and the outCQrne of the transactions can be estimated reliably
COlimission Commission is accounted for on an accrual basis when the right 10 receive the income is established
become on tra~el agencies [ncome on travel agencies is accounted for in the year in which the airline tickets are sold
IIIeresr income Joterest income is recognised as the interest accrues using the effective interest Clle method
Foreign currencies Transactions in foreign currencies ate recorded al tbe rale ruling at the date of the transaction Monetary assets and liabi lities dcoomioated io foreign currencies ace retranslated ill the raLe of exchange ruling at the reponing date All differences are recognised in the Statement ofinconlC
Use of estimates The preparation of (he Groups consolidated financial sta temenls in CQnfonnity with Intemltional Financial Reponing Standards ([fRS) requires management 10 rnake estimates and assumptions that affect the reponed amounts of assets and liabilities and disclosure of contingent asscts and liabili ties at the rcporting date and the reported amoUlils of revenues and expenses during Ihe reponing period Although these estimates are based on managements best knowtedge of current events nnd actions acnm results may ul timately differ fro m those estimates (Significant asswnptions nccounting judgments and estimates used in preparing these coosolidated fina ncial sta temenlS are disclosed in Note 31)
The estimates and underlying assumptions are reviewed regularly Revisions to accounting estimlIes are recognised in (he period in which the estimate is revised if the revision affects only that period or in th~ period of the revision and future periods if the revision affects both current and fu ture periods
17
Aamal Company QSC
NOTES TO THE CONSOLlDA TED FINANCIAL STATEMENTS For tbe year cnded 31 December 2013
3 BASI S OF PREPARATION AND SUMMARY OF SrGNIFICANT ACCOUNTING POLICIES (continued)
34 SUMMARY or SIGNIFICANT ACCOUNTING POLI CIES (continued)
Fair va lues A number of Groups accounting policies and disclosures require tJ1 C measurement of fair values for both financial and non-financial assets and liabil ities The Group has an established control framework with respect to the measuremeot of fair values When measuring the fair value of an asset or a liabili ly the Group uses market observable data for (be valuatiOD Fair values are categorised into different levels in a fair value hierarchy baCd on the inputs used in the valuation lechniques as follows
i) Leve l I - Unadjosted quoted prices io active markets for identica l assets and liabilities ji) Level 2 - Otheqobservable inputs not included within level 1 of the fair value hierarchy ii i) Level 3 - Unobtervable inputs (including enti ty s own data which are adjusted if necessary to retlect the
assumptions market participnllts would use in the circumstances) The Group recognises tralnSfers between levels of the fair value hierarchy at the end ofthe reporting period during which the change has ocdWTed_
Treasury shares When share capitl recognized in equity is repUIchased (by the Company or any of its subsidiaries) the amount of the consideration paid which includes direa ly altributable COSIS is recognized lIS a deduction from equity Wheo treasury shares are sold or reissued subsequently the amount received is recognized as no increase in equity and the resulting surplus or deficit on the transaction is presented io share premium
18
4
Aamal Company iQSc
NOTES TO THE ONSOLlDATED FINANCIAL STATEMENTS For the year ended 31 ecember 201 3
BUSINESS CO~BlNAnON
Acquisition o f Culf ROks Company VLL On 1 January 2012 the roup acquired 51 oflhe voting shares of Gulf Rocks Company WLL (Gul f Rocks) a limited Iiabiliry campan incorporated in Qatar and registered UJKier conunercial registration number 2249) The acquisition was made thT ugh Ci-San Trading WL L a subsidiary which is 50 owned by Aamal Group
I
The fai r val ue of lbe ideltifiable assets and liabilit ies of Gulf Rocks Co mpany WLL based on purchase price allocation exercise condlcd by tbe management as at the date of acquisition WJ S as follows
Fair value recognized on
acquisition QR
Assets I Cash and bank balances 14005495 ACC QUOiS receivable and wePayments I 749383 Amouots due from related plrties I
I oveotones
48311 190 5124 270
Available for sale investm~nlS 1985245 Plant and equipment 6769 17
81852500
Liabilit ies Accounts payable aJld accll1als 4724446 Amounts due to related parties 385070 Employees end of serviccibenefits (Note 15) 349272
5458788
Total identifiable net a5sellf
Purchase consideration trasferred Non-controll ing intereSt az-ising on business combination Bargain purcha5c gain rc~u ting from the tcquisilion
Allalysis ojcash flows OIl acquisition Net cash acquire11 Nith the subsidiary 14005495 Cash paid (30600000)
(16594505)
On I September 20 12 the Company acquired the balance 49 nfthe equiry of Gulf Rocks Accordingly the Group has 74 5 effective holdin4 in Gulf Rocks as at the reporting dale The excess nfthe purchase cons ideration over Ihe fair value o f net assets of GuJf Rocks acqui red from the nnn-controlHng interest has been recorded directly in the retained earnings of tbe Gr6up as at 31 December 201 2
QR Purchase consideration 404 10000 Less fuir value of oet asset~ acquiroo from the non-controlling Interest holder (39842792) EXce5s of purchllse cons idf ration over the fair value of net assets a(q uired 567208
19
5
Aamal Company QSC
NOTES TO THE (WNSOLlDATED FfNANClAL STATEMENTS For the year eoded 3 ) December 2013
CASH AND CASH EQUIVALENTS
For the pmvose of consolidated statement of cash flows cash and cash equivalents comprise the fo llowing balances
lon 2012 QR QR
Cash and bank accounts 330333904 282272895 Short lenn bank deposits 105802852 85608396 Cash and bank balances 436136756 367881 291
Bank overdrafts (6836280) (2885090)
Cash and cash equivalents 429300 476 364996120 1
The short tenn bank deposits are made for varying periods between one day aod three months depeoding on Ibe immedifltc cash requirements of the Group and earn interest at the respective short term deposit ra tes
6 ACCOUNTS RECEfVABLE AND PREPAYMENTS
2013 2012 QR QR
Trade aCColUlts receivable 411 011 567 345260657 Advances 0 suppliers and prepayments 50787921 629389J 5 Retention receivables 36217081 56943030 Other receivables 12073270 17 139173
5tO089839 4 82 28 1775
As at 31 December 2013 trade accountS receivoble amoWlting to QR 2690 1412 (201 2 OR 24984025) were impaired Movements in the allowance for impairment of trade aCColmts receivable were as follows
2013 202 QR QR
At 1 January 24984025 1 877085 Charge for [he year (Note 21) 2294590 13613 120 Amounts wriuen off (19949) (117368) Unused amotmts reversed (357254) (388812)
At 3 t December 26901412 24984025
20
6
1
lamal CompanyQSC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMEltS For the year ended 3 J December 2013
ACCotNTS RECEIVABLpound AND PREPAYMpoundNTS (contillued)
As at -1 I Dtcemxt the ageirg of unimpaired (ltlde accounb iltcivabk was as follows
P(HI duo
nor Up to 30 31-60 61middot90 Yi-jSj gt flO Tota impoirlt-fl days days days day doys
QR QR QR QR QR QR QR
1l13 411OJl$67 25l981960 32312165 2140966 19351fi43 16f)76888 60148545 2012 345260657 1695159B6 493lt)8566 2356$954 19494369 16908414 66374363
1JJJirtpai~ed receivable are expected no th bil5tS of past experienn) 10 be fully fcCi)evbc H is not the pngtctlce ofthcent Group to oblum collaleral over recejvablcI_
AMOLNTS DUE FROyl REL-TEO PARTIES
Name
AI ~aisnl Holding Company V_LL E Seweo Cabtes Qatn WL L Cnild -ftt Cvmlllny Al hz Retll E$vt rWesnnim Company WLL~ AllaZi Real Estale BrAnch EI Sewedy Electric Egypt WLL MuincrDJ1Ce Mwagmvont Group Qat3r W LL Good fe Cheffilt - The Pcarl
BuderPhtrnacy Al Faisallnlemadonal Tnl(i and Investment Company WLL AI-rabia Land Trnr~PQltit1g Company rLL ro Sewedy CabLes - Kuwuit Gcentttco hlttrnJmJilI Frijns StHytural Steel Middle East WLl Winer Wunderand Company WLL Al FtOH1H for Investment amp llllemtiOl1a Trading COntpAny WJ_L Q)lar Bahrain lmerOlnionai Cnero3 WLL Gulf EngJisb Sltl-Qo] Al Rayyao Tourism lve$lrnent Company W LL Other relater purties
2013 2012 QR QR
15412-1064 ll941Y70 34644615 ~li96858l
[()0405 14-45012 51 59197 9538116 15514113 4014727 236824$
1867526 LSOfd22
8(1012 10435r 311650 746395
15023 204450 459829
2iYHi 244940 186750
152170 143440 33500 7768(1
6259 1459lt) 758962-1
__2~61g~~_ 1~95Ji
bull 214109950 171525363
--__ shy
7
8
9
Aamal Company QSc
NOTES TO THE CONSOLIDATED FfNANClAL STATEMENTS For the year ended 3 1 December 2013
At10(JNTS DUE FROM RELATED PA RTIES (continued)
NO les (i) Transactions witll related parties are eam ed out through open account and Directors do not consider any
receivables to be past due or impaired
(ii) Related party transactions ore disclosed ill Note 26
INVENTORIES
Goods for rew le Raw materials and spare pans Work in pTOgresS Goods in transit
Less Provision fOI obsolete and slow moving invenlories
1013 QR
165499699 38388307 19944678 9671 8553
320551237 (3851692)
31 6699545
Movements in the provision for obsolete and slow moving inventories were as follov~
At I January Charge for the year (Note 19) Reversals Amounts wri tten off
At 31 December
E QUITY-ACCOUNTED INVESTEES
TIle Group has the followiog invesllnenfs in equity-accounted investees
Interests in joint venrure Interests in associa tes
At 31 December
G roup s snare of profits fr om the equity-ncco unted iovcstees arc AS follows
Profit share from in vestment iojotnt venture Profit share from investment in associates
202 QR
232597650 36608394 30622960
10521 9695
405048699 Q 145826)
40 I902873
203 QR
3145826 1 380617 (535695)
( 1139056)
385 1692
20 12 QR
2795992 2208263 (137995)
( 1720434)
3 145826
2013 QR
2012 QR
129462184 3644723
124124803 2545188
133106907 12666999 1
17330368 22869454 1169533 534050
18499901 23403504
22
10
Aama Company QSC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 31 December 201 3
9 EQUITY-ACCOUNTED INVESTEES (continued)
Counlry of incorportllion
Relationship Proportion ofownership and lotilfg power held by the Group
203 2012
EI S~wedy Cables Qatar W LL Frij ns Structural S teel Middle East WLL Al Ftfazdaq Company WLL
Qat~
Qatar Qatar
loint venture Associate Associate
55 20
55 20 35
Note With effect from 1 January 20 13 the mlnagemeot of the Group has reclassified the investment in Al Farazdaq Company W L-L from investment in associate to investment in subsidiary This is based on the transfer of share holding by the other shareholder whereby the conlroi o f AI FOl razdaq Company W LL bas been assigned 10 tbe Company
INVESTM ENT PROPERTIES
a) Reconciliation of carry ing amounl 2013 202 QR QR
AI I January 611334701 8 555 1835348 Additions 9568047 1727191 87 Transferred from property plant and equipment (Note II ) 34519828 Net gain iTo m fa if value adjlls tment 245051107 388792483
At 31 December 6402486000 6 11334701 8
b) Measurement of fair value
The fair values of the Groups inveS hnent properties as at 31 December 201 3 and 3 1 December 2012 have been arrived al on the basis of valuations carried Ollt on the respective dates by professionally qualified independent valuers not related to the Group The independent valuers have appropriate qUlli ficatioos and (eceJ11 experience in the valuation of properties in fhe relevant locations The fa ir value WltlS determined based on market comparable approach that reflocl s recent transaction prices for simillt1r properties and discounted cash flo w and income approach techniques
Details of the Group s iovestment properties and infonnation about the fa ir vn lue hierarchy as at ) I December 20 I J are as fo llows
IIvestment propenies
Level 3 fair vallie
Al I Janu ary 6 [ 13347018 Additions and trans fers from property plant and equipment 44087875
Gain included iu prom and loss Net gain from fair value lt1djuslmem 245051 107
AI J I December
The Group recognizes transfers between levels of fair value hierarchy as o f the end of the reponing period during whicb the transfer has occurred There were no transfers between the fai r va lue hierarchy during the year
23
10
Aamal Company QSc
NOTES TO THE ONSOLlDA TED FINANCIAL STATEMENTS For the year ended 3 I ecember 201 3
LNVESTM ENT ROPERTIES (contin ued)
b) Measuremen t 0 (air value (conti nued)
Vau t ion technique an significant unobservable in puts
The valuer has applied t e income capitali zation discounted cash flow and comparab le methods to detennine the market value of the lnve tment propen ies Significant unobservable inputs used included expected market rental growth rates (an average 425) occupancy rates (approximately 90 to 95) and risk adjusted discount rates (approximately 5 to 7 0) M y significant change in these inputs can impact lhe fair valuation of investment propcnies
24
Aamal Company QS c
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For che year ended 31 December 2013
11 PROPERTY PLAi~T AND EQUIPMENT
FumilUre Truck mixers fIXtures and Complllers
Leasehold and maor Plum (fd office and relaed eapiowork Buidings improvements vehicles machinery eqllipmcni sofMore in progmiddotcss Total
QR QR QR QR QR QR QJl QR
At I January 2013 137870126 371 88 132 9595813 1 262536261 19 580954 14864 385 561 32447 6241 30436 Additions 948)65 2618 100 5367399 859061 111 5268 137147581 148055774
Relating to d isposalswrite-off (1042642) (4390496) (77157L) (589150) ( 184075) (6977934) Transfer from capilal work in progress 1505 310 164 336 3601776 ( 150000) 1182741 (6304 163) Transrer to investment properlies (Note (0) (345 19828) (345 19828)
At J I Dttember 201 J 139375436 J7 258~ ~1 85735 270733865 19700865 169783 19 152456037 _73068~448
Depreciation AI I January 2013 16133915 J6902 529 49087707 68783 065 11 980009 tl71 595 3 174603 178 Charge for the year 7059805 3237150 5390767 12249797 2849162 1768823 42555504 Relating 10 disposalsJvri te-off (664709) (4 3 1716 1) (724322) (552939) ( 18 1993) (6441 124)
At 31 December 201 3 23193 720 19474 9 70 50161 313 90303540 14276232 13302783 2 107 17558
Net carrying amounts At 31 December 2013 116181J16 _17783221 44024422 180415325 5424633 3675536 __l2456O37 JJ9970~890
Notes (i) Depreciation charge for the year amounting 10 QR 33 164382 (201 1 QR 3303091 6) is included in tbe direct costs and an amount of QR 60055 (20 12 QR 36939)
has been capiulised under capital work in progress
(ii) The capital work in progress includes capitalised borrowing costs amounting to QR 125645 (20 12 QR 15358)
(ii i) The buildings are constructed on a plot ofland taken on a loog term operating lease
25
Aamal Company QS c
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 31 December 201 3
II PROPERTY PLANT AND EQUIPM ENT (continued)
C05I~
At 1 January 2012 Additions Acquired through business combinations (Note 4) Relating to d isposalswrite-off Transfer from capital work in progress Transfers
Buildings QR
137434400 435726
Leasehold improvemellls
QR
38137377 446J 04
144 103 ( 1539452)
Truck mLCers and molO
velricles QR
83427661 11464679
1697609 (631824)
Plant and machinery
QR
249335437 97264 85
35 14 132 (99498)
59705
Furniture fir ures and
office equipmem
QR
22845309 667586
192042 (3696457)
98000 (525526)
Computers and related
software
QR
158 19519 87 14 14
141837 (266 1733)
908078 (2 l4730)
Capitol work in progress
QR
12104889 451 53265
( 1065783) (59924)
Total (JR
55910459 8 68765259
5689723 (862 8964)
(800180)
AI 31 Dttember 2012 137870) 26 371881 32 95958 13 1 262536261 19580954 14864385 56132447 624 130436
Depreciation AI Jaouary2012 Charge for the year Acquired wough business combinations (Note 4) Relating to disposalswrite-off Transfers
9144666 6989249
)4 3 16620 3410618
144103
(96 812)
42558404 548 1613
1671942 (6242 52)
44555 290 2 1398849
2890797 (6 187 1)
12392584 3 182899
169005 (3558466)
(206013 )
12235266 2077633
136959 (2627283)
(J 0662)
135202830 42540861
5012806 (7840684)
(312635)
At 3 L December 201 2 161339J5 16902529 49087701 68783065 11 980009 11715953 174603 178
Nel canying amoWlts
At 31 December 201 2 12 173 6211 2028560 3 46870424 193753 196 7600945 3148432 56132447 449527258
26
12
13
Aamal Company QSC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 31 December 20 13
ACCOUNTS PA YABLE AND ACCRUALS
Trade accouots payable Advances from customers and tenants Accmals Social and sports activities levy Other payables
AJIOUNTS DUE TO RELATED PARTIES
Name
Arab Compaey for Fiber Products EI Sewedy EIC( lric Ho lding Egypiasl Egypt Egyptlech Egypt United Industri es Company WLL Johnson Controls Air condi tioning aod Refrigeration Qatar WLL pound1 Sewedy Cables Egypt Johnson Controls Air conditioning and Refrigeration rNC Dubai United Wire Company WL L Gelteo Company W LL - Gelteo Refr igera tion and Airconditioo ing CampC Lightway nc AI Shaab Group of Companies Other related pruties
NO M Related party transactio l)s a re disclosed in Note 26
2013 QR
320017657 30486837 26924669 41 761 843 25855567
445046573
2013 QR
18517474
4902528
6531231 6404578 3215821
2825884 75 7825
3467288 263715
1313247
48199591
2011 QR
26716268 1 27410234 222575 76 28954726 33)33852
379119069
2012 QR
18380528 91458 82 54 13849 1 11 6 135 5374039 35291 2020359 1693323 1064744
670 179
11 0873 12 18650
49737757
27
14
Aamal Company QSC
NOTES TO THE CONSOLIDATED f fNANCIAL STATEMENTS For the year ended 31 December 201 3
INTEREST BEARING LOANS AND BORROWINGS
NOles Malilrify
2013 QR
2012 QR
CoMl Loan 2 Loan ) Loac4 Loan 5 Loan 6 Loan 7 CoMB Loan 9 Bills discounted
(0 (ii) (iii) (iv) (v) (vi) (vii) (viii) ( ix) (x)
lune2014 Seplember2014 January 2015 November 2016 December 20 16 November 2017 Jllne20 l J December 20 7 OClober 20 19
172070387 440000000 50544000 40261 621 81387109 19920036
6] 43890 62626967 42522794
915676804
298324180 440000000 10 J088000 57955030
100 168750 2 1300492
407728 1 782871 1
35000000
1065742444
Less Defe rred finatlcing cost (771 503) (897148)
914905301 1064845296
Presented in the consolidated statement of financial positioo as fo llows 20)3 QR
201 2 QR
Current ponion Non-current ponion
749520820 165384481
825568489 239276807
914905301 1064845296
The dete rred financing costs consSt of arrangement fees The movements m the deferred financing costs were as fo llows
203 2012 QR QR
At I January 897148 332 661 Addjtions during the year 1 062565 912506 Amortised during the year (218amp210) (34801 9)
At 3 1 December 771503 89 7148
28
Aamal Company QS C
NOTES TO THE CONSOUDATED FlNANCIAL STATEMENTS For tbe year ended 31 December 2013
14 INTEREST BEARING LOANS AND BORROWINGS (continued)
Nolec
(i) Loao I i USD 93000000 impon 10n moi lily obtoined to refimnee he Icne~ of edit The 10 IT interest at commercial fate and the interest is paid at monthly intervals The fucility is repayable within ISO days including the usage period under letter ofc redits
(ii) Loan 2 is a secured bridge loan obtained to settle an existing loan and working capital requirements of the Company The loan carries interest al coOlJllercial rates and interest is 10 be paid on quarterly basis
(iii) Loan 3 was obtained for the pWpOse of financing capital ependiture and direct payment to suppliers contractors and 5ub-controctors The 10011 CMries interest at commercial rate and the inte rest is to be paid q Uar1erly The fac ility is repayable in IS quarterly iostallmenls starting I July 20 11 and ending I January 2015
(iv) Loan 4 was obla ined for conSlruclion o r an inveslmenl property The loan is seclJed by 0 primary mortgage over the some property and corporate guarantee of the Aamal Company QSC Tbe loan carries interest at commercial marke t rate and is payable in quarterly instalments
(v) Loan 5 represents a loan fOlcility obtained in two sepnrole tranches amounting to QR 309 825 000 (USD 85 million) for the purpose of refurbi shment and construction of fociJities io one of the investment properties The loan is repayable In 16 equal quanerly instalmcnlS for individua l tranche commencing from March 20 1J The loan carries interest at conunercial rJtes
(vi) Loan 6 represents secured loans obtained ffom a commercial bank in the previous periods for the purchase of heavy equipment and machines and were merged on 15 November 20 12 as a comb ined loan This loan is payable by 59 equal instalments of QR 426000 with (I last inSlalment of OR 438 326 with effect fro m 01 October 201 3 The loan carries interest at commercial market ra tes
(vii) Loan 7 is il tmst receipt banking facility obtained for the purchase of inventories This carried interest at conunercial market rates This loan was full y settled during the year
(vii i) Loan 8 represents secured loans obuined from a commercial bank in the previous periods for the purchase of delivery trucks and machinery and were merged on 22 October 2012 as a combined loan The loan carries inte rest at commercial market Tates and is payable by 59 equal insta lments o rQR 160000 with a last inSlOlmem ofQ R 128000 with effect from 3 1 December 2012
(ix) Loan 9 is an Islamic Financi ng Arrangement obtained for construction o f a manufacturing plam and as o f yearend ba lance represents partially drawn amount out of totil1 facility of QR 655 68000 The loan is secured by joint corvorate guarantee by the shareholders The loan carries profit at Islamic Financing rates and re-payable in quarterly instalments starting from the end of the 24 months gmce period from the date of loan drawn
(x) Bi ll discounting is a loan fac ility from banks The purpose of the arrangement is to discount bills locally and carries interest at current commercia l filte
15 EM PLOYEES END OF SERVICE BENEFITS
Movements in the provision reHectelt in the consolidated SLo1tement of financia l position were as fo llows 2013 201] QR QR
At I Jan uary 18111 763 17877937 Provision made during the year 4056969 4205499 Acquirelt through business combinations (Note 4) 349272 End of service benefits paid during the year (2210756) (4320945)
At 3 1 December 19957976 18 111763
29
Aamal Company Q5C
NOTES TO THE CONSOLIDATED FINANCIAL STATEMETS For tile y~ar ended 31 Dee~mber 2013
16 SHARE CAPITAL
2013 2012 QR Qq
AtI1l1)nud 60000)000 (20 2 544500JJOfn shares ofQR iii Cilch 60i)iQOOlOO 54450lt)0000
21)13 2012 Numher of
siMtS QR shares QR Issued Mtldfully paM At lJamld) 544SfWllOfJ 5445(100001) 495000000 49500000)0 1511C ofbonus S1i1-C ___ 5550~OOO 555000000 49SGOOOO 495000000
At 31 Decenef 6(OOampQllf1(1 ---14450O000 544~OOOOOO
All ampates m~ of a110 clss and caL equal voting rights
17 LEGAL Reuro5ERVE
As required by Qatar Comnertai COfrp7lnies Lav No5 of 2002 lOfp of the profit for the ye1J as a rru1imllli silould be mmsfened to legal re~erve The reserve is lot normay [lytiabe tor distribution except ill he cixcuJUstllrtUS stipulated m the above ~lemi0ntd GIW
IS HEVE1TE
2013 l)n QR QR
Sale of goods 1726893265 i709057~(iO
Renlal income UiO362322 133117509 S-ice income 858695 33940731 CornrrusslOlL Incentives and agency fces 44695S1 422~_632
212259$)33
19 DIRECT COSTS
2013 2)i2 QR
C 051 of inven(feS recognisedlIS an exptns 1522929956 497210830 Dind sL1ries lmd wages 601 [1336 5137856-8 Operating eXpenses on nml estate p~opet1les 36)711316 3041H504 fJepreciatiort (Kate I J) 33164382 B03091pound Operators marhgerrt6nt fees 14508588 li667989 Provisicn Qr obsolete and skwlt moving mvenlories (K)tc 8) 2380617 2208263 Other operating ilxpenses _31~3982 _ 3674946
1702139171 JS9653OI tgt
Aamal Compall-yQSC________________
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For lthe year ended 31 December 20 11
2G OTHER NeOiI
2013 20J3 QR QR
Interest mcume 2824216 2)314392 Profiv( loss) 00 disposal of property plant aoe eqUlpmem 737647 (l7362G) Eargain ptmnJse gain (Kote t) 8360793 MIsceJlaneous income 5723356
2013 2012 QR QR
ManllgetnUI hrQ empl(yees ws 55170302 55lt035middot1 Rent 23596799 2594915 Allowance for impaimlcot oUrsue aCQl1ot$ rc(Xjvalle (Nole 6) 129459(i 11613120 flBumcce ane profcampiitmJI fees 2IU9263 209J902 Corununication OOtHS 1935123 1649155 Trllining tid ouSfjt$s developmccl 950476 L095764 Re]X1in and mainle-nilnce 21)11SflS 2)2 I Poslag-c prjnting acri stationery 610299 541159shyvllsltdlancous expenses _~~~664 1lt2
-~~~ 125162812
22 fIN~lCE COSTS
2013 2amp2 QR QR
Inleres epen~ 42866312 5773U4B Am(vtisJliorgt ofdefcentrred financiog coStS __ 2l)tl26~~ gt3661
44930877----=
58063009
23 BASIC A~n nHUfED EARilNGS PER SHARi~
Basic trdTJogs per hue is caculatid 0y llividing the pwfill0( Ihc year attriouiabk (0- equity roldc-5 of the parent by lhi w~iglwxi avrage number of ordinary shares 0JstandirJg dulting tht_ year During Ihe year lil~ Conpmy i-sued and CBpii3lzed bonus shares lnd awmJingl) me previously ~eportod earnings per shac have blOM restatc(i
20i3 2012
Profit feT the year auributable to Cluity holderlt of the- paren (QR)
Weighted aVCTage number ofshares outstanding during the year (i)
Basic Jd diluted earnings per share (QR) 085
59985U413 shy
~~--~~~~- ~------J 1
23
Aamal Company QSc
NOTES TO THE CONSO LIDATED FfNANC[AL STATEMENTS For tbe year ended 3 l December 2013
BASIC AND DILUTED poundARNINCS PER SHARE (continued)
NOles (i) Th wigh d m nlg urnb of hres foc h P of lruling ~migs pee share h bee kulated
as follows 2013 20J2
QU3lifying shrues allhe begi ll1ling of the year 544500000 544500000 Effect of bonus shares issued and capitalised 55500000 55500000
600000000 600000000
Less T reasury shares (149587) (i357SI)
Weighted average number of shares at the end of the year 599850413 599864249
(ii) There were no potentia lly dilutiw shares outstanding at any time during tbe year and hence the diluted earnings per share is equal to the basic earnings per share
24 COItIMITMENTS
20 1] 2012 QR QR
Estimated capital expenditure approved and contracted for at the year eod but not provided for
Investment properties 2964000 8 139063 Property plant and equipment 16386500 63759762
19350500 71 898825
Operating lease commiIOlenlS under noncancellable lease agreemenlS
Payable wilhin one year 990806 702000
990806 702000
25 CONTINGENT UABILITlES
The Group had the following contingent liabi lities from which it is anticipated thai no malerial liabilities will arise
2013 2012 QR QR
Letters of guaramee 474551239 394255203
Letters of credit 7678499 194299384
NQles
(i) leHlaquogt of gu indud penonmnlaquo tend nd bid bonds d pymenlt g gi to suppliers and contractors by the Group in the ordina ry course of bus iness which will matme within twelve months fro m the reporting da te
(i i) Letters o f credit are provided by lodging documents to the bank tor purchase of trading goods fro m foreign suppliers wruch will maMC within thJee to six months from the date or tile Iransaclion
J2
26
Aamal Company QSc
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year eoded 31 December 2013
RELATED PARTY DISCLOSURES
Related party transactions Related parties represent major shareholders directors and key management persortOei of the Group and entities controlled joimly controlled or signjficamly innueoced by such parties Pricing policies md tenns of these tnlOSaclions are approved by the Group s management
Transactions with related parties induded in the consolidated financial stalemenls were as follows
20lJ 2012 QR QR
Sale o f goods and SClVices 419034048 415225221
Rental income 1980473 2069386
Purchase of goods and services 1591 38018 300835596
Rental expense 21 780G78 23397334
Bargain purchase gain 8360793
Net assets acquired 78803585
Relat ed party bal nnces AmountS due from and due to re lated parties are disclosed in Notes 7 and 13 respectively These balances do oot carry interest and are repayable OIl mulUlUy agreed dates generally within one year
The Group did not record any impairment of receivables reJatiog to amounts due from related pat1ies in either year This assessment is undertaken each fina ncial year through examining the ftnanc ial position of the related party and the market in which the related patty operates
Parent The Groups ultimate parent is Al Faisal Ho lding Company WLL
Compensa tion or key management personn el The remuneration of key management dming the year was as fullows
2013 2012 QR QR
Short-term benefi ts 7904794 1079595 Employees end of service benefits 408934 439776
8313 728 11235727
33
AamaJ Company QSC
NOTES TO THE CONSOLIDATED FINANCIAL 5T ATEMENTS For the year ended t Decernber 2013
Dilling the year 1he Group issued a XHlUS share of 10 928 of the paid tiP share capilal hdd ilS at 31 DiX2mber 2(JJ 2 mnmuning to OR 555000000 using retamed earnings as of3 December 2012 (20l2 Doe share for every ten shues held as of 31 Dcember Oll amuunting 10 QR 495OO()OOO ling reta1ned earmrgs 28 or 31 Decencer 2D II Jshy
18 SEGMENT INFORMATION
For J)iloogement PUIpltJM rhe Group i organised into business unit bused On LlJeir nature of Acttvitics lud nas fonY reportable segments and the Head Oftklt as bllow$
Propert Tbe segntn cOlists of City C~nler Qlta~ Brunch and Aamal Rea Esmte Branch whicb ll[c invoived in lampIiiog the faJ1ities of retail outlet conpex red e5ttlte nve(mltn$ and property remal buines~s
Trading mld distrib-wion The segmeul Involves wholesalB andlor rBtail distribution of phamlaceutlcai and consunable i1ems hume Epplianccs medica equimenl t-Tes ill1d lubricmtlaquo and II1UllitnEl printing The scgn(rtt includes 6c following entities
Eotl Sina Medical Branch
Aaen Medical Braudt
Amcill Troding and DistoolltlqO Branch bull Foot Care (erier HRnd) Good llre Pbannacy Bf4Uch bull Al FllfJdaq COllpafY wJ~L
InduSNol manuacturing TIle s0groent IOvolves Ulahuactrumg whole~we aliaor rewi dimibUlioti of dccnc cables lid tools ggregJ1es_ ready-IUx connole and cement bI0C~ lI1d provi$ion of servlCcent$ in rdation to iODllltroa Itvestment repair aJ-d Gonstruction of power plwts liiiding of LED ilgluitlg products und management of industnl enterpnses The segment ircludes be folloVting centntitis
bull Aam1 Cemert Industries LL AuraJ Redy1Yl(A BrQTlch
bull Doha Cables Qawf lLL Senyaf IoolJic1es Qatar Holding W LL Advanced Pipes ard Casfs CompQTly WJ L bull GuJfRoch Coroany WLL Ci~San Trading Company WLL hmovafive Lighting Compary WLL
Managed services le segment inyolvc~ provisloH of hOllseiltecpmg mi cleaning services fucditics n-anagemerJ services C1egy s(tvices ttl centfe sltrvicf)s buildiqg lnaintemHlelt aml acting as travel gens The 5cgnltnt includes the foUowing cnti(lcents
An13 ServJce Branch
amli TnlVeJa l5tmh
f-eco Gulf Co W LL
Jolinson Controls Qattl WJL
28
Aamal Company QSc
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended ) L December 20 13
SEGMENT INFORMATION (Co ntinued)
Head Office It provides corporate services to the branches and subsidiaries of the Group
The managiog d irector of the Group monitors the operating results o f its business units separately for the purpose of making decisions about resource allocation and perfonnance assessment Segment perfonnance is evaluated based Oil operating profit or loss of these segments Transfer pricing between operating segments are on anns length basis in a manoec similar to Iraosactions with third parties
Aamal Company QSC
NOTES TO THE CONSOLIDATED FINAN CIAL STATEMENTS For the year ended 3 1 December 20 13
28 SEGMENT INFORl1ATlON (continued)
Operating segments The operat ing segment after elimination or ioter-bra nch and inter-co mpany lrnnsaclioos is presented as follows
Trading (nd Industrial Managed For fh e year elided 31 December 2013 Properly disirjblli ioll manujocljlring services
QR QR QR QR Revenues
- h lemal parties 260360172 578909983 1231522768 S l802210 - Inter segments 1253914 6843 11 8 29639873 3445052 1
Heat Office QR
Eliminoions QR
(n187426) II
Tolal
QR
2J22595133
261614086 585753 lOI 126116264 1 8625273 1 (721 87426) 2122595133
Opera ti ng results Fair vallie gains
Profit I (loss) ror the year
Depreciotion
200811944
245051 107
445863051
2066290
86492834
86492834
4345438
22636250
22636250
33049 089
5157436
5157436
1760305
(47864882)
(47864882)
1334382
267233582
245051107
512 284689
42555504
36
Aamal Company QS
NOTES TO Tl CONSOLIDATED FfNANClAL STATEMENTS For the yeM ended 31 December 20 13
28 SEGMENf INFORMAnON (c)tltioucd)
FOf the yearrnrkti J f DccemOer 2(J12 QR
Revellues - ExlcmlJ partiel 2331 17 509 bull Inter segmcI11S 1168935
-- 234236434 --~- -~--
Openning results 18S2367t Fmt value gains J8S79-4~G
pront LOllS) for the rear 570616154
gt3659
No(
lnlermiddotgment revenues are eliminated on tQHs)idntiOH_
Tadiug ftfid disl d)Ntion
QR
S2S3l7661
324 j
5335493114 ~ -~-----
51384831
54384338
4J9R71(i
Indus idi mamfmturing
QR
1255694537
129U25lS4
56727059
56727059
32752742
slnltic(s QR
55216665 2939H31
S46lOJ96
7427414
7437
[908067
ilfild ()jice QR
(64(41976
Elimination QR
(74tHi2oJ Iii
Totul QR
206936372
2069336372
235721
(64641
131 f613
6245
42541)861
Amnal Company Q$l
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Por tnt yeartndeJ 31 De~embcr 2013
28 SEGMENT JNFORMATlON (contiutlld
Assc-ts and labilities
Tng alld lndtrstfw At31 December 2(113 distnbllrior manufacturIng senices HeadOJJicc EliminatioilS lola1
QR QR QR QR QR
Cumnl 3tS 227552338 620807979 61349 j 415 S()6)86922 (301636995) 1477366090 Noolucrcnt DSeIS 6411868160 12604763 622386238 4348876 (i624548 __p2438051 780
fotal asstl$ 6639420498 1194 1243194217 65698291 513Ql1470 ==-lt03H8l~O()) 853295-870 -~----~ ~---~ -
CUIT)llliabilitics 280995335 1(3511J60 6344(12777 2l0708lJ2 496261185 (3CH636995) 1249603264 Non-current iiatJlitics 7l70L5V2 8008485 HlDi16~43_ 3181668 t433799 ____ ilj534_~57 __ --Totul liahililics 353696897 ___~4159~4~ 734419720 ~4976~~~~~ 1434945711
---~~--~ -~-~~ - _2~~~4~~ (~~~~9~
C1pild expcndimn HI) WO743OOj 1397742_~471l2~--~50 ~51 ~1~623821~~1~_ -~----~------ -~
3amp
28
Aamal Company Q SC
NOTES TO THE CONSOLIDATED FfNANClAL STATEMENTS For the year ended 31 December 20 13
SEGMFNT INFORMATION (continued)
Assets and liabilities (continued)
AI 31 December 2012 Properly QR
Trading and d iSfriblllion
QR
Indusrial manufacfuring
QR
Managed senices QR
Currenl assels
Non-current assets
146491 186
6121 864484
2964425 12 903 7264
73468 1258
549267235
51387098 471 1439
Tolal assets 6268355670 305479776 1283948493 56098537
Head Office QR
468325024
6713643
475038667
Currentliabil iies
Non-current liabiLities 273444 748 1 J10 15024
86054583 7434286
669214261 1288 14977
2 1938953
287 1199
480393637 1253084
Totil lliabiliti cs 390459772 93488869 798029238 248 10 152 48J64672 1
Capila expendirure (ltII L 72865 878 1281254 6647 J356 7169 13 149045
Notes
(i)
(Ii)
Inter-segmeot balances are e limioafed 00 consolidatio n
Capi tal expendiTU res consist of additions 10 propeny plant and equip ment and iovestmenl properties
Eliminations QR
To wl QR
(273735776) (i )
(20308351(i)
1423591302
6689563230
(27576661 1) 8 113154532
(273135777) (i) 12573 10405
257388570
(273735177) 15 14698975
24 1484446
39
29
Aamal Company QSC
NOTES TO THE CONSOLIDATED FrNANCIAL STATEMENTS For the year ended 31 Dcltmber 1013
Fr-A]~ClAL RISK MANAGpoundMamp1H
Objccthes and policies fe Groups principal )uaucill liabilities comprise imltresl bctmllg loons and IxmowHgs baRlt ovetda1s amounts due to fclaled par1ies and tracte accounts payable The main pUlJXSi of thesc financial liabilities is 4J mise firmne or 610 Grmps operations The G0JP bas various fimmcial assets such as ttadc accounts receivable lInlOlmts due from related parties bark balances tltCntion receivable and other receivables which arisgt directly fran its cperuoonamp
The maiH ri~ks an3ing Joru (be Groups UnariCJlll illslrumenls jle market risk cretiJt nsk and hmdity risk Til BoarD ofDtrcctO$ reviews end agrees policies for mzrAgbg Caltt f hespound ri~k ihkh arc summariscd beloW
VIarktt risk yenfatket risk is the risk Um changes in market prices $Uch as intfcst rates and hreig lttmeocy ect14nge rilles Vltl1 affect the Groups profit eqwty Dr value tf its hoJdiI15 of financial instrl[Thnls rile objecivpoundj of marke1 risk mUnllgcrlcnt is to manage uld 1~ontr(ll tho tr))rket risk expo-sure vithir acceptable parfI-etcJ$ while optimising rerUID
Equit) price risk ampjuity prtce risk is the risk hilt the Group ampearnings will be affected as a rcmt (If luctttltions in fm vdue of ~qui-gt
mstwnents Eqlliry price risk arises from availabtetor~sale inv2strnems However the Groups exposure to eqmty price risk IS minima as II doesn hold sitl)iftrmt ailableAor-511le inYestrmmrs
[merest rate risk The Groups fimiruial poundS5ot ampId liaojlilies (at Rl $uJject to int~~ rate mk compnse brmk depoils interst bearing loans and bOITQwjags and bank overdr-afts At the reponwg dalt tbe [merest rale pronle of Ill Goups intexst bearing fbi4rdd instruments as fliows
11113 20i3 QR QR
Fued liIeryS refc insfrvrnellts
Fmmcial assets 113035962 111913394 FrOltwial liabilities --1~203712l) 1252t43~1
9)OI~ (13350972)
Fhlllting inireSI rate ns1lmlttrs Fanctl~ Isseis 127024345 ID43848o Fllllocial liabilities _-(i~9347~ (94))48926)
(836)64116)
The Groups exposure to t~ ris of changes in marXet interest fltltes relztes primariiy to the Groups financial assets and lizbitdic$ with t1Oltttirg interest mte~
lhe loEowing able demonstrates the ampmitivity nf the eonsolidattXI statemen1 of income 1) caonaly possible chonges in in1jfgtst rmes by 25 basis points with all othe vari)ble3 hdc umstant The sensitivity of the CooiK~ljclatid statement of inc(me $ the eft(ct of tb assumed changes in lnterdt rales for one year bf1sec on the floating rate financial assets and fimmcial hablhw$ held at 31 f~r The effect of deae-ascs in interest ral~ is cXp0Ctct to be equal and opposite to the effect oHlle increases sllQvro
Changes it Eftx OIl
00513 [oms profit QR
2013 Floating mterest Hlte instruments ----2$ bp (1649776)
2012 Flv-ating irkfiSt rale instrumenls +25 bp (209[9(1))
~--------- -~~ 40-middot------ _ _ shy
29
Aamal Company QSC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 3 1 December 2013
FINANCIAL RISK MANAGEMENT (continued)
Foreign currency risk Foreign currency risk is the risk lhilt the value of lhe fi nancial instruments will fluctuate due 10 changes in fore ign exchange rates
T rade aCcOlmts payable and accrued expenses include amounts due in foreign currencies mliniy US Dollars UAB Dirhams Great Britain Pounds (GB P) and Euros of which the Group has a currency risk primruily on the baJmces payable in Euros and GBP amoWlting 10 QR 14400634 (2012 QR 17214046)
The Group does not hedge its foreign currency exposure As both Qatari Riyal and UAE Dirhams are pegged to the US Dollar balances in US Dollars and UAE Dirhams are not considered to represent significant currency ris k to the Group
The table below indicates the Group s fore ign c urrency exposure on its monetary assets a nd liabilities The analysis calculates the effect o f a reasonably poss ib le move ment of the QR curre nc y rale against the Euro and GBP with all other variables held constant on the consolidated slate menl o f income (due to the fa ir va lue of currency sensitive monetary asse ts a nd liabilities) The e ffect o f decreases in fo reign c urre ncy exchange rates is expected to he equal and opposile 10 the e ffect of the increases shown
Incramp1se ill
f oreign cUlrency rate
0
the QR
Ellecl on profil
QR
2013 +5 (720032)
20 12 +5 (860 702)
C redit Tisk Credit risk is the risk that one party to a financial instrume nt wi ll fa il to discharge an obligation and cause the other party to incur a financial loss TIle Groups exposure to credit risk is indica ted by the carrying amoWlt o f its financia l asse ts whic h consist principally oftmde accollilts receivable retention receivable amounts due from related parties othe r receivables and bank baLances
The Group sells its products and prov ides services to vario us panies It is the G ro ups policy that all customers who wish to obtain on credit lerms are subject to credit verificalion procedures to ensure c redit Ilonhiness Each new customer is analysed individually for creditworthiness before the de livery o f products Of services Custo mm tbat fai l to met t the credi tworthiness may transact with the Group only o n prepayme nt basis Property rentals are mostl y received in ad vtnce or conlrlCled wi th post dated cheques 10 additio n receivable balances are monitored on an ongoing basis a nd the purchase limils are established for each c redit custoroer which are reviewed reguJarly based on the level o f past transactions and senlement The Groups max im wn exposure with regard to trade aCCOWlts receivab le net ofa llowance re nected allhe reporting date was ilS fo llows
2013 2012
Business SJgmelll QR QR
Property 15478832 19386326 Trading and distributio n 194343 597 179748274 Industrial ma nufac turing 183119753 131578668 Managed services 18069385 14547389
411 011 567 345260657
41
29
Aamal Company QSc
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For tbe year eoded 3 J December 20 13
FlNAJICIAL RISK MANAG EMENT (c-o Dtinued)
Credit risk (continued) With respect to credit risk arising from the other financi31 assets of the Group the Groups exposure to credit risk arises from default of the counterparty with a maximum exposure equal 10 the canying amount of these instruments as follows
2013 QR
202
QR
Bank balances Amounts due from related parties Retention and other receivables
436136756 214439950 48290351
36788129 t 171525363 74082203
698867057 613488857
The group reduces the expoSltre of credit risk arising from other financial assets by maintaining bank accounts in reputed banks and providing services only to creditworthy re lated parties
The management cons iders the bank balances and a mQUIIIS due from related parties as high grade fi nancial assets and lfade accounls receivable and other receivables as sundard grade financial assets When a finltmcial asset is identified 10 be impaired the managemoot downgrades such assets to impaired category and provides adequate allowances
Liquidity risk Liquidity risk is the risk that the Group will not be able to meet its fmancial obligations as they fu ll due The Groups 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 nonnal and stressed conditiom without incurring unacceptable losses or risking damage to the Groups reputa tion and is to maintain a balance belWeen continuity of fuoding and f1eilibility through the use of bank overdrafts and bank loans and borrowings
The Group monitors its risk to a shortage o f funds using a recuning liquidity plaOfling 1001 TIllS tool considers the manuiry o f financial assets (eg accounts receivable) and projected cash flows from operations The Groups teons ofsales or services require arooUIlts to be paid within 30-90 days from the invoiced dale
42
29
Aamal Company QSc
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For tbe year ended 3 1 December 2013
FrNANClAL ruSK MANAGEMENT (contiQued)
Uqujdity risk (continued) The table below summarises the ruaruriJy profile of the Groups financial 1iabililies a t 31 December based on contractual undiscountcd paymeots
2013 Interest bearing loans and borrowings Bank overdrafts Trade accowus payable Other payables Amounl~ due (0 related panles
201l Interest bearing loans and borrowings
Baok overdrafts Trade accounts payable Other payables Amounts due to related parties
On demand
QR
6836280
6836280
011 demand QR
2885090
2885090
Less than 3 months
QR
521324473
303638792
47406830
2530~480
898675575
Less thall 3
months
QR
469839033
10754JJIO 37543236
1964504 1
634568620
3 10 J2 mOlllh$
QR
239333328
16378865 20210580
2289~11l
298816884
3 to 12 monlhs
QR
365476972
159621 37 J 24745342
30092716
579936401
1to 5 years
QR
J 60092748
160092148
1 to 5 years
QR
248472226
248472226
gt 5 years
QR
25261598
25261 598
gt 5 years
QR
7648000
7648000
TOlaf
QR
947012147 6836280
320017657
67617410 48199591
1389681085
Tota
QR
109 1436231
1885090 267162681
622 88578
49737757
14735 10337
43
30
Aamal Company QSltc NOTES TO THE CONSOLIDATED FlANCIAL STATEMETS For the year ended 31 December 20 t3
21 F~ANClAL RlSK MAiAGEMElT (continued)
Capital management The Boards policy is to maintain a strong cepit1 base so as to rnainmin investor creditor and market ronfoonee and to SUSWlJ) fumre dcltclonnent Gf the buinest The Board of Directors rronitortl the tapital whkh tbe Group defines as wlal $parcloders equity excluding nonmiddotcornroliing imerests and the level of dividends to orrunury srarellOJdcfS
The Board also reeks to ITIaimain a balance between the higher (ctums (hat might be fA-~$ihle With higher leves of borrnwings end Lle edvnrJages and security named Sy it sOMd Cilpitai posi[ion The GfCup~ k1rget is to achievfl a return on slureholders equity (exclJding aonwurrolJiug iorcf(sts) greater lll(ll1 he wcighlcd average inres exxmse on mrerest bearing Ivens and oorrowing
The (lf0t-p nl)nDg-e ils cnpital structure and makes adjustneal lOll in light ofchang2s in economic nd bttincss cordjlons and shareholders expe1ationJo chmges veremiddot maCo HI Lleuro objecttves polilCS or proCCSSC3 during the years erded 31 D~mber 2013md 31 Dtccmlxr2Ql2
The Group monitors the capit2J using a gClting fatio which IS dep divided by caplla plus debL The GtOwgts policy is to keep ttJe ge-anng rmio bclew 40 Tbe Group iLdtdes withb debt imete-51 beagting loans ard ~OITORlngs less cash and cash equtVaknts Capltal includes eqmty attributable 10 the equity tolders oft~e parcrt
2013 QR
2(i2 QR
fmerest bearing loans and borrowings lcss- Cash and cas ltYJUvalcnts
9i4lJ05301 _~ (429JfJl4761
1004845296 (649)6201)
Net debt
Toa capital
Capita and net debt
699849045
~ringrttio
FAIR VALtES OF Fl~ANOAL f~STRUMETS
Finarcial iostrumenL~ cOlnprise tina~lctal assetS carl finailcialliabilities
Fmancial assets colJist of bank balance) short 1Cm bank dcposis amounL dve dom rc)ltted partilt)$ rekntion and other receivables and ttade accolmis rceivabe Finatlclll habiilics cgtmsist of banilt ovcrdratls jnerest bearing lOil1S and bOrowings amounts due (0 nliled partiG~ ane trade x-ounls payable
The- fair values of hese financial inStrumen1S except Jo-- imCfest bearing loam lHld bOlToving aproKimate lhdr cMryinJ vlhes due to the Slort temt mzrutiiles or these instrument
Tllc faiT value of iotcnst beating Nns and borrowin2s ae estimate( based on discoumed ltash flows twin int(s rale- cune-ntly nvailagtk fur tilt debt or sinuiar tetnlS an-a rell1lmng matunties
31
Aamal Company~Q=-ScC ______________~______
~OTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For fhe year ended 31 December 20 t3
SlGNIFICANT ASUMPTIONS ACCOUJTING JUDGElE1TS AND F8TIMATFS
impairment (If accoonts receivable n etrnwe of lhe collectible anoun of trade accounlgt reccvable is made when collection of the full lHl1OUt i~ nO looger probabk FOI nCividualty significitIl amounts this estimation is p~rformed on an indh-idllai a$[$ Amomts wHcb arc not indivldl11Uy significant but wluch are past due ZTe tsscssed collectively and an aJlQwaccc applied ucc()r~Jng to the length of lime past due based oc histnncal recovery nlJes
hnpalrment of inHntnries lavenoncs are held at tho lower of col and nol realisable value InIOn inventoncent$ becone old or 0-~amplete an estilTJte is mate of their net j alisable vulue For indiviolhlUy significant amountS this cstinaunrt is performec all aD lndividwl osis Amotlnts whieh are fl0t individually significan( btll which ltIre old at obsolete wx LltSessed wllecivdy md a provisior is applied sccnrding to the invenrory type and be dep)ee of ageing 0 cDsolescc1ce based on anticipUled selling prices
Classifigt1ltion of El Sew(gtdy Cable Qatar WLI ali a j(lint vwture pound1 Sovedy Cables Qatar is a limited hability company whose kgal fum confers SCprm11ior bernten tbe jXliiies 10 ~he jomi lfranpement Snd the Company Itself FurthenrlOre then IS no oontractua] arrmgelTeot or any oibe aus aod circumstriliCe$ that iocik41to tht he putic5 [0 the joint flJTIlrgernelit bave rights to the ssetl and obligrtdons fo~ the liabilities of the joint ilrrongement Acoordingly El Sewed- C[jbl~s Qamr WLL is dassifiecl 7S a joiut enrtrr of he GWtp
impairment of goodwill G0oovj)1 embedded in th~ cot 0 aquisitior of subsidiaries and eqmtj-iccounled iflV(stees ire teswt for irl1jXlirmnt aHuaily Tbe calculations of value [n use fO( cfish gecj~r)lilg units (loring to real nte projecg are rtost sensitive to tin IDHowing assumpti015
Grosgt i1wginmiddot Gross Ilmrgins arc lmsed on avrage values tuhje0d in (he [Xrioo preeedhli (e siaM of the budge xnod T1esC at( mcreased over the budgel period for mticipatltX efficiency Hnprovemots
DisC)unr r(es Discount rotes represent th cl1tent mark as~ssmetlt of the risks specific te ech cash geocroting unit regarding lhe time value of money ilnd mdividu)l risks of he tmtieriyilg assets whICh have not been inwrport1eti it the Citik flow estimates The dj~(OUrl flte tlkulation is based on the speclfte circurnsthLCes of lile Group and its opltllatJng segn)~nts (md derived (ff)rC it weighted avaage (XSt 0f apilaJ (WACC) Tb fACe (akw into uoount both deb and equity The 0$1 of equity is denved from dlC expected return 01 investmenl by the Groups investors TJc Gos10( deb is based on l1e borrvwings the Gmup IS obllsxl to service SC~lletllmiddotspecific r5k IS incorxt4too by applying individual bera facto The betn mctors ire evauatcentd annuaHy bhseci on pubJicly aVflllabe murked earn
Fair value ()fnHstmeni proputies The fuit laHe 0 nvestmel~ propertis is deltrrnlnzd b cxterrwl indepzfldell property valuers laving appr0priate recognised professional quabfiillions and recenl xperience H1 the localjl)n and G-tegory 0 the oroperty being valued
Useful hes of PfQPcrly plmr (llld zqulpment The Groups management detennints th estiunted useful jives Df It~ property plan and equipmnl fix calnurjng depreciation Thi5 e~timJte is 6lermind after cinsidring 1b expeelcd usage (1f the a5sclt [hysical l101t and (eas tedmiltal Dr com~ercia obsolesccnce
Gotlg Qncen
ibe Groups mangerncnt UiS made aJ assessmeot cf the 011115 ability (0 COllllOUC liS a going conct11l Imd is satsl1ed hat me Group ms the resources to contmue in business for he foreseeable fu1urc he1hennort he management is no aware oC lny material Hncertainties that lray CH~t signinchnt doubt tlPDfl the Groups ability 10 continue as a going umcem Therefore titpound lotlsolidatcd finilllcij stftemeols comirme to be prepltd on li g0ing concern basis
Aamal Company QSc
NOTES TO THE CONSOLIDATED FlNANC[AL STATEMENTS For the year ended 3 1 December 20 13
32 INCOME TAX
Certa in subsidiaries of the Group which have non-GCe ownership are subject to income tax under Qatar Income Tax Law No 2 1 of2009 The iocome tax is charged on the share of profits attributable to non-GCe shareholders For the purpose of these conso lidated fi nancial statements the income tax liability oftbe foreign shareholders has been excluded given that the non-GCe shareholders have agreed under the shareholder agreements signed with the Group to bear the fh lliiability and make necessary payments
33 COMPARATIVE INFORMATION
Certain comparative figw-es of the previous year have been reclassified 0 coofonn to the current years presentation However such reclassifications are oat materia and do not have an impact on tbe previously reported net profit other comprehensive income or the total equity for the comparative year
The impact from the resta tement of comparative infonnalion as a resuh of adoption of IFRS I I - Joint arrangements is detailed in Note 32 Changes in aCCQu(lting policies
46
Aamal Company QSC CONSOLIDATED STATEMENT OF FINANCIAL POSlTlON AI J I December 2013
ASSETS Current assets
Cash and bank balances Accounts receivable and prepayments Amounts due from related part ies Invento ries
NOD-current lI$sft~ A vuilable-for-sal e investments Equity-accounted illvestees Investment properties Properly plaIU arid equipment
TOTAL ASSETS
LiADILITIES AND EQUITY Curnn Jj~biljtit5
Bank overdrafts ACCOUntS payable and accruals Amounts due 10 related panies Interest bearing loans aM borrowings
Non-Curr(DI liabilities
Interest bearing loans and borrowings Employees end of service benefits
TOlRllitbililits
EQUiTY Share capital Legal reserve Treasury shares Cumului ve ch8llge in fair vlIue Retained earnings
Equity attributable to equ ity holders of the pa rcnt Non-cOnlIOII ing interests
Note
5 6 7 8
9I
5 12 IJ 14
14 15
16 17
203 QR
436136756 510089839 214439950 316699545
I4 77366090
24 983 133106907
6402486000 519970890
70551588780
8532954870
6836280 445046573
48199591 749520820
J2496031264
165384481 19957976
185342 457
143494572 1
6000000000 378132552
(2075865) 4069
526628214
6902688970 1953201 79
2012 QR
36788 129 1 482281 775 171 525363 401 902873
1423 59 1302
18963 12666999 1
611 3347018 449527258
6689563 230
8113154 532
2885090 379119069 49737757
825 568489
1257310405
239276807 18111 763
257388570
1514698975
5445000000 327445101
(207 5865) (416)
638248275
6408617095 189838462
7098009149 659814551557
TOTAL IABIIITIES AND EQUITY 8532954870 811 3154532
Mohammad Rrunah i Chitf Financial Officer
The artaehcd notes I 0 33 fonn an integral pan o f these consolidlIed financial statements
3
COgtSOLIDATED STATEENT OF INCOME For tM year ended 31 Dec-mixr 2013
Not
Revelue lR Diroctcnstb 19
GROSS PROFIT
Other income 20 Markelillg and promotion expenses Geternl MO administrativcent cxpenSs 21 Dvmiation Fine nee CDS 22 Shure of profits of equityltl(COUnleci ~nvestees 9
PROFIT REVORE FAIR VALUE GAINS ON tVfSTnlT PROPERTJES
Net fuil vl1lue gltllns or lnvestne-Ilt prcpc(li~ 10
PROFIT FOR THE YEAJt
Pmiltltributnble to Equit holcefS of tift parent J(jI1~rtroing Inreres
l)3~itand diluted eanlings per share (QR) (RITnoutable 10 cqujry holders of the parerl 23
Jon QR
2122595133 _ (1702139111)
419455956
I 516688 (18995918)
(109981101) (9331061)
(44930877) __~)499901
267233582
245051107
~--~~
5068745(17
_~~ sect4JQ82 ~~Jll4lL
(L85 ~~~--
2012 QR
2(69)36372 J~~~S965i016J
41YJ6SU56
16199921 (J I L66J 47)
(25628J2) (947 3007)
(58063809-]
_~3JA0104
2J572 1006
3R3m183
_-_2d~
594892946
~~~2S14~~ zi~L
049 -~---
The zltached notes j to 33 f01111 an integral part of these tOl50hdared financial S1tltlTWpl$
Aamal Company QSc CONSOLIDATED STATEM ENT OF COMPREHENSIVE INCOME For Ibe year eoded 3 1 December 201 3
2013 QR
Profit for the year 5 12284689
Other comprehensive income Items that are or may be reclassified to profit or loss Unreatised gain on available-for-sale investments 6020
TOTAL COIVIPRpoundHENSIVE INCOME fOR THE YEAR 512290709
TotaJ co mprehensive income attributable to Equi ty holders of the parent 506878992 Non-controUing interests 54117 17
5 12290709
101 1 QR
6245 13489
109582
624623071
59489253 0 2973 0541
62462307 1
The (luached notes I 10 33 form an integral part of these consolidated fin ancial statements
~amal Company QSC
CONSOLDATED STATEMENT OF CASH FLOWS For the year ended 31 December 2013
OPERATING ACTlVlT1ES Profit fot ioc year Adjustment for
Net fuirvalle gaj0i on overncnt properties Dpreciation Provisio~ fOf employlXs end of seevielt benefits Bargac purchaslt gAin Allowance for inp~inueO of trde accomis receIvable (Proritlloss on dJsxgtsel of property piaU( 06 equiprnent Provision fot slow moving Jllvetlories lJlterest nome finance oosts Share of profit of eqUlry-accoumcd inveslces
Operaling profit ooorc working capital changes
JllvtntorifS AU(lIJJltt receiwlbk and prepaymert1S ccoums payabe And accruals ~et l)OVem1t in amounts due from and due to rdmgti panie
Cash from operation Finance coStS pltlid End of SCfVtCe benefits paid
Net Leasb from opcrling 3ctivitilt5
INVEsnXG A(T1TTIfS Xntltresl income raeivcd Proceeds from disposal of property piii1i and equipment Divicieflds reced tTom a j(im venlure Additions to inveslmeul properties Acquisition of subsitlittry net of cush Jzquired Aquisitioll from non-controlling il]tw~st Additions 10 property plant ()nd equipment
Net cash used in invltgtliing Jctivii(lS
FINAClXC ACrlVrnrs rtt moverncl1 in inteftst bearing tiJ41S al1d borrOWings ConlribIH(llS from nonconttohng interests
Net cash tlllied in)ftom hnfCncmg actiV1ies
lNeREMyen IN CASH ANn CASH EQlJlVAUVIS Detrease to casr due to 10~S of crmol of a subsidiary Increase in cash 1t5ulttd in obtaining the conh) of il-n Il$$oile
Cash and caltr quiVlenls at 1 JanuJry
CASH AND (i5iH EQttVALENTS AT 31 DECEMBER 5
NolO
10
15 20 21 20 S
20 22 9
is
20
9 10 4 4
11)13
QR
5122846amp9
(245(51101) 4lA95449
4056969
2294590 (737647)
2380611 (2$24216)
44930$77
_~499901l
34133lno
82822711 (3lH12654) 5312iL387
~82753)
4112788011 (45056522)
_t221Q7S6)
35S52q733
2824116 1274457
119921185 9568U47)
Jl~870))741
_ (141_~3464ol
(149939995) __ ~~__f)~_L
JlplusmnB699~)
643fi4ns
~~Sif99~2U1
~pound2d9M2t
2ul2 QR
6+5~30X9
(388792483) 42540J((1
4205499 (S36)743 J 1361120
178610 2208263
(2Sl4392) 5206389
(234Q350~1
32J ~n2A89 (6[90(304)
(l46739948) 136)0977
_ 62q660
312291614 (58643654)
(432095)
-14932OI5
2894]92 609659
10049971 (72719187)
l 6594 s05) (40A toDOO)
~71~9631
Q4sectS26)Jl
237n(j7n
--1113-0~OO~~__
__ 25c~f)7J33
223251515 (3090 I 7)
5OO(UtOC ~~_6pound~Ag2
64t996~ijl
The atlached iIOle~ to 33 form an integral part of Llese corsokiated financial slUlement$
6
Aamal Company QS C
CONSOUDATED STATEMENT OF CHANGES IN EQU ITY For the year ended 3 I December 20 13
Alfribulable (Q equitY hulders Q[the parent
Cumulative N OII-
Share Legal Treasllry chollgein Retained conrro lfing Tf capilal resenc shares fair value earnings Tolal inereslS equity
QR QR QR QR QR QR QR QR
Balance at 3 December 20 J I 4950000000 267955805 61 4024 670 583 1980475 14 1645505 5973625980
Boougt shares issued (Nole 27) 495000000 (495000000) Profit for the year 594892946 591 892916 2962054) 6245 13489
Other comprehensive income for the year (416) (41 6) 109998 109582
Treasury shares acquired througb business combinati on (2075865) (2075865) (2075865) Adjustmenl due to loss ofcontrol of a subsidiary (983 643) (983643) Derecognition of non-controlling interest due 10 liquicbtion of
a subsidiary 55932 55932
Transfer to legal reserve 59489296 (59489296) Con(ribUlion from non-colllrolling inte rest 59232919 592329 19
Contribution to socia l and sports activi ties fu nd ( 11612837) ( 156 12837) (1561 2837) Non-controlling interest acq uiJed without change ofcontrol (Note 4) (567208) (567208) (39842792) (404 I 00Cl0)
Balmce at 3 1 December 20 12
Bonus shares issued (Nole 27)
Profit for the year Other comprehensive income for the yeM
Transfer to legal reserve
Cootribut ion from non-controlling interest
Contribution to social and sports activities fund
544S00000Q
555000000
32 7445101
5068745 1
(2075865) (4 16)
4485
638248275
(55 5000000)
506874507
(506amp745 1)
( 12807 11 7)
64086 17095
506874507
4485
(12807 11 7)
189838462
54 10 182
15 35
70000
6598455557
512284689
6020
70000
( 128071 122
Ballnce at 31 Decem ber 2013 6000000000 378132551 (2075865) 4069 5266282 14 6901688970 195320 179 7098009149
The a(tached notes 1 to 33 fann an integra pan a fthese consolidated financial slatements
7
2
Aamal Company QSc
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 3 I December 20 13
CORPORATE IN FORMATION AND PRINCIPA L ACTlVIT IES
Aamal was funned on 13 January 2001 as a private shareho lding company with limited liability (W LL) under the COlrunerciaJ Registration Number 23245 in the Slate of Qatar On 12 Ju ly 2007 the private shareholders resolved to transfonn AamaJ into lt) Qaari Shareholding Company (O SC) (the Company) Accordi ngly the Company was listed on Qatar Exchange on 5 December 2007 The Companys registered office is at P O Box 224TI Doha Sttlle of Qatar
The Compaoy is organised inlo a head office (Aamal) cllld branches and operates in the State of Qatar The fo llowing table sets out the principal activi ties of the branches
Brancb Principal aellvities
C ity Center Qatar Branch Leasing the facilities of the re tail outlet complex in Ci ty Cen ter Doha
Aamal Real Estate Branch Residential and commercial real estate investment and property rentaL
Aamal Readymix Branch Production and sale o f readymix concrete
Ebn Sina Medica l Braoch Wholesa le and retail distribution of phannaceulicals aod general consumable products
Aamal Medical Branch Wholesale d istribution of medical eq uipment
Aamal Trading and Dis tributioo Sale of tyres lubricants batleries and home applian~s
Branch
Amnal Servi~s Branch Providing facilitie s management arld cleaning services
Aamal T ravels Branch Operating a travel agency
Aamal fur Indus trial Projects lndusllial investments Branch
Good Life Phannacy Branch Sale of phannaceuticals baby care products medicine and general cOllsumable products
Foot Care Center Branch Sale of footwear clinical activities and general commercial tradillg products
The consolidated financial statements were authorised for issue by the representatives of the B03Id of Direclors of Aamal Corupaoy QSc on 20 February 2014
BASlS OF CONSOLIDATION
The consolidated fioancial statements comprise the fioancial statements of AamaJ Company QS C (the Company) and its subsidiaries and joint controlled entity (together referred to as the Group)
Subsidiaries Subsidiaries are enli ties controlled by tbe Group The Group controls an entity when it is exposed to or has rights 10 variable returns of its involvement with the entity and has the abili ty to affect those returns through its power over tle entity The fi nancial statementS of subsidiaries are induded in the consolidated finarlcial statements ITom the date on which control commences unti l the date on which control ceases When the Group loses control over a subsidiary it dereognises the assets aoo liabilities o f the subsidiary and aoy related non-cootrolliog interest and other components of equity AllY resulting gain or loss is recognised in consolidated statement of income Any interest re ta ined in the fonne r subsidiary is measured 01 f3i r value when control is lost
8
2
Aamal Company QS c
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 31 December 2013
BASIS OF CONSOLfDA TiON (continued)
Subsidiaries (continued) Set oul below are Ihe Group s principal subsidiaries at 3 1 December 2013 Unless oUlenvise slated the subsidiaries as listed below have share capital consisting solely of ordinary shares wh ich are held directly by the group and be proportion of ownership intereSIS held equals 10 the votiug rights held by Group Tbe country of incorporation Of
registration is also their principal place of business
Comp(my name
Aamal Cement Industries W LL
MO Qat1 Company WLL
Senyar Indus tries Qatar Holding WLL
Doho Cables Qaw WlL
EccoGulf Compaoy WLL
Advanced Pipes and Casts eompmy WLL
Johnson Controls Qatar WL L
Country 0 lJCQr por ation
Qator
Qatar
Qatar
Qatar
Q 31ar
Qatar
Principal (lcfi ity
Development and mlUlagement of factori es and the prodllaion or curb sl~ne i llleriook slabs lIId cement bricks
Construction and repai r of power plant es tablislunent and man3gemenl of industrial enterprises aud ac ting as a representative for the imcmatiOllru companies
Management of subsidiaries and associates ovming of palen~ businesses and subleltiug Ulem and provision of investment port fo lio management for Its
subsidiaries and Msocialts UOkr the shareholders agreement signed between the Group and the other
shareholders the Group is able 10 appoint the chai rman and two other members 10 (he Boflrd of Direc tOfS (out of six members) and is able to govern the fin ancial and operating policies of Senyar Industries Qatar Holding WLL Accord ingly ~ company is considered as a subsidiary oCthe Group
Mailltenance and mallllfacture of electric cables equipmelll and lools Doha Cables QalaJ WLL is
91875 (eITectively) owned by Senyar hldush es QaUlr Holding WLL a subsidiary of tllC Group TIIe Group has (he power indi rectly through SenyM [ndus tJi cs Qatar Holding WLL 10 govern fi nancial and opera ting policies of Doha Cables Qatar WLL and accordingly the company was considered IS a subsidiary ofthe Group
OITers professional and bus iness process outsourcing and Cll )] center services
Manufacturing of Wide cement md amplass reinforced pipes systems for infrsslICture (lnd pipeline projects
The Gro up h~ the power 10 govern ~lot financial and opera1 ing policies or Adv3I1ced Pipes and Casts Company WLL by virtue of a sllarchokJers agreemeot TIlus the Company has been cotls ldcrOO as II subsidiary of the Group
Provision of racililies management service5 energy se-rvices md building maimetlaoce and cleanlg services to corporate cl icn1S
PlOporl ion oj
oWPersllip held by the
Non
Group COnroiling interest
99 1
60 40
50 500
459 54 J
5 1 490
50 50
51 49
9
2
Aamal Company QSC
OTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For toe year ended) J December 2013
BASIS OF CONSOUDA nON (continued)
Suhsidiaries (wntiourd)
Cmmffyoj fNgtpvniOil j irniJpvroliin ~__~ampiphdd~~
Nor G)1)Ji contfoifgtg
iMeregt
CmiddotSan TI~ing WLL Sdilamp lYJy1ng renting me Mltcentlopil12 [e~ tSite 30 invimenl w shams rnlilVigemc1t vf real lsta propeItilttl owning ille palent and tradcentmut and tnlding in iXjUiflfIfflt amJ vcilici$ 1he GroClp has tJe pcwer tv goem 6e ~inr8hl and ojJrtltllng
roicie_~ of ClSM by vifcle 0 a shlrcholdcrs 191e~mcentn(
745 25 1~i
nnoV1iv lightinf wmpany Qatar TNriing of Ught 2rrt1nz DiDd lEU Lwpj lmd 7r J) WLL olhT $hlil1g prrltwl
Twdiflg of of4 SiJpplk-s and providll$ prindna and 65 35 laniniltmJ sltrce~
Non-coufroUing illterests Non-controrling intel(SlS are measwed tj tleir propO(hOnile $hue Ot the tcquirees identifiabk net asscl III the JCqUiSlOt1 rote Chuegts in t1e Groups imcest in i $ubsiciwty hat do tot rcmltlo a loss of ~)I1a1)l xc accountd for as equity trnramplclions
Tamil-crions eUminnted on c)lwtidaticu lntngtgroup baiances Jue transactions 00 any unrealised income 1nd expenses ari$tng from intrnwgrOU tranSaOiQlls arc eiimmatcd UfiJeaiiHd gaina arising from ITaUstlclions ttlt equity-lKcoUl11uJ IlVtSlCCS are eliminatd 1gamst the investment 10 the extent oftlle Group interest in the inveMee Umaslised loses are eiiminatd II the same VllY us unrvalised gains hit only to Ille eXfeut that there is 10 evidence ofimpaimcentut
Illttn~ts in jOint arrangements iu)d associates Detais ofeach of ttc Groups Hutilrial Joint venlU)s fujltj assoeime~ at the end of the reponing period are 5 [OHOViS
Cmnirycgt PltJporlion qf Compao name infOjwNiIIO1 ewonlup Qltd
vOingjYwer htld by
tiff GrOlp
[I Sewed Cable QntM Tndllg in ele(mHnechmita CGlJ)ptnefllmd plOvicmg WLL rei) services El SWNed Cables )ilMr WLL is
49 JWoo (Wilt 55 tblre of rrofils (losses) hy StHyar lrdl11(rie~ Qal3t Hodirg WLt e 511b8idimy 0 ~he GOllp However (kw 10 ~ feiBtil shareholdergt agreewli pound ellWY has I~)mc a jOm vent( eTdive trmJ l January 20 wllkh is mC(t511rec Il1de the eqJity ngtU1l
rins $tngtdJBI S~ 1idJgt (law Ertity lS engaged l sled (b[iclli0ls Gf0Jp mtllpoundure Ea LC t11cent fl5sodau under cquhy nlctooo
Aamal Company QS c
NOTES TO THE CONSOLIDATED FlNANClAL STA TEMENTS For the year ended 31 December 2013
3 BASIS OF PREPARATION AND SUMMARY OF SfGNlflCA1T ACCO UNTING POLICIES
31 BASIS OF PREPARATION
The consolidated fi nancial statements have been prepared in accordance with lntema tional Financial Reporting Standards (IFRS) and the appLicable requirements ofQalar Commercial Companies law No5 of 2002
The consolidated financial statements have been presented in Qatari Riyals (QR) which is he Companys floclional and presenUll ion currency and have been rounded to tlle nearest Qatari Riyal TIle consolidated financial statements are prepared lUlder the historical cost convention modified to include he measurement a l fair value o f investment properties and available-for-sale investments
32 CHANGES IN ACCO UNTING POLICI ES
The [lccoWiting policies adopted are consistent wilh Ihose of the previous fi nancial year except for the following standards effe ctive for the annual period beginning on or lfter 1 Jlnuary 20 13 These standards and amendments other tM n the impact of (FRS II - Joint Arrnnge menlS noted below did not have aoy malenal impact to the Group
lAS I (amendment) - Presenfalion of items ofother comprehensive income The amendments to IAS I require that an emity present separate ly the items of ltN her comprehensive income that would be reclassified to profit or loss in the future if certain conditions are met from those that would nC ver be reclass ified to profit or loss
lAS J9 - Employee benefits (201) lAS 19 (201 1) changes the definition of short-tenn and other long-tenn employee benefits to clatify the di stinction between the two
lAS 28 (201 f) - fnvesfmem in Associates and Joint ventires lAS 28 (2011 ) supersedes lAS 28 (2008) lAS 28 (2011) makes the foHowing amendments Associues held for sale JFRS 5 Non-current Assets Held for Sale and Discontinued Operat ions applies 10 an investment or a portion of an investment in an associate or a joint venture that meets the criteria to be classified as held fo r sale For any retained portion of the investment tlwt has not beell classified as beld for sale the entity applies the equity method until disposal o f the portion held for sa l ~ After disposal any re tained interes t is accounted for using the equity method if the re tained interest continues to be an associate or a joint venture and 0 0 cessation of significant influence or jo int conltOl even ifan investment in an associate becomes an investment in a joint venture or vice versa Ihe entity does not fe-measure the retaincd interest
Amendments ft) fFRS 7on ofseftingjil1ancial assels and jinancialliabilities (2011) Disclosures - O ffsetti ng Financial Assets and Financial Liabilities (amendmems to FRS 1) introduces disclosures bout Ihe impact of oetting arrangements on an entity s fin ancial position Based on the new disclosure requirements the Group has to provide inforroation about what amounts have been offset in the consolidated statement of fimmcial position and the nature and extent of rights of set o ff under master netting aITlngements or simi lar a1Tlngernents
fFRS 10 - Consolidate1 financial SIOlemenlS and lAS 17 Separate Fillancial SfalemenS (2011) [FR S 10 introduces a single control model to determine whether an investee should be consolidated FRS 0 replaces the parts of previQlSly exis ting lAS 27 Consolidated and Separate Financial Statements that dealt wi th consolidated fin ancial statements and SIC-12 Consolidation - Special Purpose Entities This new contro l model fo cuses on whether the Group has power over an investee exposure or righlS to variable rerums from its involvement with the in veSlee lnd abili ty to use its power to affect those returns The Group has amended its accounting policy on consolidation in line with requirements of TFR S 10 and has re-assessed its consolidation conclusion
[FRS 12 - Disclosures ofimerests ill other entities IFRS 12 brings together into a single Sfandatd all the disclosure requirements about an enti ty s interests in subsidiaries jo int arrangements associates and unconsolidated structured entities It requires the disclosure of infonnation about the nature risks and financial effects of these interests
II
Aamal Company QSc
NOTES TO THE CONSOLIDATED FTNANClAL STATEMENTS For the year ended 3 1 December 201 3
3 BASIS OF PREPARATION AND SUMMARY Of SIGNIFICANT ACCOUNTrNC POLICIES (continued)
32 CHANGES IN ACCOUNTING POLlc ms (coDtinued)
IFRS IJ Fair ~alue measuremetll TFRS 13 provides a single source of guidance on how fair value is measured and replaces the faif value measurement guidance tha i is currently d ispersed thIo tlghool [FRS It unifies the definiti on of fair va lue as the price that would be received 10 sell an asset or paid to transfer a liability in an orderly transaction between market participants a t the measurement dale It replaces and expands the disclosure reltjuiremenlS about fair value measurements in other IFRSs including TFRS 7
Improvements (0 IFRSs (20 ) Improvements to IFRS issued in 20 11 contained numerous amendments to IFRS that the IASB considers nonshyurgent but necessary Improvements to lFRS comprise amendments that result il) accounting changes to presentation recognition or measurement purposes as well as tennioology or editorial amendments related to a varie) of individuallFRS standards
During the period the Group has adopted the fo llowing new s tandard which became effecti ve for the annual periods beginning on I January 201 3 which had a materi81 impact to ule Group
IFRS II Joint AlTwlgements As a result of adopting IFRS II the GrOlp has changed its ltlccoUJ)ting policy for interests in jo int a rrangemeots Uuder rFRS 11 the Group classifies its interest in jo int arrJngements as e imer j oint operations or joint ventures depending on the Groups rights to the assets and obligations for the liabil ities ofthe arrangements When maldng this assessmenl the group considers the strucltire of the arrangements the legal fonn of any separate vehicles the contrac tual tenns of the arrangements and other fact s and arrangements Previously the structure of tbe a rrangement was the sole foc us of classification The Group has re-evaluated its involve men t in ils o nly joint a rrangement El Sewedy Cables Qatar WLL ltlnd has recla ssified the investment from jointly controlled entity to joint venture Also the Group has discontinued with re rrospective effect the use o f the proportionilte consol idation method and adopted the equity method to account for joint venture in accordance mth IFRS I I
Summary oquulllitative impuct The following tables summarises the materia l impac ts rcsulting from the above change in accounting polic ies on the Groups financ ial position profit o r loss and cash flo ws
Effect of chnnge in 31 Decemb er2012 accounting policy
Cunem assets (278 880441 ) Non-current assets 1295 1346 Total assds (265929095)
Current liabilities (265072694) NonmiddotcWTent liabilities (856401) Total lin bill ties (265929095)
For the year ended 31 December 2012
Profit for the year
Net chflllge in cash and cash equivalents dlUing the year (99696J)
12
Aamal Company QSc
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 3 I December 2013
3 BASIS OF PREPARATION AND SUMMARY OF SlGNlf[CANT ACCOUNTING PO LICI ES (continued)
33 lASB STANDARDS AND lNTERPRETATIONS ISSUED BUT NOT ADOPTED
The following lASB standardsamendments hJve been issued but are not yet mandatory and have 1l0( been etrly adopted by the Group
Standard
Illterpretotion COnem EffeClive dale
TfRS9 Financia l InstrumentS (new standard) I Januruy20 17
IAS 32 Financia l Instruments O ffsetting (amendment) I January 20 14 JAS 36 Financia llnslnnnents Disclosure - non-fi nancial asse ts (amendment) I January 2014
The Group is considering the implications of the above standards and the till1ing (If adoption by the Group
34 SUM MARY OF SIGNIFICAJT ACCOUNTING POLICI ES
Bu siness combinnriO llS The Group accounts for business combinations using the acquisitio n method wben connol is Imasferroo to the Group The consideration ITansrerred n the acquisition is generally measured at fa ir value as are the identifiable net assets acquired Any goodwill that arises is tested annua lly for impairmeot AllYgain on a bargain purchase is recognised in pro fit or loss immediately Transaction COStS arc expensed as incurred except if rehated to the issue of debt or equity securities
The considera tion transferred does nOt include amounts related to the settlement of pre-existing re lationships Such amounts are recognised in profit or loss
Any contingent consideration payable is roeasured at fair va lue at the acquisition date If the contingent consdicrntion is classified as equity then it is oote nmeasured and settlement is accounted for within equity Otherwise subsequent changes in the fa ir value of the contingent consderafion are recognised iu profit or loss
Cash a nd eash equivalen ts For the purpose of the consolidaled statement or cash flo ws cash and cash equivalents consist of cash and bank balaoces ruld short teJTIl bank deposi ts wi th an original marurily of three months or less net of outstanding bank overdrafts
Accounts receivable Accounts receivable are stated at originill invoice amount less an allowance for any uncollectible amounts An estimate for doubttit debts is made when collection of the flilt amount is no longer probable Bad debts are wntlen off when (here is no possibility o f recovery
Inventories Inventories are stated at the lower of cost and net realisable value Costs are those expenses incurred in bringing each product to its present location and condition
Goods ror resalework in progress - Cost of di rect materials aJld labour plus attributable overheads based on a oormallevel ofac1i vity
Raw material and spare pan s PlIlchase cost on a weighted average basis
Net realisable value is based on estimated selling price less any further costs expocted to be incurred to completion and disposal
13
Aama Company QSc
NOTES TO THE CONSOLIDATED FINANC IAL STATEMENTS For tbe year ended 31 December 20 13
3 BASIS OF PREPARATION AND SUMMA RY OF SIGNIFICANT ACCOUNTfNC POLI CIES (contin ued)
34 SUMMARY OF SIGNIFICANT ACCO UNTLNG POLICIES (continued)
Interests in equity-aecoupled inveslecs The Groups interest in equity-accounted investees comprise interest in associates and joint venture
Associates are lhose entities in which the Group has significant influence but not control or joint control over the financia l and operating policies A joint vennu-c is an arrangement in which the Group has jo int ool1lrol whereby the Group has rights to the net assets of the arrangement rather thall rights to its assets and obugations for its liabilities
InlereSIS in associates and the joint venture are accoliDted for using the equity method They are recognised initially tit cost which includes transaction costs Subsequent to ini tial recognition the consolidated financ ial stateme nts ioc lude the Groups shrre of the profit or loss and other comprehensive income of equity-accounted investees unti l the dalc on which significant in Lluence or joint control ceases
The reponing d~les of the equity-accounted investees and the Group are identical and the equi ty-accounted investees accoWlting policies confonn to those used by the Group for like tmnsactions afld events in similar circumstances
Investmefl t properties umd aod buildings are considered as investment properties only when they are being held to earn ren tals or for capital appreciation or fo r both
Investment properties are measured ini tia lly at cost including traosaction costs and borrowing costs that are directty attributable to construc tion o f the 8sseL The carrying alRount includes the cost of replacing part of an existing investment property at the time that cost is incurred jf toe recognition cri teria are mel and excludes the costs of day-to-day servic ing of an investment property Sub~quent to inilial recognition investment propert ies are slated at fa ir value which reOects market conditions at the reporting date Gains or losses arising from changes in the fa ir values of investment properties are included in the consolidated statement of income in the yeltl r in which they arise
Investment properties are derecognised when either they have been disposed off or when the investment property is pennanently withdrawn 1T0m use and no fu ture economic benefit is expected from its disposal Any gains or losses on the retirement or disposa l of aD investment property are recognised in the consolidated statement of income in the year of retiremeOl or disposal
Property under construc tion is dealt with under lAS 40 and rttorded at cost less accumulated impairment losses until either its fair value becomes relia bly detenninable or cons(TUction is completed (whichever is earl ier) At that time it is reclassified as inves tment property and a fa ir value adjustment is recognised in the consolidated statemenlof income
Transfers are made to or fro m in vestment property onl y when there is a change in use For a transfer from investmen propeIT) to ovmer occupied proreIT) the deemed cost for subsequent accounting is the fair value at the date of change in use If owner occupied property ~omes an investment property the difference between the canying value aoo the fair value at the date oflransfer is rttognised as a revaluation reserve in the equity and is released to the consol idated sta tement of income llpon disposal of such propcny
14
Aamal Company QSc
NOTES TO THE CONSOLIDATED FrNANCIAL STATEMENTS For the year eDded 31 December 20 13
3 BASIS OF PREPARATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLI CIES (continued)
304 SUMMARY Of SIGNIFICANT ACCOUNTING POLICIES (continued)
Property plant and equipment Property plant and equipment is stated at cost including borrowing costs that are eligible for capitalisation and excluding the costs of day-to-day servicing less accumu lated depreciation and any imp~innem in value
Depreciation is provided on a straight line basis on all propelT) planl and equi pment The rales of depreciatioo are based upon the following eSImnelt useful lives
Buildings 20 years Leasehold improvements 2-8 years Truck mixers and motor vehicles 4-1 5 years Plant and ITIJchioery 8-2 5 years Furniture fixtures and office equipment 3-5 years Computers and related software 3-5 years Capital work in progress Not depreciated
The carrying amounts are reviewed for impain nellt when events or changes in circumstances indicate that the carrying value may not be recoverable If any such indication exists and where the carrying values exceed tbe estimated recoverable amouot the assets are wri tten down to their recoverable amount being the higher of their fair value less costs to sen and their value in use
Expendirure iocurred lO replace a component of an item of property plaot and equipment that is accotmted for separately is capitalised and the carrying amount of the component that is replaced is written off Other subsequent expenditure is capitalised only when it increases furure economic benefits of the related item of property plant and equiproent Al l other expendirure is recognised in the consolidated statement of income as the expense is Incurred
An item o f property plaot and equipment is dereeognised upon disposal or when no future economic benefi ts are expected from its use or disposal Any gain or loss arising on derecognilloo of the asset is iocluded in the consolidated stalemeot o f income io the year the asset is derecognised
The asset s residual values useful lives and method of depreciation are reviewed and adjusted if appropriate at each rnancial year end
Borrowing costs Borrowing costs direc tly attributable to the acquisition constmction or production of an asset that necessarily takes substalltjal period of time 10 get ready for its intended use or sale are capilalised as pan of the cost o f lhe respective assets All other borrowing costs are expensed in the year they incur BOlTOwiog COSts consist of the interest and other costs that the Group incurs in coomction with the borrowing of fund s
Accounts paytlble and accruBls Liabilities are recognised for amounts to be paid in the fuMe for goods or services received whether billed by the supplier or not
Interest bearing loans Bnd borrowings Interest bearing loaos and borrowings are recognised ini tiaJy at fai r value of the amounts borrowed less direc tly attributable transaction costs Subsequent to initial recognition interest bearing loons and borrowings are measured at amortised COSt using the effecti ve interest method with any differences between the cost and tinal settlement values being recognized in the conso lidated statement of income over the peliod of borrowings Instalments due within one year aI amortised cost are shown as a ctuTentliabiliry
Gains or losses are recogTlised in the consolidated sialement of income when (he liabililies are derecognised Interest relating (0 imerest bearing loans and borrowings is expensed in the year in which it is incWTed e(cept those qualify for capitalisation
15
Aamal Company QSC
NOTES TO THE CONSOLIDATED FfNANClAL STATEMENTS For tbe year eoded 31 December 201 3
J BASIS OF PRpoundPARATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
34 SUMMARY Of)SIGNIFICAtlT ACCOUNTING POLICI ES (continued)
TClaot deposits Tenant deposit liabilities are initially recognised at fair value and subsequently measured at amortised cost where material Any di fference between the initial fair vllue and the oominal amount is [eluded as a component of rental income and rocognised on a straight-line basis over the lease term
Derecognition or fiolocial nsstls and liabilities
a) Financial assets
A fi nanCIal asset (or w~re apphcabJe a part of a fin ancial asset or part of a group of SImilar financIal assets) IS derecogmsed where J bull The n ghts to receIve [5h flo ws from the asset have expIred bull The Group has trans f rred Its rights to receive cash flows from the ass or has assumed an obhg811On to pay the
reltelved cash flows I full Wlthout mfl tenal delay to a third party under a pass-through arrangement and elther (3) the Group has Ira sferred substantially aIthe nsKs and rewards of the asset or (b) Ihe Group has neuher transferred nor relain substantially ai the n sks and rewards of the asset but has tnlnsferred control of the asset
When the Group has tTa~fened its rights 10 receive cash flo ws from an asset or has entered into a pass-waugh arrangement and has nejlher trmsferred nor reta ined substantially all of the risks and rewards of the asset nor trnnsferred control of the asset the asset is recogoised to the extent of the Groups cOlilinuing involvement in Ihe
In that case the Group at 0 recognises an associmed liability The mnsferred asset and ihe associaled liabi lity are measured 00 a basis thai flects Ihe rights lnd obligations that the Group has retained Continuing involvement that takes the form of a guara tee over the transferred asset is measured at the lower of the original canying amount of Ihe asset and fbe maxim amoun o f consideration that the Groop could be required to repay
b) Financialliabiliti
A financial liabili ty is defogniSed when the obligation under the liabil ity is discharged or cancelled or expires Where an existing fio8 1lci I liability is replaced by another from the same lender on substantia ll y d ifferent lenns or the terms of an existin liabili ty are substantia lly modified such an exchange or modification is treated as a derecognition of the orig~al liabili ty and the recog1Jitioil of a new liability and the dirference io the respective carrying amounts is reco ised in the consolidated Slatement o f income
Impalr meot ood uncollec ibility of fina ncial assets An assessment is made al each repon ing date to determine whether there is objective evidence that a speci fic financial asset may be impaired If such evidence exists allY impainneOl loss is recogoised in the consolidated statement of income ImT t is detemtined as fo llows
(a) For assets earned a t fair value impainnellt is tbe difference between cost and fair va lue (b) For asseamp carried at COSt impairment is the difference between cost and lIle present value of future
cash flo1S discounted at lhe current market rate of rdurn for a simi lar finan cial asset (0) For asseq carried al amortised COSt impainneot is the difference between canying arnOWll and lhe
present Value of future cash flO M discowlled at the original effective iDlerest rate
Provisions Provisions are rewgnised hen the Group has an obl igation (legal or COnslnlctive) aris ing fro m a past event and the costs to settle the obl igalio are both probable and able to be reliably measured
16
Aamal Company QSc
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 31 December 2013
3 BAses OF PR EPARATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICI ES (colltinued)
34 SUMMARY OF S IGNIFICANT ACCOUNTING POLICIES (continued)
Employees eod of service benefits The Group provides end of service benefits to all employees in accordance wi th employment contracts and Qatar Labour Law The entitlement to these benefits is based upon the employees final salary aocl length of service subject to the completion of a minimum service period The expected costs of these benefits are accrued over the period ofemployment
Revenue Revenue is recognised to the extent thal it is probable that the economic benefits will flow to the Group and the revenue call be reliably measured Revenue is measured al the fair value of the consideration received excluding discoWlIS rebates and duty The following spec ific recognition criteria must also be met before revenue is recognised
Sale ofgoods Sales are recognised whcn significant risks and rewards of ownership of the goods have passed to the boyer and the amount of revenue cao be me3sured rcli3bly
Rental income Rental incorne from investment properties is accoWlted for on a time proportion basis over the period of tenancy Incentives for leases to enter into lease agreements are spread evenly over the lease teon even if the payments are not made 0 0 such basis Income arising Tom expenses recharged to tenants is recogn ised in the year in which the expenses can be contrac tually recei ved Service charges aud other such receipts are includcd gross o f related cosls in revenues as the Group acts as principal io this regard Premiwns received to terminate leases arc recognised in the consolidated statement of income when they arise
Service income Service income is recognised when the service is rendered and the outCQrne of the transactions can be estimated reliably
COlimission Commission is accounted for on an accrual basis when the right 10 receive the income is established
become on tra~el agencies [ncome on travel agencies is accounted for in the year in which the airline tickets are sold
IIIeresr income Joterest income is recognised as the interest accrues using the effective interest Clle method
Foreign currencies Transactions in foreign currencies ate recorded al tbe rale ruling at the date of the transaction Monetary assets and liabi lities dcoomioated io foreign currencies ace retranslated ill the raLe of exchange ruling at the reponing date All differences are recognised in the Statement ofinconlC
Use of estimates The preparation of (he Groups consolidated financial sta temenls in CQnfonnity with Intemltional Financial Reponing Standards ([fRS) requires management 10 rnake estimates and assumptions that affect the reponed amounts of assets and liabilities and disclosure of contingent asscts and liabili ties at the rcporting date and the reported amoUlils of revenues and expenses during Ihe reponing period Although these estimates are based on managements best knowtedge of current events nnd actions acnm results may ul timately differ fro m those estimates (Significant asswnptions nccounting judgments and estimates used in preparing these coosolidated fina ncial sta temenlS are disclosed in Note 31)
The estimates and underlying assumptions are reviewed regularly Revisions to accounting estimlIes are recognised in (he period in which the estimate is revised if the revision affects only that period or in th~ period of the revision and future periods if the revision affects both current and fu ture periods
17
Aamal Company QSC
NOTES TO THE CONSOLlDA TED FINANCIAL STATEMENTS For tbe year cnded 31 December 2013
3 BASI S OF PREPARATION AND SUMMARY OF SrGNIFICANT ACCOUNTING POLICIES (continued)
34 SUMMARY or SIGNIFICANT ACCOUNTING POLI CIES (continued)
Fair va lues A number of Groups accounting policies and disclosures require tJ1 C measurement of fair values for both financial and non-financial assets and liabil ities The Group has an established control framework with respect to the measuremeot of fair values When measuring the fair value of an asset or a liabili ly the Group uses market observable data for (be valuatiOD Fair values are categorised into different levels in a fair value hierarchy baCd on the inputs used in the valuation lechniques as follows
i) Leve l I - Unadjosted quoted prices io active markets for identica l assets and liabilities ji) Level 2 - Otheqobservable inputs not included within level 1 of the fair value hierarchy ii i) Level 3 - Unobtervable inputs (including enti ty s own data which are adjusted if necessary to retlect the
assumptions market participnllts would use in the circumstances) The Group recognises tralnSfers between levels of the fair value hierarchy at the end ofthe reporting period during which the change has ocdWTed_
Treasury shares When share capitl recognized in equity is repUIchased (by the Company or any of its subsidiaries) the amount of the consideration paid which includes direa ly altributable COSIS is recognized lIS a deduction from equity Wheo treasury shares are sold or reissued subsequently the amount received is recognized as no increase in equity and the resulting surplus or deficit on the transaction is presented io share premium
18
4
Aamal Company iQSc
NOTES TO THE ONSOLlDATED FINANCIAL STATEMENTS For the year ended 31 ecember 201 3
BUSINESS CO~BlNAnON
Acquisition o f Culf ROks Company VLL On 1 January 2012 the roup acquired 51 oflhe voting shares of Gulf Rocks Company WLL (Gul f Rocks) a limited Iiabiliry campan incorporated in Qatar and registered UJKier conunercial registration number 2249) The acquisition was made thT ugh Ci-San Trading WL L a subsidiary which is 50 owned by Aamal Group
I
The fai r val ue of lbe ideltifiable assets and liabilit ies of Gulf Rocks Co mpany WLL based on purchase price allocation exercise condlcd by tbe management as at the date of acquisition WJ S as follows
Fair value recognized on
acquisition QR
Assets I Cash and bank balances 14005495 ACC QUOiS receivable and wePayments I 749383 Amouots due from related plrties I
I oveotones
48311 190 5124 270
Available for sale investm~nlS 1985245 Plant and equipment 6769 17
81852500
Liabilit ies Accounts payable aJld accll1als 4724446 Amounts due to related parties 385070 Employees end of serviccibenefits (Note 15) 349272
5458788
Total identifiable net a5sellf
Purchase consideration trasferred Non-controll ing intereSt az-ising on business combination Bargain purcha5c gain rc~u ting from the tcquisilion
Allalysis ojcash flows OIl acquisition Net cash acquire11 Nith the subsidiary 14005495 Cash paid (30600000)
(16594505)
On I September 20 12 the Company acquired the balance 49 nfthe equiry of Gulf Rocks Accordingly the Group has 74 5 effective holdin4 in Gulf Rocks as at the reporting dale The excess nfthe purchase cons ideration over Ihe fair value o f net assets of GuJf Rocks acqui red from the nnn-controlHng interest has been recorded directly in the retained earnings of tbe Gr6up as at 31 December 201 2
QR Purchase consideration 404 10000 Less fuir value of oet asset~ acquiroo from the non-controlling Interest holder (39842792) EXce5s of purchllse cons idf ration over the fair value of net assets a(q uired 567208
19
5
Aamal Company QSC
NOTES TO THE (WNSOLlDATED FfNANClAL STATEMENTS For the year eoded 3 ) December 2013
CASH AND CASH EQUIVALENTS
For the pmvose of consolidated statement of cash flows cash and cash equivalents comprise the fo llowing balances
lon 2012 QR QR
Cash and bank accounts 330333904 282272895 Short lenn bank deposits 105802852 85608396 Cash and bank balances 436136756 367881 291
Bank overdrafts (6836280) (2885090)
Cash and cash equivalents 429300 476 364996120 1
The short tenn bank deposits are made for varying periods between one day aod three months depeoding on Ibe immedifltc cash requirements of the Group and earn interest at the respective short term deposit ra tes
6 ACCOUNTS RECEfVABLE AND PREPAYMENTS
2013 2012 QR QR
Trade aCColUlts receivable 411 011 567 345260657 Advances 0 suppliers and prepayments 50787921 629389J 5 Retention receivables 36217081 56943030 Other receivables 12073270 17 139173
5tO089839 4 82 28 1775
As at 31 December 2013 trade accountS receivoble amoWlting to QR 2690 1412 (201 2 OR 24984025) were impaired Movements in the allowance for impairment of trade aCColmts receivable were as follows
2013 202 QR QR
At 1 January 24984025 1 877085 Charge for [he year (Note 21) 2294590 13613 120 Amounts wriuen off (19949) (117368) Unused amotmts reversed (357254) (388812)
At 3 t December 26901412 24984025
20
6
1
lamal CompanyQSC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMEltS For the year ended 3 J December 2013
ACCotNTS RECEIVABLpound AND PREPAYMpoundNTS (contillued)
As at -1 I Dtcemxt the ageirg of unimpaired (ltlde accounb iltcivabk was as follows
P(HI duo
nor Up to 30 31-60 61middot90 Yi-jSj gt flO Tota impoirlt-fl days days days day doys
QR QR QR QR QR QR QR
1l13 411OJl$67 25l981960 32312165 2140966 19351fi43 16f)76888 60148545 2012 345260657 1695159B6 493lt)8566 2356$954 19494369 16908414 66374363
1JJJirtpai~ed receivable are expected no th bil5tS of past experienn) 10 be fully fcCi)evbc H is not the pngtctlce ofthcent Group to oblum collaleral over recejvablcI_
AMOLNTS DUE FROyl REL-TEO PARTIES
Name
AI ~aisnl Holding Company V_LL E Seweo Cabtes Qatn WL L Cnild -ftt Cvmlllny Al hz Retll E$vt rWesnnim Company WLL~ AllaZi Real Estale BrAnch EI Sewedy Electric Egypt WLL MuincrDJ1Ce Mwagmvont Group Qat3r W LL Good fe Cheffilt - The Pcarl
BuderPhtrnacy Al Faisallnlemadonal Tnl(i and Investment Company WLL AI-rabia Land Trnr~PQltit1g Company rLL ro Sewedy CabLes - Kuwuit Gcentttco hlttrnJmJilI Frijns StHytural Steel Middle East WLl Winer Wunderand Company WLL Al FtOH1H for Investment amp llllemtiOl1a Trading COntpAny WJ_L Q)lar Bahrain lmerOlnionai Cnero3 WLL Gulf EngJisb Sltl-Qo] Al Rayyao Tourism lve$lrnent Company W LL Other relater purties
2013 2012 QR QR
15412-1064 ll941Y70 34644615 ~li96858l
[()0405 14-45012 51 59197 9538116 15514113 4014727 236824$
1867526 LSOfd22
8(1012 10435r 311650 746395
15023 204450 459829
2iYHi 244940 186750
152170 143440 33500 7768(1
6259 1459lt) 758962-1
__2~61g~~_ 1~95Ji
bull 214109950 171525363
--__ shy
7
8
9
Aamal Company QSc
NOTES TO THE CONSOLIDATED FfNANClAL STATEMENTS For the year ended 3 1 December 2013
At10(JNTS DUE FROM RELATED PA RTIES (continued)
NO les (i) Transactions witll related parties are eam ed out through open account and Directors do not consider any
receivables to be past due or impaired
(ii) Related party transactions ore disclosed ill Note 26
INVENTORIES
Goods for rew le Raw materials and spare pans Work in pTOgresS Goods in transit
Less Provision fOI obsolete and slow moving invenlories
1013 QR
165499699 38388307 19944678 9671 8553
320551237 (3851692)
31 6699545
Movements in the provision for obsolete and slow moving inventories were as follov~
At I January Charge for the year (Note 19) Reversals Amounts wri tten off
At 31 December
E QUITY-ACCOUNTED INVESTEES
TIle Group has the followiog invesllnenfs in equity-accounted investees
Interests in joint venrure Interests in associa tes
At 31 December
G roup s snare of profits fr om the equity-ncco unted iovcstees arc AS follows
Profit share from in vestment iojotnt venture Profit share from investment in associates
202 QR
232597650 36608394 30622960
10521 9695
405048699 Q 145826)
40 I902873
203 QR
3145826 1 380617 (535695)
( 1139056)
385 1692
20 12 QR
2795992 2208263 (137995)
( 1720434)
3 145826
2013 QR
2012 QR
129462184 3644723
124124803 2545188
133106907 12666999 1
17330368 22869454 1169533 534050
18499901 23403504
22
10
Aama Company QSC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 31 December 201 3
9 EQUITY-ACCOUNTED INVESTEES (continued)
Counlry of incorportllion
Relationship Proportion ofownership and lotilfg power held by the Group
203 2012
EI S~wedy Cables Qatar W LL Frij ns Structural S teel Middle East WLL Al Ftfazdaq Company WLL
Qat~
Qatar Qatar
loint venture Associate Associate
55 20
55 20 35
Note With effect from 1 January 20 13 the mlnagemeot of the Group has reclassified the investment in Al Farazdaq Company W L-L from investment in associate to investment in subsidiary This is based on the transfer of share holding by the other shareholder whereby the conlroi o f AI FOl razdaq Company W LL bas been assigned 10 tbe Company
INVESTM ENT PROPERTIES
a) Reconciliation of carry ing amounl 2013 202 QR QR
AI I January 611334701 8 555 1835348 Additions 9568047 1727191 87 Transferred from property plant and equipment (Note II ) 34519828 Net gain iTo m fa if value adjlls tment 245051107 388792483
At 31 December 6402486000 6 11334701 8
b) Measurement of fair value
The fair values of the Groups inveS hnent properties as at 31 December 201 3 and 3 1 December 2012 have been arrived al on the basis of valuations carried Ollt on the respective dates by professionally qualified independent valuers not related to the Group The independent valuers have appropriate qUlli ficatioos and (eceJ11 experience in the valuation of properties in fhe relevant locations The fa ir value WltlS determined based on market comparable approach that reflocl s recent transaction prices for simillt1r properties and discounted cash flo w and income approach techniques
Details of the Group s iovestment properties and infonnation about the fa ir vn lue hierarchy as at ) I December 20 I J are as fo llows
IIvestment propenies
Level 3 fair vallie
Al I Janu ary 6 [ 13347018 Additions and trans fers from property plant and equipment 44087875
Gain included iu prom and loss Net gain from fair value lt1djuslmem 245051 107
AI J I December
The Group recognizes transfers between levels of fair value hierarchy as o f the end of the reponing period during whicb the transfer has occurred There were no transfers between the fai r va lue hierarchy during the year
23
10
Aamal Company QSc
NOTES TO THE ONSOLlDA TED FINANCIAL STATEMENTS For the year ended 3 I ecember 201 3
LNVESTM ENT ROPERTIES (contin ued)
b) Measuremen t 0 (air value (conti nued)
Vau t ion technique an significant unobservable in puts
The valuer has applied t e income capitali zation discounted cash flow and comparab le methods to detennine the market value of the lnve tment propen ies Significant unobservable inputs used included expected market rental growth rates (an average 425) occupancy rates (approximately 90 to 95) and risk adjusted discount rates (approximately 5 to 7 0) M y significant change in these inputs can impact lhe fair valuation of investment propcnies
24
Aamal Company QS c
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For che year ended 31 December 2013
11 PROPERTY PLAi~T AND EQUIPMENT
FumilUre Truck mixers fIXtures and Complllers
Leasehold and maor Plum (fd office and relaed eapiowork Buidings improvements vehicles machinery eqllipmcni sofMore in progmiddotcss Total
QR QR QR QR QR QR QJl QR
At I January 2013 137870126 371 88 132 9595813 1 262536261 19 580954 14864 385 561 32447 6241 30436 Additions 948)65 2618 100 5367399 859061 111 5268 137147581 148055774
Relating to d isposalswrite-off (1042642) (4390496) (77157L) (589150) ( 184075) (6977934) Transfer from capilal work in progress 1505 310 164 336 3601776 ( 150000) 1182741 (6304 163) Transrer to investment properlies (Note (0) (345 19828) (345 19828)
At J I Dttember 201 J 139375436 J7 258~ ~1 85735 270733865 19700865 169783 19 152456037 _73068~448
Depreciation AI I January 2013 16133915 J6902 529 49087707 68783 065 11 980009 tl71 595 3 174603 178 Charge for the year 7059805 3237150 5390767 12249797 2849162 1768823 42555504 Relating 10 disposalsJvri te-off (664709) (4 3 1716 1) (724322) (552939) ( 18 1993) (6441 124)
At 31 December 201 3 23193 720 19474 9 70 50161 313 90303540 14276232 13302783 2 107 17558
Net carrying amounts At 31 December 2013 116181J16 _17783221 44024422 180415325 5424633 3675536 __l2456O37 JJ9970~890
Notes (i) Depreciation charge for the year amounting 10 QR 33 164382 (201 1 QR 3303091 6) is included in tbe direct costs and an amount of QR 60055 (20 12 QR 36939)
has been capiulised under capital work in progress
(ii) The capital work in progress includes capitalised borrowing costs amounting to QR 125645 (20 12 QR 15358)
(ii i) The buildings are constructed on a plot ofland taken on a loog term operating lease
25
Aamal Company QS c
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 31 December 201 3
II PROPERTY PLANT AND EQUIPM ENT (continued)
C05I~
At 1 January 2012 Additions Acquired through business combinations (Note 4) Relating to d isposalswrite-off Transfer from capital work in progress Transfers
Buildings QR
137434400 435726
Leasehold improvemellls
QR
38137377 446J 04
144 103 ( 1539452)
Truck mLCers and molO
velricles QR
83427661 11464679
1697609 (631824)
Plant and machinery
QR
249335437 97264 85
35 14 132 (99498)
59705
Furniture fir ures and
office equipmem
QR
22845309 667586
192042 (3696457)
98000 (525526)
Computers and related
software
QR
158 19519 87 14 14
141837 (266 1733)
908078 (2 l4730)
Capitol work in progress
QR
12104889 451 53265
( 1065783) (59924)
Total (JR
55910459 8 68765259
5689723 (862 8964)
(800180)
AI 31 Dttember 2012 137870) 26 371881 32 95958 13 1 262536261 19580954 14864385 56132447 624 130436
Depreciation AI Jaouary2012 Charge for the year Acquired wough business combinations (Note 4) Relating to disposalswrite-off Transfers
9144666 6989249
)4 3 16620 3410618
144103
(96 812)
42558404 548 1613
1671942 (6242 52)
44555 290 2 1398849
2890797 (6 187 1)
12392584 3 182899
169005 (3558466)
(206013 )
12235266 2077633
136959 (2627283)
(J 0662)
135202830 42540861
5012806 (7840684)
(312635)
At 3 L December 201 2 161339J5 16902529 49087701 68783065 11 980009 11715953 174603 178
Nel canying amoWlts
At 31 December 201 2 12 173 6211 2028560 3 46870424 193753 196 7600945 3148432 56132447 449527258
26
12
13
Aamal Company QSC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 31 December 20 13
ACCOUNTS PA YABLE AND ACCRUALS
Trade accouots payable Advances from customers and tenants Accmals Social and sports activities levy Other payables
AJIOUNTS DUE TO RELATED PARTIES
Name
Arab Compaey for Fiber Products EI Sewedy EIC( lric Ho lding Egypiasl Egypt Egyptlech Egypt United Industri es Company WLL Johnson Controls Air condi tioning aod Refrigeration Qatar WLL pound1 Sewedy Cables Egypt Johnson Controls Air conditioning and Refrigeration rNC Dubai United Wire Company WL L Gelteo Company W LL - Gelteo Refr igera tion and Airconditioo ing CampC Lightway nc AI Shaab Group of Companies Other related pruties
NO M Related party transactio l)s a re disclosed in Note 26
2013 QR
320017657 30486837 26924669 41 761 843 25855567
445046573
2013 QR
18517474
4902528
6531231 6404578 3215821
2825884 75 7825
3467288 263715
1313247
48199591
2011 QR
26716268 1 27410234 222575 76 28954726 33)33852
379119069
2012 QR
18380528 91458 82 54 13849 1 11 6 135 5374039 35291 2020359 1693323 1064744
670 179
11 0873 12 18650
49737757
27
14
Aamal Company QSC
NOTES TO THE CONSOLIDATED f fNANCIAL STATEMENTS For the year ended 31 December 201 3
INTEREST BEARING LOANS AND BORROWINGS
NOles Malilrify
2013 QR
2012 QR
CoMl Loan 2 Loan ) Loac4 Loan 5 Loan 6 Loan 7 CoMB Loan 9 Bills discounted
(0 (ii) (iii) (iv) (v) (vi) (vii) (viii) ( ix) (x)
lune2014 Seplember2014 January 2015 November 2016 December 20 16 November 2017 Jllne20 l J December 20 7 OClober 20 19
172070387 440000000 50544000 40261 621 81387109 19920036
6] 43890 62626967 42522794
915676804
298324180 440000000 10 J088000 57955030
100 168750 2 1300492
407728 1 782871 1
35000000
1065742444
Less Defe rred finatlcing cost (771 503) (897148)
914905301 1064845296
Presented in the consolidated statement of financial positioo as fo llows 20)3 QR
201 2 QR
Current ponion Non-current ponion
749520820 165384481
825568489 239276807
914905301 1064845296
The dete rred financing costs consSt of arrangement fees The movements m the deferred financing costs were as fo llows
203 2012 QR QR
At I January 897148 332 661 Addjtions during the year 1 062565 912506 Amortised during the year (218amp210) (34801 9)
At 3 1 December 771503 89 7148
28
Aamal Company QS C
NOTES TO THE CONSOUDATED FlNANCIAL STATEMENTS For tbe year ended 31 December 2013
14 INTEREST BEARING LOANS AND BORROWINGS (continued)
Nolec
(i) Loao I i USD 93000000 impon 10n moi lily obtoined to refimnee he Icne~ of edit The 10 IT interest at commercial fate and the interest is paid at monthly intervals The fucility is repayable within ISO days including the usage period under letter ofc redits
(ii) Loan 2 is a secured bridge loan obtained to settle an existing loan and working capital requirements of the Company The loan carries interest al coOlJllercial rates and interest is 10 be paid on quarterly basis
(iii) Loan 3 was obtained for the pWpOse of financing capital ependiture and direct payment to suppliers contractors and 5ub-controctors The 10011 CMries interest at commercial rate and the inte rest is to be paid q Uar1erly The fac ility is repayable in IS quarterly iostallmenls starting I July 20 11 and ending I January 2015
(iv) Loan 4 was obla ined for conSlruclion o r an inveslmenl property The loan is seclJed by 0 primary mortgage over the some property and corporate guarantee of the Aamal Company QSC Tbe loan carries interest at commercial marke t rate and is payable in quarterly instalments
(v) Loan 5 represents a loan fOlcility obtained in two sepnrole tranches amounting to QR 309 825 000 (USD 85 million) for the purpose of refurbi shment and construction of fociJities io one of the investment properties The loan is repayable In 16 equal quanerly instalmcnlS for individua l tranche commencing from March 20 1J The loan carries interest at conunercial rJtes
(vi) Loan 6 represents secured loans obtained ffom a commercial bank in the previous periods for the purchase of heavy equipment and machines and were merged on 15 November 20 12 as a comb ined loan This loan is payable by 59 equal instalments of QR 426000 with (I last inSlalment of OR 438 326 with effect fro m 01 October 201 3 The loan carries interest at commercial market ra tes
(vii) Loan 7 is il tmst receipt banking facility obtained for the purchase of inventories This carried interest at conunercial market rates This loan was full y settled during the year
(vii i) Loan 8 represents secured loans obuined from a commercial bank in the previous periods for the purchase of delivery trucks and machinery and were merged on 22 October 2012 as a combined loan The loan carries inte rest at commercial market Tates and is payable by 59 equal insta lments o rQR 160000 with a last inSlOlmem ofQ R 128000 with effect from 3 1 December 2012
(ix) Loan 9 is an Islamic Financi ng Arrangement obtained for construction o f a manufacturing plam and as o f yearend ba lance represents partially drawn amount out of totil1 facility of QR 655 68000 The loan is secured by joint corvorate guarantee by the shareholders The loan carries profit at Islamic Financing rates and re-payable in quarterly instalments starting from the end of the 24 months gmce period from the date of loan drawn
(x) Bi ll discounting is a loan fac ility from banks The purpose of the arrangement is to discount bills locally and carries interest at current commercia l filte
15 EM PLOYEES END OF SERVICE BENEFITS
Movements in the provision reHectelt in the consolidated SLo1tement of financia l position were as fo llows 2013 201] QR QR
At I Jan uary 18111 763 17877937 Provision made during the year 4056969 4205499 Acquirelt through business combinations (Note 4) 349272 End of service benefits paid during the year (2210756) (4320945)
At 3 1 December 19957976 18 111763
29
Aamal Company Q5C
NOTES TO THE CONSOLIDATED FINANCIAL STATEMETS For tile y~ar ended 31 Dee~mber 2013
16 SHARE CAPITAL
2013 2012 QR Qq
AtI1l1)nud 60000)000 (20 2 544500JJOfn shares ofQR iii Cilch 60i)iQOOlOO 54450lt)0000
21)13 2012 Numher of
siMtS QR shares QR Issued Mtldfully paM At lJamld) 544SfWllOfJ 5445(100001) 495000000 49500000)0 1511C ofbonus S1i1-C ___ 5550~OOO 555000000 49SGOOOO 495000000
At 31 Decenef 6(OOampQllf1(1 ---14450O000 544~OOOOOO
All ampates m~ of a110 clss and caL equal voting rights
17 LEGAL Reuro5ERVE
As required by Qatar Comnertai COfrp7lnies Lav No5 of 2002 lOfp of the profit for the ye1J as a rru1imllli silould be mmsfened to legal re~erve The reserve is lot normay [lytiabe tor distribution except ill he cixcuJUstllrtUS stipulated m the above ~lemi0ntd GIW
IS HEVE1TE
2013 l)n QR QR
Sale of goods 1726893265 i709057~(iO
Renlal income UiO362322 133117509 S-ice income 858695 33940731 CornrrusslOlL Incentives and agency fces 44695S1 422~_632
212259$)33
19 DIRECT COSTS
2013 2)i2 QR
C 051 of inven(feS recognisedlIS an exptns 1522929956 497210830 Dind sL1ries lmd wages 601 [1336 5137856-8 Operating eXpenses on nml estate p~opet1les 36)711316 3041H504 fJepreciatiort (Kate I J) 33164382 B03091pound Operators marhgerrt6nt fees 14508588 li667989 Provisicn Qr obsolete and skwlt moving mvenlories (K)tc 8) 2380617 2208263 Other operating ilxpenses _31~3982 _ 3674946
1702139171 JS9653OI tgt
Aamal Compall-yQSC________________
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For lthe year ended 31 December 20 11
2G OTHER NeOiI
2013 20J3 QR QR
Interest mcume 2824216 2)314392 Profiv( loss) 00 disposal of property plant aoe eqUlpmem 737647 (l7362G) Eargain ptmnJse gain (Kote t) 8360793 MIsceJlaneous income 5723356
2013 2012 QR QR
ManllgetnUI hrQ empl(yees ws 55170302 55lt035middot1 Rent 23596799 2594915 Allowance for impaimlcot oUrsue aCQl1ot$ rc(Xjvalle (Nole 6) 129459(i 11613120 flBumcce ane profcampiitmJI fees 2IU9263 209J902 Corununication OOtHS 1935123 1649155 Trllining tid ouSfjt$s developmccl 950476 L095764 Re]X1in and mainle-nilnce 21)11SflS 2)2 I Poslag-c prjnting acri stationery 610299 541159shyvllsltdlancous expenses _~~~664 1lt2
-~~~ 125162812
22 fIN~lCE COSTS
2013 2amp2 QR QR
Inleres epen~ 42866312 5773U4B Am(vtisJliorgt ofdefcentrred financiog coStS __ 2l)tl26~~ gt3661
44930877----=
58063009
23 BASIC A~n nHUfED EARilNGS PER SHARi~
Basic trdTJogs per hue is caculatid 0y llividing the pwfill0( Ihc year attriouiabk (0- equity roldc-5 of the parent by lhi w~iglwxi avrage number of ordinary shares 0JstandirJg dulting tht_ year During Ihe year lil~ Conpmy i-sued and CBpii3lzed bonus shares lnd awmJingl) me previously ~eportod earnings per shac have blOM restatc(i
20i3 2012
Profit feT the year auributable to Cluity holderlt of the- paren (QR)
Weighted aVCTage number ofshares outstanding during the year (i)
Basic Jd diluted earnings per share (QR) 085
59985U413 shy
~~--~~~~- ~------J 1
23
Aamal Company QSc
NOTES TO THE CONSO LIDATED FfNANC[AL STATEMENTS For tbe year ended 3 l December 2013
BASIC AND DILUTED poundARNINCS PER SHARE (continued)
NOles (i) Th wigh d m nlg urnb of hres foc h P of lruling ~migs pee share h bee kulated
as follows 2013 20J2
QU3lifying shrues allhe begi ll1ling of the year 544500000 544500000 Effect of bonus shares issued and capitalised 55500000 55500000
600000000 600000000
Less T reasury shares (149587) (i357SI)
Weighted average number of shares at the end of the year 599850413 599864249
(ii) There were no potentia lly dilutiw shares outstanding at any time during tbe year and hence the diluted earnings per share is equal to the basic earnings per share
24 COItIMITMENTS
20 1] 2012 QR QR
Estimated capital expenditure approved and contracted for at the year eod but not provided for
Investment properties 2964000 8 139063 Property plant and equipment 16386500 63759762
19350500 71 898825
Operating lease commiIOlenlS under noncancellable lease agreemenlS
Payable wilhin one year 990806 702000
990806 702000
25 CONTINGENT UABILITlES
The Group had the following contingent liabi lities from which it is anticipated thai no malerial liabilities will arise
2013 2012 QR QR
Letters of guaramee 474551239 394255203
Letters of credit 7678499 194299384
NQles
(i) leHlaquogt of gu indud penonmnlaquo tend nd bid bonds d pymenlt g gi to suppliers and contractors by the Group in the ordina ry course of bus iness which will matme within twelve months fro m the reporting da te
(i i) Letters o f credit are provided by lodging documents to the bank tor purchase of trading goods fro m foreign suppliers wruch will maMC within thJee to six months from the date or tile Iransaclion
J2
26
Aamal Company QSc
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year eoded 31 December 2013
RELATED PARTY DISCLOSURES
Related party transactions Related parties represent major shareholders directors and key management persortOei of the Group and entities controlled joimly controlled or signjficamly innueoced by such parties Pricing policies md tenns of these tnlOSaclions are approved by the Group s management
Transactions with related parties induded in the consolidated financial stalemenls were as follows
20lJ 2012 QR QR
Sale o f goods and SClVices 419034048 415225221
Rental income 1980473 2069386
Purchase of goods and services 1591 38018 300835596
Rental expense 21 780G78 23397334
Bargain purchase gain 8360793
Net assets acquired 78803585
Relat ed party bal nnces AmountS due from and due to re lated parties are disclosed in Notes 7 and 13 respectively These balances do oot carry interest and are repayable OIl mulUlUy agreed dates generally within one year
The Group did not record any impairment of receivables reJatiog to amounts due from related pat1ies in either year This assessment is undertaken each fina ncial year through examining the ftnanc ial position of the related party and the market in which the related patty operates
Parent The Groups ultimate parent is Al Faisal Ho lding Company WLL
Compensa tion or key management personn el The remuneration of key management dming the year was as fullows
2013 2012 QR QR
Short-term benefi ts 7904794 1079595 Employees end of service benefits 408934 439776
8313 728 11235727
33
AamaJ Company QSC
NOTES TO THE CONSOLIDATED FINANCIAL 5T ATEMENTS For the year ended t Decernber 2013
Dilling the year 1he Group issued a XHlUS share of 10 928 of the paid tiP share capilal hdd ilS at 31 DiX2mber 2(JJ 2 mnmuning to OR 555000000 using retamed earnings as of3 December 2012 (20l2 Doe share for every ten shues held as of 31 Dcember Oll amuunting 10 QR 495OO()OOO ling reta1ned earmrgs 28 or 31 Decencer 2D II Jshy
18 SEGMENT INFORMATION
For J)iloogement PUIpltJM rhe Group i organised into business unit bused On LlJeir nature of Acttvitics lud nas fonY reportable segments and the Head Oftklt as bllow$
Propert Tbe segntn cOlists of City C~nler Qlta~ Brunch and Aamal Rea Esmte Branch whicb ll[c invoived in lampIiiog the faJ1ities of retail outlet conpex red e5ttlte nve(mltn$ and property remal buines~s
Trading mld distrib-wion The segmeul Involves wholesalB andlor rBtail distribution of phamlaceutlcai and consunable i1ems hume Epplianccs medica equimenl t-Tes ill1d lubricmtlaquo and II1UllitnEl printing The scgn(rtt includes 6c following entities
Eotl Sina Medical Branch
Aaen Medical Braudt
Amcill Troding and DistoolltlqO Branch bull Foot Care (erier HRnd) Good llre Pbannacy Bf4Uch bull Al FllfJdaq COllpafY wJ~L
InduSNol manuacturing TIle s0groent IOvolves Ulahuactrumg whole~we aliaor rewi dimibUlioti of dccnc cables lid tools ggregJ1es_ ready-IUx connole and cement bI0C~ lI1d provi$ion of servlCcent$ in rdation to iODllltroa Itvestment repair aJ-d Gonstruction of power plwts liiiding of LED ilgluitlg products und management of industnl enterpnses The segment ircludes be folloVting centntitis
bull Aam1 Cemert Industries LL AuraJ Redy1Yl(A BrQTlch
bull Doha Cables Qawf lLL Senyaf IoolJic1es Qatar Holding W LL Advanced Pipes ard Casfs CompQTly WJ L bull GuJfRoch Coroany WLL Ci~San Trading Company WLL hmovafive Lighting Compary WLL
Managed services le segment inyolvc~ provisloH of hOllseiltecpmg mi cleaning services fucditics n-anagemerJ services C1egy s(tvices ttl centfe sltrvicf)s buildiqg lnaintemHlelt aml acting as travel gens The 5cgnltnt includes the foUowing cnti(lcents
An13 ServJce Branch
amli TnlVeJa l5tmh
f-eco Gulf Co W LL
Jolinson Controls Qattl WJL
28
Aamal Company QSc
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended ) L December 20 13
SEGMENT INFORMATION (Co ntinued)
Head Office It provides corporate services to the branches and subsidiaries of the Group
The managiog d irector of the Group monitors the operating results o f its business units separately for the purpose of making decisions about resource allocation and perfonnance assessment Segment perfonnance is evaluated based Oil operating profit or loss of these segments Transfer pricing between operating segments are on anns length basis in a manoec similar to Iraosactions with third parties
Aamal Company QSC
NOTES TO THE CONSOLIDATED FINAN CIAL STATEMENTS For the year ended 3 1 December 20 13
28 SEGMENT INFORl1ATlON (continued)
Operating segments The operat ing segment after elimination or ioter-bra nch and inter-co mpany lrnnsaclioos is presented as follows
Trading (nd Industrial Managed For fh e year elided 31 December 2013 Properly disirjblli ioll manujocljlring services
QR QR QR QR Revenues
- h lemal parties 260360172 578909983 1231522768 S l802210 - Inter segments 1253914 6843 11 8 29639873 3445052 1
Heat Office QR
Eliminoions QR
(n187426) II
Tolal
QR
2J22595133
261614086 585753 lOI 126116264 1 8625273 1 (721 87426) 2122595133
Opera ti ng results Fair vallie gains
Profit I (loss) ror the year
Depreciotion
200811944
245051 107
445863051
2066290
86492834
86492834
4345438
22636250
22636250
33049 089
5157436
5157436
1760305
(47864882)
(47864882)
1334382
267233582
245051107
512 284689
42555504
36
Aamal Company QS
NOTES TO Tl CONSOLIDATED FfNANClAL STATEMENTS For the yeM ended 31 December 20 13
28 SEGMENf INFORMAnON (c)tltioucd)
FOf the yearrnrkti J f DccemOer 2(J12 QR
Revellues - ExlcmlJ partiel 2331 17 509 bull Inter segmcI11S 1168935
-- 234236434 --~- -~--
Openning results 18S2367t Fmt value gains J8S79-4~G
pront LOllS) for the rear 570616154
gt3659
No(
lnlermiddotgment revenues are eliminated on tQHs)idntiOH_
Tadiug ftfid disl d)Ntion
QR
S2S3l7661
324 j
5335493114 ~ -~-----
51384831
54384338
4J9R71(i
Indus idi mamfmturing
QR
1255694537
129U25lS4
56727059
56727059
32752742
slnltic(s QR
55216665 2939H31
S46lOJ96
7427414
7437
[908067
ilfild ()jice QR
(64(41976
Elimination QR
(74tHi2oJ Iii
Totul QR
206936372
2069336372
235721
(64641
131 f613
6245
42541)861
Amnal Company Q$l
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Por tnt yeartndeJ 31 De~embcr 2013
28 SEGMENT JNFORMATlON (contiutlld
Assc-ts and labilities
Tng alld lndtrstfw At31 December 2(113 distnbllrior manufacturIng senices HeadOJJicc EliminatioilS lola1
QR QR QR QR QR
Cumnl 3tS 227552338 620807979 61349 j 415 S()6)86922 (301636995) 1477366090 Noolucrcnt DSeIS 6411868160 12604763 622386238 4348876 (i624548 __p2438051 780
fotal asstl$ 6639420498 1194 1243194217 65698291 513Ql1470 ==-lt03H8l~O()) 853295-870 -~----~ ~---~ -
CUIT)llliabilitics 280995335 1(3511J60 6344(12777 2l0708lJ2 496261185 (3CH636995) 1249603264 Non-current iiatJlitics 7l70L5V2 8008485 HlDi16~43_ 3181668 t433799 ____ ilj534_~57 __ --Totul liahililics 353696897 ___~4159~4~ 734419720 ~4976~~~~~ 1434945711
---~~--~ -~-~~ - _2~~~4~~ (~~~~9~
C1pild expcndimn HI) WO743OOj 1397742_~471l2~--~50 ~51 ~1~623821~~1~_ -~----~------ -~
3amp
28
Aamal Company Q SC
NOTES TO THE CONSOLIDATED FfNANClAL STATEMENTS For the year ended 31 December 20 13
SEGMFNT INFORMATION (continued)
Assets and liabilities (continued)
AI 31 December 2012 Properly QR
Trading and d iSfriblllion
QR
Indusrial manufacfuring
QR
Managed senices QR
Currenl assels
Non-current assets
146491 186
6121 864484
2964425 12 903 7264
73468 1258
549267235
51387098 471 1439
Tolal assets 6268355670 305479776 1283948493 56098537
Head Office QR
468325024
6713643
475038667
Currentliabil iies
Non-current liabiLities 273444 748 1 J10 15024
86054583 7434286
669214261 1288 14977
2 1938953
287 1199
480393637 1253084
Totil lliabiliti cs 390459772 93488869 798029238 248 10 152 48J64672 1
Capila expendirure (ltII L 72865 878 1281254 6647 J356 7169 13 149045
Notes
(i)
(Ii)
Inter-segmeot balances are e limioafed 00 consolidatio n
Capi tal expendiTU res consist of additions 10 propeny plant and equip ment and iovestmenl properties
Eliminations QR
To wl QR
(273735776) (i )
(20308351(i)
1423591302
6689563230
(27576661 1) 8 113154532
(273135777) (i) 12573 10405
257388570
(273735177) 15 14698975
24 1484446
39
29
Aamal Company QSC
NOTES TO THE CONSOLIDATED FrNANCIAL STATEMENTS For the year ended 31 Dcltmber 1013
Fr-A]~ClAL RISK MANAGpoundMamp1H
Objccthes and policies fe Groups principal )uaucill liabilities comprise imltresl bctmllg loons and IxmowHgs baRlt ovetda1s amounts due to fclaled par1ies and tracte accounts payable The main pUlJXSi of thesc financial liabilities is 4J mise firmne or 610 Grmps operations The G0JP bas various fimmcial assets such as ttadc accounts receivable lInlOlmts due from related parties bark balances tltCntion receivable and other receivables which arisgt directly fran its cperuoonamp
The maiH ri~ks an3ing Joru (be Groups UnariCJlll illslrumenls jle market risk cretiJt nsk and hmdity risk Til BoarD ofDtrcctO$ reviews end agrees policies for mzrAgbg Caltt f hespound ri~k ihkh arc summariscd beloW
VIarktt risk yenfatket risk is the risk Um changes in market prices $Uch as intfcst rates and hreig lttmeocy ect14nge rilles Vltl1 affect the Groups profit eqwty Dr value tf its hoJdiI15 of financial instrl[Thnls rile objecivpoundj of marke1 risk mUnllgcrlcnt is to manage uld 1~ontr(ll tho tr))rket risk expo-sure vithir acceptable parfI-etcJ$ while optimising rerUID
Equit) price risk ampjuity prtce risk is the risk hilt the Group ampearnings will be affected as a rcmt (If luctttltions in fm vdue of ~qui-gt
mstwnents Eqlliry price risk arises from availabtetor~sale inv2strnems However the Groups exposure to eqmty price risk IS minima as II doesn hold sitl)iftrmt ailableAor-511le inYestrmmrs
[merest rate risk The Groups fimiruial poundS5ot ampId liaojlilies (at Rl $uJject to int~~ rate mk compnse brmk depoils interst bearing loans and bOITQwjags and bank overdr-afts At the reponwg dalt tbe [merest rale pronle of Ill Goups intexst bearing fbi4rdd instruments as fliows
11113 20i3 QR QR
Fued liIeryS refc insfrvrnellts
Fmmcial assets 113035962 111913394 FrOltwial liabilities --1~203712l) 1252t43~1
9)OI~ (13350972)
Fhlllting inireSI rate ns1lmlttrs Fanctl~ Isseis 127024345 ID43848o Fllllocial liabilities _-(i~9347~ (94))48926)
(836)64116)
The Groups exposure to t~ ris of changes in marXet interest fltltes relztes primariiy to the Groups financial assets and lizbitdic$ with t1Oltttirg interest mte~
lhe loEowing able demonstrates the ampmitivity nf the eonsolidattXI statemen1 of income 1) caonaly possible chonges in in1jfgtst rmes by 25 basis points with all othe vari)ble3 hdc umstant The sensitivity of the CooiK~ljclatid statement of inc(me $ the eft(ct of tb assumed changes in lnterdt rales for one year bf1sec on the floating rate financial assets and fimmcial hablhw$ held at 31 f~r The effect of deae-ascs in interest ral~ is cXp0Ctct to be equal and opposite to the effect oHlle increases sllQvro
Changes it Eftx OIl
00513 [oms profit QR
2013 Floating mterest Hlte instruments ----2$ bp (1649776)
2012 Flv-ating irkfiSt rale instrumenls +25 bp (209[9(1))
~--------- -~~ 40-middot------ _ _ shy
29
Aamal Company QSC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 3 1 December 2013
FINANCIAL RISK MANAGEMENT (continued)
Foreign currency risk Foreign currency risk is the risk lhilt the value of lhe fi nancial instruments will fluctuate due 10 changes in fore ign exchange rates
T rade aCcOlmts payable and accrued expenses include amounts due in foreign currencies mliniy US Dollars UAB Dirhams Great Britain Pounds (GB P) and Euros of which the Group has a currency risk primruily on the baJmces payable in Euros and GBP amoWlting 10 QR 14400634 (2012 QR 17214046)
The Group does not hedge its foreign currency exposure As both Qatari Riyal and UAE Dirhams are pegged to the US Dollar balances in US Dollars and UAE Dirhams are not considered to represent significant currency ris k to the Group
The table below indicates the Group s fore ign c urrency exposure on its monetary assets a nd liabilities The analysis calculates the effect o f a reasonably poss ib le move ment of the QR curre nc y rale against the Euro and GBP with all other variables held constant on the consolidated slate menl o f income (due to the fa ir va lue of currency sensitive monetary asse ts a nd liabilities) The e ffect o f decreases in fo reign c urre ncy exchange rates is expected to he equal and opposile 10 the e ffect of the increases shown
Incramp1se ill
f oreign cUlrency rate
0
the QR
Ellecl on profil
QR
2013 +5 (720032)
20 12 +5 (860 702)
C redit Tisk Credit risk is the risk that one party to a financial instrume nt wi ll fa il to discharge an obligation and cause the other party to incur a financial loss TIle Groups exposure to credit risk is indica ted by the carrying amoWlt o f its financia l asse ts whic h consist principally oftmde accollilts receivable retention receivable amounts due from related parties othe r receivables and bank baLances
The Group sells its products and prov ides services to vario us panies It is the G ro ups policy that all customers who wish to obtain on credit lerms are subject to credit verificalion procedures to ensure c redit Ilonhiness Each new customer is analysed individually for creditworthiness before the de livery o f products Of services Custo mm tbat fai l to met t the credi tworthiness may transact with the Group only o n prepayme nt basis Property rentals are mostl y received in ad vtnce or conlrlCled wi th post dated cheques 10 additio n receivable balances are monitored on an ongoing basis a nd the purchase limils are established for each c redit custoroer which are reviewed reguJarly based on the level o f past transactions and senlement The Groups max im wn exposure with regard to trade aCCOWlts receivab le net ofa llowance re nected allhe reporting date was ilS fo llows
2013 2012
Business SJgmelll QR QR
Property 15478832 19386326 Trading and distributio n 194343 597 179748274 Industrial ma nufac turing 183119753 131578668 Managed services 18069385 14547389
411 011 567 345260657
41
29
Aamal Company QSc
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For tbe year eoded 3 J December 20 13
FlNAJICIAL RISK MANAG EMENT (c-o Dtinued)
Credit risk (continued) With respect to credit risk arising from the other financi31 assets of the Group the Groups exposure to credit risk arises from default of the counterparty with a maximum exposure equal 10 the canying amount of these instruments as follows
2013 QR
202
QR
Bank balances Amounts due from related parties Retention and other receivables
436136756 214439950 48290351
36788129 t 171525363 74082203
698867057 613488857
The group reduces the expoSltre of credit risk arising from other financial assets by maintaining bank accounts in reputed banks and providing services only to creditworthy re lated parties
The management cons iders the bank balances and a mQUIIIS due from related parties as high grade fi nancial assets and lfade accounls receivable and other receivables as sundard grade financial assets When a finltmcial asset is identified 10 be impaired the managemoot downgrades such assets to impaired category and provides adequate allowances
Liquidity risk Liquidity risk is the risk that the Group will not be able to meet its fmancial obligations as they fu ll due The Groups 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 nonnal and stressed conditiom without incurring unacceptable losses or risking damage to the Groups reputa tion and is to maintain a balance belWeen continuity of fuoding and f1eilibility through the use of bank overdrafts and bank loans and borrowings
The Group monitors its risk to a shortage o f funds using a recuning liquidity plaOfling 1001 TIllS tool considers the manuiry o f financial assets (eg accounts receivable) and projected cash flows from operations The Groups teons ofsales or services require arooUIlts to be paid within 30-90 days from the invoiced dale
42
29
Aamal Company QSc
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For tbe year ended 3 1 December 2013
FrNANClAL ruSK MANAGEMENT (contiQued)
Uqujdity risk (continued) The table below summarises the ruaruriJy profile of the Groups financial 1iabililies a t 31 December based on contractual undiscountcd paymeots
2013 Interest bearing loans and borrowings Bank overdrafts Trade accowus payable Other payables Amounl~ due (0 related panles
201l Interest bearing loans and borrowings
Baok overdrafts Trade accounts payable Other payables Amounts due to related parties
On demand
QR
6836280
6836280
011 demand QR
2885090
2885090
Less than 3 months
QR
521324473
303638792
47406830
2530~480
898675575
Less thall 3
months
QR
469839033
10754JJIO 37543236
1964504 1
634568620
3 10 J2 mOlllh$
QR
239333328
16378865 20210580
2289~11l
298816884
3 to 12 monlhs
QR
365476972
159621 37 J 24745342
30092716
579936401
1to 5 years
QR
J 60092748
160092148
1 to 5 years
QR
248472226
248472226
gt 5 years
QR
25261598
25261 598
gt 5 years
QR
7648000
7648000
TOlaf
QR
947012147 6836280
320017657
67617410 48199591
1389681085
Tota
QR
109 1436231
1885090 267162681
622 88578
49737757
14735 10337
43
30
Aamal Company QSltc NOTES TO THE CONSOLIDATED FlANCIAL STATEMETS For the year ended 31 December 20 t3
21 F~ANClAL RlSK MAiAGEMElT (continued)
Capital management The Boards policy is to maintain a strong cepit1 base so as to rnainmin investor creditor and market ronfoonee and to SUSWlJ) fumre dcltclonnent Gf the buinest The Board of Directors rronitortl the tapital whkh tbe Group defines as wlal $parcloders equity excluding nonmiddotcornroliing imerests and the level of dividends to orrunury srarellOJdcfS
The Board also reeks to ITIaimain a balance between the higher (ctums (hat might be fA-~$ihle With higher leves of borrnwings end Lle edvnrJages and security named Sy it sOMd Cilpitai posi[ion The GfCup~ k1rget is to achievfl a return on slureholders equity (exclJding aonwurrolJiug iorcf(sts) greater lll(ll1 he wcighlcd average inres exxmse on mrerest bearing Ivens and oorrowing
The (lf0t-p nl)nDg-e ils cnpital structure and makes adjustneal lOll in light ofchang2s in economic nd bttincss cordjlons and shareholders expe1ationJo chmges veremiddot maCo HI Lleuro objecttves polilCS or proCCSSC3 during the years erded 31 D~mber 2013md 31 Dtccmlxr2Ql2
The Group monitors the capit2J using a gClting fatio which IS dep divided by caplla plus debL The GtOwgts policy is to keep ttJe ge-anng rmio bclew 40 Tbe Group iLdtdes withb debt imete-51 beagting loans ard ~OITORlngs less cash and cash equtVaknts Capltal includes eqmty attributable 10 the equity tolders oft~e parcrt
2013 QR
2(i2 QR
fmerest bearing loans and borrowings lcss- Cash and cas ltYJUvalcnts
9i4lJ05301 _~ (429JfJl4761
1004845296 (649)6201)
Net debt
Toa capital
Capita and net debt
699849045
~ringrttio
FAIR VALtES OF Fl~ANOAL f~STRUMETS
Finarcial iostrumenL~ cOlnprise tina~lctal assetS carl finailcialliabilities
Fmancial assets colJist of bank balance) short 1Cm bank dcposis amounL dve dom rc)ltted partilt)$ rekntion and other receivables and ttade accolmis rceivabe Finatlclll habiilics cgtmsist of banilt ovcrdratls jnerest bearing lOil1S and bOrowings amounts due (0 nliled partiG~ ane trade x-ounls payable
The- fair values of hese financial inStrumen1S except Jo-- imCfest bearing loam lHld bOlToving aproKimate lhdr cMryinJ vlhes due to the Slort temt mzrutiiles or these instrument
Tllc faiT value of iotcnst beating Nns and borrowin2s ae estimate( based on discoumed ltash flows twin int(s rale- cune-ntly nvailagtk fur tilt debt or sinuiar tetnlS an-a rell1lmng matunties
31
Aamal Company~Q=-ScC ______________~______
~OTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For fhe year ended 31 December 20 t3
SlGNIFICANT ASUMPTIONS ACCOUJTING JUDGElE1TS AND F8TIMATFS
impairment (If accoonts receivable n etrnwe of lhe collectible anoun of trade accounlgt reccvable is made when collection of the full lHl1OUt i~ nO looger probabk FOI nCividualty significitIl amounts this estimation is p~rformed on an indh-idllai a$[$ Amomts wHcb arc not indivldl11Uy significant but wluch are past due ZTe tsscssed collectively and an aJlQwaccc applied ucc()r~Jng to the length of lime past due based oc histnncal recovery nlJes
hnpalrment of inHntnries lavenoncs are held at tho lower of col and nol realisable value InIOn inventoncent$ becone old or 0-~amplete an estilTJte is mate of their net j alisable vulue For indiviolhlUy significant amountS this cstinaunrt is performec all aD lndividwl osis Amotlnts whieh are fl0t individually significan( btll which ltIre old at obsolete wx LltSessed wllecivdy md a provisior is applied sccnrding to the invenrory type and be dep)ee of ageing 0 cDsolescc1ce based on anticipUled selling prices
Classifigt1ltion of El Sew(gtdy Cable Qatar WLI ali a j(lint vwture pound1 Sovedy Cables Qatar is a limited hability company whose kgal fum confers SCprm11ior bernten tbe jXliiies 10 ~he jomi lfranpement Snd the Company Itself FurthenrlOre then IS no oontractua] arrmgelTeot or any oibe aus aod circumstriliCe$ that iocik41to tht he putic5 [0 the joint flJTIlrgernelit bave rights to the ssetl and obligrtdons fo~ the liabilities of the joint ilrrongement Acoordingly El Sewed- C[jbl~s Qamr WLL is dassifiecl 7S a joiut enrtrr of he GWtp
impairment of goodwill G0oovj)1 embedded in th~ cot 0 aquisitior of subsidiaries and eqmtj-iccounled iflV(stees ire teswt for irl1jXlirmnt aHuaily Tbe calculations of value [n use fO( cfish gecj~r)lilg units (loring to real nte projecg are rtost sensitive to tin IDHowing assumpti015
Grosgt i1wginmiddot Gross Ilmrgins arc lmsed on avrage values tuhje0d in (he [Xrioo preeedhli (e siaM of the budge xnod T1esC at( mcreased over the budgel period for mticipatltX efficiency Hnprovemots
DisC)unr r(es Discount rotes represent th cl1tent mark as~ssmetlt of the risks specific te ech cash geocroting unit regarding lhe time value of money ilnd mdividu)l risks of he tmtieriyilg assets whICh have not been inwrport1eti it the Citik flow estimates The dj~(OUrl flte tlkulation is based on the speclfte circurnsthLCes of lile Group and its opltllatJng segn)~nts (md derived (ff)rC it weighted avaage (XSt 0f apilaJ (WACC) Tb fACe (akw into uoount both deb and equity The 0$1 of equity is denved from dlC expected return 01 investmenl by the Groups investors TJc Gos10( deb is based on l1e borrvwings the Gmup IS obllsxl to service SC~lletllmiddotspecific r5k IS incorxt4too by applying individual bera facto The betn mctors ire evauatcentd annuaHy bhseci on pubJicly aVflllabe murked earn
Fair value ()fnHstmeni proputies The fuit laHe 0 nvestmel~ propertis is deltrrnlnzd b cxterrwl indepzfldell property valuers laving appr0priate recognised professional quabfiillions and recenl xperience H1 the localjl)n and G-tegory 0 the oroperty being valued
Useful hes of PfQPcrly plmr (llld zqulpment The Groups management detennints th estiunted useful jives Df It~ property plan and equipmnl fix calnurjng depreciation Thi5 e~timJte is 6lermind after cinsidring 1b expeelcd usage (1f the a5sclt [hysical l101t and (eas tedmiltal Dr com~ercia obsolesccnce
Gotlg Qncen
ibe Groups mangerncnt UiS made aJ assessmeot cf the 011115 ability (0 COllllOUC liS a going conct11l Imd is satsl1ed hat me Group ms the resources to contmue in business for he foreseeable fu1urc he1hennort he management is no aware oC lny material Hncertainties that lray CH~t signinchnt doubt tlPDfl the Groups ability 10 continue as a going umcem Therefore titpound lotlsolidatcd finilllcij stftemeols comirme to be prepltd on li g0ing concern basis
Aamal Company QSc
NOTES TO THE CONSOLIDATED FlNANC[AL STATEMENTS For the year ended 3 1 December 20 13
32 INCOME TAX
Certa in subsidiaries of the Group which have non-GCe ownership are subject to income tax under Qatar Income Tax Law No 2 1 of2009 The iocome tax is charged on the share of profits attributable to non-GCe shareholders For the purpose of these conso lidated fi nancial statements the income tax liability oftbe foreign shareholders has been excluded given that the non-GCe shareholders have agreed under the shareholder agreements signed with the Group to bear the fh lliiability and make necessary payments
33 COMPARATIVE INFORMATION
Certain comparative figw-es of the previous year have been reclassified 0 coofonn to the current years presentation However such reclassifications are oat materia and do not have an impact on tbe previously reported net profit other comprehensive income or the total equity for the comparative year
The impact from the resta tement of comparative infonnalion as a resuh of adoption of IFRS I I - Joint arrangements is detailed in Note 32 Changes in aCCQu(lting policies
46
COgtSOLIDATED STATEENT OF INCOME For tM year ended 31 Dec-mixr 2013
Not
Revelue lR Diroctcnstb 19
GROSS PROFIT
Other income 20 Markelillg and promotion expenses Geternl MO administrativcent cxpenSs 21 Dvmiation Fine nee CDS 22 Shure of profits of equityltl(COUnleci ~nvestees 9
PROFIT REVORE FAIR VALUE GAINS ON tVfSTnlT PROPERTJES
Net fuil vl1lue gltllns or lnvestne-Ilt prcpc(li~ 10
PROFIT FOR THE YEAJt
Pmiltltributnble to Equit holcefS of tift parent J(jI1~rtroing Inreres
l)3~itand diluted eanlings per share (QR) (RITnoutable 10 cqujry holders of the parerl 23
Jon QR
2122595133 _ (1702139111)
419455956
I 516688 (18995918)
(109981101) (9331061)
(44930877) __~)499901
267233582
245051107
~--~~
5068745(17
_~~ sect4JQ82 ~~Jll4lL
(L85 ~~~--
2012 QR
2(69)36372 J~~~S965i016J
41YJ6SU56
16199921 (J I L66J 47)
(25628J2) (947 3007)
(58063809-]
_~3JA0104
2J572 1006
3R3m183
_-_2d~
594892946
~~~2S14~~ zi~L
049 -~---
The zltached notes j to 33 f01111 an integral part of these tOl50hdared financial S1tltlTWpl$
Aamal Company QSc CONSOLIDATED STATEM ENT OF COMPREHENSIVE INCOME For Ibe year eoded 3 1 December 201 3
2013 QR
Profit for the year 5 12284689
Other comprehensive income Items that are or may be reclassified to profit or loss Unreatised gain on available-for-sale investments 6020
TOTAL COIVIPRpoundHENSIVE INCOME fOR THE YEAR 512290709
TotaJ co mprehensive income attributable to Equi ty holders of the parent 506878992 Non-controUing interests 54117 17
5 12290709
101 1 QR
6245 13489
109582
624623071
59489253 0 2973 0541
62462307 1
The (luached notes I 10 33 form an integral part of these consolidated fin ancial statements
~amal Company QSC
CONSOLDATED STATEMENT OF CASH FLOWS For the year ended 31 December 2013
OPERATING ACTlVlT1ES Profit fot ioc year Adjustment for
Net fuirvalle gaj0i on overncnt properties Dpreciation Provisio~ fOf employlXs end of seevielt benefits Bargac purchaslt gAin Allowance for inp~inueO of trde accomis receIvable (Proritlloss on dJsxgtsel of property piaU( 06 equiprnent Provision fot slow moving Jllvetlories lJlterest nome finance oosts Share of profit of eqUlry-accoumcd inveslces
Operaling profit ooorc working capital changes
JllvtntorifS AU(lIJJltt receiwlbk and prepaymert1S ccoums payabe And accruals ~et l)OVem1t in amounts due from and due to rdmgti panie
Cash from operation Finance coStS pltlid End of SCfVtCe benefits paid
Net Leasb from opcrling 3ctivitilt5
INVEsnXG A(T1TTIfS Xntltresl income raeivcd Proceeds from disposal of property piii1i and equipment Divicieflds reced tTom a j(im venlure Additions to inveslmeul properties Acquisition of subsitlittry net of cush Jzquired Aquisitioll from non-controlling il]tw~st Additions 10 property plant ()nd equipment
Net cash used in invltgtliing Jctivii(lS
FINAClXC ACrlVrnrs rtt moverncl1 in inteftst bearing tiJ41S al1d borrOWings ConlribIH(llS from nonconttohng interests
Net cash tlllied in)ftom hnfCncmg actiV1ies
lNeREMyen IN CASH ANn CASH EQlJlVAUVIS Detrease to casr due to 10~S of crmol of a subsidiary Increase in cash 1t5ulttd in obtaining the conh) of il-n Il$$oile
Cash and caltr quiVlenls at 1 JanuJry
CASH AND (i5iH EQttVALENTS AT 31 DECEMBER 5
NolO
10
15 20 21 20 S
20 22 9
is
20
9 10 4 4
11)13
QR
5122846amp9
(245(51101) 4lA95449
4056969
2294590 (737647)
2380611 (2$24216)
44930$77
_~499901l
34133lno
82822711 (3lH12654) 5312iL387
~82753)
4112788011 (45056522)
_t221Q7S6)
35S52q733
2824116 1274457
119921185 9568U47)
Jl~870))741
_ (141_~3464ol
(149939995) __ ~~__f)~_L
JlplusmnB699~)
643fi4ns
~~Sif99~2U1
~pound2d9M2t
2ul2 QR
6+5~30X9
(388792483) 42540J((1
4205499 (S36)743 J 1361120
178610 2208263
(2Sl4392) 5206389
(234Q350~1
32J ~n2A89 (6[90(304)
(l46739948) 136)0977
_ 62q660
312291614 (58643654)
(432095)
-14932OI5
2894]92 609659
10049971 (72719187)
l 6594 s05) (40A toDOO)
~71~9631
Q4sectS26)Jl
237n(j7n
--1113-0~OO~~__
__ 25c~f)7J33
223251515 (3090 I 7)
5OO(UtOC ~~_6pound~Ag2
64t996~ijl
The atlached iIOle~ to 33 form an integral part of Llese corsokiated financial slUlement$
6
Aamal Company QS C
CONSOUDATED STATEMENT OF CHANGES IN EQU ITY For the year ended 3 I December 20 13
Alfribulable (Q equitY hulders Q[the parent
Cumulative N OII-
Share Legal Treasllry chollgein Retained conrro lfing Tf capilal resenc shares fair value earnings Tolal inereslS equity
QR QR QR QR QR QR QR QR
Balance at 3 December 20 J I 4950000000 267955805 61 4024 670 583 1980475 14 1645505 5973625980
Boougt shares issued (Nole 27) 495000000 (495000000) Profit for the year 594892946 591 892916 2962054) 6245 13489
Other comprehensive income for the year (416) (41 6) 109998 109582
Treasury shares acquired througb business combinati on (2075865) (2075865) (2075865) Adjustmenl due to loss ofcontrol of a subsidiary (983 643) (983643) Derecognition of non-controlling interest due 10 liquicbtion of
a subsidiary 55932 55932
Transfer to legal reserve 59489296 (59489296) Con(ribUlion from non-colllrolling inte rest 59232919 592329 19
Contribution to socia l and sports activi ties fu nd ( 11612837) ( 156 12837) (1561 2837) Non-controlling interest acq uiJed without change ofcontrol (Note 4) (567208) (567208) (39842792) (404 I 00Cl0)
Balmce at 3 1 December 20 12
Bonus shares issued (Nole 27)
Profit for the year Other comprehensive income for the yeM
Transfer to legal reserve
Cootribut ion from non-controlling interest
Contribution to social and sports activities fund
544S00000Q
555000000
32 7445101
5068745 1
(2075865) (4 16)
4485
638248275
(55 5000000)
506874507
(506amp745 1)
( 12807 11 7)
64086 17095
506874507
4485
(12807 11 7)
189838462
54 10 182
15 35
70000
6598455557
512284689
6020
70000
( 128071 122
Ballnce at 31 Decem ber 2013 6000000000 378132551 (2075865) 4069 5266282 14 6901688970 195320 179 7098009149
The a(tached notes 1 to 33 fann an integra pan a fthese consolidated financial slatements
7
2
Aamal Company QSc
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 3 I December 20 13
CORPORATE IN FORMATION AND PRINCIPA L ACTlVIT IES
Aamal was funned on 13 January 2001 as a private shareho lding company with limited liability (W LL) under the COlrunerciaJ Registration Number 23245 in the Slate of Qatar On 12 Ju ly 2007 the private shareholders resolved to transfonn AamaJ into lt) Qaari Shareholding Company (O SC) (the Company) Accordi ngly the Company was listed on Qatar Exchange on 5 December 2007 The Companys registered office is at P O Box 224TI Doha Sttlle of Qatar
The Compaoy is organised inlo a head office (Aamal) cllld branches and operates in the State of Qatar The fo llowing table sets out the principal activi ties of the branches
Brancb Principal aellvities
C ity Center Qatar Branch Leasing the facilities of the re tail outlet complex in Ci ty Cen ter Doha
Aamal Real Estate Branch Residential and commercial real estate investment and property rentaL
Aamal Readymix Branch Production and sale o f readymix concrete
Ebn Sina Medica l Braoch Wholesa le and retail distribution of phannaceulicals aod general consumable products
Aamal Medical Branch Wholesale d istribution of medical eq uipment
Aamal Trading and Dis tributioo Sale of tyres lubricants batleries and home applian~s
Branch
Amnal Servi~s Branch Providing facilitie s management arld cleaning services
Aamal T ravels Branch Operating a travel agency
Aamal fur Indus trial Projects lndusllial investments Branch
Good Life Phannacy Branch Sale of phannaceuticals baby care products medicine and general cOllsumable products
Foot Care Center Branch Sale of footwear clinical activities and general commercial tradillg products
The consolidated financial statements were authorised for issue by the representatives of the B03Id of Direclors of Aamal Corupaoy QSc on 20 February 2014
BASlS OF CONSOLIDATION
The consolidated fioancial statements comprise the fioancial statements of AamaJ Company QS C (the Company) and its subsidiaries and joint controlled entity (together referred to as the Group)
Subsidiaries Subsidiaries are enli ties controlled by tbe Group The Group controls an entity when it is exposed to or has rights 10 variable returns of its involvement with the entity and has the abili ty to affect those returns through its power over tle entity The fi nancial statementS of subsidiaries are induded in the consolidated finarlcial statements ITom the date on which control commences unti l the date on which control ceases When the Group loses control over a subsidiary it dereognises the assets aoo liabilities o f the subsidiary and aoy related non-cootrolliog interest and other components of equity AllY resulting gain or loss is recognised in consolidated statement of income Any interest re ta ined in the fonne r subsidiary is measured 01 f3i r value when control is lost
8
2
Aamal Company QS c
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 31 December 2013
BASIS OF CONSOLfDA TiON (continued)
Subsidiaries (continued) Set oul below are Ihe Group s principal subsidiaries at 3 1 December 2013 Unless oUlenvise slated the subsidiaries as listed below have share capital consisting solely of ordinary shares wh ich are held directly by the group and be proportion of ownership intereSIS held equals 10 the votiug rights held by Group Tbe country of incorporation Of
registration is also their principal place of business
Comp(my name
Aamal Cement Industries W LL
MO Qat1 Company WLL
Senyar Indus tries Qatar Holding WLL
Doho Cables Qaw WlL
EccoGulf Compaoy WLL
Advanced Pipes and Casts eompmy WLL
Johnson Controls Qatar WL L
Country 0 lJCQr por ation
Qator
Qatar
Qatar
Qatar
Q 31ar
Qatar
Principal (lcfi ity
Development and mlUlagement of factori es and the prodllaion or curb sl~ne i llleriook slabs lIId cement bricks
Construction and repai r of power plant es tablislunent and man3gemenl of industrial enterprises aud ac ting as a representative for the imcmatiOllru companies
Management of subsidiaries and associates ovming of palen~ businesses and subleltiug Ulem and provision of investment port fo lio management for Its
subsidiaries and Msocialts UOkr the shareholders agreement signed between the Group and the other
shareholders the Group is able 10 appoint the chai rman and two other members 10 (he Boflrd of Direc tOfS (out of six members) and is able to govern the fin ancial and operating policies of Senyar Industries Qatar Holding WLL Accord ingly ~ company is considered as a subsidiary oCthe Group
Mailltenance and mallllfacture of electric cables equipmelll and lools Doha Cables QalaJ WLL is
91875 (eITectively) owned by Senyar hldush es QaUlr Holding WLL a subsidiary of tllC Group TIIe Group has (he power indi rectly through SenyM [ndus tJi cs Qatar Holding WLL 10 govern fi nancial and opera ting policies of Doha Cables Qatar WLL and accordingly the company was considered IS a subsidiary ofthe Group
OITers professional and bus iness process outsourcing and Cll )] center services
Manufacturing of Wide cement md amplass reinforced pipes systems for infrsslICture (lnd pipeline projects
The Gro up h~ the power 10 govern ~lot financial and opera1 ing policies or Adv3I1ced Pipes and Casts Company WLL by virtue of a sllarchokJers agreemeot TIlus the Company has been cotls ldcrOO as II subsidiary of the Group
Provision of racililies management service5 energy se-rvices md building maimetlaoce and cleanlg services to corporate cl icn1S
PlOporl ion oj
oWPersllip held by the
Non
Group COnroiling interest
99 1
60 40
50 500
459 54 J
5 1 490
50 50
51 49
9
2
Aamal Company QSC
OTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For toe year ended) J December 2013
BASIS OF CONSOUDA nON (continued)
Suhsidiaries (wntiourd)
Cmmffyoj fNgtpvniOil j irniJpvroliin ~__~ampiphdd~~
Nor G)1)Ji contfoifgtg
iMeregt
CmiddotSan TI~ing WLL Sdilamp lYJy1ng renting me Mltcentlopil12 [e~ tSite 30 invimenl w shams rnlilVigemc1t vf real lsta propeItilttl owning ille palent and tradcentmut and tnlding in iXjUiflfIfflt amJ vcilici$ 1he GroClp has tJe pcwer tv goem 6e ~inr8hl and ojJrtltllng
roicie_~ of ClSM by vifcle 0 a shlrcholdcrs 191e~mcentn(
745 25 1~i
nnoV1iv lightinf wmpany Qatar TNriing of Ught 2rrt1nz DiDd lEU Lwpj lmd 7r J) WLL olhT $hlil1g prrltwl
Twdiflg of of4 SiJpplk-s and providll$ prindna and 65 35 laniniltmJ sltrce~
Non-coufroUing illterests Non-controrling intel(SlS are measwed tj tleir propO(hOnile $hue Ot the tcquirees identifiabk net asscl III the JCqUiSlOt1 rote Chuegts in t1e Groups imcest in i $ubsiciwty hat do tot rcmltlo a loss of ~)I1a1)l xc accountd for as equity trnramplclions
Tamil-crions eUminnted on c)lwtidaticu lntngtgroup baiances Jue transactions 00 any unrealised income 1nd expenses ari$tng from intrnwgrOU tranSaOiQlls arc eiimmatcd UfiJeaiiHd gaina arising from ITaUstlclions ttlt equity-lKcoUl11uJ IlVtSlCCS are eliminatd 1gamst the investment 10 the extent oftlle Group interest in the inveMee Umaslised loses are eiiminatd II the same VllY us unrvalised gains hit only to Ille eXfeut that there is 10 evidence ofimpaimcentut
Illttn~ts in jOint arrangements iu)d associates Detais ofeach of ttc Groups Hutilrial Joint venlU)s fujltj assoeime~ at the end of the reponing period are 5 [OHOViS
Cmnirycgt PltJporlion qf Compao name infOjwNiIIO1 ewonlup Qltd
vOingjYwer htld by
tiff GrOlp
[I Sewed Cable QntM Tndllg in ele(mHnechmita CGlJ)ptnefllmd plOvicmg WLL rei) services El SWNed Cables )ilMr WLL is
49 JWoo (Wilt 55 tblre of rrofils (losses) hy StHyar lrdl11(rie~ Qal3t Hodirg WLt e 511b8idimy 0 ~he GOllp However (kw 10 ~ feiBtil shareholdergt agreewli pound ellWY has I~)mc a jOm vent( eTdive trmJ l January 20 wllkh is mC(t511rec Il1de the eqJity ngtU1l
rins $tngtdJBI S~ 1idJgt (law Ertity lS engaged l sled (b[iclli0ls Gf0Jp mtllpoundure Ea LC t11cent fl5sodau under cquhy nlctooo
Aamal Company QS c
NOTES TO THE CONSOLIDATED FlNANClAL STA TEMENTS For the year ended 31 December 2013
3 BASIS OF PREPARATION AND SUMMARY OF SfGNlflCA1T ACCO UNTING POLICIES
31 BASIS OF PREPARATION
The consolidated fi nancial statements have been prepared in accordance with lntema tional Financial Reporting Standards (IFRS) and the appLicable requirements ofQalar Commercial Companies law No5 of 2002
The consolidated financial statements have been presented in Qatari Riyals (QR) which is he Companys floclional and presenUll ion currency and have been rounded to tlle nearest Qatari Riyal TIle consolidated financial statements are prepared lUlder the historical cost convention modified to include he measurement a l fair value o f investment properties and available-for-sale investments
32 CHANGES IN ACCO UNTING POLICI ES
The [lccoWiting policies adopted are consistent wilh Ihose of the previous fi nancial year except for the following standards effe ctive for the annual period beginning on or lfter 1 Jlnuary 20 13 These standards and amendments other tM n the impact of (FRS II - Joint Arrnnge menlS noted below did not have aoy malenal impact to the Group
lAS I (amendment) - Presenfalion of items ofother comprehensive income The amendments to IAS I require that an emity present separate ly the items of ltN her comprehensive income that would be reclassified to profit or loss in the future if certain conditions are met from those that would nC ver be reclass ified to profit or loss
lAS J9 - Employee benefits (201) lAS 19 (201 1) changes the definition of short-tenn and other long-tenn employee benefits to clatify the di stinction between the two
lAS 28 (201 f) - fnvesfmem in Associates and Joint ventires lAS 28 (2011 ) supersedes lAS 28 (2008) lAS 28 (2011) makes the foHowing amendments Associues held for sale JFRS 5 Non-current Assets Held for Sale and Discontinued Operat ions applies 10 an investment or a portion of an investment in an associate or a joint venture that meets the criteria to be classified as held fo r sale For any retained portion of the investment tlwt has not beell classified as beld for sale the entity applies the equity method until disposal o f the portion held for sa l ~ After disposal any re tained interes t is accounted for using the equity method if the re tained interest continues to be an associate or a joint venture and 0 0 cessation of significant influence or jo int conltOl even ifan investment in an associate becomes an investment in a joint venture or vice versa Ihe entity does not fe-measure the retaincd interest
Amendments ft) fFRS 7on ofseftingjil1ancial assels and jinancialliabilities (2011) Disclosures - O ffsetti ng Financial Assets and Financial Liabilities (amendmems to FRS 1) introduces disclosures bout Ihe impact of oetting arrangements on an entity s fin ancial position Based on the new disclosure requirements the Group has to provide inforroation about what amounts have been offset in the consolidated statement of fimmcial position and the nature and extent of rights of set o ff under master netting aITlngements or simi lar a1Tlngernents
fFRS 10 - Consolidate1 financial SIOlemenlS and lAS 17 Separate Fillancial SfalemenS (2011) [FR S 10 introduces a single control model to determine whether an investee should be consolidated FRS 0 replaces the parts of previQlSly exis ting lAS 27 Consolidated and Separate Financial Statements that dealt wi th consolidated fin ancial statements and SIC-12 Consolidation - Special Purpose Entities This new contro l model fo cuses on whether the Group has power over an investee exposure or righlS to variable rerums from its involvement with the in veSlee lnd abili ty to use its power to affect those returns The Group has amended its accounting policy on consolidation in line with requirements of TFR S 10 and has re-assessed its consolidation conclusion
[FRS 12 - Disclosures ofimerests ill other entities IFRS 12 brings together into a single Sfandatd all the disclosure requirements about an enti ty s interests in subsidiaries jo int arrangements associates and unconsolidated structured entities It requires the disclosure of infonnation about the nature risks and financial effects of these interests
II
Aamal Company QSc
NOTES TO THE CONSOLIDATED FTNANClAL STATEMENTS For the year ended 3 1 December 201 3
3 BASIS OF PREPARATION AND SUMMARY Of SIGNIFICANT ACCOUNTrNC POLICIES (continued)
32 CHANGES IN ACCOUNTING POLlc ms (coDtinued)
IFRS IJ Fair ~alue measuremetll TFRS 13 provides a single source of guidance on how fair value is measured and replaces the faif value measurement guidance tha i is currently d ispersed thIo tlghool [FRS It unifies the definiti on of fair va lue as the price that would be received 10 sell an asset or paid to transfer a liability in an orderly transaction between market participants a t the measurement dale It replaces and expands the disclosure reltjuiremenlS about fair value measurements in other IFRSs including TFRS 7
Improvements (0 IFRSs (20 ) Improvements to IFRS issued in 20 11 contained numerous amendments to IFRS that the IASB considers nonshyurgent but necessary Improvements to lFRS comprise amendments that result il) accounting changes to presentation recognition or measurement purposes as well as tennioology or editorial amendments related to a varie) of individuallFRS standards
During the period the Group has adopted the fo llowing new s tandard which became effecti ve for the annual periods beginning on I January 201 3 which had a materi81 impact to ule Group
IFRS II Joint AlTwlgements As a result of adopting IFRS II the GrOlp has changed its ltlccoUJ)ting policy for interests in jo int a rrangemeots Uuder rFRS 11 the Group classifies its interest in jo int arrJngements as e imer j oint operations or joint ventures depending on the Groups rights to the assets and obligations for the liabil ities ofthe arrangements When maldng this assessmenl the group considers the strucltire of the arrangements the legal fonn of any separate vehicles the contrac tual tenns of the arrangements and other fact s and arrangements Previously the structure of tbe a rrangement was the sole foc us of classification The Group has re-evaluated its involve men t in ils o nly joint a rrangement El Sewedy Cables Qatar WLL ltlnd has recla ssified the investment from jointly controlled entity to joint venture Also the Group has discontinued with re rrospective effect the use o f the proportionilte consol idation method and adopted the equity method to account for joint venture in accordance mth IFRS I I
Summary oquulllitative impuct The following tables summarises the materia l impac ts rcsulting from the above change in accounting polic ies on the Groups financ ial position profit o r loss and cash flo ws
Effect of chnnge in 31 Decemb er2012 accounting policy
Cunem assets (278 880441 ) Non-current assets 1295 1346 Total assds (265929095)
Current liabilities (265072694) NonmiddotcWTent liabilities (856401) Total lin bill ties (265929095)
For the year ended 31 December 2012
Profit for the year
Net chflllge in cash and cash equivalents dlUing the year (99696J)
12
Aamal Company QSc
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 3 I December 2013
3 BASIS OF PREPARATION AND SUMMARY OF SlGNlf[CANT ACCOUNTING PO LICI ES (continued)
33 lASB STANDARDS AND lNTERPRETATIONS ISSUED BUT NOT ADOPTED
The following lASB standardsamendments hJve been issued but are not yet mandatory and have 1l0( been etrly adopted by the Group
Standard
Illterpretotion COnem EffeClive dale
TfRS9 Financia l InstrumentS (new standard) I Januruy20 17
IAS 32 Financia l Instruments O ffsetting (amendment) I January 20 14 JAS 36 Financia llnslnnnents Disclosure - non-fi nancial asse ts (amendment) I January 2014
The Group is considering the implications of the above standards and the till1ing (If adoption by the Group
34 SUM MARY OF SIGNIFICAJT ACCOUNTING POLICI ES
Bu siness combinnriO llS The Group accounts for business combinations using the acquisitio n method wben connol is Imasferroo to the Group The consideration ITansrerred n the acquisition is generally measured at fa ir value as are the identifiable net assets acquired Any goodwill that arises is tested annua lly for impairmeot AllYgain on a bargain purchase is recognised in pro fit or loss immediately Transaction COStS arc expensed as incurred except if rehated to the issue of debt or equity securities
The considera tion transferred does nOt include amounts related to the settlement of pre-existing re lationships Such amounts are recognised in profit or loss
Any contingent consideration payable is roeasured at fair va lue at the acquisition date If the contingent consdicrntion is classified as equity then it is oote nmeasured and settlement is accounted for within equity Otherwise subsequent changes in the fa ir value of the contingent consderafion are recognised iu profit or loss
Cash a nd eash equivalen ts For the purpose of the consolidaled statement or cash flo ws cash and cash equivalents consist of cash and bank balaoces ruld short teJTIl bank deposi ts wi th an original marurily of three months or less net of outstanding bank overdrafts
Accounts receivable Accounts receivable are stated at originill invoice amount less an allowance for any uncollectible amounts An estimate for doubttit debts is made when collection of the flilt amount is no longer probable Bad debts are wntlen off when (here is no possibility o f recovery
Inventories Inventories are stated at the lower of cost and net realisable value Costs are those expenses incurred in bringing each product to its present location and condition
Goods ror resalework in progress - Cost of di rect materials aJld labour plus attributable overheads based on a oormallevel ofac1i vity
Raw material and spare pan s PlIlchase cost on a weighted average basis
Net realisable value is based on estimated selling price less any further costs expocted to be incurred to completion and disposal
13
Aama Company QSc
NOTES TO THE CONSOLIDATED FINANC IAL STATEMENTS For tbe year ended 31 December 20 13
3 BASIS OF PREPARATION AND SUMMA RY OF SIGNIFICANT ACCOUNTfNC POLI CIES (contin ued)
34 SUMMARY OF SIGNIFICANT ACCO UNTLNG POLICIES (continued)
Interests in equity-aecoupled inveslecs The Groups interest in equity-accounted investees comprise interest in associates and joint venture
Associates are lhose entities in which the Group has significant influence but not control or joint control over the financia l and operating policies A joint vennu-c is an arrangement in which the Group has jo int ool1lrol whereby the Group has rights to the net assets of the arrangement rather thall rights to its assets and obugations for its liabilities
InlereSIS in associates and the joint venture are accoliDted for using the equity method They are recognised initially tit cost which includes transaction costs Subsequent to ini tial recognition the consolidated financ ial stateme nts ioc lude the Groups shrre of the profit or loss and other comprehensive income of equity-accounted investees unti l the dalc on which significant in Lluence or joint control ceases
The reponing d~les of the equity-accounted investees and the Group are identical and the equi ty-accounted investees accoWlting policies confonn to those used by the Group for like tmnsactions afld events in similar circumstances
Investmefl t properties umd aod buildings are considered as investment properties only when they are being held to earn ren tals or for capital appreciation or fo r both
Investment properties are measured ini tia lly at cost including traosaction costs and borrowing costs that are directty attributable to construc tion o f the 8sseL The carrying alRount includes the cost of replacing part of an existing investment property at the time that cost is incurred jf toe recognition cri teria are mel and excludes the costs of day-to-day servic ing of an investment property Sub~quent to inilial recognition investment propert ies are slated at fa ir value which reOects market conditions at the reporting date Gains or losses arising from changes in the fa ir values of investment properties are included in the consolidated statement of income in the yeltl r in which they arise
Investment properties are derecognised when either they have been disposed off or when the investment property is pennanently withdrawn 1T0m use and no fu ture economic benefit is expected from its disposal Any gains or losses on the retirement or disposa l of aD investment property are recognised in the consolidated statement of income in the year of retiremeOl or disposal
Property under construc tion is dealt with under lAS 40 and rttorded at cost less accumulated impairment losses until either its fair value becomes relia bly detenninable or cons(TUction is completed (whichever is earl ier) At that time it is reclassified as inves tment property and a fa ir value adjustment is recognised in the consolidated statemenlof income
Transfers are made to or fro m in vestment property onl y when there is a change in use For a transfer from investmen propeIT) to ovmer occupied proreIT) the deemed cost for subsequent accounting is the fair value at the date of change in use If owner occupied property ~omes an investment property the difference between the canying value aoo the fair value at the date oflransfer is rttognised as a revaluation reserve in the equity and is released to the consol idated sta tement of income llpon disposal of such propcny
14
Aamal Company QSc
NOTES TO THE CONSOLIDATED FrNANCIAL STATEMENTS For the year eDded 31 December 20 13
3 BASIS OF PREPARATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLI CIES (continued)
304 SUMMARY Of SIGNIFICANT ACCOUNTING POLICIES (continued)
Property plant and equipment Property plant and equipment is stated at cost including borrowing costs that are eligible for capitalisation and excluding the costs of day-to-day servicing less accumu lated depreciation and any imp~innem in value
Depreciation is provided on a straight line basis on all propelT) planl and equi pment The rales of depreciatioo are based upon the following eSImnelt useful lives
Buildings 20 years Leasehold improvements 2-8 years Truck mixers and motor vehicles 4-1 5 years Plant and ITIJchioery 8-2 5 years Furniture fixtures and office equipment 3-5 years Computers and related software 3-5 years Capital work in progress Not depreciated
The carrying amounts are reviewed for impain nellt when events or changes in circumstances indicate that the carrying value may not be recoverable If any such indication exists and where the carrying values exceed tbe estimated recoverable amouot the assets are wri tten down to their recoverable amount being the higher of their fair value less costs to sen and their value in use
Expendirure iocurred lO replace a component of an item of property plaot and equipment that is accotmted for separately is capitalised and the carrying amount of the component that is replaced is written off Other subsequent expenditure is capitalised only when it increases furure economic benefits of the related item of property plant and equiproent Al l other expendirure is recognised in the consolidated statement of income as the expense is Incurred
An item o f property plaot and equipment is dereeognised upon disposal or when no future economic benefi ts are expected from its use or disposal Any gain or loss arising on derecognilloo of the asset is iocluded in the consolidated stalemeot o f income io the year the asset is derecognised
The asset s residual values useful lives and method of depreciation are reviewed and adjusted if appropriate at each rnancial year end
Borrowing costs Borrowing costs direc tly attributable to the acquisition constmction or production of an asset that necessarily takes substalltjal period of time 10 get ready for its intended use or sale are capilalised as pan of the cost o f lhe respective assets All other borrowing costs are expensed in the year they incur BOlTOwiog COSts consist of the interest and other costs that the Group incurs in coomction with the borrowing of fund s
Accounts paytlble and accruBls Liabilities are recognised for amounts to be paid in the fuMe for goods or services received whether billed by the supplier or not
Interest bearing loans Bnd borrowings Interest bearing loaos and borrowings are recognised ini tiaJy at fai r value of the amounts borrowed less direc tly attributable transaction costs Subsequent to initial recognition interest bearing loons and borrowings are measured at amortised COSt using the effecti ve interest method with any differences between the cost and tinal settlement values being recognized in the conso lidated statement of income over the peliod of borrowings Instalments due within one year aI amortised cost are shown as a ctuTentliabiliry
Gains or losses are recogTlised in the consolidated sialement of income when (he liabililies are derecognised Interest relating (0 imerest bearing loans and borrowings is expensed in the year in which it is incWTed e(cept those qualify for capitalisation
15
Aamal Company QSC
NOTES TO THE CONSOLIDATED FfNANClAL STATEMENTS For tbe year eoded 31 December 201 3
J BASIS OF PRpoundPARATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
34 SUMMARY Of)SIGNIFICAtlT ACCOUNTING POLICI ES (continued)
TClaot deposits Tenant deposit liabilities are initially recognised at fair value and subsequently measured at amortised cost where material Any di fference between the initial fair vllue and the oominal amount is [eluded as a component of rental income and rocognised on a straight-line basis over the lease term
Derecognition or fiolocial nsstls and liabilities
a) Financial assets
A fi nanCIal asset (or w~re apphcabJe a part of a fin ancial asset or part of a group of SImilar financIal assets) IS derecogmsed where J bull The n ghts to receIve [5h flo ws from the asset have expIred bull The Group has trans f rred Its rights to receive cash flows from the ass or has assumed an obhg811On to pay the
reltelved cash flows I full Wlthout mfl tenal delay to a third party under a pass-through arrangement and elther (3) the Group has Ira sferred substantially aIthe nsKs and rewards of the asset or (b) Ihe Group has neuher transferred nor relain substantially ai the n sks and rewards of the asset but has tnlnsferred control of the asset
When the Group has tTa~fened its rights 10 receive cash flo ws from an asset or has entered into a pass-waugh arrangement and has nejlher trmsferred nor reta ined substantially all of the risks and rewards of the asset nor trnnsferred control of the asset the asset is recogoised to the extent of the Groups cOlilinuing involvement in Ihe
In that case the Group at 0 recognises an associmed liability The mnsferred asset and ihe associaled liabi lity are measured 00 a basis thai flects Ihe rights lnd obligations that the Group has retained Continuing involvement that takes the form of a guara tee over the transferred asset is measured at the lower of the original canying amount of Ihe asset and fbe maxim amoun o f consideration that the Groop could be required to repay
b) Financialliabiliti
A financial liabili ty is defogniSed when the obligation under the liabil ity is discharged or cancelled or expires Where an existing fio8 1lci I liability is replaced by another from the same lender on substantia ll y d ifferent lenns or the terms of an existin liabili ty are substantia lly modified such an exchange or modification is treated as a derecognition of the orig~al liabili ty and the recog1Jitioil of a new liability and the dirference io the respective carrying amounts is reco ised in the consolidated Slatement o f income
Impalr meot ood uncollec ibility of fina ncial assets An assessment is made al each repon ing date to determine whether there is objective evidence that a speci fic financial asset may be impaired If such evidence exists allY impainneOl loss is recogoised in the consolidated statement of income ImT t is detemtined as fo llows
(a) For assets earned a t fair value impainnellt is tbe difference between cost and fair va lue (b) For asseamp carried at COSt impairment is the difference between cost and lIle present value of future
cash flo1S discounted at lhe current market rate of rdurn for a simi lar finan cial asset (0) For asseq carried al amortised COSt impainneot is the difference between canying arnOWll and lhe
present Value of future cash flO M discowlled at the original effective iDlerest rate
Provisions Provisions are rewgnised hen the Group has an obl igation (legal or COnslnlctive) aris ing fro m a past event and the costs to settle the obl igalio are both probable and able to be reliably measured
16
Aamal Company QSc
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 31 December 2013
3 BAses OF PR EPARATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICI ES (colltinued)
34 SUMMARY OF S IGNIFICANT ACCOUNTING POLICIES (continued)
Employees eod of service benefits The Group provides end of service benefits to all employees in accordance wi th employment contracts and Qatar Labour Law The entitlement to these benefits is based upon the employees final salary aocl length of service subject to the completion of a minimum service period The expected costs of these benefits are accrued over the period ofemployment
Revenue Revenue is recognised to the extent thal it is probable that the economic benefits will flow to the Group and the revenue call be reliably measured Revenue is measured al the fair value of the consideration received excluding discoWlIS rebates and duty The following spec ific recognition criteria must also be met before revenue is recognised
Sale ofgoods Sales are recognised whcn significant risks and rewards of ownership of the goods have passed to the boyer and the amount of revenue cao be me3sured rcli3bly
Rental income Rental incorne from investment properties is accoWlted for on a time proportion basis over the period of tenancy Incentives for leases to enter into lease agreements are spread evenly over the lease teon even if the payments are not made 0 0 such basis Income arising Tom expenses recharged to tenants is recogn ised in the year in which the expenses can be contrac tually recei ved Service charges aud other such receipts are includcd gross o f related cosls in revenues as the Group acts as principal io this regard Premiwns received to terminate leases arc recognised in the consolidated statement of income when they arise
Service income Service income is recognised when the service is rendered and the outCQrne of the transactions can be estimated reliably
COlimission Commission is accounted for on an accrual basis when the right 10 receive the income is established
become on tra~el agencies [ncome on travel agencies is accounted for in the year in which the airline tickets are sold
IIIeresr income Joterest income is recognised as the interest accrues using the effective interest Clle method
Foreign currencies Transactions in foreign currencies ate recorded al tbe rale ruling at the date of the transaction Monetary assets and liabi lities dcoomioated io foreign currencies ace retranslated ill the raLe of exchange ruling at the reponing date All differences are recognised in the Statement ofinconlC
Use of estimates The preparation of (he Groups consolidated financial sta temenls in CQnfonnity with Intemltional Financial Reponing Standards ([fRS) requires management 10 rnake estimates and assumptions that affect the reponed amounts of assets and liabilities and disclosure of contingent asscts and liabili ties at the rcporting date and the reported amoUlils of revenues and expenses during Ihe reponing period Although these estimates are based on managements best knowtedge of current events nnd actions acnm results may ul timately differ fro m those estimates (Significant asswnptions nccounting judgments and estimates used in preparing these coosolidated fina ncial sta temenlS are disclosed in Note 31)
The estimates and underlying assumptions are reviewed regularly Revisions to accounting estimlIes are recognised in (he period in which the estimate is revised if the revision affects only that period or in th~ period of the revision and future periods if the revision affects both current and fu ture periods
17
Aamal Company QSC
NOTES TO THE CONSOLlDA TED FINANCIAL STATEMENTS For tbe year cnded 31 December 2013
3 BASI S OF PREPARATION AND SUMMARY OF SrGNIFICANT ACCOUNTING POLICIES (continued)
34 SUMMARY or SIGNIFICANT ACCOUNTING POLI CIES (continued)
Fair va lues A number of Groups accounting policies and disclosures require tJ1 C measurement of fair values for both financial and non-financial assets and liabil ities The Group has an established control framework with respect to the measuremeot of fair values When measuring the fair value of an asset or a liabili ly the Group uses market observable data for (be valuatiOD Fair values are categorised into different levels in a fair value hierarchy baCd on the inputs used in the valuation lechniques as follows
i) Leve l I - Unadjosted quoted prices io active markets for identica l assets and liabilities ji) Level 2 - Otheqobservable inputs not included within level 1 of the fair value hierarchy ii i) Level 3 - Unobtervable inputs (including enti ty s own data which are adjusted if necessary to retlect the
assumptions market participnllts would use in the circumstances) The Group recognises tralnSfers between levels of the fair value hierarchy at the end ofthe reporting period during which the change has ocdWTed_
Treasury shares When share capitl recognized in equity is repUIchased (by the Company or any of its subsidiaries) the amount of the consideration paid which includes direa ly altributable COSIS is recognized lIS a deduction from equity Wheo treasury shares are sold or reissued subsequently the amount received is recognized as no increase in equity and the resulting surplus or deficit on the transaction is presented io share premium
18
4
Aamal Company iQSc
NOTES TO THE ONSOLlDATED FINANCIAL STATEMENTS For the year ended 31 ecember 201 3
BUSINESS CO~BlNAnON
Acquisition o f Culf ROks Company VLL On 1 January 2012 the roup acquired 51 oflhe voting shares of Gulf Rocks Company WLL (Gul f Rocks) a limited Iiabiliry campan incorporated in Qatar and registered UJKier conunercial registration number 2249) The acquisition was made thT ugh Ci-San Trading WL L a subsidiary which is 50 owned by Aamal Group
I
The fai r val ue of lbe ideltifiable assets and liabilit ies of Gulf Rocks Co mpany WLL based on purchase price allocation exercise condlcd by tbe management as at the date of acquisition WJ S as follows
Fair value recognized on
acquisition QR
Assets I Cash and bank balances 14005495 ACC QUOiS receivable and wePayments I 749383 Amouots due from related plrties I
I oveotones
48311 190 5124 270
Available for sale investm~nlS 1985245 Plant and equipment 6769 17
81852500
Liabilit ies Accounts payable aJld accll1als 4724446 Amounts due to related parties 385070 Employees end of serviccibenefits (Note 15) 349272
5458788
Total identifiable net a5sellf
Purchase consideration trasferred Non-controll ing intereSt az-ising on business combination Bargain purcha5c gain rc~u ting from the tcquisilion
Allalysis ojcash flows OIl acquisition Net cash acquire11 Nith the subsidiary 14005495 Cash paid (30600000)
(16594505)
On I September 20 12 the Company acquired the balance 49 nfthe equiry of Gulf Rocks Accordingly the Group has 74 5 effective holdin4 in Gulf Rocks as at the reporting dale The excess nfthe purchase cons ideration over Ihe fair value o f net assets of GuJf Rocks acqui red from the nnn-controlHng interest has been recorded directly in the retained earnings of tbe Gr6up as at 31 December 201 2
QR Purchase consideration 404 10000 Less fuir value of oet asset~ acquiroo from the non-controlling Interest holder (39842792) EXce5s of purchllse cons idf ration over the fair value of net assets a(q uired 567208
19
5
Aamal Company QSC
NOTES TO THE (WNSOLlDATED FfNANClAL STATEMENTS For the year eoded 3 ) December 2013
CASH AND CASH EQUIVALENTS
For the pmvose of consolidated statement of cash flows cash and cash equivalents comprise the fo llowing balances
lon 2012 QR QR
Cash and bank accounts 330333904 282272895 Short lenn bank deposits 105802852 85608396 Cash and bank balances 436136756 367881 291
Bank overdrafts (6836280) (2885090)
Cash and cash equivalents 429300 476 364996120 1
The short tenn bank deposits are made for varying periods between one day aod three months depeoding on Ibe immedifltc cash requirements of the Group and earn interest at the respective short term deposit ra tes
6 ACCOUNTS RECEfVABLE AND PREPAYMENTS
2013 2012 QR QR
Trade aCColUlts receivable 411 011 567 345260657 Advances 0 suppliers and prepayments 50787921 629389J 5 Retention receivables 36217081 56943030 Other receivables 12073270 17 139173
5tO089839 4 82 28 1775
As at 31 December 2013 trade accountS receivoble amoWlting to QR 2690 1412 (201 2 OR 24984025) were impaired Movements in the allowance for impairment of trade aCColmts receivable were as follows
2013 202 QR QR
At 1 January 24984025 1 877085 Charge for [he year (Note 21) 2294590 13613 120 Amounts wriuen off (19949) (117368) Unused amotmts reversed (357254) (388812)
At 3 t December 26901412 24984025
20
6
1
lamal CompanyQSC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMEltS For the year ended 3 J December 2013
ACCotNTS RECEIVABLpound AND PREPAYMpoundNTS (contillued)
As at -1 I Dtcemxt the ageirg of unimpaired (ltlde accounb iltcivabk was as follows
P(HI duo
nor Up to 30 31-60 61middot90 Yi-jSj gt flO Tota impoirlt-fl days days days day doys
QR QR QR QR QR QR QR
1l13 411OJl$67 25l981960 32312165 2140966 19351fi43 16f)76888 60148545 2012 345260657 1695159B6 493lt)8566 2356$954 19494369 16908414 66374363
1JJJirtpai~ed receivable are expected no th bil5tS of past experienn) 10 be fully fcCi)evbc H is not the pngtctlce ofthcent Group to oblum collaleral over recejvablcI_
AMOLNTS DUE FROyl REL-TEO PARTIES
Name
AI ~aisnl Holding Company V_LL E Seweo Cabtes Qatn WL L Cnild -ftt Cvmlllny Al hz Retll E$vt rWesnnim Company WLL~ AllaZi Real Estale BrAnch EI Sewedy Electric Egypt WLL MuincrDJ1Ce Mwagmvont Group Qat3r W LL Good fe Cheffilt - The Pcarl
BuderPhtrnacy Al Faisallnlemadonal Tnl(i and Investment Company WLL AI-rabia Land Trnr~PQltit1g Company rLL ro Sewedy CabLes - Kuwuit Gcentttco hlttrnJmJilI Frijns StHytural Steel Middle East WLl Winer Wunderand Company WLL Al FtOH1H for Investment amp llllemtiOl1a Trading COntpAny WJ_L Q)lar Bahrain lmerOlnionai Cnero3 WLL Gulf EngJisb Sltl-Qo] Al Rayyao Tourism lve$lrnent Company W LL Other relater purties
2013 2012 QR QR
15412-1064 ll941Y70 34644615 ~li96858l
[()0405 14-45012 51 59197 9538116 15514113 4014727 236824$
1867526 LSOfd22
8(1012 10435r 311650 746395
15023 204450 459829
2iYHi 244940 186750
152170 143440 33500 7768(1
6259 1459lt) 758962-1
__2~61g~~_ 1~95Ji
bull 214109950 171525363
--__ shy
7
8
9
Aamal Company QSc
NOTES TO THE CONSOLIDATED FfNANClAL STATEMENTS For the year ended 3 1 December 2013
At10(JNTS DUE FROM RELATED PA RTIES (continued)
NO les (i) Transactions witll related parties are eam ed out through open account and Directors do not consider any
receivables to be past due or impaired
(ii) Related party transactions ore disclosed ill Note 26
INVENTORIES
Goods for rew le Raw materials and spare pans Work in pTOgresS Goods in transit
Less Provision fOI obsolete and slow moving invenlories
1013 QR
165499699 38388307 19944678 9671 8553
320551237 (3851692)
31 6699545
Movements in the provision for obsolete and slow moving inventories were as follov~
At I January Charge for the year (Note 19) Reversals Amounts wri tten off
At 31 December
E QUITY-ACCOUNTED INVESTEES
TIle Group has the followiog invesllnenfs in equity-accounted investees
Interests in joint venrure Interests in associa tes
At 31 December
G roup s snare of profits fr om the equity-ncco unted iovcstees arc AS follows
Profit share from in vestment iojotnt venture Profit share from investment in associates
202 QR
232597650 36608394 30622960
10521 9695
405048699 Q 145826)
40 I902873
203 QR
3145826 1 380617 (535695)
( 1139056)
385 1692
20 12 QR
2795992 2208263 (137995)
( 1720434)
3 145826
2013 QR
2012 QR
129462184 3644723
124124803 2545188
133106907 12666999 1
17330368 22869454 1169533 534050
18499901 23403504
22
10
Aama Company QSC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 31 December 201 3
9 EQUITY-ACCOUNTED INVESTEES (continued)
Counlry of incorportllion
Relationship Proportion ofownership and lotilfg power held by the Group
203 2012
EI S~wedy Cables Qatar W LL Frij ns Structural S teel Middle East WLL Al Ftfazdaq Company WLL
Qat~
Qatar Qatar
loint venture Associate Associate
55 20
55 20 35
Note With effect from 1 January 20 13 the mlnagemeot of the Group has reclassified the investment in Al Farazdaq Company W L-L from investment in associate to investment in subsidiary This is based on the transfer of share holding by the other shareholder whereby the conlroi o f AI FOl razdaq Company W LL bas been assigned 10 tbe Company
INVESTM ENT PROPERTIES
a) Reconciliation of carry ing amounl 2013 202 QR QR
AI I January 611334701 8 555 1835348 Additions 9568047 1727191 87 Transferred from property plant and equipment (Note II ) 34519828 Net gain iTo m fa if value adjlls tment 245051107 388792483
At 31 December 6402486000 6 11334701 8
b) Measurement of fair value
The fair values of the Groups inveS hnent properties as at 31 December 201 3 and 3 1 December 2012 have been arrived al on the basis of valuations carried Ollt on the respective dates by professionally qualified independent valuers not related to the Group The independent valuers have appropriate qUlli ficatioos and (eceJ11 experience in the valuation of properties in fhe relevant locations The fa ir value WltlS determined based on market comparable approach that reflocl s recent transaction prices for simillt1r properties and discounted cash flo w and income approach techniques
Details of the Group s iovestment properties and infonnation about the fa ir vn lue hierarchy as at ) I December 20 I J are as fo llows
IIvestment propenies
Level 3 fair vallie
Al I Janu ary 6 [ 13347018 Additions and trans fers from property plant and equipment 44087875
Gain included iu prom and loss Net gain from fair value lt1djuslmem 245051 107
AI J I December
The Group recognizes transfers between levels of fair value hierarchy as o f the end of the reponing period during whicb the transfer has occurred There were no transfers between the fai r va lue hierarchy during the year
23
10
Aamal Company QSc
NOTES TO THE ONSOLlDA TED FINANCIAL STATEMENTS For the year ended 3 I ecember 201 3
LNVESTM ENT ROPERTIES (contin ued)
b) Measuremen t 0 (air value (conti nued)
Vau t ion technique an significant unobservable in puts
The valuer has applied t e income capitali zation discounted cash flow and comparab le methods to detennine the market value of the lnve tment propen ies Significant unobservable inputs used included expected market rental growth rates (an average 425) occupancy rates (approximately 90 to 95) and risk adjusted discount rates (approximately 5 to 7 0) M y significant change in these inputs can impact lhe fair valuation of investment propcnies
24
Aamal Company QS c
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For che year ended 31 December 2013
11 PROPERTY PLAi~T AND EQUIPMENT
FumilUre Truck mixers fIXtures and Complllers
Leasehold and maor Plum (fd office and relaed eapiowork Buidings improvements vehicles machinery eqllipmcni sofMore in progmiddotcss Total
QR QR QR QR QR QR QJl QR
At I January 2013 137870126 371 88 132 9595813 1 262536261 19 580954 14864 385 561 32447 6241 30436 Additions 948)65 2618 100 5367399 859061 111 5268 137147581 148055774
Relating to d isposalswrite-off (1042642) (4390496) (77157L) (589150) ( 184075) (6977934) Transfer from capilal work in progress 1505 310 164 336 3601776 ( 150000) 1182741 (6304 163) Transrer to investment properlies (Note (0) (345 19828) (345 19828)
At J I Dttember 201 J 139375436 J7 258~ ~1 85735 270733865 19700865 169783 19 152456037 _73068~448
Depreciation AI I January 2013 16133915 J6902 529 49087707 68783 065 11 980009 tl71 595 3 174603 178 Charge for the year 7059805 3237150 5390767 12249797 2849162 1768823 42555504 Relating 10 disposalsJvri te-off (664709) (4 3 1716 1) (724322) (552939) ( 18 1993) (6441 124)
At 31 December 201 3 23193 720 19474 9 70 50161 313 90303540 14276232 13302783 2 107 17558
Net carrying amounts At 31 December 2013 116181J16 _17783221 44024422 180415325 5424633 3675536 __l2456O37 JJ9970~890
Notes (i) Depreciation charge for the year amounting 10 QR 33 164382 (201 1 QR 3303091 6) is included in tbe direct costs and an amount of QR 60055 (20 12 QR 36939)
has been capiulised under capital work in progress
(ii) The capital work in progress includes capitalised borrowing costs amounting to QR 125645 (20 12 QR 15358)
(ii i) The buildings are constructed on a plot ofland taken on a loog term operating lease
25
Aamal Company QS c
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 31 December 201 3
II PROPERTY PLANT AND EQUIPM ENT (continued)
C05I~
At 1 January 2012 Additions Acquired through business combinations (Note 4) Relating to d isposalswrite-off Transfer from capital work in progress Transfers
Buildings QR
137434400 435726
Leasehold improvemellls
QR
38137377 446J 04
144 103 ( 1539452)
Truck mLCers and molO
velricles QR
83427661 11464679
1697609 (631824)
Plant and machinery
QR
249335437 97264 85
35 14 132 (99498)
59705
Furniture fir ures and
office equipmem
QR
22845309 667586
192042 (3696457)
98000 (525526)
Computers and related
software
QR
158 19519 87 14 14
141837 (266 1733)
908078 (2 l4730)
Capitol work in progress
QR
12104889 451 53265
( 1065783) (59924)
Total (JR
55910459 8 68765259
5689723 (862 8964)
(800180)
AI 31 Dttember 2012 137870) 26 371881 32 95958 13 1 262536261 19580954 14864385 56132447 624 130436
Depreciation AI Jaouary2012 Charge for the year Acquired wough business combinations (Note 4) Relating to disposalswrite-off Transfers
9144666 6989249
)4 3 16620 3410618
144103
(96 812)
42558404 548 1613
1671942 (6242 52)
44555 290 2 1398849
2890797 (6 187 1)
12392584 3 182899
169005 (3558466)
(206013 )
12235266 2077633
136959 (2627283)
(J 0662)
135202830 42540861
5012806 (7840684)
(312635)
At 3 L December 201 2 161339J5 16902529 49087701 68783065 11 980009 11715953 174603 178
Nel canying amoWlts
At 31 December 201 2 12 173 6211 2028560 3 46870424 193753 196 7600945 3148432 56132447 449527258
26
12
13
Aamal Company QSC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 31 December 20 13
ACCOUNTS PA YABLE AND ACCRUALS
Trade accouots payable Advances from customers and tenants Accmals Social and sports activities levy Other payables
AJIOUNTS DUE TO RELATED PARTIES
Name
Arab Compaey for Fiber Products EI Sewedy EIC( lric Ho lding Egypiasl Egypt Egyptlech Egypt United Industri es Company WLL Johnson Controls Air condi tioning aod Refrigeration Qatar WLL pound1 Sewedy Cables Egypt Johnson Controls Air conditioning and Refrigeration rNC Dubai United Wire Company WL L Gelteo Company W LL - Gelteo Refr igera tion and Airconditioo ing CampC Lightway nc AI Shaab Group of Companies Other related pruties
NO M Related party transactio l)s a re disclosed in Note 26
2013 QR
320017657 30486837 26924669 41 761 843 25855567
445046573
2013 QR
18517474
4902528
6531231 6404578 3215821
2825884 75 7825
3467288 263715
1313247
48199591
2011 QR
26716268 1 27410234 222575 76 28954726 33)33852
379119069
2012 QR
18380528 91458 82 54 13849 1 11 6 135 5374039 35291 2020359 1693323 1064744
670 179
11 0873 12 18650
49737757
27
14
Aamal Company QSC
NOTES TO THE CONSOLIDATED f fNANCIAL STATEMENTS For the year ended 31 December 201 3
INTEREST BEARING LOANS AND BORROWINGS
NOles Malilrify
2013 QR
2012 QR
CoMl Loan 2 Loan ) Loac4 Loan 5 Loan 6 Loan 7 CoMB Loan 9 Bills discounted
(0 (ii) (iii) (iv) (v) (vi) (vii) (viii) ( ix) (x)
lune2014 Seplember2014 January 2015 November 2016 December 20 16 November 2017 Jllne20 l J December 20 7 OClober 20 19
172070387 440000000 50544000 40261 621 81387109 19920036
6] 43890 62626967 42522794
915676804
298324180 440000000 10 J088000 57955030
100 168750 2 1300492
407728 1 782871 1
35000000
1065742444
Less Defe rred finatlcing cost (771 503) (897148)
914905301 1064845296
Presented in the consolidated statement of financial positioo as fo llows 20)3 QR
201 2 QR
Current ponion Non-current ponion
749520820 165384481
825568489 239276807
914905301 1064845296
The dete rred financing costs consSt of arrangement fees The movements m the deferred financing costs were as fo llows
203 2012 QR QR
At I January 897148 332 661 Addjtions during the year 1 062565 912506 Amortised during the year (218amp210) (34801 9)
At 3 1 December 771503 89 7148
28
Aamal Company QS C
NOTES TO THE CONSOUDATED FlNANCIAL STATEMENTS For tbe year ended 31 December 2013
14 INTEREST BEARING LOANS AND BORROWINGS (continued)
Nolec
(i) Loao I i USD 93000000 impon 10n moi lily obtoined to refimnee he Icne~ of edit The 10 IT interest at commercial fate and the interest is paid at monthly intervals The fucility is repayable within ISO days including the usage period under letter ofc redits
(ii) Loan 2 is a secured bridge loan obtained to settle an existing loan and working capital requirements of the Company The loan carries interest al coOlJllercial rates and interest is 10 be paid on quarterly basis
(iii) Loan 3 was obtained for the pWpOse of financing capital ependiture and direct payment to suppliers contractors and 5ub-controctors The 10011 CMries interest at commercial rate and the inte rest is to be paid q Uar1erly The fac ility is repayable in IS quarterly iostallmenls starting I July 20 11 and ending I January 2015
(iv) Loan 4 was obla ined for conSlruclion o r an inveslmenl property The loan is seclJed by 0 primary mortgage over the some property and corporate guarantee of the Aamal Company QSC Tbe loan carries interest at commercial marke t rate and is payable in quarterly instalments
(v) Loan 5 represents a loan fOlcility obtained in two sepnrole tranches amounting to QR 309 825 000 (USD 85 million) for the purpose of refurbi shment and construction of fociJities io one of the investment properties The loan is repayable In 16 equal quanerly instalmcnlS for individua l tranche commencing from March 20 1J The loan carries interest at conunercial rJtes
(vi) Loan 6 represents secured loans obtained ffom a commercial bank in the previous periods for the purchase of heavy equipment and machines and were merged on 15 November 20 12 as a comb ined loan This loan is payable by 59 equal instalments of QR 426000 with (I last inSlalment of OR 438 326 with effect fro m 01 October 201 3 The loan carries interest at commercial market ra tes
(vii) Loan 7 is il tmst receipt banking facility obtained for the purchase of inventories This carried interest at conunercial market rates This loan was full y settled during the year
(vii i) Loan 8 represents secured loans obuined from a commercial bank in the previous periods for the purchase of delivery trucks and machinery and were merged on 22 October 2012 as a combined loan The loan carries inte rest at commercial market Tates and is payable by 59 equal insta lments o rQR 160000 with a last inSlOlmem ofQ R 128000 with effect from 3 1 December 2012
(ix) Loan 9 is an Islamic Financi ng Arrangement obtained for construction o f a manufacturing plam and as o f yearend ba lance represents partially drawn amount out of totil1 facility of QR 655 68000 The loan is secured by joint corvorate guarantee by the shareholders The loan carries profit at Islamic Financing rates and re-payable in quarterly instalments starting from the end of the 24 months gmce period from the date of loan drawn
(x) Bi ll discounting is a loan fac ility from banks The purpose of the arrangement is to discount bills locally and carries interest at current commercia l filte
15 EM PLOYEES END OF SERVICE BENEFITS
Movements in the provision reHectelt in the consolidated SLo1tement of financia l position were as fo llows 2013 201] QR QR
At I Jan uary 18111 763 17877937 Provision made during the year 4056969 4205499 Acquirelt through business combinations (Note 4) 349272 End of service benefits paid during the year (2210756) (4320945)
At 3 1 December 19957976 18 111763
29
Aamal Company Q5C
NOTES TO THE CONSOLIDATED FINANCIAL STATEMETS For tile y~ar ended 31 Dee~mber 2013
16 SHARE CAPITAL
2013 2012 QR Qq
AtI1l1)nud 60000)000 (20 2 544500JJOfn shares ofQR iii Cilch 60i)iQOOlOO 54450lt)0000
21)13 2012 Numher of
siMtS QR shares QR Issued Mtldfully paM At lJamld) 544SfWllOfJ 5445(100001) 495000000 49500000)0 1511C ofbonus S1i1-C ___ 5550~OOO 555000000 49SGOOOO 495000000
At 31 Decenef 6(OOampQllf1(1 ---14450O000 544~OOOOOO
All ampates m~ of a110 clss and caL equal voting rights
17 LEGAL Reuro5ERVE
As required by Qatar Comnertai COfrp7lnies Lav No5 of 2002 lOfp of the profit for the ye1J as a rru1imllli silould be mmsfened to legal re~erve The reserve is lot normay [lytiabe tor distribution except ill he cixcuJUstllrtUS stipulated m the above ~lemi0ntd GIW
IS HEVE1TE
2013 l)n QR QR
Sale of goods 1726893265 i709057~(iO
Renlal income UiO362322 133117509 S-ice income 858695 33940731 CornrrusslOlL Incentives and agency fces 44695S1 422~_632
212259$)33
19 DIRECT COSTS
2013 2)i2 QR
C 051 of inven(feS recognisedlIS an exptns 1522929956 497210830 Dind sL1ries lmd wages 601 [1336 5137856-8 Operating eXpenses on nml estate p~opet1les 36)711316 3041H504 fJepreciatiort (Kate I J) 33164382 B03091pound Operators marhgerrt6nt fees 14508588 li667989 Provisicn Qr obsolete and skwlt moving mvenlories (K)tc 8) 2380617 2208263 Other operating ilxpenses _31~3982 _ 3674946
1702139171 JS9653OI tgt
Aamal Compall-yQSC________________
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For lthe year ended 31 December 20 11
2G OTHER NeOiI
2013 20J3 QR QR
Interest mcume 2824216 2)314392 Profiv( loss) 00 disposal of property plant aoe eqUlpmem 737647 (l7362G) Eargain ptmnJse gain (Kote t) 8360793 MIsceJlaneous income 5723356
2013 2012 QR QR
ManllgetnUI hrQ empl(yees ws 55170302 55lt035middot1 Rent 23596799 2594915 Allowance for impaimlcot oUrsue aCQl1ot$ rc(Xjvalle (Nole 6) 129459(i 11613120 flBumcce ane profcampiitmJI fees 2IU9263 209J902 Corununication OOtHS 1935123 1649155 Trllining tid ouSfjt$s developmccl 950476 L095764 Re]X1in and mainle-nilnce 21)11SflS 2)2 I Poslag-c prjnting acri stationery 610299 541159shyvllsltdlancous expenses _~~~664 1lt2
-~~~ 125162812
22 fIN~lCE COSTS
2013 2amp2 QR QR
Inleres epen~ 42866312 5773U4B Am(vtisJliorgt ofdefcentrred financiog coStS __ 2l)tl26~~ gt3661
44930877----=
58063009
23 BASIC A~n nHUfED EARilNGS PER SHARi~
Basic trdTJogs per hue is caculatid 0y llividing the pwfill0( Ihc year attriouiabk (0- equity roldc-5 of the parent by lhi w~iglwxi avrage number of ordinary shares 0JstandirJg dulting tht_ year During Ihe year lil~ Conpmy i-sued and CBpii3lzed bonus shares lnd awmJingl) me previously ~eportod earnings per shac have blOM restatc(i
20i3 2012
Profit feT the year auributable to Cluity holderlt of the- paren (QR)
Weighted aVCTage number ofshares outstanding during the year (i)
Basic Jd diluted earnings per share (QR) 085
59985U413 shy
~~--~~~~- ~------J 1
23
Aamal Company QSc
NOTES TO THE CONSO LIDATED FfNANC[AL STATEMENTS For tbe year ended 3 l December 2013
BASIC AND DILUTED poundARNINCS PER SHARE (continued)
NOles (i) Th wigh d m nlg urnb of hres foc h P of lruling ~migs pee share h bee kulated
as follows 2013 20J2
QU3lifying shrues allhe begi ll1ling of the year 544500000 544500000 Effect of bonus shares issued and capitalised 55500000 55500000
600000000 600000000
Less T reasury shares (149587) (i357SI)
Weighted average number of shares at the end of the year 599850413 599864249
(ii) There were no potentia lly dilutiw shares outstanding at any time during tbe year and hence the diluted earnings per share is equal to the basic earnings per share
24 COItIMITMENTS
20 1] 2012 QR QR
Estimated capital expenditure approved and contracted for at the year eod but not provided for
Investment properties 2964000 8 139063 Property plant and equipment 16386500 63759762
19350500 71 898825
Operating lease commiIOlenlS under noncancellable lease agreemenlS
Payable wilhin one year 990806 702000
990806 702000
25 CONTINGENT UABILITlES
The Group had the following contingent liabi lities from which it is anticipated thai no malerial liabilities will arise
2013 2012 QR QR
Letters of guaramee 474551239 394255203
Letters of credit 7678499 194299384
NQles
(i) leHlaquogt of gu indud penonmnlaquo tend nd bid bonds d pymenlt g gi to suppliers and contractors by the Group in the ordina ry course of bus iness which will matme within twelve months fro m the reporting da te
(i i) Letters o f credit are provided by lodging documents to the bank tor purchase of trading goods fro m foreign suppliers wruch will maMC within thJee to six months from the date or tile Iransaclion
J2
26
Aamal Company QSc
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year eoded 31 December 2013
RELATED PARTY DISCLOSURES
Related party transactions Related parties represent major shareholders directors and key management persortOei of the Group and entities controlled joimly controlled or signjficamly innueoced by such parties Pricing policies md tenns of these tnlOSaclions are approved by the Group s management
Transactions with related parties induded in the consolidated financial stalemenls were as follows
20lJ 2012 QR QR
Sale o f goods and SClVices 419034048 415225221
Rental income 1980473 2069386
Purchase of goods and services 1591 38018 300835596
Rental expense 21 780G78 23397334
Bargain purchase gain 8360793
Net assets acquired 78803585
Relat ed party bal nnces AmountS due from and due to re lated parties are disclosed in Notes 7 and 13 respectively These balances do oot carry interest and are repayable OIl mulUlUy agreed dates generally within one year
The Group did not record any impairment of receivables reJatiog to amounts due from related pat1ies in either year This assessment is undertaken each fina ncial year through examining the ftnanc ial position of the related party and the market in which the related patty operates
Parent The Groups ultimate parent is Al Faisal Ho lding Company WLL
Compensa tion or key management personn el The remuneration of key management dming the year was as fullows
2013 2012 QR QR
Short-term benefi ts 7904794 1079595 Employees end of service benefits 408934 439776
8313 728 11235727
33
AamaJ Company QSC
NOTES TO THE CONSOLIDATED FINANCIAL 5T ATEMENTS For the year ended t Decernber 2013
Dilling the year 1he Group issued a XHlUS share of 10 928 of the paid tiP share capilal hdd ilS at 31 DiX2mber 2(JJ 2 mnmuning to OR 555000000 using retamed earnings as of3 December 2012 (20l2 Doe share for every ten shues held as of 31 Dcember Oll amuunting 10 QR 495OO()OOO ling reta1ned earmrgs 28 or 31 Decencer 2D II Jshy
18 SEGMENT INFORMATION
For J)iloogement PUIpltJM rhe Group i organised into business unit bused On LlJeir nature of Acttvitics lud nas fonY reportable segments and the Head Oftklt as bllow$
Propert Tbe segntn cOlists of City C~nler Qlta~ Brunch and Aamal Rea Esmte Branch whicb ll[c invoived in lampIiiog the faJ1ities of retail outlet conpex red e5ttlte nve(mltn$ and property remal buines~s
Trading mld distrib-wion The segmeul Involves wholesalB andlor rBtail distribution of phamlaceutlcai and consunable i1ems hume Epplianccs medica equimenl t-Tes ill1d lubricmtlaquo and II1UllitnEl printing The scgn(rtt includes 6c following entities
Eotl Sina Medical Branch
Aaen Medical Braudt
Amcill Troding and DistoolltlqO Branch bull Foot Care (erier HRnd) Good llre Pbannacy Bf4Uch bull Al FllfJdaq COllpafY wJ~L
InduSNol manuacturing TIle s0groent IOvolves Ulahuactrumg whole~we aliaor rewi dimibUlioti of dccnc cables lid tools ggregJ1es_ ready-IUx connole and cement bI0C~ lI1d provi$ion of servlCcent$ in rdation to iODllltroa Itvestment repair aJ-d Gonstruction of power plwts liiiding of LED ilgluitlg products und management of industnl enterpnses The segment ircludes be folloVting centntitis
bull Aam1 Cemert Industries LL AuraJ Redy1Yl(A BrQTlch
bull Doha Cables Qawf lLL Senyaf IoolJic1es Qatar Holding W LL Advanced Pipes ard Casfs CompQTly WJ L bull GuJfRoch Coroany WLL Ci~San Trading Company WLL hmovafive Lighting Compary WLL
Managed services le segment inyolvc~ provisloH of hOllseiltecpmg mi cleaning services fucditics n-anagemerJ services C1egy s(tvices ttl centfe sltrvicf)s buildiqg lnaintemHlelt aml acting as travel gens The 5cgnltnt includes the foUowing cnti(lcents
An13 ServJce Branch
amli TnlVeJa l5tmh
f-eco Gulf Co W LL
Jolinson Controls Qattl WJL
28
Aamal Company QSc
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended ) L December 20 13
SEGMENT INFORMATION (Co ntinued)
Head Office It provides corporate services to the branches and subsidiaries of the Group
The managiog d irector of the Group monitors the operating results o f its business units separately for the purpose of making decisions about resource allocation and perfonnance assessment Segment perfonnance is evaluated based Oil operating profit or loss of these segments Transfer pricing between operating segments are on anns length basis in a manoec similar to Iraosactions with third parties
Aamal Company QSC
NOTES TO THE CONSOLIDATED FINAN CIAL STATEMENTS For the year ended 3 1 December 20 13
28 SEGMENT INFORl1ATlON (continued)
Operating segments The operat ing segment after elimination or ioter-bra nch and inter-co mpany lrnnsaclioos is presented as follows
Trading (nd Industrial Managed For fh e year elided 31 December 2013 Properly disirjblli ioll manujocljlring services
QR QR QR QR Revenues
- h lemal parties 260360172 578909983 1231522768 S l802210 - Inter segments 1253914 6843 11 8 29639873 3445052 1
Heat Office QR
Eliminoions QR
(n187426) II
Tolal
QR
2J22595133
261614086 585753 lOI 126116264 1 8625273 1 (721 87426) 2122595133
Opera ti ng results Fair vallie gains
Profit I (loss) ror the year
Depreciotion
200811944
245051 107
445863051
2066290
86492834
86492834
4345438
22636250
22636250
33049 089
5157436
5157436
1760305
(47864882)
(47864882)
1334382
267233582
245051107
512 284689
42555504
36
Aamal Company QS
NOTES TO Tl CONSOLIDATED FfNANClAL STATEMENTS For the yeM ended 31 December 20 13
28 SEGMENf INFORMAnON (c)tltioucd)
FOf the yearrnrkti J f DccemOer 2(J12 QR
Revellues - ExlcmlJ partiel 2331 17 509 bull Inter segmcI11S 1168935
-- 234236434 --~- -~--
Openning results 18S2367t Fmt value gains J8S79-4~G
pront LOllS) for the rear 570616154
gt3659
No(
lnlermiddotgment revenues are eliminated on tQHs)idntiOH_
Tadiug ftfid disl d)Ntion
QR
S2S3l7661
324 j
5335493114 ~ -~-----
51384831
54384338
4J9R71(i
Indus idi mamfmturing
QR
1255694537
129U25lS4
56727059
56727059
32752742
slnltic(s QR
55216665 2939H31
S46lOJ96
7427414
7437
[908067
ilfild ()jice QR
(64(41976
Elimination QR
(74tHi2oJ Iii
Totul QR
206936372
2069336372
235721
(64641
131 f613
6245
42541)861
Amnal Company Q$l
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Por tnt yeartndeJ 31 De~embcr 2013
28 SEGMENT JNFORMATlON (contiutlld
Assc-ts and labilities
Tng alld lndtrstfw At31 December 2(113 distnbllrior manufacturIng senices HeadOJJicc EliminatioilS lola1
QR QR QR QR QR
Cumnl 3tS 227552338 620807979 61349 j 415 S()6)86922 (301636995) 1477366090 Noolucrcnt DSeIS 6411868160 12604763 622386238 4348876 (i624548 __p2438051 780
fotal asstl$ 6639420498 1194 1243194217 65698291 513Ql1470 ==-lt03H8l~O()) 853295-870 -~----~ ~---~ -
CUIT)llliabilitics 280995335 1(3511J60 6344(12777 2l0708lJ2 496261185 (3CH636995) 1249603264 Non-current iiatJlitics 7l70L5V2 8008485 HlDi16~43_ 3181668 t433799 ____ ilj534_~57 __ --Totul liahililics 353696897 ___~4159~4~ 734419720 ~4976~~~~~ 1434945711
---~~--~ -~-~~ - _2~~~4~~ (~~~~9~
C1pild expcndimn HI) WO743OOj 1397742_~471l2~--~50 ~51 ~1~623821~~1~_ -~----~------ -~
3amp
28
Aamal Company Q SC
NOTES TO THE CONSOLIDATED FfNANClAL STATEMENTS For the year ended 31 December 20 13
SEGMFNT INFORMATION (continued)
Assets and liabilities (continued)
AI 31 December 2012 Properly QR
Trading and d iSfriblllion
QR
Indusrial manufacfuring
QR
Managed senices QR
Currenl assels
Non-current assets
146491 186
6121 864484
2964425 12 903 7264
73468 1258
549267235
51387098 471 1439
Tolal assets 6268355670 305479776 1283948493 56098537
Head Office QR
468325024
6713643
475038667
Currentliabil iies
Non-current liabiLities 273444 748 1 J10 15024
86054583 7434286
669214261 1288 14977
2 1938953
287 1199
480393637 1253084
Totil lliabiliti cs 390459772 93488869 798029238 248 10 152 48J64672 1
Capila expendirure (ltII L 72865 878 1281254 6647 J356 7169 13 149045
Notes
(i)
(Ii)
Inter-segmeot balances are e limioafed 00 consolidatio n
Capi tal expendiTU res consist of additions 10 propeny plant and equip ment and iovestmenl properties
Eliminations QR
To wl QR
(273735776) (i )
(20308351(i)
1423591302
6689563230
(27576661 1) 8 113154532
(273135777) (i) 12573 10405
257388570
(273735177) 15 14698975
24 1484446
39
29
Aamal Company QSC
NOTES TO THE CONSOLIDATED FrNANCIAL STATEMENTS For the year ended 31 Dcltmber 1013
Fr-A]~ClAL RISK MANAGpoundMamp1H
Objccthes and policies fe Groups principal )uaucill liabilities comprise imltresl bctmllg loons and IxmowHgs baRlt ovetda1s amounts due to fclaled par1ies and tracte accounts payable The main pUlJXSi of thesc financial liabilities is 4J mise firmne or 610 Grmps operations The G0JP bas various fimmcial assets such as ttadc accounts receivable lInlOlmts due from related parties bark balances tltCntion receivable and other receivables which arisgt directly fran its cperuoonamp
The maiH ri~ks an3ing Joru (be Groups UnariCJlll illslrumenls jle market risk cretiJt nsk and hmdity risk Til BoarD ofDtrcctO$ reviews end agrees policies for mzrAgbg Caltt f hespound ri~k ihkh arc summariscd beloW
VIarktt risk yenfatket risk is the risk Um changes in market prices $Uch as intfcst rates and hreig lttmeocy ect14nge rilles Vltl1 affect the Groups profit eqwty Dr value tf its hoJdiI15 of financial instrl[Thnls rile objecivpoundj of marke1 risk mUnllgcrlcnt is to manage uld 1~ontr(ll tho tr))rket risk expo-sure vithir acceptable parfI-etcJ$ while optimising rerUID
Equit) price risk ampjuity prtce risk is the risk hilt the Group ampearnings will be affected as a rcmt (If luctttltions in fm vdue of ~qui-gt
mstwnents Eqlliry price risk arises from availabtetor~sale inv2strnems However the Groups exposure to eqmty price risk IS minima as II doesn hold sitl)iftrmt ailableAor-511le inYestrmmrs
[merest rate risk The Groups fimiruial poundS5ot ampId liaojlilies (at Rl $uJject to int~~ rate mk compnse brmk depoils interst bearing loans and bOITQwjags and bank overdr-afts At the reponwg dalt tbe [merest rale pronle of Ill Goups intexst bearing fbi4rdd instruments as fliows
11113 20i3 QR QR
Fued liIeryS refc insfrvrnellts
Fmmcial assets 113035962 111913394 FrOltwial liabilities --1~203712l) 1252t43~1
9)OI~ (13350972)
Fhlllting inireSI rate ns1lmlttrs Fanctl~ Isseis 127024345 ID43848o Fllllocial liabilities _-(i~9347~ (94))48926)
(836)64116)
The Groups exposure to t~ ris of changes in marXet interest fltltes relztes primariiy to the Groups financial assets and lizbitdic$ with t1Oltttirg interest mte~
lhe loEowing able demonstrates the ampmitivity nf the eonsolidattXI statemen1 of income 1) caonaly possible chonges in in1jfgtst rmes by 25 basis points with all othe vari)ble3 hdc umstant The sensitivity of the CooiK~ljclatid statement of inc(me $ the eft(ct of tb assumed changes in lnterdt rales for one year bf1sec on the floating rate financial assets and fimmcial hablhw$ held at 31 f~r The effect of deae-ascs in interest ral~ is cXp0Ctct to be equal and opposite to the effect oHlle increases sllQvro
Changes it Eftx OIl
00513 [oms profit QR
2013 Floating mterest Hlte instruments ----2$ bp (1649776)
2012 Flv-ating irkfiSt rale instrumenls +25 bp (209[9(1))
~--------- -~~ 40-middot------ _ _ shy
29
Aamal Company QSC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 3 1 December 2013
FINANCIAL RISK MANAGEMENT (continued)
Foreign currency risk Foreign currency risk is the risk lhilt the value of lhe fi nancial instruments will fluctuate due 10 changes in fore ign exchange rates
T rade aCcOlmts payable and accrued expenses include amounts due in foreign currencies mliniy US Dollars UAB Dirhams Great Britain Pounds (GB P) and Euros of which the Group has a currency risk primruily on the baJmces payable in Euros and GBP amoWlting 10 QR 14400634 (2012 QR 17214046)
The Group does not hedge its foreign currency exposure As both Qatari Riyal and UAE Dirhams are pegged to the US Dollar balances in US Dollars and UAE Dirhams are not considered to represent significant currency ris k to the Group
The table below indicates the Group s fore ign c urrency exposure on its monetary assets a nd liabilities The analysis calculates the effect o f a reasonably poss ib le move ment of the QR curre nc y rale against the Euro and GBP with all other variables held constant on the consolidated slate menl o f income (due to the fa ir va lue of currency sensitive monetary asse ts a nd liabilities) The e ffect o f decreases in fo reign c urre ncy exchange rates is expected to he equal and opposile 10 the e ffect of the increases shown
Incramp1se ill
f oreign cUlrency rate
0
the QR
Ellecl on profil
QR
2013 +5 (720032)
20 12 +5 (860 702)
C redit Tisk Credit risk is the risk that one party to a financial instrume nt wi ll fa il to discharge an obligation and cause the other party to incur a financial loss TIle Groups exposure to credit risk is indica ted by the carrying amoWlt o f its financia l asse ts whic h consist principally oftmde accollilts receivable retention receivable amounts due from related parties othe r receivables and bank baLances
The Group sells its products and prov ides services to vario us panies It is the G ro ups policy that all customers who wish to obtain on credit lerms are subject to credit verificalion procedures to ensure c redit Ilonhiness Each new customer is analysed individually for creditworthiness before the de livery o f products Of services Custo mm tbat fai l to met t the credi tworthiness may transact with the Group only o n prepayme nt basis Property rentals are mostl y received in ad vtnce or conlrlCled wi th post dated cheques 10 additio n receivable balances are monitored on an ongoing basis a nd the purchase limils are established for each c redit custoroer which are reviewed reguJarly based on the level o f past transactions and senlement The Groups max im wn exposure with regard to trade aCCOWlts receivab le net ofa llowance re nected allhe reporting date was ilS fo llows
2013 2012
Business SJgmelll QR QR
Property 15478832 19386326 Trading and distributio n 194343 597 179748274 Industrial ma nufac turing 183119753 131578668 Managed services 18069385 14547389
411 011 567 345260657
41
29
Aamal Company QSc
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For tbe year eoded 3 J December 20 13
FlNAJICIAL RISK MANAG EMENT (c-o Dtinued)
Credit risk (continued) With respect to credit risk arising from the other financi31 assets of the Group the Groups exposure to credit risk arises from default of the counterparty with a maximum exposure equal 10 the canying amount of these instruments as follows
2013 QR
202
QR
Bank balances Amounts due from related parties Retention and other receivables
436136756 214439950 48290351
36788129 t 171525363 74082203
698867057 613488857
The group reduces the expoSltre of credit risk arising from other financial assets by maintaining bank accounts in reputed banks and providing services only to creditworthy re lated parties
The management cons iders the bank balances and a mQUIIIS due from related parties as high grade fi nancial assets and lfade accounls receivable and other receivables as sundard grade financial assets When a finltmcial asset is identified 10 be impaired the managemoot downgrades such assets to impaired category and provides adequate allowances
Liquidity risk Liquidity risk is the risk that the Group will not be able to meet its fmancial obligations as they fu ll due The Groups 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 nonnal and stressed conditiom without incurring unacceptable losses or risking damage to the Groups reputa tion and is to maintain a balance belWeen continuity of fuoding and f1eilibility through the use of bank overdrafts and bank loans and borrowings
The Group monitors its risk to a shortage o f funds using a recuning liquidity plaOfling 1001 TIllS tool considers the manuiry o f financial assets (eg accounts receivable) and projected cash flows from operations The Groups teons ofsales or services require arooUIlts to be paid within 30-90 days from the invoiced dale
42
29
Aamal Company QSc
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For tbe year ended 3 1 December 2013
FrNANClAL ruSK MANAGEMENT (contiQued)
Uqujdity risk (continued) The table below summarises the ruaruriJy profile of the Groups financial 1iabililies a t 31 December based on contractual undiscountcd paymeots
2013 Interest bearing loans and borrowings Bank overdrafts Trade accowus payable Other payables Amounl~ due (0 related panles
201l Interest bearing loans and borrowings
Baok overdrafts Trade accounts payable Other payables Amounts due to related parties
On demand
QR
6836280
6836280
011 demand QR
2885090
2885090
Less than 3 months
QR
521324473
303638792
47406830
2530~480
898675575
Less thall 3
months
QR
469839033
10754JJIO 37543236
1964504 1
634568620
3 10 J2 mOlllh$
QR
239333328
16378865 20210580
2289~11l
298816884
3 to 12 monlhs
QR
365476972
159621 37 J 24745342
30092716
579936401
1to 5 years
QR
J 60092748
160092148
1 to 5 years
QR
248472226
248472226
gt 5 years
QR
25261598
25261 598
gt 5 years
QR
7648000
7648000
TOlaf
QR
947012147 6836280
320017657
67617410 48199591
1389681085
Tota
QR
109 1436231
1885090 267162681
622 88578
49737757
14735 10337
43
30
Aamal Company QSltc NOTES TO THE CONSOLIDATED FlANCIAL STATEMETS For the year ended 31 December 20 t3
21 F~ANClAL RlSK MAiAGEMElT (continued)
Capital management The Boards policy is to maintain a strong cepit1 base so as to rnainmin investor creditor and market ronfoonee and to SUSWlJ) fumre dcltclonnent Gf the buinest The Board of Directors rronitortl the tapital whkh tbe Group defines as wlal $parcloders equity excluding nonmiddotcornroliing imerests and the level of dividends to orrunury srarellOJdcfS
The Board also reeks to ITIaimain a balance between the higher (ctums (hat might be fA-~$ihle With higher leves of borrnwings end Lle edvnrJages and security named Sy it sOMd Cilpitai posi[ion The GfCup~ k1rget is to achievfl a return on slureholders equity (exclJding aonwurrolJiug iorcf(sts) greater lll(ll1 he wcighlcd average inres exxmse on mrerest bearing Ivens and oorrowing
The (lf0t-p nl)nDg-e ils cnpital structure and makes adjustneal lOll in light ofchang2s in economic nd bttincss cordjlons and shareholders expe1ationJo chmges veremiddot maCo HI Lleuro objecttves polilCS or proCCSSC3 during the years erded 31 D~mber 2013md 31 Dtccmlxr2Ql2
The Group monitors the capit2J using a gClting fatio which IS dep divided by caplla plus debL The GtOwgts policy is to keep ttJe ge-anng rmio bclew 40 Tbe Group iLdtdes withb debt imete-51 beagting loans ard ~OITORlngs less cash and cash equtVaknts Capltal includes eqmty attributable 10 the equity tolders oft~e parcrt
2013 QR
2(i2 QR
fmerest bearing loans and borrowings lcss- Cash and cas ltYJUvalcnts
9i4lJ05301 _~ (429JfJl4761
1004845296 (649)6201)
Net debt
Toa capital
Capita and net debt
699849045
~ringrttio
FAIR VALtES OF Fl~ANOAL f~STRUMETS
Finarcial iostrumenL~ cOlnprise tina~lctal assetS carl finailcialliabilities
Fmancial assets colJist of bank balance) short 1Cm bank dcposis amounL dve dom rc)ltted partilt)$ rekntion and other receivables and ttade accolmis rceivabe Finatlclll habiilics cgtmsist of banilt ovcrdratls jnerest bearing lOil1S and bOrowings amounts due (0 nliled partiG~ ane trade x-ounls payable
The- fair values of hese financial inStrumen1S except Jo-- imCfest bearing loam lHld bOlToving aproKimate lhdr cMryinJ vlhes due to the Slort temt mzrutiiles or these instrument
Tllc faiT value of iotcnst beating Nns and borrowin2s ae estimate( based on discoumed ltash flows twin int(s rale- cune-ntly nvailagtk fur tilt debt or sinuiar tetnlS an-a rell1lmng matunties
31
Aamal Company~Q=-ScC ______________~______
~OTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For fhe year ended 31 December 20 t3
SlGNIFICANT ASUMPTIONS ACCOUJTING JUDGElE1TS AND F8TIMATFS
impairment (If accoonts receivable n etrnwe of lhe collectible anoun of trade accounlgt reccvable is made when collection of the full lHl1OUt i~ nO looger probabk FOI nCividualty significitIl amounts this estimation is p~rformed on an indh-idllai a$[$ Amomts wHcb arc not indivldl11Uy significant but wluch are past due ZTe tsscssed collectively and an aJlQwaccc applied ucc()r~Jng to the length of lime past due based oc histnncal recovery nlJes
hnpalrment of inHntnries lavenoncs are held at tho lower of col and nol realisable value InIOn inventoncent$ becone old or 0-~amplete an estilTJte is mate of their net j alisable vulue For indiviolhlUy significant amountS this cstinaunrt is performec all aD lndividwl osis Amotlnts whieh are fl0t individually significan( btll which ltIre old at obsolete wx LltSessed wllecivdy md a provisior is applied sccnrding to the invenrory type and be dep)ee of ageing 0 cDsolescc1ce based on anticipUled selling prices
Classifigt1ltion of El Sew(gtdy Cable Qatar WLI ali a j(lint vwture pound1 Sovedy Cables Qatar is a limited hability company whose kgal fum confers SCprm11ior bernten tbe jXliiies 10 ~he jomi lfranpement Snd the Company Itself FurthenrlOre then IS no oontractua] arrmgelTeot or any oibe aus aod circumstriliCe$ that iocik41to tht he putic5 [0 the joint flJTIlrgernelit bave rights to the ssetl and obligrtdons fo~ the liabilities of the joint ilrrongement Acoordingly El Sewed- C[jbl~s Qamr WLL is dassifiecl 7S a joiut enrtrr of he GWtp
impairment of goodwill G0oovj)1 embedded in th~ cot 0 aquisitior of subsidiaries and eqmtj-iccounled iflV(stees ire teswt for irl1jXlirmnt aHuaily Tbe calculations of value [n use fO( cfish gecj~r)lilg units (loring to real nte projecg are rtost sensitive to tin IDHowing assumpti015
Grosgt i1wginmiddot Gross Ilmrgins arc lmsed on avrage values tuhje0d in (he [Xrioo preeedhli (e siaM of the budge xnod T1esC at( mcreased over the budgel period for mticipatltX efficiency Hnprovemots
DisC)unr r(es Discount rotes represent th cl1tent mark as~ssmetlt of the risks specific te ech cash geocroting unit regarding lhe time value of money ilnd mdividu)l risks of he tmtieriyilg assets whICh have not been inwrport1eti it the Citik flow estimates The dj~(OUrl flte tlkulation is based on the speclfte circurnsthLCes of lile Group and its opltllatJng segn)~nts (md derived (ff)rC it weighted avaage (XSt 0f apilaJ (WACC) Tb fACe (akw into uoount both deb and equity The 0$1 of equity is denved from dlC expected return 01 investmenl by the Groups investors TJc Gos10( deb is based on l1e borrvwings the Gmup IS obllsxl to service SC~lletllmiddotspecific r5k IS incorxt4too by applying individual bera facto The betn mctors ire evauatcentd annuaHy bhseci on pubJicly aVflllabe murked earn
Fair value ()fnHstmeni proputies The fuit laHe 0 nvestmel~ propertis is deltrrnlnzd b cxterrwl indepzfldell property valuers laving appr0priate recognised professional quabfiillions and recenl xperience H1 the localjl)n and G-tegory 0 the oroperty being valued
Useful hes of PfQPcrly plmr (llld zqulpment The Groups management detennints th estiunted useful jives Df It~ property plan and equipmnl fix calnurjng depreciation Thi5 e~timJte is 6lermind after cinsidring 1b expeelcd usage (1f the a5sclt [hysical l101t and (eas tedmiltal Dr com~ercia obsolesccnce
Gotlg Qncen
ibe Groups mangerncnt UiS made aJ assessmeot cf the 011115 ability (0 COllllOUC liS a going conct11l Imd is satsl1ed hat me Group ms the resources to contmue in business for he foreseeable fu1urc he1hennort he management is no aware oC lny material Hncertainties that lray CH~t signinchnt doubt tlPDfl the Groups ability 10 continue as a going umcem Therefore titpound lotlsolidatcd finilllcij stftemeols comirme to be prepltd on li g0ing concern basis
Aamal Company QSc
NOTES TO THE CONSOLIDATED FlNANC[AL STATEMENTS For the year ended 3 1 December 20 13
32 INCOME TAX
Certa in subsidiaries of the Group which have non-GCe ownership are subject to income tax under Qatar Income Tax Law No 2 1 of2009 The iocome tax is charged on the share of profits attributable to non-GCe shareholders For the purpose of these conso lidated fi nancial statements the income tax liability oftbe foreign shareholders has been excluded given that the non-GCe shareholders have agreed under the shareholder agreements signed with the Group to bear the fh lliiability and make necessary payments
33 COMPARATIVE INFORMATION
Certain comparative figw-es of the previous year have been reclassified 0 coofonn to the current years presentation However such reclassifications are oat materia and do not have an impact on tbe previously reported net profit other comprehensive income or the total equity for the comparative year
The impact from the resta tement of comparative infonnalion as a resuh of adoption of IFRS I I - Joint arrangements is detailed in Note 32 Changes in aCCQu(lting policies
46
Aamal Company QSc CONSOLIDATED STATEM ENT OF COMPREHENSIVE INCOME For Ibe year eoded 3 1 December 201 3
2013 QR
Profit for the year 5 12284689
Other comprehensive income Items that are or may be reclassified to profit or loss Unreatised gain on available-for-sale investments 6020
TOTAL COIVIPRpoundHENSIVE INCOME fOR THE YEAR 512290709
TotaJ co mprehensive income attributable to Equi ty holders of the parent 506878992 Non-controUing interests 54117 17
5 12290709
101 1 QR
6245 13489
109582
624623071
59489253 0 2973 0541
62462307 1
The (luached notes I 10 33 form an integral part of these consolidated fin ancial statements
~amal Company QSC
CONSOLDATED STATEMENT OF CASH FLOWS For the year ended 31 December 2013
OPERATING ACTlVlT1ES Profit fot ioc year Adjustment for
Net fuirvalle gaj0i on overncnt properties Dpreciation Provisio~ fOf employlXs end of seevielt benefits Bargac purchaslt gAin Allowance for inp~inueO of trde accomis receIvable (Proritlloss on dJsxgtsel of property piaU( 06 equiprnent Provision fot slow moving Jllvetlories lJlterest nome finance oosts Share of profit of eqUlry-accoumcd inveslces
Operaling profit ooorc working capital changes
JllvtntorifS AU(lIJJltt receiwlbk and prepaymert1S ccoums payabe And accruals ~et l)OVem1t in amounts due from and due to rdmgti panie
Cash from operation Finance coStS pltlid End of SCfVtCe benefits paid
Net Leasb from opcrling 3ctivitilt5
INVEsnXG A(T1TTIfS Xntltresl income raeivcd Proceeds from disposal of property piii1i and equipment Divicieflds reced tTom a j(im venlure Additions to inveslmeul properties Acquisition of subsitlittry net of cush Jzquired Aquisitioll from non-controlling il]tw~st Additions 10 property plant ()nd equipment
Net cash used in invltgtliing Jctivii(lS
FINAClXC ACrlVrnrs rtt moverncl1 in inteftst bearing tiJ41S al1d borrOWings ConlribIH(llS from nonconttohng interests
Net cash tlllied in)ftom hnfCncmg actiV1ies
lNeREMyen IN CASH ANn CASH EQlJlVAUVIS Detrease to casr due to 10~S of crmol of a subsidiary Increase in cash 1t5ulttd in obtaining the conh) of il-n Il$$oile
Cash and caltr quiVlenls at 1 JanuJry
CASH AND (i5iH EQttVALENTS AT 31 DECEMBER 5
NolO
10
15 20 21 20 S
20 22 9
is
20
9 10 4 4
11)13
QR
5122846amp9
(245(51101) 4lA95449
4056969
2294590 (737647)
2380611 (2$24216)
44930$77
_~499901l
34133lno
82822711 (3lH12654) 5312iL387
~82753)
4112788011 (45056522)
_t221Q7S6)
35S52q733
2824116 1274457
119921185 9568U47)
Jl~870))741
_ (141_~3464ol
(149939995) __ ~~__f)~_L
JlplusmnB699~)
643fi4ns
~~Sif99~2U1
~pound2d9M2t
2ul2 QR
6+5~30X9
(388792483) 42540J((1
4205499 (S36)743 J 1361120
178610 2208263
(2Sl4392) 5206389
(234Q350~1
32J ~n2A89 (6[90(304)
(l46739948) 136)0977
_ 62q660
312291614 (58643654)
(432095)
-14932OI5
2894]92 609659
10049971 (72719187)
l 6594 s05) (40A toDOO)
~71~9631
Q4sectS26)Jl
237n(j7n
--1113-0~OO~~__
__ 25c~f)7J33
223251515 (3090 I 7)
5OO(UtOC ~~_6pound~Ag2
64t996~ijl
The atlached iIOle~ to 33 form an integral part of Llese corsokiated financial slUlement$
6
Aamal Company QS C
CONSOUDATED STATEMENT OF CHANGES IN EQU ITY For the year ended 3 I December 20 13
Alfribulable (Q equitY hulders Q[the parent
Cumulative N OII-
Share Legal Treasllry chollgein Retained conrro lfing Tf capilal resenc shares fair value earnings Tolal inereslS equity
QR QR QR QR QR QR QR QR
Balance at 3 December 20 J I 4950000000 267955805 61 4024 670 583 1980475 14 1645505 5973625980
Boougt shares issued (Nole 27) 495000000 (495000000) Profit for the year 594892946 591 892916 2962054) 6245 13489
Other comprehensive income for the year (416) (41 6) 109998 109582
Treasury shares acquired througb business combinati on (2075865) (2075865) (2075865) Adjustmenl due to loss ofcontrol of a subsidiary (983 643) (983643) Derecognition of non-controlling interest due 10 liquicbtion of
a subsidiary 55932 55932
Transfer to legal reserve 59489296 (59489296) Con(ribUlion from non-colllrolling inte rest 59232919 592329 19
Contribution to socia l and sports activi ties fu nd ( 11612837) ( 156 12837) (1561 2837) Non-controlling interest acq uiJed without change ofcontrol (Note 4) (567208) (567208) (39842792) (404 I 00Cl0)
Balmce at 3 1 December 20 12
Bonus shares issued (Nole 27)
Profit for the year Other comprehensive income for the yeM
Transfer to legal reserve
Cootribut ion from non-controlling interest
Contribution to social and sports activities fund
544S00000Q
555000000
32 7445101
5068745 1
(2075865) (4 16)
4485
638248275
(55 5000000)
506874507
(506amp745 1)
( 12807 11 7)
64086 17095
506874507
4485
(12807 11 7)
189838462
54 10 182
15 35
70000
6598455557
512284689
6020
70000
( 128071 122
Ballnce at 31 Decem ber 2013 6000000000 378132551 (2075865) 4069 5266282 14 6901688970 195320 179 7098009149
The a(tached notes 1 to 33 fann an integra pan a fthese consolidated financial slatements
7
2
Aamal Company QSc
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 3 I December 20 13
CORPORATE IN FORMATION AND PRINCIPA L ACTlVIT IES
Aamal was funned on 13 January 2001 as a private shareho lding company with limited liability (W LL) under the COlrunerciaJ Registration Number 23245 in the Slate of Qatar On 12 Ju ly 2007 the private shareholders resolved to transfonn AamaJ into lt) Qaari Shareholding Company (O SC) (the Company) Accordi ngly the Company was listed on Qatar Exchange on 5 December 2007 The Companys registered office is at P O Box 224TI Doha Sttlle of Qatar
The Compaoy is organised inlo a head office (Aamal) cllld branches and operates in the State of Qatar The fo llowing table sets out the principal activi ties of the branches
Brancb Principal aellvities
C ity Center Qatar Branch Leasing the facilities of the re tail outlet complex in Ci ty Cen ter Doha
Aamal Real Estate Branch Residential and commercial real estate investment and property rentaL
Aamal Readymix Branch Production and sale o f readymix concrete
Ebn Sina Medica l Braoch Wholesa le and retail distribution of phannaceulicals aod general consumable products
Aamal Medical Branch Wholesale d istribution of medical eq uipment
Aamal Trading and Dis tributioo Sale of tyres lubricants batleries and home applian~s
Branch
Amnal Servi~s Branch Providing facilitie s management arld cleaning services
Aamal T ravels Branch Operating a travel agency
Aamal fur Indus trial Projects lndusllial investments Branch
Good Life Phannacy Branch Sale of phannaceuticals baby care products medicine and general cOllsumable products
Foot Care Center Branch Sale of footwear clinical activities and general commercial tradillg products
The consolidated financial statements were authorised for issue by the representatives of the B03Id of Direclors of Aamal Corupaoy QSc on 20 February 2014
BASlS OF CONSOLIDATION
The consolidated fioancial statements comprise the fioancial statements of AamaJ Company QS C (the Company) and its subsidiaries and joint controlled entity (together referred to as the Group)
Subsidiaries Subsidiaries are enli ties controlled by tbe Group The Group controls an entity when it is exposed to or has rights 10 variable returns of its involvement with the entity and has the abili ty to affect those returns through its power over tle entity The fi nancial statementS of subsidiaries are induded in the consolidated finarlcial statements ITom the date on which control commences unti l the date on which control ceases When the Group loses control over a subsidiary it dereognises the assets aoo liabilities o f the subsidiary and aoy related non-cootrolliog interest and other components of equity AllY resulting gain or loss is recognised in consolidated statement of income Any interest re ta ined in the fonne r subsidiary is measured 01 f3i r value when control is lost
8
2
Aamal Company QS c
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 31 December 2013
BASIS OF CONSOLfDA TiON (continued)
Subsidiaries (continued) Set oul below are Ihe Group s principal subsidiaries at 3 1 December 2013 Unless oUlenvise slated the subsidiaries as listed below have share capital consisting solely of ordinary shares wh ich are held directly by the group and be proportion of ownership intereSIS held equals 10 the votiug rights held by Group Tbe country of incorporation Of
registration is also their principal place of business
Comp(my name
Aamal Cement Industries W LL
MO Qat1 Company WLL
Senyar Indus tries Qatar Holding WLL
Doho Cables Qaw WlL
EccoGulf Compaoy WLL
Advanced Pipes and Casts eompmy WLL
Johnson Controls Qatar WL L
Country 0 lJCQr por ation
Qator
Qatar
Qatar
Qatar
Q 31ar
Qatar
Principal (lcfi ity
Development and mlUlagement of factori es and the prodllaion or curb sl~ne i llleriook slabs lIId cement bricks
Construction and repai r of power plant es tablislunent and man3gemenl of industrial enterprises aud ac ting as a representative for the imcmatiOllru companies
Management of subsidiaries and associates ovming of palen~ businesses and subleltiug Ulem and provision of investment port fo lio management for Its
subsidiaries and Msocialts UOkr the shareholders agreement signed between the Group and the other
shareholders the Group is able 10 appoint the chai rman and two other members 10 (he Boflrd of Direc tOfS (out of six members) and is able to govern the fin ancial and operating policies of Senyar Industries Qatar Holding WLL Accord ingly ~ company is considered as a subsidiary oCthe Group
Mailltenance and mallllfacture of electric cables equipmelll and lools Doha Cables QalaJ WLL is
91875 (eITectively) owned by Senyar hldush es QaUlr Holding WLL a subsidiary of tllC Group TIIe Group has (he power indi rectly through SenyM [ndus tJi cs Qatar Holding WLL 10 govern fi nancial and opera ting policies of Doha Cables Qatar WLL and accordingly the company was considered IS a subsidiary ofthe Group
OITers professional and bus iness process outsourcing and Cll )] center services
Manufacturing of Wide cement md amplass reinforced pipes systems for infrsslICture (lnd pipeline projects
The Gro up h~ the power 10 govern ~lot financial and opera1 ing policies or Adv3I1ced Pipes and Casts Company WLL by virtue of a sllarchokJers agreemeot TIlus the Company has been cotls ldcrOO as II subsidiary of the Group
Provision of racililies management service5 energy se-rvices md building maimetlaoce and cleanlg services to corporate cl icn1S
PlOporl ion oj
oWPersllip held by the
Non
Group COnroiling interest
99 1
60 40
50 500
459 54 J
5 1 490
50 50
51 49
9
2
Aamal Company QSC
OTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For toe year ended) J December 2013
BASIS OF CONSOUDA nON (continued)
Suhsidiaries (wntiourd)
Cmmffyoj fNgtpvniOil j irniJpvroliin ~__~ampiphdd~~
Nor G)1)Ji contfoifgtg
iMeregt
CmiddotSan TI~ing WLL Sdilamp lYJy1ng renting me Mltcentlopil12 [e~ tSite 30 invimenl w shams rnlilVigemc1t vf real lsta propeItilttl owning ille palent and tradcentmut and tnlding in iXjUiflfIfflt amJ vcilici$ 1he GroClp has tJe pcwer tv goem 6e ~inr8hl and ojJrtltllng
roicie_~ of ClSM by vifcle 0 a shlrcholdcrs 191e~mcentn(
745 25 1~i
nnoV1iv lightinf wmpany Qatar TNriing of Ught 2rrt1nz DiDd lEU Lwpj lmd 7r J) WLL olhT $hlil1g prrltwl
Twdiflg of of4 SiJpplk-s and providll$ prindna and 65 35 laniniltmJ sltrce~
Non-coufroUing illterests Non-controrling intel(SlS are measwed tj tleir propO(hOnile $hue Ot the tcquirees identifiabk net asscl III the JCqUiSlOt1 rote Chuegts in t1e Groups imcest in i $ubsiciwty hat do tot rcmltlo a loss of ~)I1a1)l xc accountd for as equity trnramplclions
Tamil-crions eUminnted on c)lwtidaticu lntngtgroup baiances Jue transactions 00 any unrealised income 1nd expenses ari$tng from intrnwgrOU tranSaOiQlls arc eiimmatcd UfiJeaiiHd gaina arising from ITaUstlclions ttlt equity-lKcoUl11uJ IlVtSlCCS are eliminatd 1gamst the investment 10 the extent oftlle Group interest in the inveMee Umaslised loses are eiiminatd II the same VllY us unrvalised gains hit only to Ille eXfeut that there is 10 evidence ofimpaimcentut
Illttn~ts in jOint arrangements iu)d associates Detais ofeach of ttc Groups Hutilrial Joint venlU)s fujltj assoeime~ at the end of the reponing period are 5 [OHOViS
Cmnirycgt PltJporlion qf Compao name infOjwNiIIO1 ewonlup Qltd
vOingjYwer htld by
tiff GrOlp
[I Sewed Cable QntM Tndllg in ele(mHnechmita CGlJ)ptnefllmd plOvicmg WLL rei) services El SWNed Cables )ilMr WLL is
49 JWoo (Wilt 55 tblre of rrofils (losses) hy StHyar lrdl11(rie~ Qal3t Hodirg WLt e 511b8idimy 0 ~he GOllp However (kw 10 ~ feiBtil shareholdergt agreewli pound ellWY has I~)mc a jOm vent( eTdive trmJ l January 20 wllkh is mC(t511rec Il1de the eqJity ngtU1l
rins $tngtdJBI S~ 1idJgt (law Ertity lS engaged l sled (b[iclli0ls Gf0Jp mtllpoundure Ea LC t11cent fl5sodau under cquhy nlctooo
Aamal Company QS c
NOTES TO THE CONSOLIDATED FlNANClAL STA TEMENTS For the year ended 31 December 2013
3 BASIS OF PREPARATION AND SUMMARY OF SfGNlflCA1T ACCO UNTING POLICIES
31 BASIS OF PREPARATION
The consolidated fi nancial statements have been prepared in accordance with lntema tional Financial Reporting Standards (IFRS) and the appLicable requirements ofQalar Commercial Companies law No5 of 2002
The consolidated financial statements have been presented in Qatari Riyals (QR) which is he Companys floclional and presenUll ion currency and have been rounded to tlle nearest Qatari Riyal TIle consolidated financial statements are prepared lUlder the historical cost convention modified to include he measurement a l fair value o f investment properties and available-for-sale investments
32 CHANGES IN ACCO UNTING POLICI ES
The [lccoWiting policies adopted are consistent wilh Ihose of the previous fi nancial year except for the following standards effe ctive for the annual period beginning on or lfter 1 Jlnuary 20 13 These standards and amendments other tM n the impact of (FRS II - Joint Arrnnge menlS noted below did not have aoy malenal impact to the Group
lAS I (amendment) - Presenfalion of items ofother comprehensive income The amendments to IAS I require that an emity present separate ly the items of ltN her comprehensive income that would be reclassified to profit or loss in the future if certain conditions are met from those that would nC ver be reclass ified to profit or loss
lAS J9 - Employee benefits (201) lAS 19 (201 1) changes the definition of short-tenn and other long-tenn employee benefits to clatify the di stinction between the two
lAS 28 (201 f) - fnvesfmem in Associates and Joint ventires lAS 28 (2011 ) supersedes lAS 28 (2008) lAS 28 (2011) makes the foHowing amendments Associues held for sale JFRS 5 Non-current Assets Held for Sale and Discontinued Operat ions applies 10 an investment or a portion of an investment in an associate or a joint venture that meets the criteria to be classified as held fo r sale For any retained portion of the investment tlwt has not beell classified as beld for sale the entity applies the equity method until disposal o f the portion held for sa l ~ After disposal any re tained interes t is accounted for using the equity method if the re tained interest continues to be an associate or a joint venture and 0 0 cessation of significant influence or jo int conltOl even ifan investment in an associate becomes an investment in a joint venture or vice versa Ihe entity does not fe-measure the retaincd interest
Amendments ft) fFRS 7on ofseftingjil1ancial assels and jinancialliabilities (2011) Disclosures - O ffsetti ng Financial Assets and Financial Liabilities (amendmems to FRS 1) introduces disclosures bout Ihe impact of oetting arrangements on an entity s fin ancial position Based on the new disclosure requirements the Group has to provide inforroation about what amounts have been offset in the consolidated statement of fimmcial position and the nature and extent of rights of set o ff under master netting aITlngements or simi lar a1Tlngernents
fFRS 10 - Consolidate1 financial SIOlemenlS and lAS 17 Separate Fillancial SfalemenS (2011) [FR S 10 introduces a single control model to determine whether an investee should be consolidated FRS 0 replaces the parts of previQlSly exis ting lAS 27 Consolidated and Separate Financial Statements that dealt wi th consolidated fin ancial statements and SIC-12 Consolidation - Special Purpose Entities This new contro l model fo cuses on whether the Group has power over an investee exposure or righlS to variable rerums from its involvement with the in veSlee lnd abili ty to use its power to affect those returns The Group has amended its accounting policy on consolidation in line with requirements of TFR S 10 and has re-assessed its consolidation conclusion
[FRS 12 - Disclosures ofimerests ill other entities IFRS 12 brings together into a single Sfandatd all the disclosure requirements about an enti ty s interests in subsidiaries jo int arrangements associates and unconsolidated structured entities It requires the disclosure of infonnation about the nature risks and financial effects of these interests
II
Aamal Company QSc
NOTES TO THE CONSOLIDATED FTNANClAL STATEMENTS For the year ended 3 1 December 201 3
3 BASIS OF PREPARATION AND SUMMARY Of SIGNIFICANT ACCOUNTrNC POLICIES (continued)
32 CHANGES IN ACCOUNTING POLlc ms (coDtinued)
IFRS IJ Fair ~alue measuremetll TFRS 13 provides a single source of guidance on how fair value is measured and replaces the faif value measurement guidance tha i is currently d ispersed thIo tlghool [FRS It unifies the definiti on of fair va lue as the price that would be received 10 sell an asset or paid to transfer a liability in an orderly transaction between market participants a t the measurement dale It replaces and expands the disclosure reltjuiremenlS about fair value measurements in other IFRSs including TFRS 7
Improvements (0 IFRSs (20 ) Improvements to IFRS issued in 20 11 contained numerous amendments to IFRS that the IASB considers nonshyurgent but necessary Improvements to lFRS comprise amendments that result il) accounting changes to presentation recognition or measurement purposes as well as tennioology or editorial amendments related to a varie) of individuallFRS standards
During the period the Group has adopted the fo llowing new s tandard which became effecti ve for the annual periods beginning on I January 201 3 which had a materi81 impact to ule Group
IFRS II Joint AlTwlgements As a result of adopting IFRS II the GrOlp has changed its ltlccoUJ)ting policy for interests in jo int a rrangemeots Uuder rFRS 11 the Group classifies its interest in jo int arrJngements as e imer j oint operations or joint ventures depending on the Groups rights to the assets and obligations for the liabil ities ofthe arrangements When maldng this assessmenl the group considers the strucltire of the arrangements the legal fonn of any separate vehicles the contrac tual tenns of the arrangements and other fact s and arrangements Previously the structure of tbe a rrangement was the sole foc us of classification The Group has re-evaluated its involve men t in ils o nly joint a rrangement El Sewedy Cables Qatar WLL ltlnd has recla ssified the investment from jointly controlled entity to joint venture Also the Group has discontinued with re rrospective effect the use o f the proportionilte consol idation method and adopted the equity method to account for joint venture in accordance mth IFRS I I
Summary oquulllitative impuct The following tables summarises the materia l impac ts rcsulting from the above change in accounting polic ies on the Groups financ ial position profit o r loss and cash flo ws
Effect of chnnge in 31 Decemb er2012 accounting policy
Cunem assets (278 880441 ) Non-current assets 1295 1346 Total assds (265929095)
Current liabilities (265072694) NonmiddotcWTent liabilities (856401) Total lin bill ties (265929095)
For the year ended 31 December 2012
Profit for the year
Net chflllge in cash and cash equivalents dlUing the year (99696J)
12
Aamal Company QSc
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 3 I December 2013
3 BASIS OF PREPARATION AND SUMMARY OF SlGNlf[CANT ACCOUNTING PO LICI ES (continued)
33 lASB STANDARDS AND lNTERPRETATIONS ISSUED BUT NOT ADOPTED
The following lASB standardsamendments hJve been issued but are not yet mandatory and have 1l0( been etrly adopted by the Group
Standard
Illterpretotion COnem EffeClive dale
TfRS9 Financia l InstrumentS (new standard) I Januruy20 17
IAS 32 Financia l Instruments O ffsetting (amendment) I January 20 14 JAS 36 Financia llnslnnnents Disclosure - non-fi nancial asse ts (amendment) I January 2014
The Group is considering the implications of the above standards and the till1ing (If adoption by the Group
34 SUM MARY OF SIGNIFICAJT ACCOUNTING POLICI ES
Bu siness combinnriO llS The Group accounts for business combinations using the acquisitio n method wben connol is Imasferroo to the Group The consideration ITansrerred n the acquisition is generally measured at fa ir value as are the identifiable net assets acquired Any goodwill that arises is tested annua lly for impairmeot AllYgain on a bargain purchase is recognised in pro fit or loss immediately Transaction COStS arc expensed as incurred except if rehated to the issue of debt or equity securities
The considera tion transferred does nOt include amounts related to the settlement of pre-existing re lationships Such amounts are recognised in profit or loss
Any contingent consideration payable is roeasured at fair va lue at the acquisition date If the contingent consdicrntion is classified as equity then it is oote nmeasured and settlement is accounted for within equity Otherwise subsequent changes in the fa ir value of the contingent consderafion are recognised iu profit or loss
Cash a nd eash equivalen ts For the purpose of the consolidaled statement or cash flo ws cash and cash equivalents consist of cash and bank balaoces ruld short teJTIl bank deposi ts wi th an original marurily of three months or less net of outstanding bank overdrafts
Accounts receivable Accounts receivable are stated at originill invoice amount less an allowance for any uncollectible amounts An estimate for doubttit debts is made when collection of the flilt amount is no longer probable Bad debts are wntlen off when (here is no possibility o f recovery
Inventories Inventories are stated at the lower of cost and net realisable value Costs are those expenses incurred in bringing each product to its present location and condition
Goods ror resalework in progress - Cost of di rect materials aJld labour plus attributable overheads based on a oormallevel ofac1i vity
Raw material and spare pan s PlIlchase cost on a weighted average basis
Net realisable value is based on estimated selling price less any further costs expocted to be incurred to completion and disposal
13
Aama Company QSc
NOTES TO THE CONSOLIDATED FINANC IAL STATEMENTS For tbe year ended 31 December 20 13
3 BASIS OF PREPARATION AND SUMMA RY OF SIGNIFICANT ACCOUNTfNC POLI CIES (contin ued)
34 SUMMARY OF SIGNIFICANT ACCO UNTLNG POLICIES (continued)
Interests in equity-aecoupled inveslecs The Groups interest in equity-accounted investees comprise interest in associates and joint venture
Associates are lhose entities in which the Group has significant influence but not control or joint control over the financia l and operating policies A joint vennu-c is an arrangement in which the Group has jo int ool1lrol whereby the Group has rights to the net assets of the arrangement rather thall rights to its assets and obugations for its liabilities
InlereSIS in associates and the joint venture are accoliDted for using the equity method They are recognised initially tit cost which includes transaction costs Subsequent to ini tial recognition the consolidated financ ial stateme nts ioc lude the Groups shrre of the profit or loss and other comprehensive income of equity-accounted investees unti l the dalc on which significant in Lluence or joint control ceases
The reponing d~les of the equity-accounted investees and the Group are identical and the equi ty-accounted investees accoWlting policies confonn to those used by the Group for like tmnsactions afld events in similar circumstances
Investmefl t properties umd aod buildings are considered as investment properties only when they are being held to earn ren tals or for capital appreciation or fo r both
Investment properties are measured ini tia lly at cost including traosaction costs and borrowing costs that are directty attributable to construc tion o f the 8sseL The carrying alRount includes the cost of replacing part of an existing investment property at the time that cost is incurred jf toe recognition cri teria are mel and excludes the costs of day-to-day servic ing of an investment property Sub~quent to inilial recognition investment propert ies are slated at fa ir value which reOects market conditions at the reporting date Gains or losses arising from changes in the fa ir values of investment properties are included in the consolidated statement of income in the yeltl r in which they arise
Investment properties are derecognised when either they have been disposed off or when the investment property is pennanently withdrawn 1T0m use and no fu ture economic benefit is expected from its disposal Any gains or losses on the retirement or disposa l of aD investment property are recognised in the consolidated statement of income in the year of retiremeOl or disposal
Property under construc tion is dealt with under lAS 40 and rttorded at cost less accumulated impairment losses until either its fair value becomes relia bly detenninable or cons(TUction is completed (whichever is earl ier) At that time it is reclassified as inves tment property and a fa ir value adjustment is recognised in the consolidated statemenlof income
Transfers are made to or fro m in vestment property onl y when there is a change in use For a transfer from investmen propeIT) to ovmer occupied proreIT) the deemed cost for subsequent accounting is the fair value at the date of change in use If owner occupied property ~omes an investment property the difference between the canying value aoo the fair value at the date oflransfer is rttognised as a revaluation reserve in the equity and is released to the consol idated sta tement of income llpon disposal of such propcny
14
Aamal Company QSc
NOTES TO THE CONSOLIDATED FrNANCIAL STATEMENTS For the year eDded 31 December 20 13
3 BASIS OF PREPARATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLI CIES (continued)
304 SUMMARY Of SIGNIFICANT ACCOUNTING POLICIES (continued)
Property plant and equipment Property plant and equipment is stated at cost including borrowing costs that are eligible for capitalisation and excluding the costs of day-to-day servicing less accumu lated depreciation and any imp~innem in value
Depreciation is provided on a straight line basis on all propelT) planl and equi pment The rales of depreciatioo are based upon the following eSImnelt useful lives
Buildings 20 years Leasehold improvements 2-8 years Truck mixers and motor vehicles 4-1 5 years Plant and ITIJchioery 8-2 5 years Furniture fixtures and office equipment 3-5 years Computers and related software 3-5 years Capital work in progress Not depreciated
The carrying amounts are reviewed for impain nellt when events or changes in circumstances indicate that the carrying value may not be recoverable If any such indication exists and where the carrying values exceed tbe estimated recoverable amouot the assets are wri tten down to their recoverable amount being the higher of their fair value less costs to sen and their value in use
Expendirure iocurred lO replace a component of an item of property plaot and equipment that is accotmted for separately is capitalised and the carrying amount of the component that is replaced is written off Other subsequent expenditure is capitalised only when it increases furure economic benefits of the related item of property plant and equiproent Al l other expendirure is recognised in the consolidated statement of income as the expense is Incurred
An item o f property plaot and equipment is dereeognised upon disposal or when no future economic benefi ts are expected from its use or disposal Any gain or loss arising on derecognilloo of the asset is iocluded in the consolidated stalemeot o f income io the year the asset is derecognised
The asset s residual values useful lives and method of depreciation are reviewed and adjusted if appropriate at each rnancial year end
Borrowing costs Borrowing costs direc tly attributable to the acquisition constmction or production of an asset that necessarily takes substalltjal period of time 10 get ready for its intended use or sale are capilalised as pan of the cost o f lhe respective assets All other borrowing costs are expensed in the year they incur BOlTOwiog COSts consist of the interest and other costs that the Group incurs in coomction with the borrowing of fund s
Accounts paytlble and accruBls Liabilities are recognised for amounts to be paid in the fuMe for goods or services received whether billed by the supplier or not
Interest bearing loans Bnd borrowings Interest bearing loaos and borrowings are recognised ini tiaJy at fai r value of the amounts borrowed less direc tly attributable transaction costs Subsequent to initial recognition interest bearing loons and borrowings are measured at amortised COSt using the effecti ve interest method with any differences between the cost and tinal settlement values being recognized in the conso lidated statement of income over the peliod of borrowings Instalments due within one year aI amortised cost are shown as a ctuTentliabiliry
Gains or losses are recogTlised in the consolidated sialement of income when (he liabililies are derecognised Interest relating (0 imerest bearing loans and borrowings is expensed in the year in which it is incWTed e(cept those qualify for capitalisation
15
Aamal Company QSC
NOTES TO THE CONSOLIDATED FfNANClAL STATEMENTS For tbe year eoded 31 December 201 3
J BASIS OF PRpoundPARATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
34 SUMMARY Of)SIGNIFICAtlT ACCOUNTING POLICI ES (continued)
TClaot deposits Tenant deposit liabilities are initially recognised at fair value and subsequently measured at amortised cost where material Any di fference between the initial fair vllue and the oominal amount is [eluded as a component of rental income and rocognised on a straight-line basis over the lease term
Derecognition or fiolocial nsstls and liabilities
a) Financial assets
A fi nanCIal asset (or w~re apphcabJe a part of a fin ancial asset or part of a group of SImilar financIal assets) IS derecogmsed where J bull The n ghts to receIve [5h flo ws from the asset have expIred bull The Group has trans f rred Its rights to receive cash flows from the ass or has assumed an obhg811On to pay the
reltelved cash flows I full Wlthout mfl tenal delay to a third party under a pass-through arrangement and elther (3) the Group has Ira sferred substantially aIthe nsKs and rewards of the asset or (b) Ihe Group has neuher transferred nor relain substantially ai the n sks and rewards of the asset but has tnlnsferred control of the asset
When the Group has tTa~fened its rights 10 receive cash flo ws from an asset or has entered into a pass-waugh arrangement and has nejlher trmsferred nor reta ined substantially all of the risks and rewards of the asset nor trnnsferred control of the asset the asset is recogoised to the extent of the Groups cOlilinuing involvement in Ihe
In that case the Group at 0 recognises an associmed liability The mnsferred asset and ihe associaled liabi lity are measured 00 a basis thai flects Ihe rights lnd obligations that the Group has retained Continuing involvement that takes the form of a guara tee over the transferred asset is measured at the lower of the original canying amount of Ihe asset and fbe maxim amoun o f consideration that the Groop could be required to repay
b) Financialliabiliti
A financial liabili ty is defogniSed when the obligation under the liabil ity is discharged or cancelled or expires Where an existing fio8 1lci I liability is replaced by another from the same lender on substantia ll y d ifferent lenns or the terms of an existin liabili ty are substantia lly modified such an exchange or modification is treated as a derecognition of the orig~al liabili ty and the recog1Jitioil of a new liability and the dirference io the respective carrying amounts is reco ised in the consolidated Slatement o f income
Impalr meot ood uncollec ibility of fina ncial assets An assessment is made al each repon ing date to determine whether there is objective evidence that a speci fic financial asset may be impaired If such evidence exists allY impainneOl loss is recogoised in the consolidated statement of income ImT t is detemtined as fo llows
(a) For assets earned a t fair value impainnellt is tbe difference between cost and fair va lue (b) For asseamp carried at COSt impairment is the difference between cost and lIle present value of future
cash flo1S discounted at lhe current market rate of rdurn for a simi lar finan cial asset (0) For asseq carried al amortised COSt impainneot is the difference between canying arnOWll and lhe
present Value of future cash flO M discowlled at the original effective iDlerest rate
Provisions Provisions are rewgnised hen the Group has an obl igation (legal or COnslnlctive) aris ing fro m a past event and the costs to settle the obl igalio are both probable and able to be reliably measured
16
Aamal Company QSc
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 31 December 2013
3 BAses OF PR EPARATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICI ES (colltinued)
34 SUMMARY OF S IGNIFICANT ACCOUNTING POLICIES (continued)
Employees eod of service benefits The Group provides end of service benefits to all employees in accordance wi th employment contracts and Qatar Labour Law The entitlement to these benefits is based upon the employees final salary aocl length of service subject to the completion of a minimum service period The expected costs of these benefits are accrued over the period ofemployment
Revenue Revenue is recognised to the extent thal it is probable that the economic benefits will flow to the Group and the revenue call be reliably measured Revenue is measured al the fair value of the consideration received excluding discoWlIS rebates and duty The following spec ific recognition criteria must also be met before revenue is recognised
Sale ofgoods Sales are recognised whcn significant risks and rewards of ownership of the goods have passed to the boyer and the amount of revenue cao be me3sured rcli3bly
Rental income Rental incorne from investment properties is accoWlted for on a time proportion basis over the period of tenancy Incentives for leases to enter into lease agreements are spread evenly over the lease teon even if the payments are not made 0 0 such basis Income arising Tom expenses recharged to tenants is recogn ised in the year in which the expenses can be contrac tually recei ved Service charges aud other such receipts are includcd gross o f related cosls in revenues as the Group acts as principal io this regard Premiwns received to terminate leases arc recognised in the consolidated statement of income when they arise
Service income Service income is recognised when the service is rendered and the outCQrne of the transactions can be estimated reliably
COlimission Commission is accounted for on an accrual basis when the right 10 receive the income is established
become on tra~el agencies [ncome on travel agencies is accounted for in the year in which the airline tickets are sold
IIIeresr income Joterest income is recognised as the interest accrues using the effective interest Clle method
Foreign currencies Transactions in foreign currencies ate recorded al tbe rale ruling at the date of the transaction Monetary assets and liabi lities dcoomioated io foreign currencies ace retranslated ill the raLe of exchange ruling at the reponing date All differences are recognised in the Statement ofinconlC
Use of estimates The preparation of (he Groups consolidated financial sta temenls in CQnfonnity with Intemltional Financial Reponing Standards ([fRS) requires management 10 rnake estimates and assumptions that affect the reponed amounts of assets and liabilities and disclosure of contingent asscts and liabili ties at the rcporting date and the reported amoUlils of revenues and expenses during Ihe reponing period Although these estimates are based on managements best knowtedge of current events nnd actions acnm results may ul timately differ fro m those estimates (Significant asswnptions nccounting judgments and estimates used in preparing these coosolidated fina ncial sta temenlS are disclosed in Note 31)
The estimates and underlying assumptions are reviewed regularly Revisions to accounting estimlIes are recognised in (he period in which the estimate is revised if the revision affects only that period or in th~ period of the revision and future periods if the revision affects both current and fu ture periods
17
Aamal Company QSC
NOTES TO THE CONSOLlDA TED FINANCIAL STATEMENTS For tbe year cnded 31 December 2013
3 BASI S OF PREPARATION AND SUMMARY OF SrGNIFICANT ACCOUNTING POLICIES (continued)
34 SUMMARY or SIGNIFICANT ACCOUNTING POLI CIES (continued)
Fair va lues A number of Groups accounting policies and disclosures require tJ1 C measurement of fair values for both financial and non-financial assets and liabil ities The Group has an established control framework with respect to the measuremeot of fair values When measuring the fair value of an asset or a liabili ly the Group uses market observable data for (be valuatiOD Fair values are categorised into different levels in a fair value hierarchy baCd on the inputs used in the valuation lechniques as follows
i) Leve l I - Unadjosted quoted prices io active markets for identica l assets and liabilities ji) Level 2 - Otheqobservable inputs not included within level 1 of the fair value hierarchy ii i) Level 3 - Unobtervable inputs (including enti ty s own data which are adjusted if necessary to retlect the
assumptions market participnllts would use in the circumstances) The Group recognises tralnSfers between levels of the fair value hierarchy at the end ofthe reporting period during which the change has ocdWTed_
Treasury shares When share capitl recognized in equity is repUIchased (by the Company or any of its subsidiaries) the amount of the consideration paid which includes direa ly altributable COSIS is recognized lIS a deduction from equity Wheo treasury shares are sold or reissued subsequently the amount received is recognized as no increase in equity and the resulting surplus or deficit on the transaction is presented io share premium
18
4
Aamal Company iQSc
NOTES TO THE ONSOLlDATED FINANCIAL STATEMENTS For the year ended 31 ecember 201 3
BUSINESS CO~BlNAnON
Acquisition o f Culf ROks Company VLL On 1 January 2012 the roup acquired 51 oflhe voting shares of Gulf Rocks Company WLL (Gul f Rocks) a limited Iiabiliry campan incorporated in Qatar and registered UJKier conunercial registration number 2249) The acquisition was made thT ugh Ci-San Trading WL L a subsidiary which is 50 owned by Aamal Group
I
The fai r val ue of lbe ideltifiable assets and liabilit ies of Gulf Rocks Co mpany WLL based on purchase price allocation exercise condlcd by tbe management as at the date of acquisition WJ S as follows
Fair value recognized on
acquisition QR
Assets I Cash and bank balances 14005495 ACC QUOiS receivable and wePayments I 749383 Amouots due from related plrties I
I oveotones
48311 190 5124 270
Available for sale investm~nlS 1985245 Plant and equipment 6769 17
81852500
Liabilit ies Accounts payable aJld accll1als 4724446 Amounts due to related parties 385070 Employees end of serviccibenefits (Note 15) 349272
5458788
Total identifiable net a5sellf
Purchase consideration trasferred Non-controll ing intereSt az-ising on business combination Bargain purcha5c gain rc~u ting from the tcquisilion
Allalysis ojcash flows OIl acquisition Net cash acquire11 Nith the subsidiary 14005495 Cash paid (30600000)
(16594505)
On I September 20 12 the Company acquired the balance 49 nfthe equiry of Gulf Rocks Accordingly the Group has 74 5 effective holdin4 in Gulf Rocks as at the reporting dale The excess nfthe purchase cons ideration over Ihe fair value o f net assets of GuJf Rocks acqui red from the nnn-controlHng interest has been recorded directly in the retained earnings of tbe Gr6up as at 31 December 201 2
QR Purchase consideration 404 10000 Less fuir value of oet asset~ acquiroo from the non-controlling Interest holder (39842792) EXce5s of purchllse cons idf ration over the fair value of net assets a(q uired 567208
19
5
Aamal Company QSC
NOTES TO THE (WNSOLlDATED FfNANClAL STATEMENTS For the year eoded 3 ) December 2013
CASH AND CASH EQUIVALENTS
For the pmvose of consolidated statement of cash flows cash and cash equivalents comprise the fo llowing balances
lon 2012 QR QR
Cash and bank accounts 330333904 282272895 Short lenn bank deposits 105802852 85608396 Cash and bank balances 436136756 367881 291
Bank overdrafts (6836280) (2885090)
Cash and cash equivalents 429300 476 364996120 1
The short tenn bank deposits are made for varying periods between one day aod three months depeoding on Ibe immedifltc cash requirements of the Group and earn interest at the respective short term deposit ra tes
6 ACCOUNTS RECEfVABLE AND PREPAYMENTS
2013 2012 QR QR
Trade aCColUlts receivable 411 011 567 345260657 Advances 0 suppliers and prepayments 50787921 629389J 5 Retention receivables 36217081 56943030 Other receivables 12073270 17 139173
5tO089839 4 82 28 1775
As at 31 December 2013 trade accountS receivoble amoWlting to QR 2690 1412 (201 2 OR 24984025) were impaired Movements in the allowance for impairment of trade aCColmts receivable were as follows
2013 202 QR QR
At 1 January 24984025 1 877085 Charge for [he year (Note 21) 2294590 13613 120 Amounts wriuen off (19949) (117368) Unused amotmts reversed (357254) (388812)
At 3 t December 26901412 24984025
20
6
1
lamal CompanyQSC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMEltS For the year ended 3 J December 2013
ACCotNTS RECEIVABLpound AND PREPAYMpoundNTS (contillued)
As at -1 I Dtcemxt the ageirg of unimpaired (ltlde accounb iltcivabk was as follows
P(HI duo
nor Up to 30 31-60 61middot90 Yi-jSj gt flO Tota impoirlt-fl days days days day doys
QR QR QR QR QR QR QR
1l13 411OJl$67 25l981960 32312165 2140966 19351fi43 16f)76888 60148545 2012 345260657 1695159B6 493lt)8566 2356$954 19494369 16908414 66374363
1JJJirtpai~ed receivable are expected no th bil5tS of past experienn) 10 be fully fcCi)evbc H is not the pngtctlce ofthcent Group to oblum collaleral over recejvablcI_
AMOLNTS DUE FROyl REL-TEO PARTIES
Name
AI ~aisnl Holding Company V_LL E Seweo Cabtes Qatn WL L Cnild -ftt Cvmlllny Al hz Retll E$vt rWesnnim Company WLL~ AllaZi Real Estale BrAnch EI Sewedy Electric Egypt WLL MuincrDJ1Ce Mwagmvont Group Qat3r W LL Good fe Cheffilt - The Pcarl
BuderPhtrnacy Al Faisallnlemadonal Tnl(i and Investment Company WLL AI-rabia Land Trnr~PQltit1g Company rLL ro Sewedy CabLes - Kuwuit Gcentttco hlttrnJmJilI Frijns StHytural Steel Middle East WLl Winer Wunderand Company WLL Al FtOH1H for Investment amp llllemtiOl1a Trading COntpAny WJ_L Q)lar Bahrain lmerOlnionai Cnero3 WLL Gulf EngJisb Sltl-Qo] Al Rayyao Tourism lve$lrnent Company W LL Other relater purties
2013 2012 QR QR
15412-1064 ll941Y70 34644615 ~li96858l
[()0405 14-45012 51 59197 9538116 15514113 4014727 236824$
1867526 LSOfd22
8(1012 10435r 311650 746395
15023 204450 459829
2iYHi 244940 186750
152170 143440 33500 7768(1
6259 1459lt) 758962-1
__2~61g~~_ 1~95Ji
bull 214109950 171525363
--__ shy
7
8
9
Aamal Company QSc
NOTES TO THE CONSOLIDATED FfNANClAL STATEMENTS For the year ended 3 1 December 2013
At10(JNTS DUE FROM RELATED PA RTIES (continued)
NO les (i) Transactions witll related parties are eam ed out through open account and Directors do not consider any
receivables to be past due or impaired
(ii) Related party transactions ore disclosed ill Note 26
INVENTORIES
Goods for rew le Raw materials and spare pans Work in pTOgresS Goods in transit
Less Provision fOI obsolete and slow moving invenlories
1013 QR
165499699 38388307 19944678 9671 8553
320551237 (3851692)
31 6699545
Movements in the provision for obsolete and slow moving inventories were as follov~
At I January Charge for the year (Note 19) Reversals Amounts wri tten off
At 31 December
E QUITY-ACCOUNTED INVESTEES
TIle Group has the followiog invesllnenfs in equity-accounted investees
Interests in joint venrure Interests in associa tes
At 31 December
G roup s snare of profits fr om the equity-ncco unted iovcstees arc AS follows
Profit share from in vestment iojotnt venture Profit share from investment in associates
202 QR
232597650 36608394 30622960
10521 9695
405048699 Q 145826)
40 I902873
203 QR
3145826 1 380617 (535695)
( 1139056)
385 1692
20 12 QR
2795992 2208263 (137995)
( 1720434)
3 145826
2013 QR
2012 QR
129462184 3644723
124124803 2545188
133106907 12666999 1
17330368 22869454 1169533 534050
18499901 23403504
22
10
Aama Company QSC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 31 December 201 3
9 EQUITY-ACCOUNTED INVESTEES (continued)
Counlry of incorportllion
Relationship Proportion ofownership and lotilfg power held by the Group
203 2012
EI S~wedy Cables Qatar W LL Frij ns Structural S teel Middle East WLL Al Ftfazdaq Company WLL
Qat~
Qatar Qatar
loint venture Associate Associate
55 20
55 20 35
Note With effect from 1 January 20 13 the mlnagemeot of the Group has reclassified the investment in Al Farazdaq Company W L-L from investment in associate to investment in subsidiary This is based on the transfer of share holding by the other shareholder whereby the conlroi o f AI FOl razdaq Company W LL bas been assigned 10 tbe Company
INVESTM ENT PROPERTIES
a) Reconciliation of carry ing amounl 2013 202 QR QR
AI I January 611334701 8 555 1835348 Additions 9568047 1727191 87 Transferred from property plant and equipment (Note II ) 34519828 Net gain iTo m fa if value adjlls tment 245051107 388792483
At 31 December 6402486000 6 11334701 8
b) Measurement of fair value
The fair values of the Groups inveS hnent properties as at 31 December 201 3 and 3 1 December 2012 have been arrived al on the basis of valuations carried Ollt on the respective dates by professionally qualified independent valuers not related to the Group The independent valuers have appropriate qUlli ficatioos and (eceJ11 experience in the valuation of properties in fhe relevant locations The fa ir value WltlS determined based on market comparable approach that reflocl s recent transaction prices for simillt1r properties and discounted cash flo w and income approach techniques
Details of the Group s iovestment properties and infonnation about the fa ir vn lue hierarchy as at ) I December 20 I J are as fo llows
IIvestment propenies
Level 3 fair vallie
Al I Janu ary 6 [ 13347018 Additions and trans fers from property plant and equipment 44087875
Gain included iu prom and loss Net gain from fair value lt1djuslmem 245051 107
AI J I December
The Group recognizes transfers between levels of fair value hierarchy as o f the end of the reponing period during whicb the transfer has occurred There were no transfers between the fai r va lue hierarchy during the year
23
10
Aamal Company QSc
NOTES TO THE ONSOLlDA TED FINANCIAL STATEMENTS For the year ended 3 I ecember 201 3
LNVESTM ENT ROPERTIES (contin ued)
b) Measuremen t 0 (air value (conti nued)
Vau t ion technique an significant unobservable in puts
The valuer has applied t e income capitali zation discounted cash flow and comparab le methods to detennine the market value of the lnve tment propen ies Significant unobservable inputs used included expected market rental growth rates (an average 425) occupancy rates (approximately 90 to 95) and risk adjusted discount rates (approximately 5 to 7 0) M y significant change in these inputs can impact lhe fair valuation of investment propcnies
24
Aamal Company QS c
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For che year ended 31 December 2013
11 PROPERTY PLAi~T AND EQUIPMENT
FumilUre Truck mixers fIXtures and Complllers
Leasehold and maor Plum (fd office and relaed eapiowork Buidings improvements vehicles machinery eqllipmcni sofMore in progmiddotcss Total
QR QR QR QR QR QR QJl QR
At I January 2013 137870126 371 88 132 9595813 1 262536261 19 580954 14864 385 561 32447 6241 30436 Additions 948)65 2618 100 5367399 859061 111 5268 137147581 148055774
Relating to d isposalswrite-off (1042642) (4390496) (77157L) (589150) ( 184075) (6977934) Transfer from capilal work in progress 1505 310 164 336 3601776 ( 150000) 1182741 (6304 163) Transrer to investment properlies (Note (0) (345 19828) (345 19828)
At J I Dttember 201 J 139375436 J7 258~ ~1 85735 270733865 19700865 169783 19 152456037 _73068~448
Depreciation AI I January 2013 16133915 J6902 529 49087707 68783 065 11 980009 tl71 595 3 174603 178 Charge for the year 7059805 3237150 5390767 12249797 2849162 1768823 42555504 Relating 10 disposalsJvri te-off (664709) (4 3 1716 1) (724322) (552939) ( 18 1993) (6441 124)
At 31 December 201 3 23193 720 19474 9 70 50161 313 90303540 14276232 13302783 2 107 17558
Net carrying amounts At 31 December 2013 116181J16 _17783221 44024422 180415325 5424633 3675536 __l2456O37 JJ9970~890
Notes (i) Depreciation charge for the year amounting 10 QR 33 164382 (201 1 QR 3303091 6) is included in tbe direct costs and an amount of QR 60055 (20 12 QR 36939)
has been capiulised under capital work in progress
(ii) The capital work in progress includes capitalised borrowing costs amounting to QR 125645 (20 12 QR 15358)
(ii i) The buildings are constructed on a plot ofland taken on a loog term operating lease
25
Aamal Company QS c
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 31 December 201 3
II PROPERTY PLANT AND EQUIPM ENT (continued)
C05I~
At 1 January 2012 Additions Acquired through business combinations (Note 4) Relating to d isposalswrite-off Transfer from capital work in progress Transfers
Buildings QR
137434400 435726
Leasehold improvemellls
QR
38137377 446J 04
144 103 ( 1539452)
Truck mLCers and molO
velricles QR
83427661 11464679
1697609 (631824)
Plant and machinery
QR
249335437 97264 85
35 14 132 (99498)
59705
Furniture fir ures and
office equipmem
QR
22845309 667586
192042 (3696457)
98000 (525526)
Computers and related
software
QR
158 19519 87 14 14
141837 (266 1733)
908078 (2 l4730)
Capitol work in progress
QR
12104889 451 53265
( 1065783) (59924)
Total (JR
55910459 8 68765259
5689723 (862 8964)
(800180)
AI 31 Dttember 2012 137870) 26 371881 32 95958 13 1 262536261 19580954 14864385 56132447 624 130436
Depreciation AI Jaouary2012 Charge for the year Acquired wough business combinations (Note 4) Relating to disposalswrite-off Transfers
9144666 6989249
)4 3 16620 3410618
144103
(96 812)
42558404 548 1613
1671942 (6242 52)
44555 290 2 1398849
2890797 (6 187 1)
12392584 3 182899
169005 (3558466)
(206013 )
12235266 2077633
136959 (2627283)
(J 0662)
135202830 42540861
5012806 (7840684)
(312635)
At 3 L December 201 2 161339J5 16902529 49087701 68783065 11 980009 11715953 174603 178
Nel canying amoWlts
At 31 December 201 2 12 173 6211 2028560 3 46870424 193753 196 7600945 3148432 56132447 449527258
26
12
13
Aamal Company QSC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 31 December 20 13
ACCOUNTS PA YABLE AND ACCRUALS
Trade accouots payable Advances from customers and tenants Accmals Social and sports activities levy Other payables
AJIOUNTS DUE TO RELATED PARTIES
Name
Arab Compaey for Fiber Products EI Sewedy EIC( lric Ho lding Egypiasl Egypt Egyptlech Egypt United Industri es Company WLL Johnson Controls Air condi tioning aod Refrigeration Qatar WLL pound1 Sewedy Cables Egypt Johnson Controls Air conditioning and Refrigeration rNC Dubai United Wire Company WL L Gelteo Company W LL - Gelteo Refr igera tion and Airconditioo ing CampC Lightway nc AI Shaab Group of Companies Other related pruties
NO M Related party transactio l)s a re disclosed in Note 26
2013 QR
320017657 30486837 26924669 41 761 843 25855567
445046573
2013 QR
18517474
4902528
6531231 6404578 3215821
2825884 75 7825
3467288 263715
1313247
48199591
2011 QR
26716268 1 27410234 222575 76 28954726 33)33852
379119069
2012 QR
18380528 91458 82 54 13849 1 11 6 135 5374039 35291 2020359 1693323 1064744
670 179
11 0873 12 18650
49737757
27
14
Aamal Company QSC
NOTES TO THE CONSOLIDATED f fNANCIAL STATEMENTS For the year ended 31 December 201 3
INTEREST BEARING LOANS AND BORROWINGS
NOles Malilrify
2013 QR
2012 QR
CoMl Loan 2 Loan ) Loac4 Loan 5 Loan 6 Loan 7 CoMB Loan 9 Bills discounted
(0 (ii) (iii) (iv) (v) (vi) (vii) (viii) ( ix) (x)
lune2014 Seplember2014 January 2015 November 2016 December 20 16 November 2017 Jllne20 l J December 20 7 OClober 20 19
172070387 440000000 50544000 40261 621 81387109 19920036
6] 43890 62626967 42522794
915676804
298324180 440000000 10 J088000 57955030
100 168750 2 1300492
407728 1 782871 1
35000000
1065742444
Less Defe rred finatlcing cost (771 503) (897148)
914905301 1064845296
Presented in the consolidated statement of financial positioo as fo llows 20)3 QR
201 2 QR
Current ponion Non-current ponion
749520820 165384481
825568489 239276807
914905301 1064845296
The dete rred financing costs consSt of arrangement fees The movements m the deferred financing costs were as fo llows
203 2012 QR QR
At I January 897148 332 661 Addjtions during the year 1 062565 912506 Amortised during the year (218amp210) (34801 9)
At 3 1 December 771503 89 7148
28
Aamal Company QS C
NOTES TO THE CONSOUDATED FlNANCIAL STATEMENTS For tbe year ended 31 December 2013
14 INTEREST BEARING LOANS AND BORROWINGS (continued)
Nolec
(i) Loao I i USD 93000000 impon 10n moi lily obtoined to refimnee he Icne~ of edit The 10 IT interest at commercial fate and the interest is paid at monthly intervals The fucility is repayable within ISO days including the usage period under letter ofc redits
(ii) Loan 2 is a secured bridge loan obtained to settle an existing loan and working capital requirements of the Company The loan carries interest al coOlJllercial rates and interest is 10 be paid on quarterly basis
(iii) Loan 3 was obtained for the pWpOse of financing capital ependiture and direct payment to suppliers contractors and 5ub-controctors The 10011 CMries interest at commercial rate and the inte rest is to be paid q Uar1erly The fac ility is repayable in IS quarterly iostallmenls starting I July 20 11 and ending I January 2015
(iv) Loan 4 was obla ined for conSlruclion o r an inveslmenl property The loan is seclJed by 0 primary mortgage over the some property and corporate guarantee of the Aamal Company QSC Tbe loan carries interest at commercial marke t rate and is payable in quarterly instalments
(v) Loan 5 represents a loan fOlcility obtained in two sepnrole tranches amounting to QR 309 825 000 (USD 85 million) for the purpose of refurbi shment and construction of fociJities io one of the investment properties The loan is repayable In 16 equal quanerly instalmcnlS for individua l tranche commencing from March 20 1J The loan carries interest at conunercial rJtes
(vi) Loan 6 represents secured loans obtained ffom a commercial bank in the previous periods for the purchase of heavy equipment and machines and were merged on 15 November 20 12 as a comb ined loan This loan is payable by 59 equal instalments of QR 426000 with (I last inSlalment of OR 438 326 with effect fro m 01 October 201 3 The loan carries interest at commercial market ra tes
(vii) Loan 7 is il tmst receipt banking facility obtained for the purchase of inventories This carried interest at conunercial market rates This loan was full y settled during the year
(vii i) Loan 8 represents secured loans obuined from a commercial bank in the previous periods for the purchase of delivery trucks and machinery and were merged on 22 October 2012 as a combined loan The loan carries inte rest at commercial market Tates and is payable by 59 equal insta lments o rQR 160000 with a last inSlOlmem ofQ R 128000 with effect from 3 1 December 2012
(ix) Loan 9 is an Islamic Financi ng Arrangement obtained for construction o f a manufacturing plam and as o f yearend ba lance represents partially drawn amount out of totil1 facility of QR 655 68000 The loan is secured by joint corvorate guarantee by the shareholders The loan carries profit at Islamic Financing rates and re-payable in quarterly instalments starting from the end of the 24 months gmce period from the date of loan drawn
(x) Bi ll discounting is a loan fac ility from banks The purpose of the arrangement is to discount bills locally and carries interest at current commercia l filte
15 EM PLOYEES END OF SERVICE BENEFITS
Movements in the provision reHectelt in the consolidated SLo1tement of financia l position were as fo llows 2013 201] QR QR
At I Jan uary 18111 763 17877937 Provision made during the year 4056969 4205499 Acquirelt through business combinations (Note 4) 349272 End of service benefits paid during the year (2210756) (4320945)
At 3 1 December 19957976 18 111763
29
Aamal Company Q5C
NOTES TO THE CONSOLIDATED FINANCIAL STATEMETS For tile y~ar ended 31 Dee~mber 2013
16 SHARE CAPITAL
2013 2012 QR Qq
AtI1l1)nud 60000)000 (20 2 544500JJOfn shares ofQR iii Cilch 60i)iQOOlOO 54450lt)0000
21)13 2012 Numher of
siMtS QR shares QR Issued Mtldfully paM At lJamld) 544SfWllOfJ 5445(100001) 495000000 49500000)0 1511C ofbonus S1i1-C ___ 5550~OOO 555000000 49SGOOOO 495000000
At 31 Decenef 6(OOampQllf1(1 ---14450O000 544~OOOOOO
All ampates m~ of a110 clss and caL equal voting rights
17 LEGAL Reuro5ERVE
As required by Qatar Comnertai COfrp7lnies Lav No5 of 2002 lOfp of the profit for the ye1J as a rru1imllli silould be mmsfened to legal re~erve The reserve is lot normay [lytiabe tor distribution except ill he cixcuJUstllrtUS stipulated m the above ~lemi0ntd GIW
IS HEVE1TE
2013 l)n QR QR
Sale of goods 1726893265 i709057~(iO
Renlal income UiO362322 133117509 S-ice income 858695 33940731 CornrrusslOlL Incentives and agency fces 44695S1 422~_632
212259$)33
19 DIRECT COSTS
2013 2)i2 QR
C 051 of inven(feS recognisedlIS an exptns 1522929956 497210830 Dind sL1ries lmd wages 601 [1336 5137856-8 Operating eXpenses on nml estate p~opet1les 36)711316 3041H504 fJepreciatiort (Kate I J) 33164382 B03091pound Operators marhgerrt6nt fees 14508588 li667989 Provisicn Qr obsolete and skwlt moving mvenlories (K)tc 8) 2380617 2208263 Other operating ilxpenses _31~3982 _ 3674946
1702139171 JS9653OI tgt
Aamal Compall-yQSC________________
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For lthe year ended 31 December 20 11
2G OTHER NeOiI
2013 20J3 QR QR
Interest mcume 2824216 2)314392 Profiv( loss) 00 disposal of property plant aoe eqUlpmem 737647 (l7362G) Eargain ptmnJse gain (Kote t) 8360793 MIsceJlaneous income 5723356
2013 2012 QR QR
ManllgetnUI hrQ empl(yees ws 55170302 55lt035middot1 Rent 23596799 2594915 Allowance for impaimlcot oUrsue aCQl1ot$ rc(Xjvalle (Nole 6) 129459(i 11613120 flBumcce ane profcampiitmJI fees 2IU9263 209J902 Corununication OOtHS 1935123 1649155 Trllining tid ouSfjt$s developmccl 950476 L095764 Re]X1in and mainle-nilnce 21)11SflS 2)2 I Poslag-c prjnting acri stationery 610299 541159shyvllsltdlancous expenses _~~~664 1lt2
-~~~ 125162812
22 fIN~lCE COSTS
2013 2amp2 QR QR
Inleres epen~ 42866312 5773U4B Am(vtisJliorgt ofdefcentrred financiog coStS __ 2l)tl26~~ gt3661
44930877----=
58063009
23 BASIC A~n nHUfED EARilNGS PER SHARi~
Basic trdTJogs per hue is caculatid 0y llividing the pwfill0( Ihc year attriouiabk (0- equity roldc-5 of the parent by lhi w~iglwxi avrage number of ordinary shares 0JstandirJg dulting tht_ year During Ihe year lil~ Conpmy i-sued and CBpii3lzed bonus shares lnd awmJingl) me previously ~eportod earnings per shac have blOM restatc(i
20i3 2012
Profit feT the year auributable to Cluity holderlt of the- paren (QR)
Weighted aVCTage number ofshares outstanding during the year (i)
Basic Jd diluted earnings per share (QR) 085
59985U413 shy
~~--~~~~- ~------J 1
23
Aamal Company QSc
NOTES TO THE CONSO LIDATED FfNANC[AL STATEMENTS For tbe year ended 3 l December 2013
BASIC AND DILUTED poundARNINCS PER SHARE (continued)
NOles (i) Th wigh d m nlg urnb of hres foc h P of lruling ~migs pee share h bee kulated
as follows 2013 20J2
QU3lifying shrues allhe begi ll1ling of the year 544500000 544500000 Effect of bonus shares issued and capitalised 55500000 55500000
600000000 600000000
Less T reasury shares (149587) (i357SI)
Weighted average number of shares at the end of the year 599850413 599864249
(ii) There were no potentia lly dilutiw shares outstanding at any time during tbe year and hence the diluted earnings per share is equal to the basic earnings per share
24 COItIMITMENTS
20 1] 2012 QR QR
Estimated capital expenditure approved and contracted for at the year eod but not provided for
Investment properties 2964000 8 139063 Property plant and equipment 16386500 63759762
19350500 71 898825
Operating lease commiIOlenlS under noncancellable lease agreemenlS
Payable wilhin one year 990806 702000
990806 702000
25 CONTINGENT UABILITlES
The Group had the following contingent liabi lities from which it is anticipated thai no malerial liabilities will arise
2013 2012 QR QR
Letters of guaramee 474551239 394255203
Letters of credit 7678499 194299384
NQles
(i) leHlaquogt of gu indud penonmnlaquo tend nd bid bonds d pymenlt g gi to suppliers and contractors by the Group in the ordina ry course of bus iness which will matme within twelve months fro m the reporting da te
(i i) Letters o f credit are provided by lodging documents to the bank tor purchase of trading goods fro m foreign suppliers wruch will maMC within thJee to six months from the date or tile Iransaclion
J2
26
Aamal Company QSc
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year eoded 31 December 2013
RELATED PARTY DISCLOSURES
Related party transactions Related parties represent major shareholders directors and key management persortOei of the Group and entities controlled joimly controlled or signjficamly innueoced by such parties Pricing policies md tenns of these tnlOSaclions are approved by the Group s management
Transactions with related parties induded in the consolidated financial stalemenls were as follows
20lJ 2012 QR QR
Sale o f goods and SClVices 419034048 415225221
Rental income 1980473 2069386
Purchase of goods and services 1591 38018 300835596
Rental expense 21 780G78 23397334
Bargain purchase gain 8360793
Net assets acquired 78803585
Relat ed party bal nnces AmountS due from and due to re lated parties are disclosed in Notes 7 and 13 respectively These balances do oot carry interest and are repayable OIl mulUlUy agreed dates generally within one year
The Group did not record any impairment of receivables reJatiog to amounts due from related pat1ies in either year This assessment is undertaken each fina ncial year through examining the ftnanc ial position of the related party and the market in which the related patty operates
Parent The Groups ultimate parent is Al Faisal Ho lding Company WLL
Compensa tion or key management personn el The remuneration of key management dming the year was as fullows
2013 2012 QR QR
Short-term benefi ts 7904794 1079595 Employees end of service benefits 408934 439776
8313 728 11235727
33
AamaJ Company QSC
NOTES TO THE CONSOLIDATED FINANCIAL 5T ATEMENTS For the year ended t Decernber 2013
Dilling the year 1he Group issued a XHlUS share of 10 928 of the paid tiP share capilal hdd ilS at 31 DiX2mber 2(JJ 2 mnmuning to OR 555000000 using retamed earnings as of3 December 2012 (20l2 Doe share for every ten shues held as of 31 Dcember Oll amuunting 10 QR 495OO()OOO ling reta1ned earmrgs 28 or 31 Decencer 2D II Jshy
18 SEGMENT INFORMATION
For J)iloogement PUIpltJM rhe Group i organised into business unit bused On LlJeir nature of Acttvitics lud nas fonY reportable segments and the Head Oftklt as bllow$
Propert Tbe segntn cOlists of City C~nler Qlta~ Brunch and Aamal Rea Esmte Branch whicb ll[c invoived in lampIiiog the faJ1ities of retail outlet conpex red e5ttlte nve(mltn$ and property remal buines~s
Trading mld distrib-wion The segmeul Involves wholesalB andlor rBtail distribution of phamlaceutlcai and consunable i1ems hume Epplianccs medica equimenl t-Tes ill1d lubricmtlaquo and II1UllitnEl printing The scgn(rtt includes 6c following entities
Eotl Sina Medical Branch
Aaen Medical Braudt
Amcill Troding and DistoolltlqO Branch bull Foot Care (erier HRnd) Good llre Pbannacy Bf4Uch bull Al FllfJdaq COllpafY wJ~L
InduSNol manuacturing TIle s0groent IOvolves Ulahuactrumg whole~we aliaor rewi dimibUlioti of dccnc cables lid tools ggregJ1es_ ready-IUx connole and cement bI0C~ lI1d provi$ion of servlCcent$ in rdation to iODllltroa Itvestment repair aJ-d Gonstruction of power plwts liiiding of LED ilgluitlg products und management of industnl enterpnses The segment ircludes be folloVting centntitis
bull Aam1 Cemert Industries LL AuraJ Redy1Yl(A BrQTlch
bull Doha Cables Qawf lLL Senyaf IoolJic1es Qatar Holding W LL Advanced Pipes ard Casfs CompQTly WJ L bull GuJfRoch Coroany WLL Ci~San Trading Company WLL hmovafive Lighting Compary WLL
Managed services le segment inyolvc~ provisloH of hOllseiltecpmg mi cleaning services fucditics n-anagemerJ services C1egy s(tvices ttl centfe sltrvicf)s buildiqg lnaintemHlelt aml acting as travel gens The 5cgnltnt includes the foUowing cnti(lcents
An13 ServJce Branch
amli TnlVeJa l5tmh
f-eco Gulf Co W LL
Jolinson Controls Qattl WJL
28
Aamal Company QSc
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended ) L December 20 13
SEGMENT INFORMATION (Co ntinued)
Head Office It provides corporate services to the branches and subsidiaries of the Group
The managiog d irector of the Group monitors the operating results o f its business units separately for the purpose of making decisions about resource allocation and perfonnance assessment Segment perfonnance is evaluated based Oil operating profit or loss of these segments Transfer pricing between operating segments are on anns length basis in a manoec similar to Iraosactions with third parties
Aamal Company QSC
NOTES TO THE CONSOLIDATED FINAN CIAL STATEMENTS For the year ended 3 1 December 20 13
28 SEGMENT INFORl1ATlON (continued)
Operating segments The operat ing segment after elimination or ioter-bra nch and inter-co mpany lrnnsaclioos is presented as follows
Trading (nd Industrial Managed For fh e year elided 31 December 2013 Properly disirjblli ioll manujocljlring services
QR QR QR QR Revenues
- h lemal parties 260360172 578909983 1231522768 S l802210 - Inter segments 1253914 6843 11 8 29639873 3445052 1
Heat Office QR
Eliminoions QR
(n187426) II
Tolal
QR
2J22595133
261614086 585753 lOI 126116264 1 8625273 1 (721 87426) 2122595133
Opera ti ng results Fair vallie gains
Profit I (loss) ror the year
Depreciotion
200811944
245051 107
445863051
2066290
86492834
86492834
4345438
22636250
22636250
33049 089
5157436
5157436
1760305
(47864882)
(47864882)
1334382
267233582
245051107
512 284689
42555504
36
Aamal Company QS
NOTES TO Tl CONSOLIDATED FfNANClAL STATEMENTS For the yeM ended 31 December 20 13
28 SEGMENf INFORMAnON (c)tltioucd)
FOf the yearrnrkti J f DccemOer 2(J12 QR
Revellues - ExlcmlJ partiel 2331 17 509 bull Inter segmcI11S 1168935
-- 234236434 --~- -~--
Openning results 18S2367t Fmt value gains J8S79-4~G
pront LOllS) for the rear 570616154
gt3659
No(
lnlermiddotgment revenues are eliminated on tQHs)idntiOH_
Tadiug ftfid disl d)Ntion
QR
S2S3l7661
324 j
5335493114 ~ -~-----
51384831
54384338
4J9R71(i
Indus idi mamfmturing
QR
1255694537
129U25lS4
56727059
56727059
32752742
slnltic(s QR
55216665 2939H31
S46lOJ96
7427414
7437
[908067
ilfild ()jice QR
(64(41976
Elimination QR
(74tHi2oJ Iii
Totul QR
206936372
2069336372
235721
(64641
131 f613
6245
42541)861
Amnal Company Q$l
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Por tnt yeartndeJ 31 De~embcr 2013
28 SEGMENT JNFORMATlON (contiutlld
Assc-ts and labilities
Tng alld lndtrstfw At31 December 2(113 distnbllrior manufacturIng senices HeadOJJicc EliminatioilS lola1
QR QR QR QR QR
Cumnl 3tS 227552338 620807979 61349 j 415 S()6)86922 (301636995) 1477366090 Noolucrcnt DSeIS 6411868160 12604763 622386238 4348876 (i624548 __p2438051 780
fotal asstl$ 6639420498 1194 1243194217 65698291 513Ql1470 ==-lt03H8l~O()) 853295-870 -~----~ ~---~ -
CUIT)llliabilitics 280995335 1(3511J60 6344(12777 2l0708lJ2 496261185 (3CH636995) 1249603264 Non-current iiatJlitics 7l70L5V2 8008485 HlDi16~43_ 3181668 t433799 ____ ilj534_~57 __ --Totul liahililics 353696897 ___~4159~4~ 734419720 ~4976~~~~~ 1434945711
---~~--~ -~-~~ - _2~~~4~~ (~~~~9~
C1pild expcndimn HI) WO743OOj 1397742_~471l2~--~50 ~51 ~1~623821~~1~_ -~----~------ -~
3amp
28
Aamal Company Q SC
NOTES TO THE CONSOLIDATED FfNANClAL STATEMENTS For the year ended 31 December 20 13
SEGMFNT INFORMATION (continued)
Assets and liabilities (continued)
AI 31 December 2012 Properly QR
Trading and d iSfriblllion
QR
Indusrial manufacfuring
QR
Managed senices QR
Currenl assels
Non-current assets
146491 186
6121 864484
2964425 12 903 7264
73468 1258
549267235
51387098 471 1439
Tolal assets 6268355670 305479776 1283948493 56098537
Head Office QR
468325024
6713643
475038667
Currentliabil iies
Non-current liabiLities 273444 748 1 J10 15024
86054583 7434286
669214261 1288 14977
2 1938953
287 1199
480393637 1253084
Totil lliabiliti cs 390459772 93488869 798029238 248 10 152 48J64672 1
Capila expendirure (ltII L 72865 878 1281254 6647 J356 7169 13 149045
Notes
(i)
(Ii)
Inter-segmeot balances are e limioafed 00 consolidatio n
Capi tal expendiTU res consist of additions 10 propeny plant and equip ment and iovestmenl properties
Eliminations QR
To wl QR
(273735776) (i )
(20308351(i)
1423591302
6689563230
(27576661 1) 8 113154532
(273135777) (i) 12573 10405
257388570
(273735177) 15 14698975
24 1484446
39
29
Aamal Company QSC
NOTES TO THE CONSOLIDATED FrNANCIAL STATEMENTS For the year ended 31 Dcltmber 1013
Fr-A]~ClAL RISK MANAGpoundMamp1H
Objccthes and policies fe Groups principal )uaucill liabilities comprise imltresl bctmllg loons and IxmowHgs baRlt ovetda1s amounts due to fclaled par1ies and tracte accounts payable The main pUlJXSi of thesc financial liabilities is 4J mise firmne or 610 Grmps operations The G0JP bas various fimmcial assets such as ttadc accounts receivable lInlOlmts due from related parties bark balances tltCntion receivable and other receivables which arisgt directly fran its cperuoonamp
The maiH ri~ks an3ing Joru (be Groups UnariCJlll illslrumenls jle market risk cretiJt nsk and hmdity risk Til BoarD ofDtrcctO$ reviews end agrees policies for mzrAgbg Caltt f hespound ri~k ihkh arc summariscd beloW
VIarktt risk yenfatket risk is the risk Um changes in market prices $Uch as intfcst rates and hreig lttmeocy ect14nge rilles Vltl1 affect the Groups profit eqwty Dr value tf its hoJdiI15 of financial instrl[Thnls rile objecivpoundj of marke1 risk mUnllgcrlcnt is to manage uld 1~ontr(ll tho tr))rket risk expo-sure vithir acceptable parfI-etcJ$ while optimising rerUID
Equit) price risk ampjuity prtce risk is the risk hilt the Group ampearnings will be affected as a rcmt (If luctttltions in fm vdue of ~qui-gt
mstwnents Eqlliry price risk arises from availabtetor~sale inv2strnems However the Groups exposure to eqmty price risk IS minima as II doesn hold sitl)iftrmt ailableAor-511le inYestrmmrs
[merest rate risk The Groups fimiruial poundS5ot ampId liaojlilies (at Rl $uJject to int~~ rate mk compnse brmk depoils interst bearing loans and bOITQwjags and bank overdr-afts At the reponwg dalt tbe [merest rale pronle of Ill Goups intexst bearing fbi4rdd instruments as fliows
11113 20i3 QR QR
Fued liIeryS refc insfrvrnellts
Fmmcial assets 113035962 111913394 FrOltwial liabilities --1~203712l) 1252t43~1
9)OI~ (13350972)
Fhlllting inireSI rate ns1lmlttrs Fanctl~ Isseis 127024345 ID43848o Fllllocial liabilities _-(i~9347~ (94))48926)
(836)64116)
The Groups exposure to t~ ris of changes in marXet interest fltltes relztes primariiy to the Groups financial assets and lizbitdic$ with t1Oltttirg interest mte~
lhe loEowing able demonstrates the ampmitivity nf the eonsolidattXI statemen1 of income 1) caonaly possible chonges in in1jfgtst rmes by 25 basis points with all othe vari)ble3 hdc umstant The sensitivity of the CooiK~ljclatid statement of inc(me $ the eft(ct of tb assumed changes in lnterdt rales for one year bf1sec on the floating rate financial assets and fimmcial hablhw$ held at 31 f~r The effect of deae-ascs in interest ral~ is cXp0Ctct to be equal and opposite to the effect oHlle increases sllQvro
Changes it Eftx OIl
00513 [oms profit QR
2013 Floating mterest Hlte instruments ----2$ bp (1649776)
2012 Flv-ating irkfiSt rale instrumenls +25 bp (209[9(1))
~--------- -~~ 40-middot------ _ _ shy
29
Aamal Company QSC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 3 1 December 2013
FINANCIAL RISK MANAGEMENT (continued)
Foreign currency risk Foreign currency risk is the risk lhilt the value of lhe fi nancial instruments will fluctuate due 10 changes in fore ign exchange rates
T rade aCcOlmts payable and accrued expenses include amounts due in foreign currencies mliniy US Dollars UAB Dirhams Great Britain Pounds (GB P) and Euros of which the Group has a currency risk primruily on the baJmces payable in Euros and GBP amoWlting 10 QR 14400634 (2012 QR 17214046)
The Group does not hedge its foreign currency exposure As both Qatari Riyal and UAE Dirhams are pegged to the US Dollar balances in US Dollars and UAE Dirhams are not considered to represent significant currency ris k to the Group
The table below indicates the Group s fore ign c urrency exposure on its monetary assets a nd liabilities The analysis calculates the effect o f a reasonably poss ib le move ment of the QR curre nc y rale against the Euro and GBP with all other variables held constant on the consolidated slate menl o f income (due to the fa ir va lue of currency sensitive monetary asse ts a nd liabilities) The e ffect o f decreases in fo reign c urre ncy exchange rates is expected to he equal and opposile 10 the e ffect of the increases shown
Incramp1se ill
f oreign cUlrency rate
0
the QR
Ellecl on profil
QR
2013 +5 (720032)
20 12 +5 (860 702)
C redit Tisk Credit risk is the risk that one party to a financial instrume nt wi ll fa il to discharge an obligation and cause the other party to incur a financial loss TIle Groups exposure to credit risk is indica ted by the carrying amoWlt o f its financia l asse ts whic h consist principally oftmde accollilts receivable retention receivable amounts due from related parties othe r receivables and bank baLances
The Group sells its products and prov ides services to vario us panies It is the G ro ups policy that all customers who wish to obtain on credit lerms are subject to credit verificalion procedures to ensure c redit Ilonhiness Each new customer is analysed individually for creditworthiness before the de livery o f products Of services Custo mm tbat fai l to met t the credi tworthiness may transact with the Group only o n prepayme nt basis Property rentals are mostl y received in ad vtnce or conlrlCled wi th post dated cheques 10 additio n receivable balances are monitored on an ongoing basis a nd the purchase limils are established for each c redit custoroer which are reviewed reguJarly based on the level o f past transactions and senlement The Groups max im wn exposure with regard to trade aCCOWlts receivab le net ofa llowance re nected allhe reporting date was ilS fo llows
2013 2012
Business SJgmelll QR QR
Property 15478832 19386326 Trading and distributio n 194343 597 179748274 Industrial ma nufac turing 183119753 131578668 Managed services 18069385 14547389
411 011 567 345260657
41
29
Aamal Company QSc
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For tbe year eoded 3 J December 20 13
FlNAJICIAL RISK MANAG EMENT (c-o Dtinued)
Credit risk (continued) With respect to credit risk arising from the other financi31 assets of the Group the Groups exposure to credit risk arises from default of the counterparty with a maximum exposure equal 10 the canying amount of these instruments as follows
2013 QR
202
QR
Bank balances Amounts due from related parties Retention and other receivables
436136756 214439950 48290351
36788129 t 171525363 74082203
698867057 613488857
The group reduces the expoSltre of credit risk arising from other financial assets by maintaining bank accounts in reputed banks and providing services only to creditworthy re lated parties
The management cons iders the bank balances and a mQUIIIS due from related parties as high grade fi nancial assets and lfade accounls receivable and other receivables as sundard grade financial assets When a finltmcial asset is identified 10 be impaired the managemoot downgrades such assets to impaired category and provides adequate allowances
Liquidity risk Liquidity risk is the risk that the Group will not be able to meet its fmancial obligations as they fu ll due The Groups 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 nonnal and stressed conditiom without incurring unacceptable losses or risking damage to the Groups reputa tion and is to maintain a balance belWeen continuity of fuoding and f1eilibility through the use of bank overdrafts and bank loans and borrowings
The Group monitors its risk to a shortage o f funds using a recuning liquidity plaOfling 1001 TIllS tool considers the manuiry o f financial assets (eg accounts receivable) and projected cash flows from operations The Groups teons ofsales or services require arooUIlts to be paid within 30-90 days from the invoiced dale
42
29
Aamal Company QSc
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For tbe year ended 3 1 December 2013
FrNANClAL ruSK MANAGEMENT (contiQued)
Uqujdity risk (continued) The table below summarises the ruaruriJy profile of the Groups financial 1iabililies a t 31 December based on contractual undiscountcd paymeots
2013 Interest bearing loans and borrowings Bank overdrafts Trade accowus payable Other payables Amounl~ due (0 related panles
201l Interest bearing loans and borrowings
Baok overdrafts Trade accounts payable Other payables Amounts due to related parties
On demand
QR
6836280
6836280
011 demand QR
2885090
2885090
Less than 3 months
QR
521324473
303638792
47406830
2530~480
898675575
Less thall 3
months
QR
469839033
10754JJIO 37543236
1964504 1
634568620
3 10 J2 mOlllh$
QR
239333328
16378865 20210580
2289~11l
298816884
3 to 12 monlhs
QR
365476972
159621 37 J 24745342
30092716
579936401
1to 5 years
QR
J 60092748
160092148
1 to 5 years
QR
248472226
248472226
gt 5 years
QR
25261598
25261 598
gt 5 years
QR
7648000
7648000
TOlaf
QR
947012147 6836280
320017657
67617410 48199591
1389681085
Tota
QR
109 1436231
1885090 267162681
622 88578
49737757
14735 10337
43
30
Aamal Company QSltc NOTES TO THE CONSOLIDATED FlANCIAL STATEMETS For the year ended 31 December 20 t3
21 F~ANClAL RlSK MAiAGEMElT (continued)
Capital management The Boards policy is to maintain a strong cepit1 base so as to rnainmin investor creditor and market ronfoonee and to SUSWlJ) fumre dcltclonnent Gf the buinest The Board of Directors rronitortl the tapital whkh tbe Group defines as wlal $parcloders equity excluding nonmiddotcornroliing imerests and the level of dividends to orrunury srarellOJdcfS
The Board also reeks to ITIaimain a balance between the higher (ctums (hat might be fA-~$ihle With higher leves of borrnwings end Lle edvnrJages and security named Sy it sOMd Cilpitai posi[ion The GfCup~ k1rget is to achievfl a return on slureholders equity (exclJding aonwurrolJiug iorcf(sts) greater lll(ll1 he wcighlcd average inres exxmse on mrerest bearing Ivens and oorrowing
The (lf0t-p nl)nDg-e ils cnpital structure and makes adjustneal lOll in light ofchang2s in economic nd bttincss cordjlons and shareholders expe1ationJo chmges veremiddot maCo HI Lleuro objecttves polilCS or proCCSSC3 during the years erded 31 D~mber 2013md 31 Dtccmlxr2Ql2
The Group monitors the capit2J using a gClting fatio which IS dep divided by caplla plus debL The GtOwgts policy is to keep ttJe ge-anng rmio bclew 40 Tbe Group iLdtdes withb debt imete-51 beagting loans ard ~OITORlngs less cash and cash equtVaknts Capltal includes eqmty attributable 10 the equity tolders oft~e parcrt
2013 QR
2(i2 QR
fmerest bearing loans and borrowings lcss- Cash and cas ltYJUvalcnts
9i4lJ05301 _~ (429JfJl4761
1004845296 (649)6201)
Net debt
Toa capital
Capita and net debt
699849045
~ringrttio
FAIR VALtES OF Fl~ANOAL f~STRUMETS
Finarcial iostrumenL~ cOlnprise tina~lctal assetS carl finailcialliabilities
Fmancial assets colJist of bank balance) short 1Cm bank dcposis amounL dve dom rc)ltted partilt)$ rekntion and other receivables and ttade accolmis rceivabe Finatlclll habiilics cgtmsist of banilt ovcrdratls jnerest bearing lOil1S and bOrowings amounts due (0 nliled partiG~ ane trade x-ounls payable
The- fair values of hese financial inStrumen1S except Jo-- imCfest bearing loam lHld bOlToving aproKimate lhdr cMryinJ vlhes due to the Slort temt mzrutiiles or these instrument
Tllc faiT value of iotcnst beating Nns and borrowin2s ae estimate( based on discoumed ltash flows twin int(s rale- cune-ntly nvailagtk fur tilt debt or sinuiar tetnlS an-a rell1lmng matunties
31
Aamal Company~Q=-ScC ______________~______
~OTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For fhe year ended 31 December 20 t3
SlGNIFICANT ASUMPTIONS ACCOUJTING JUDGElE1TS AND F8TIMATFS
impairment (If accoonts receivable n etrnwe of lhe collectible anoun of trade accounlgt reccvable is made when collection of the full lHl1OUt i~ nO looger probabk FOI nCividualty significitIl amounts this estimation is p~rformed on an indh-idllai a$[$ Amomts wHcb arc not indivldl11Uy significant but wluch are past due ZTe tsscssed collectively and an aJlQwaccc applied ucc()r~Jng to the length of lime past due based oc histnncal recovery nlJes
hnpalrment of inHntnries lavenoncs are held at tho lower of col and nol realisable value InIOn inventoncent$ becone old or 0-~amplete an estilTJte is mate of their net j alisable vulue For indiviolhlUy significant amountS this cstinaunrt is performec all aD lndividwl osis Amotlnts whieh are fl0t individually significan( btll which ltIre old at obsolete wx LltSessed wllecivdy md a provisior is applied sccnrding to the invenrory type and be dep)ee of ageing 0 cDsolescc1ce based on anticipUled selling prices
Classifigt1ltion of El Sew(gtdy Cable Qatar WLI ali a j(lint vwture pound1 Sovedy Cables Qatar is a limited hability company whose kgal fum confers SCprm11ior bernten tbe jXliiies 10 ~he jomi lfranpement Snd the Company Itself FurthenrlOre then IS no oontractua] arrmgelTeot or any oibe aus aod circumstriliCe$ that iocik41to tht he putic5 [0 the joint flJTIlrgernelit bave rights to the ssetl and obligrtdons fo~ the liabilities of the joint ilrrongement Acoordingly El Sewed- C[jbl~s Qamr WLL is dassifiecl 7S a joiut enrtrr of he GWtp
impairment of goodwill G0oovj)1 embedded in th~ cot 0 aquisitior of subsidiaries and eqmtj-iccounled iflV(stees ire teswt for irl1jXlirmnt aHuaily Tbe calculations of value [n use fO( cfish gecj~r)lilg units (loring to real nte projecg are rtost sensitive to tin IDHowing assumpti015
Grosgt i1wginmiddot Gross Ilmrgins arc lmsed on avrage values tuhje0d in (he [Xrioo preeedhli (e siaM of the budge xnod T1esC at( mcreased over the budgel period for mticipatltX efficiency Hnprovemots
DisC)unr r(es Discount rotes represent th cl1tent mark as~ssmetlt of the risks specific te ech cash geocroting unit regarding lhe time value of money ilnd mdividu)l risks of he tmtieriyilg assets whICh have not been inwrport1eti it the Citik flow estimates The dj~(OUrl flte tlkulation is based on the speclfte circurnsthLCes of lile Group and its opltllatJng segn)~nts (md derived (ff)rC it weighted avaage (XSt 0f apilaJ (WACC) Tb fACe (akw into uoount both deb and equity The 0$1 of equity is denved from dlC expected return 01 investmenl by the Groups investors TJc Gos10( deb is based on l1e borrvwings the Gmup IS obllsxl to service SC~lletllmiddotspecific r5k IS incorxt4too by applying individual bera facto The betn mctors ire evauatcentd annuaHy bhseci on pubJicly aVflllabe murked earn
Fair value ()fnHstmeni proputies The fuit laHe 0 nvestmel~ propertis is deltrrnlnzd b cxterrwl indepzfldell property valuers laving appr0priate recognised professional quabfiillions and recenl xperience H1 the localjl)n and G-tegory 0 the oroperty being valued
Useful hes of PfQPcrly plmr (llld zqulpment The Groups management detennints th estiunted useful jives Df It~ property plan and equipmnl fix calnurjng depreciation Thi5 e~timJte is 6lermind after cinsidring 1b expeelcd usage (1f the a5sclt [hysical l101t and (eas tedmiltal Dr com~ercia obsolesccnce
Gotlg Qncen
ibe Groups mangerncnt UiS made aJ assessmeot cf the 011115 ability (0 COllllOUC liS a going conct11l Imd is satsl1ed hat me Group ms the resources to contmue in business for he foreseeable fu1urc he1hennort he management is no aware oC lny material Hncertainties that lray CH~t signinchnt doubt tlPDfl the Groups ability 10 continue as a going umcem Therefore titpound lotlsolidatcd finilllcij stftemeols comirme to be prepltd on li g0ing concern basis
Aamal Company QSc
NOTES TO THE CONSOLIDATED FlNANC[AL STATEMENTS For the year ended 3 1 December 20 13
32 INCOME TAX
Certa in subsidiaries of the Group which have non-GCe ownership are subject to income tax under Qatar Income Tax Law No 2 1 of2009 The iocome tax is charged on the share of profits attributable to non-GCe shareholders For the purpose of these conso lidated fi nancial statements the income tax liability oftbe foreign shareholders has been excluded given that the non-GCe shareholders have agreed under the shareholder agreements signed with the Group to bear the fh lliiability and make necessary payments
33 COMPARATIVE INFORMATION
Certain comparative figw-es of the previous year have been reclassified 0 coofonn to the current years presentation However such reclassifications are oat materia and do not have an impact on tbe previously reported net profit other comprehensive income or the total equity for the comparative year
The impact from the resta tement of comparative infonnalion as a resuh of adoption of IFRS I I - Joint arrangements is detailed in Note 32 Changes in aCCQu(lting policies
46
~amal Company QSC
CONSOLDATED STATEMENT OF CASH FLOWS For the year ended 31 December 2013
OPERATING ACTlVlT1ES Profit fot ioc year Adjustment for
Net fuirvalle gaj0i on overncnt properties Dpreciation Provisio~ fOf employlXs end of seevielt benefits Bargac purchaslt gAin Allowance for inp~inueO of trde accomis receIvable (Proritlloss on dJsxgtsel of property piaU( 06 equiprnent Provision fot slow moving Jllvetlories lJlterest nome finance oosts Share of profit of eqUlry-accoumcd inveslces
Operaling profit ooorc working capital changes
JllvtntorifS AU(lIJJltt receiwlbk and prepaymert1S ccoums payabe And accruals ~et l)OVem1t in amounts due from and due to rdmgti panie
Cash from operation Finance coStS pltlid End of SCfVtCe benefits paid
Net Leasb from opcrling 3ctivitilt5
INVEsnXG A(T1TTIfS Xntltresl income raeivcd Proceeds from disposal of property piii1i and equipment Divicieflds reced tTom a j(im venlure Additions to inveslmeul properties Acquisition of subsitlittry net of cush Jzquired Aquisitioll from non-controlling il]tw~st Additions 10 property plant ()nd equipment
Net cash used in invltgtliing Jctivii(lS
FINAClXC ACrlVrnrs rtt moverncl1 in inteftst bearing tiJ41S al1d borrOWings ConlribIH(llS from nonconttohng interests
Net cash tlllied in)ftom hnfCncmg actiV1ies
lNeREMyen IN CASH ANn CASH EQlJlVAUVIS Detrease to casr due to 10~S of crmol of a subsidiary Increase in cash 1t5ulttd in obtaining the conh) of il-n Il$$oile
Cash and caltr quiVlenls at 1 JanuJry
CASH AND (i5iH EQttVALENTS AT 31 DECEMBER 5
NolO
10
15 20 21 20 S
20 22 9
is
20
9 10 4 4
11)13
QR
5122846amp9
(245(51101) 4lA95449
4056969
2294590 (737647)
2380611 (2$24216)
44930$77
_~499901l
34133lno
82822711 (3lH12654) 5312iL387
~82753)
4112788011 (45056522)
_t221Q7S6)
35S52q733
2824116 1274457
119921185 9568U47)
Jl~870))741
_ (141_~3464ol
(149939995) __ ~~__f)~_L
JlplusmnB699~)
643fi4ns
~~Sif99~2U1
~pound2d9M2t
2ul2 QR
6+5~30X9
(388792483) 42540J((1
4205499 (S36)743 J 1361120
178610 2208263
(2Sl4392) 5206389
(234Q350~1
32J ~n2A89 (6[90(304)
(l46739948) 136)0977
_ 62q660
312291614 (58643654)
(432095)
-14932OI5
2894]92 609659
10049971 (72719187)
l 6594 s05) (40A toDOO)
~71~9631
Q4sectS26)Jl
237n(j7n
--1113-0~OO~~__
__ 25c~f)7J33
223251515 (3090 I 7)
5OO(UtOC ~~_6pound~Ag2
64t996~ijl
The atlached iIOle~ to 33 form an integral part of Llese corsokiated financial slUlement$
6
Aamal Company QS C
CONSOUDATED STATEMENT OF CHANGES IN EQU ITY For the year ended 3 I December 20 13
Alfribulable (Q equitY hulders Q[the parent
Cumulative N OII-
Share Legal Treasllry chollgein Retained conrro lfing Tf capilal resenc shares fair value earnings Tolal inereslS equity
QR QR QR QR QR QR QR QR
Balance at 3 December 20 J I 4950000000 267955805 61 4024 670 583 1980475 14 1645505 5973625980
Boougt shares issued (Nole 27) 495000000 (495000000) Profit for the year 594892946 591 892916 2962054) 6245 13489
Other comprehensive income for the year (416) (41 6) 109998 109582
Treasury shares acquired througb business combinati on (2075865) (2075865) (2075865) Adjustmenl due to loss ofcontrol of a subsidiary (983 643) (983643) Derecognition of non-controlling interest due 10 liquicbtion of
a subsidiary 55932 55932
Transfer to legal reserve 59489296 (59489296) Con(ribUlion from non-colllrolling inte rest 59232919 592329 19
Contribution to socia l and sports activi ties fu nd ( 11612837) ( 156 12837) (1561 2837) Non-controlling interest acq uiJed without change ofcontrol (Note 4) (567208) (567208) (39842792) (404 I 00Cl0)
Balmce at 3 1 December 20 12
Bonus shares issued (Nole 27)
Profit for the year Other comprehensive income for the yeM
Transfer to legal reserve
Cootribut ion from non-controlling interest
Contribution to social and sports activities fund
544S00000Q
555000000
32 7445101
5068745 1
(2075865) (4 16)
4485
638248275
(55 5000000)
506874507
(506amp745 1)
( 12807 11 7)
64086 17095
506874507
4485
(12807 11 7)
189838462
54 10 182
15 35
70000
6598455557
512284689
6020
70000
( 128071 122
Ballnce at 31 Decem ber 2013 6000000000 378132551 (2075865) 4069 5266282 14 6901688970 195320 179 7098009149
The a(tached notes 1 to 33 fann an integra pan a fthese consolidated financial slatements
7
2
Aamal Company QSc
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 3 I December 20 13
CORPORATE IN FORMATION AND PRINCIPA L ACTlVIT IES
Aamal was funned on 13 January 2001 as a private shareho lding company with limited liability (W LL) under the COlrunerciaJ Registration Number 23245 in the Slate of Qatar On 12 Ju ly 2007 the private shareholders resolved to transfonn AamaJ into lt) Qaari Shareholding Company (O SC) (the Company) Accordi ngly the Company was listed on Qatar Exchange on 5 December 2007 The Companys registered office is at P O Box 224TI Doha Sttlle of Qatar
The Compaoy is organised inlo a head office (Aamal) cllld branches and operates in the State of Qatar The fo llowing table sets out the principal activi ties of the branches
Brancb Principal aellvities
C ity Center Qatar Branch Leasing the facilities of the re tail outlet complex in Ci ty Cen ter Doha
Aamal Real Estate Branch Residential and commercial real estate investment and property rentaL
Aamal Readymix Branch Production and sale o f readymix concrete
Ebn Sina Medica l Braoch Wholesa le and retail distribution of phannaceulicals aod general consumable products
Aamal Medical Branch Wholesale d istribution of medical eq uipment
Aamal Trading and Dis tributioo Sale of tyres lubricants batleries and home applian~s
Branch
Amnal Servi~s Branch Providing facilitie s management arld cleaning services
Aamal T ravels Branch Operating a travel agency
Aamal fur Indus trial Projects lndusllial investments Branch
Good Life Phannacy Branch Sale of phannaceuticals baby care products medicine and general cOllsumable products
Foot Care Center Branch Sale of footwear clinical activities and general commercial tradillg products
The consolidated financial statements were authorised for issue by the representatives of the B03Id of Direclors of Aamal Corupaoy QSc on 20 February 2014
BASlS OF CONSOLIDATION
The consolidated fioancial statements comprise the fioancial statements of AamaJ Company QS C (the Company) and its subsidiaries and joint controlled entity (together referred to as the Group)
Subsidiaries Subsidiaries are enli ties controlled by tbe Group The Group controls an entity when it is exposed to or has rights 10 variable returns of its involvement with the entity and has the abili ty to affect those returns through its power over tle entity The fi nancial statementS of subsidiaries are induded in the consolidated finarlcial statements ITom the date on which control commences unti l the date on which control ceases When the Group loses control over a subsidiary it dereognises the assets aoo liabilities o f the subsidiary and aoy related non-cootrolliog interest and other components of equity AllY resulting gain or loss is recognised in consolidated statement of income Any interest re ta ined in the fonne r subsidiary is measured 01 f3i r value when control is lost
8
2
Aamal Company QS c
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 31 December 2013
BASIS OF CONSOLfDA TiON (continued)
Subsidiaries (continued) Set oul below are Ihe Group s principal subsidiaries at 3 1 December 2013 Unless oUlenvise slated the subsidiaries as listed below have share capital consisting solely of ordinary shares wh ich are held directly by the group and be proportion of ownership intereSIS held equals 10 the votiug rights held by Group Tbe country of incorporation Of
registration is also their principal place of business
Comp(my name
Aamal Cement Industries W LL
MO Qat1 Company WLL
Senyar Indus tries Qatar Holding WLL
Doho Cables Qaw WlL
EccoGulf Compaoy WLL
Advanced Pipes and Casts eompmy WLL
Johnson Controls Qatar WL L
Country 0 lJCQr por ation
Qator
Qatar
Qatar
Qatar
Q 31ar
Qatar
Principal (lcfi ity
Development and mlUlagement of factori es and the prodllaion or curb sl~ne i llleriook slabs lIId cement bricks
Construction and repai r of power plant es tablislunent and man3gemenl of industrial enterprises aud ac ting as a representative for the imcmatiOllru companies
Management of subsidiaries and associates ovming of palen~ businesses and subleltiug Ulem and provision of investment port fo lio management for Its
subsidiaries and Msocialts UOkr the shareholders agreement signed between the Group and the other
shareholders the Group is able 10 appoint the chai rman and two other members 10 (he Boflrd of Direc tOfS (out of six members) and is able to govern the fin ancial and operating policies of Senyar Industries Qatar Holding WLL Accord ingly ~ company is considered as a subsidiary oCthe Group
Mailltenance and mallllfacture of electric cables equipmelll and lools Doha Cables QalaJ WLL is
91875 (eITectively) owned by Senyar hldush es QaUlr Holding WLL a subsidiary of tllC Group TIIe Group has (he power indi rectly through SenyM [ndus tJi cs Qatar Holding WLL 10 govern fi nancial and opera ting policies of Doha Cables Qatar WLL and accordingly the company was considered IS a subsidiary ofthe Group
OITers professional and bus iness process outsourcing and Cll )] center services
Manufacturing of Wide cement md amplass reinforced pipes systems for infrsslICture (lnd pipeline projects
The Gro up h~ the power 10 govern ~lot financial and opera1 ing policies or Adv3I1ced Pipes and Casts Company WLL by virtue of a sllarchokJers agreemeot TIlus the Company has been cotls ldcrOO as II subsidiary of the Group
Provision of racililies management service5 energy se-rvices md building maimetlaoce and cleanlg services to corporate cl icn1S
PlOporl ion oj
oWPersllip held by the
Non
Group COnroiling interest
99 1
60 40
50 500
459 54 J
5 1 490
50 50
51 49
9
2
Aamal Company QSC
OTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For toe year ended) J December 2013
BASIS OF CONSOUDA nON (continued)
Suhsidiaries (wntiourd)
Cmmffyoj fNgtpvniOil j irniJpvroliin ~__~ampiphdd~~
Nor G)1)Ji contfoifgtg
iMeregt
CmiddotSan TI~ing WLL Sdilamp lYJy1ng renting me Mltcentlopil12 [e~ tSite 30 invimenl w shams rnlilVigemc1t vf real lsta propeItilttl owning ille palent and tradcentmut and tnlding in iXjUiflfIfflt amJ vcilici$ 1he GroClp has tJe pcwer tv goem 6e ~inr8hl and ojJrtltllng
roicie_~ of ClSM by vifcle 0 a shlrcholdcrs 191e~mcentn(
745 25 1~i
nnoV1iv lightinf wmpany Qatar TNriing of Ught 2rrt1nz DiDd lEU Lwpj lmd 7r J) WLL olhT $hlil1g prrltwl
Twdiflg of of4 SiJpplk-s and providll$ prindna and 65 35 laniniltmJ sltrce~
Non-coufroUing illterests Non-controrling intel(SlS are measwed tj tleir propO(hOnile $hue Ot the tcquirees identifiabk net asscl III the JCqUiSlOt1 rote Chuegts in t1e Groups imcest in i $ubsiciwty hat do tot rcmltlo a loss of ~)I1a1)l xc accountd for as equity trnramplclions
Tamil-crions eUminnted on c)lwtidaticu lntngtgroup baiances Jue transactions 00 any unrealised income 1nd expenses ari$tng from intrnwgrOU tranSaOiQlls arc eiimmatcd UfiJeaiiHd gaina arising from ITaUstlclions ttlt equity-lKcoUl11uJ IlVtSlCCS are eliminatd 1gamst the investment 10 the extent oftlle Group interest in the inveMee Umaslised loses are eiiminatd II the same VllY us unrvalised gains hit only to Ille eXfeut that there is 10 evidence ofimpaimcentut
Illttn~ts in jOint arrangements iu)d associates Detais ofeach of ttc Groups Hutilrial Joint venlU)s fujltj assoeime~ at the end of the reponing period are 5 [OHOViS
Cmnirycgt PltJporlion qf Compao name infOjwNiIIO1 ewonlup Qltd
vOingjYwer htld by
tiff GrOlp
[I Sewed Cable QntM Tndllg in ele(mHnechmita CGlJ)ptnefllmd plOvicmg WLL rei) services El SWNed Cables )ilMr WLL is
49 JWoo (Wilt 55 tblre of rrofils (losses) hy StHyar lrdl11(rie~ Qal3t Hodirg WLt e 511b8idimy 0 ~he GOllp However (kw 10 ~ feiBtil shareholdergt agreewli pound ellWY has I~)mc a jOm vent( eTdive trmJ l January 20 wllkh is mC(t511rec Il1de the eqJity ngtU1l
rins $tngtdJBI S~ 1idJgt (law Ertity lS engaged l sled (b[iclli0ls Gf0Jp mtllpoundure Ea LC t11cent fl5sodau under cquhy nlctooo
Aamal Company QS c
NOTES TO THE CONSOLIDATED FlNANClAL STA TEMENTS For the year ended 31 December 2013
3 BASIS OF PREPARATION AND SUMMARY OF SfGNlflCA1T ACCO UNTING POLICIES
31 BASIS OF PREPARATION
The consolidated fi nancial statements have been prepared in accordance with lntema tional Financial Reporting Standards (IFRS) and the appLicable requirements ofQalar Commercial Companies law No5 of 2002
The consolidated financial statements have been presented in Qatari Riyals (QR) which is he Companys floclional and presenUll ion currency and have been rounded to tlle nearest Qatari Riyal TIle consolidated financial statements are prepared lUlder the historical cost convention modified to include he measurement a l fair value o f investment properties and available-for-sale investments
32 CHANGES IN ACCO UNTING POLICI ES
The [lccoWiting policies adopted are consistent wilh Ihose of the previous fi nancial year except for the following standards effe ctive for the annual period beginning on or lfter 1 Jlnuary 20 13 These standards and amendments other tM n the impact of (FRS II - Joint Arrnnge menlS noted below did not have aoy malenal impact to the Group
lAS I (amendment) - Presenfalion of items ofother comprehensive income The amendments to IAS I require that an emity present separate ly the items of ltN her comprehensive income that would be reclassified to profit or loss in the future if certain conditions are met from those that would nC ver be reclass ified to profit or loss
lAS J9 - Employee benefits (201) lAS 19 (201 1) changes the definition of short-tenn and other long-tenn employee benefits to clatify the di stinction between the two
lAS 28 (201 f) - fnvesfmem in Associates and Joint ventires lAS 28 (2011 ) supersedes lAS 28 (2008) lAS 28 (2011) makes the foHowing amendments Associues held for sale JFRS 5 Non-current Assets Held for Sale and Discontinued Operat ions applies 10 an investment or a portion of an investment in an associate or a joint venture that meets the criteria to be classified as held fo r sale For any retained portion of the investment tlwt has not beell classified as beld for sale the entity applies the equity method until disposal o f the portion held for sa l ~ After disposal any re tained interes t is accounted for using the equity method if the re tained interest continues to be an associate or a joint venture and 0 0 cessation of significant influence or jo int conltOl even ifan investment in an associate becomes an investment in a joint venture or vice versa Ihe entity does not fe-measure the retaincd interest
Amendments ft) fFRS 7on ofseftingjil1ancial assels and jinancialliabilities (2011) Disclosures - O ffsetti ng Financial Assets and Financial Liabilities (amendmems to FRS 1) introduces disclosures bout Ihe impact of oetting arrangements on an entity s fin ancial position Based on the new disclosure requirements the Group has to provide inforroation about what amounts have been offset in the consolidated statement of fimmcial position and the nature and extent of rights of set o ff under master netting aITlngements or simi lar a1Tlngernents
fFRS 10 - Consolidate1 financial SIOlemenlS and lAS 17 Separate Fillancial SfalemenS (2011) [FR S 10 introduces a single control model to determine whether an investee should be consolidated FRS 0 replaces the parts of previQlSly exis ting lAS 27 Consolidated and Separate Financial Statements that dealt wi th consolidated fin ancial statements and SIC-12 Consolidation - Special Purpose Entities This new contro l model fo cuses on whether the Group has power over an investee exposure or righlS to variable rerums from its involvement with the in veSlee lnd abili ty to use its power to affect those returns The Group has amended its accounting policy on consolidation in line with requirements of TFR S 10 and has re-assessed its consolidation conclusion
[FRS 12 - Disclosures ofimerests ill other entities IFRS 12 brings together into a single Sfandatd all the disclosure requirements about an enti ty s interests in subsidiaries jo int arrangements associates and unconsolidated structured entities It requires the disclosure of infonnation about the nature risks and financial effects of these interests
II
Aamal Company QSc
NOTES TO THE CONSOLIDATED FTNANClAL STATEMENTS For the year ended 3 1 December 201 3
3 BASIS OF PREPARATION AND SUMMARY Of SIGNIFICANT ACCOUNTrNC POLICIES (continued)
32 CHANGES IN ACCOUNTING POLlc ms (coDtinued)
IFRS IJ Fair ~alue measuremetll TFRS 13 provides a single source of guidance on how fair value is measured and replaces the faif value measurement guidance tha i is currently d ispersed thIo tlghool [FRS It unifies the definiti on of fair va lue as the price that would be received 10 sell an asset or paid to transfer a liability in an orderly transaction between market participants a t the measurement dale It replaces and expands the disclosure reltjuiremenlS about fair value measurements in other IFRSs including TFRS 7
Improvements (0 IFRSs (20 ) Improvements to IFRS issued in 20 11 contained numerous amendments to IFRS that the IASB considers nonshyurgent but necessary Improvements to lFRS comprise amendments that result il) accounting changes to presentation recognition or measurement purposes as well as tennioology or editorial amendments related to a varie) of individuallFRS standards
During the period the Group has adopted the fo llowing new s tandard which became effecti ve for the annual periods beginning on I January 201 3 which had a materi81 impact to ule Group
IFRS II Joint AlTwlgements As a result of adopting IFRS II the GrOlp has changed its ltlccoUJ)ting policy for interests in jo int a rrangemeots Uuder rFRS 11 the Group classifies its interest in jo int arrJngements as e imer j oint operations or joint ventures depending on the Groups rights to the assets and obligations for the liabil ities ofthe arrangements When maldng this assessmenl the group considers the strucltire of the arrangements the legal fonn of any separate vehicles the contrac tual tenns of the arrangements and other fact s and arrangements Previously the structure of tbe a rrangement was the sole foc us of classification The Group has re-evaluated its involve men t in ils o nly joint a rrangement El Sewedy Cables Qatar WLL ltlnd has recla ssified the investment from jointly controlled entity to joint venture Also the Group has discontinued with re rrospective effect the use o f the proportionilte consol idation method and adopted the equity method to account for joint venture in accordance mth IFRS I I
Summary oquulllitative impuct The following tables summarises the materia l impac ts rcsulting from the above change in accounting polic ies on the Groups financ ial position profit o r loss and cash flo ws
Effect of chnnge in 31 Decemb er2012 accounting policy
Cunem assets (278 880441 ) Non-current assets 1295 1346 Total assds (265929095)
Current liabilities (265072694) NonmiddotcWTent liabilities (856401) Total lin bill ties (265929095)
For the year ended 31 December 2012
Profit for the year
Net chflllge in cash and cash equivalents dlUing the year (99696J)
12
Aamal Company QSc
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 3 I December 2013
3 BASIS OF PREPARATION AND SUMMARY OF SlGNlf[CANT ACCOUNTING PO LICI ES (continued)
33 lASB STANDARDS AND lNTERPRETATIONS ISSUED BUT NOT ADOPTED
The following lASB standardsamendments hJve been issued but are not yet mandatory and have 1l0( been etrly adopted by the Group
Standard
Illterpretotion COnem EffeClive dale
TfRS9 Financia l InstrumentS (new standard) I Januruy20 17
IAS 32 Financia l Instruments O ffsetting (amendment) I January 20 14 JAS 36 Financia llnslnnnents Disclosure - non-fi nancial asse ts (amendment) I January 2014
The Group is considering the implications of the above standards and the till1ing (If adoption by the Group
34 SUM MARY OF SIGNIFICAJT ACCOUNTING POLICI ES
Bu siness combinnriO llS The Group accounts for business combinations using the acquisitio n method wben connol is Imasferroo to the Group The consideration ITansrerred n the acquisition is generally measured at fa ir value as are the identifiable net assets acquired Any goodwill that arises is tested annua lly for impairmeot AllYgain on a bargain purchase is recognised in pro fit or loss immediately Transaction COStS arc expensed as incurred except if rehated to the issue of debt or equity securities
The considera tion transferred does nOt include amounts related to the settlement of pre-existing re lationships Such amounts are recognised in profit or loss
Any contingent consideration payable is roeasured at fair va lue at the acquisition date If the contingent consdicrntion is classified as equity then it is oote nmeasured and settlement is accounted for within equity Otherwise subsequent changes in the fa ir value of the contingent consderafion are recognised iu profit or loss
Cash a nd eash equivalen ts For the purpose of the consolidaled statement or cash flo ws cash and cash equivalents consist of cash and bank balaoces ruld short teJTIl bank deposi ts wi th an original marurily of three months or less net of outstanding bank overdrafts
Accounts receivable Accounts receivable are stated at originill invoice amount less an allowance for any uncollectible amounts An estimate for doubttit debts is made when collection of the flilt amount is no longer probable Bad debts are wntlen off when (here is no possibility o f recovery
Inventories Inventories are stated at the lower of cost and net realisable value Costs are those expenses incurred in bringing each product to its present location and condition
Goods ror resalework in progress - Cost of di rect materials aJld labour plus attributable overheads based on a oormallevel ofac1i vity
Raw material and spare pan s PlIlchase cost on a weighted average basis
Net realisable value is based on estimated selling price less any further costs expocted to be incurred to completion and disposal
13
Aama Company QSc
NOTES TO THE CONSOLIDATED FINANC IAL STATEMENTS For tbe year ended 31 December 20 13
3 BASIS OF PREPARATION AND SUMMA RY OF SIGNIFICANT ACCOUNTfNC POLI CIES (contin ued)
34 SUMMARY OF SIGNIFICANT ACCO UNTLNG POLICIES (continued)
Interests in equity-aecoupled inveslecs The Groups interest in equity-accounted investees comprise interest in associates and joint venture
Associates are lhose entities in which the Group has significant influence but not control or joint control over the financia l and operating policies A joint vennu-c is an arrangement in which the Group has jo int ool1lrol whereby the Group has rights to the net assets of the arrangement rather thall rights to its assets and obugations for its liabilities
InlereSIS in associates and the joint venture are accoliDted for using the equity method They are recognised initially tit cost which includes transaction costs Subsequent to ini tial recognition the consolidated financ ial stateme nts ioc lude the Groups shrre of the profit or loss and other comprehensive income of equity-accounted investees unti l the dalc on which significant in Lluence or joint control ceases
The reponing d~les of the equity-accounted investees and the Group are identical and the equi ty-accounted investees accoWlting policies confonn to those used by the Group for like tmnsactions afld events in similar circumstances
Investmefl t properties umd aod buildings are considered as investment properties only when they are being held to earn ren tals or for capital appreciation or fo r both
Investment properties are measured ini tia lly at cost including traosaction costs and borrowing costs that are directty attributable to construc tion o f the 8sseL The carrying alRount includes the cost of replacing part of an existing investment property at the time that cost is incurred jf toe recognition cri teria are mel and excludes the costs of day-to-day servic ing of an investment property Sub~quent to inilial recognition investment propert ies are slated at fa ir value which reOects market conditions at the reporting date Gains or losses arising from changes in the fa ir values of investment properties are included in the consolidated statement of income in the yeltl r in which they arise
Investment properties are derecognised when either they have been disposed off or when the investment property is pennanently withdrawn 1T0m use and no fu ture economic benefit is expected from its disposal Any gains or losses on the retirement or disposa l of aD investment property are recognised in the consolidated statement of income in the year of retiremeOl or disposal
Property under construc tion is dealt with under lAS 40 and rttorded at cost less accumulated impairment losses until either its fair value becomes relia bly detenninable or cons(TUction is completed (whichever is earl ier) At that time it is reclassified as inves tment property and a fa ir value adjustment is recognised in the consolidated statemenlof income
Transfers are made to or fro m in vestment property onl y when there is a change in use For a transfer from investmen propeIT) to ovmer occupied proreIT) the deemed cost for subsequent accounting is the fair value at the date of change in use If owner occupied property ~omes an investment property the difference between the canying value aoo the fair value at the date oflransfer is rttognised as a revaluation reserve in the equity and is released to the consol idated sta tement of income llpon disposal of such propcny
14
Aamal Company QSc
NOTES TO THE CONSOLIDATED FrNANCIAL STATEMENTS For the year eDded 31 December 20 13
3 BASIS OF PREPARATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLI CIES (continued)
304 SUMMARY Of SIGNIFICANT ACCOUNTING POLICIES (continued)
Property plant and equipment Property plant and equipment is stated at cost including borrowing costs that are eligible for capitalisation and excluding the costs of day-to-day servicing less accumu lated depreciation and any imp~innem in value
Depreciation is provided on a straight line basis on all propelT) planl and equi pment The rales of depreciatioo are based upon the following eSImnelt useful lives
Buildings 20 years Leasehold improvements 2-8 years Truck mixers and motor vehicles 4-1 5 years Plant and ITIJchioery 8-2 5 years Furniture fixtures and office equipment 3-5 years Computers and related software 3-5 years Capital work in progress Not depreciated
The carrying amounts are reviewed for impain nellt when events or changes in circumstances indicate that the carrying value may not be recoverable If any such indication exists and where the carrying values exceed tbe estimated recoverable amouot the assets are wri tten down to their recoverable amount being the higher of their fair value less costs to sen and their value in use
Expendirure iocurred lO replace a component of an item of property plaot and equipment that is accotmted for separately is capitalised and the carrying amount of the component that is replaced is written off Other subsequent expenditure is capitalised only when it increases furure economic benefits of the related item of property plant and equiproent Al l other expendirure is recognised in the consolidated statement of income as the expense is Incurred
An item o f property plaot and equipment is dereeognised upon disposal or when no future economic benefi ts are expected from its use or disposal Any gain or loss arising on derecognilloo of the asset is iocluded in the consolidated stalemeot o f income io the year the asset is derecognised
The asset s residual values useful lives and method of depreciation are reviewed and adjusted if appropriate at each rnancial year end
Borrowing costs Borrowing costs direc tly attributable to the acquisition constmction or production of an asset that necessarily takes substalltjal period of time 10 get ready for its intended use or sale are capilalised as pan of the cost o f lhe respective assets All other borrowing costs are expensed in the year they incur BOlTOwiog COSts consist of the interest and other costs that the Group incurs in coomction with the borrowing of fund s
Accounts paytlble and accruBls Liabilities are recognised for amounts to be paid in the fuMe for goods or services received whether billed by the supplier or not
Interest bearing loans Bnd borrowings Interest bearing loaos and borrowings are recognised ini tiaJy at fai r value of the amounts borrowed less direc tly attributable transaction costs Subsequent to initial recognition interest bearing loons and borrowings are measured at amortised COSt using the effecti ve interest method with any differences between the cost and tinal settlement values being recognized in the conso lidated statement of income over the peliod of borrowings Instalments due within one year aI amortised cost are shown as a ctuTentliabiliry
Gains or losses are recogTlised in the consolidated sialement of income when (he liabililies are derecognised Interest relating (0 imerest bearing loans and borrowings is expensed in the year in which it is incWTed e(cept those qualify for capitalisation
15
Aamal Company QSC
NOTES TO THE CONSOLIDATED FfNANClAL STATEMENTS For tbe year eoded 31 December 201 3
J BASIS OF PRpoundPARATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
34 SUMMARY Of)SIGNIFICAtlT ACCOUNTING POLICI ES (continued)
TClaot deposits Tenant deposit liabilities are initially recognised at fair value and subsequently measured at amortised cost where material Any di fference between the initial fair vllue and the oominal amount is [eluded as a component of rental income and rocognised on a straight-line basis over the lease term
Derecognition or fiolocial nsstls and liabilities
a) Financial assets
A fi nanCIal asset (or w~re apphcabJe a part of a fin ancial asset or part of a group of SImilar financIal assets) IS derecogmsed where J bull The n ghts to receIve [5h flo ws from the asset have expIred bull The Group has trans f rred Its rights to receive cash flows from the ass or has assumed an obhg811On to pay the
reltelved cash flows I full Wlthout mfl tenal delay to a third party under a pass-through arrangement and elther (3) the Group has Ira sferred substantially aIthe nsKs and rewards of the asset or (b) Ihe Group has neuher transferred nor relain substantially ai the n sks and rewards of the asset but has tnlnsferred control of the asset
When the Group has tTa~fened its rights 10 receive cash flo ws from an asset or has entered into a pass-waugh arrangement and has nejlher trmsferred nor reta ined substantially all of the risks and rewards of the asset nor trnnsferred control of the asset the asset is recogoised to the extent of the Groups cOlilinuing involvement in Ihe
In that case the Group at 0 recognises an associmed liability The mnsferred asset and ihe associaled liabi lity are measured 00 a basis thai flects Ihe rights lnd obligations that the Group has retained Continuing involvement that takes the form of a guara tee over the transferred asset is measured at the lower of the original canying amount of Ihe asset and fbe maxim amoun o f consideration that the Groop could be required to repay
b) Financialliabiliti
A financial liabili ty is defogniSed when the obligation under the liabil ity is discharged or cancelled or expires Where an existing fio8 1lci I liability is replaced by another from the same lender on substantia ll y d ifferent lenns or the terms of an existin liabili ty are substantia lly modified such an exchange or modification is treated as a derecognition of the orig~al liabili ty and the recog1Jitioil of a new liability and the dirference io the respective carrying amounts is reco ised in the consolidated Slatement o f income
Impalr meot ood uncollec ibility of fina ncial assets An assessment is made al each repon ing date to determine whether there is objective evidence that a speci fic financial asset may be impaired If such evidence exists allY impainneOl loss is recogoised in the consolidated statement of income ImT t is detemtined as fo llows
(a) For assets earned a t fair value impainnellt is tbe difference between cost and fair va lue (b) For asseamp carried at COSt impairment is the difference between cost and lIle present value of future
cash flo1S discounted at lhe current market rate of rdurn for a simi lar finan cial asset (0) For asseq carried al amortised COSt impainneot is the difference between canying arnOWll and lhe
present Value of future cash flO M discowlled at the original effective iDlerest rate
Provisions Provisions are rewgnised hen the Group has an obl igation (legal or COnslnlctive) aris ing fro m a past event and the costs to settle the obl igalio are both probable and able to be reliably measured
16
Aamal Company QSc
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 31 December 2013
3 BAses OF PR EPARATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICI ES (colltinued)
34 SUMMARY OF S IGNIFICANT ACCOUNTING POLICIES (continued)
Employees eod of service benefits The Group provides end of service benefits to all employees in accordance wi th employment contracts and Qatar Labour Law The entitlement to these benefits is based upon the employees final salary aocl length of service subject to the completion of a minimum service period The expected costs of these benefits are accrued over the period ofemployment
Revenue Revenue is recognised to the extent thal it is probable that the economic benefits will flow to the Group and the revenue call be reliably measured Revenue is measured al the fair value of the consideration received excluding discoWlIS rebates and duty The following spec ific recognition criteria must also be met before revenue is recognised
Sale ofgoods Sales are recognised whcn significant risks and rewards of ownership of the goods have passed to the boyer and the amount of revenue cao be me3sured rcli3bly
Rental income Rental incorne from investment properties is accoWlted for on a time proportion basis over the period of tenancy Incentives for leases to enter into lease agreements are spread evenly over the lease teon even if the payments are not made 0 0 such basis Income arising Tom expenses recharged to tenants is recogn ised in the year in which the expenses can be contrac tually recei ved Service charges aud other such receipts are includcd gross o f related cosls in revenues as the Group acts as principal io this regard Premiwns received to terminate leases arc recognised in the consolidated statement of income when they arise
Service income Service income is recognised when the service is rendered and the outCQrne of the transactions can be estimated reliably
COlimission Commission is accounted for on an accrual basis when the right 10 receive the income is established
become on tra~el agencies [ncome on travel agencies is accounted for in the year in which the airline tickets are sold
IIIeresr income Joterest income is recognised as the interest accrues using the effective interest Clle method
Foreign currencies Transactions in foreign currencies ate recorded al tbe rale ruling at the date of the transaction Monetary assets and liabi lities dcoomioated io foreign currencies ace retranslated ill the raLe of exchange ruling at the reponing date All differences are recognised in the Statement ofinconlC
Use of estimates The preparation of (he Groups consolidated financial sta temenls in CQnfonnity with Intemltional Financial Reponing Standards ([fRS) requires management 10 rnake estimates and assumptions that affect the reponed amounts of assets and liabilities and disclosure of contingent asscts and liabili ties at the rcporting date and the reported amoUlils of revenues and expenses during Ihe reponing period Although these estimates are based on managements best knowtedge of current events nnd actions acnm results may ul timately differ fro m those estimates (Significant asswnptions nccounting judgments and estimates used in preparing these coosolidated fina ncial sta temenlS are disclosed in Note 31)
The estimates and underlying assumptions are reviewed regularly Revisions to accounting estimlIes are recognised in (he period in which the estimate is revised if the revision affects only that period or in th~ period of the revision and future periods if the revision affects both current and fu ture periods
17
Aamal Company QSC
NOTES TO THE CONSOLlDA TED FINANCIAL STATEMENTS For tbe year cnded 31 December 2013
3 BASI S OF PREPARATION AND SUMMARY OF SrGNIFICANT ACCOUNTING POLICIES (continued)
34 SUMMARY or SIGNIFICANT ACCOUNTING POLI CIES (continued)
Fair va lues A number of Groups accounting policies and disclosures require tJ1 C measurement of fair values for both financial and non-financial assets and liabil ities The Group has an established control framework with respect to the measuremeot of fair values When measuring the fair value of an asset or a liabili ly the Group uses market observable data for (be valuatiOD Fair values are categorised into different levels in a fair value hierarchy baCd on the inputs used in the valuation lechniques as follows
i) Leve l I - Unadjosted quoted prices io active markets for identica l assets and liabilities ji) Level 2 - Otheqobservable inputs not included within level 1 of the fair value hierarchy ii i) Level 3 - Unobtervable inputs (including enti ty s own data which are adjusted if necessary to retlect the
assumptions market participnllts would use in the circumstances) The Group recognises tralnSfers between levels of the fair value hierarchy at the end ofthe reporting period during which the change has ocdWTed_
Treasury shares When share capitl recognized in equity is repUIchased (by the Company or any of its subsidiaries) the amount of the consideration paid which includes direa ly altributable COSIS is recognized lIS a deduction from equity Wheo treasury shares are sold or reissued subsequently the amount received is recognized as no increase in equity and the resulting surplus or deficit on the transaction is presented io share premium
18
4
Aamal Company iQSc
NOTES TO THE ONSOLlDATED FINANCIAL STATEMENTS For the year ended 31 ecember 201 3
BUSINESS CO~BlNAnON
Acquisition o f Culf ROks Company VLL On 1 January 2012 the roup acquired 51 oflhe voting shares of Gulf Rocks Company WLL (Gul f Rocks) a limited Iiabiliry campan incorporated in Qatar and registered UJKier conunercial registration number 2249) The acquisition was made thT ugh Ci-San Trading WL L a subsidiary which is 50 owned by Aamal Group
I
The fai r val ue of lbe ideltifiable assets and liabilit ies of Gulf Rocks Co mpany WLL based on purchase price allocation exercise condlcd by tbe management as at the date of acquisition WJ S as follows
Fair value recognized on
acquisition QR
Assets I Cash and bank balances 14005495 ACC QUOiS receivable and wePayments I 749383 Amouots due from related plrties I
I oveotones
48311 190 5124 270
Available for sale investm~nlS 1985245 Plant and equipment 6769 17
81852500
Liabilit ies Accounts payable aJld accll1als 4724446 Amounts due to related parties 385070 Employees end of serviccibenefits (Note 15) 349272
5458788
Total identifiable net a5sellf
Purchase consideration trasferred Non-controll ing intereSt az-ising on business combination Bargain purcha5c gain rc~u ting from the tcquisilion
Allalysis ojcash flows OIl acquisition Net cash acquire11 Nith the subsidiary 14005495 Cash paid (30600000)
(16594505)
On I September 20 12 the Company acquired the balance 49 nfthe equiry of Gulf Rocks Accordingly the Group has 74 5 effective holdin4 in Gulf Rocks as at the reporting dale The excess nfthe purchase cons ideration over Ihe fair value o f net assets of GuJf Rocks acqui red from the nnn-controlHng interest has been recorded directly in the retained earnings of tbe Gr6up as at 31 December 201 2
QR Purchase consideration 404 10000 Less fuir value of oet asset~ acquiroo from the non-controlling Interest holder (39842792) EXce5s of purchllse cons idf ration over the fair value of net assets a(q uired 567208
19
5
Aamal Company QSC
NOTES TO THE (WNSOLlDATED FfNANClAL STATEMENTS For the year eoded 3 ) December 2013
CASH AND CASH EQUIVALENTS
For the pmvose of consolidated statement of cash flows cash and cash equivalents comprise the fo llowing balances
lon 2012 QR QR
Cash and bank accounts 330333904 282272895 Short lenn bank deposits 105802852 85608396 Cash and bank balances 436136756 367881 291
Bank overdrafts (6836280) (2885090)
Cash and cash equivalents 429300 476 364996120 1
The short tenn bank deposits are made for varying periods between one day aod three months depeoding on Ibe immedifltc cash requirements of the Group and earn interest at the respective short term deposit ra tes
6 ACCOUNTS RECEfVABLE AND PREPAYMENTS
2013 2012 QR QR
Trade aCColUlts receivable 411 011 567 345260657 Advances 0 suppliers and prepayments 50787921 629389J 5 Retention receivables 36217081 56943030 Other receivables 12073270 17 139173
5tO089839 4 82 28 1775
As at 31 December 2013 trade accountS receivoble amoWlting to QR 2690 1412 (201 2 OR 24984025) were impaired Movements in the allowance for impairment of trade aCColmts receivable were as follows
2013 202 QR QR
At 1 January 24984025 1 877085 Charge for [he year (Note 21) 2294590 13613 120 Amounts wriuen off (19949) (117368) Unused amotmts reversed (357254) (388812)
At 3 t December 26901412 24984025
20
6
1
lamal CompanyQSC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMEltS For the year ended 3 J December 2013
ACCotNTS RECEIVABLpound AND PREPAYMpoundNTS (contillued)
As at -1 I Dtcemxt the ageirg of unimpaired (ltlde accounb iltcivabk was as follows
P(HI duo
nor Up to 30 31-60 61middot90 Yi-jSj gt flO Tota impoirlt-fl days days days day doys
QR QR QR QR QR QR QR
1l13 411OJl$67 25l981960 32312165 2140966 19351fi43 16f)76888 60148545 2012 345260657 1695159B6 493lt)8566 2356$954 19494369 16908414 66374363
1JJJirtpai~ed receivable are expected no th bil5tS of past experienn) 10 be fully fcCi)evbc H is not the pngtctlce ofthcent Group to oblum collaleral over recejvablcI_
AMOLNTS DUE FROyl REL-TEO PARTIES
Name
AI ~aisnl Holding Company V_LL E Seweo Cabtes Qatn WL L Cnild -ftt Cvmlllny Al hz Retll E$vt rWesnnim Company WLL~ AllaZi Real Estale BrAnch EI Sewedy Electric Egypt WLL MuincrDJ1Ce Mwagmvont Group Qat3r W LL Good fe Cheffilt - The Pcarl
BuderPhtrnacy Al Faisallnlemadonal Tnl(i and Investment Company WLL AI-rabia Land Trnr~PQltit1g Company rLL ro Sewedy CabLes - Kuwuit Gcentttco hlttrnJmJilI Frijns StHytural Steel Middle East WLl Winer Wunderand Company WLL Al FtOH1H for Investment amp llllemtiOl1a Trading COntpAny WJ_L Q)lar Bahrain lmerOlnionai Cnero3 WLL Gulf EngJisb Sltl-Qo] Al Rayyao Tourism lve$lrnent Company W LL Other relater purties
2013 2012 QR QR
15412-1064 ll941Y70 34644615 ~li96858l
[()0405 14-45012 51 59197 9538116 15514113 4014727 236824$
1867526 LSOfd22
8(1012 10435r 311650 746395
15023 204450 459829
2iYHi 244940 186750
152170 143440 33500 7768(1
6259 1459lt) 758962-1
__2~61g~~_ 1~95Ji
bull 214109950 171525363
--__ shy
7
8
9
Aamal Company QSc
NOTES TO THE CONSOLIDATED FfNANClAL STATEMENTS For the year ended 3 1 December 2013
At10(JNTS DUE FROM RELATED PA RTIES (continued)
NO les (i) Transactions witll related parties are eam ed out through open account and Directors do not consider any
receivables to be past due or impaired
(ii) Related party transactions ore disclosed ill Note 26
INVENTORIES
Goods for rew le Raw materials and spare pans Work in pTOgresS Goods in transit
Less Provision fOI obsolete and slow moving invenlories
1013 QR
165499699 38388307 19944678 9671 8553
320551237 (3851692)
31 6699545
Movements in the provision for obsolete and slow moving inventories were as follov~
At I January Charge for the year (Note 19) Reversals Amounts wri tten off
At 31 December
E QUITY-ACCOUNTED INVESTEES
TIle Group has the followiog invesllnenfs in equity-accounted investees
Interests in joint venrure Interests in associa tes
At 31 December
G roup s snare of profits fr om the equity-ncco unted iovcstees arc AS follows
Profit share from in vestment iojotnt venture Profit share from investment in associates
202 QR
232597650 36608394 30622960
10521 9695
405048699 Q 145826)
40 I902873
203 QR
3145826 1 380617 (535695)
( 1139056)
385 1692
20 12 QR
2795992 2208263 (137995)
( 1720434)
3 145826
2013 QR
2012 QR
129462184 3644723
124124803 2545188
133106907 12666999 1
17330368 22869454 1169533 534050
18499901 23403504
22
10
Aama Company QSC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 31 December 201 3
9 EQUITY-ACCOUNTED INVESTEES (continued)
Counlry of incorportllion
Relationship Proportion ofownership and lotilfg power held by the Group
203 2012
EI S~wedy Cables Qatar W LL Frij ns Structural S teel Middle East WLL Al Ftfazdaq Company WLL
Qat~
Qatar Qatar
loint venture Associate Associate
55 20
55 20 35
Note With effect from 1 January 20 13 the mlnagemeot of the Group has reclassified the investment in Al Farazdaq Company W L-L from investment in associate to investment in subsidiary This is based on the transfer of share holding by the other shareholder whereby the conlroi o f AI FOl razdaq Company W LL bas been assigned 10 tbe Company
INVESTM ENT PROPERTIES
a) Reconciliation of carry ing amounl 2013 202 QR QR
AI I January 611334701 8 555 1835348 Additions 9568047 1727191 87 Transferred from property plant and equipment (Note II ) 34519828 Net gain iTo m fa if value adjlls tment 245051107 388792483
At 31 December 6402486000 6 11334701 8
b) Measurement of fair value
The fair values of the Groups inveS hnent properties as at 31 December 201 3 and 3 1 December 2012 have been arrived al on the basis of valuations carried Ollt on the respective dates by professionally qualified independent valuers not related to the Group The independent valuers have appropriate qUlli ficatioos and (eceJ11 experience in the valuation of properties in fhe relevant locations The fa ir value WltlS determined based on market comparable approach that reflocl s recent transaction prices for simillt1r properties and discounted cash flo w and income approach techniques
Details of the Group s iovestment properties and infonnation about the fa ir vn lue hierarchy as at ) I December 20 I J are as fo llows
IIvestment propenies
Level 3 fair vallie
Al I Janu ary 6 [ 13347018 Additions and trans fers from property plant and equipment 44087875
Gain included iu prom and loss Net gain from fair value lt1djuslmem 245051 107
AI J I December
The Group recognizes transfers between levels of fair value hierarchy as o f the end of the reponing period during whicb the transfer has occurred There were no transfers between the fai r va lue hierarchy during the year
23
10
Aamal Company QSc
NOTES TO THE ONSOLlDA TED FINANCIAL STATEMENTS For the year ended 3 I ecember 201 3
LNVESTM ENT ROPERTIES (contin ued)
b) Measuremen t 0 (air value (conti nued)
Vau t ion technique an significant unobservable in puts
The valuer has applied t e income capitali zation discounted cash flow and comparab le methods to detennine the market value of the lnve tment propen ies Significant unobservable inputs used included expected market rental growth rates (an average 425) occupancy rates (approximately 90 to 95) and risk adjusted discount rates (approximately 5 to 7 0) M y significant change in these inputs can impact lhe fair valuation of investment propcnies
24
Aamal Company QS c
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For che year ended 31 December 2013
11 PROPERTY PLAi~T AND EQUIPMENT
FumilUre Truck mixers fIXtures and Complllers
Leasehold and maor Plum (fd office and relaed eapiowork Buidings improvements vehicles machinery eqllipmcni sofMore in progmiddotcss Total
QR QR QR QR QR QR QJl QR
At I January 2013 137870126 371 88 132 9595813 1 262536261 19 580954 14864 385 561 32447 6241 30436 Additions 948)65 2618 100 5367399 859061 111 5268 137147581 148055774
Relating to d isposalswrite-off (1042642) (4390496) (77157L) (589150) ( 184075) (6977934) Transfer from capilal work in progress 1505 310 164 336 3601776 ( 150000) 1182741 (6304 163) Transrer to investment properlies (Note (0) (345 19828) (345 19828)
At J I Dttember 201 J 139375436 J7 258~ ~1 85735 270733865 19700865 169783 19 152456037 _73068~448
Depreciation AI I January 2013 16133915 J6902 529 49087707 68783 065 11 980009 tl71 595 3 174603 178 Charge for the year 7059805 3237150 5390767 12249797 2849162 1768823 42555504 Relating 10 disposalsJvri te-off (664709) (4 3 1716 1) (724322) (552939) ( 18 1993) (6441 124)
At 31 December 201 3 23193 720 19474 9 70 50161 313 90303540 14276232 13302783 2 107 17558
Net carrying amounts At 31 December 2013 116181J16 _17783221 44024422 180415325 5424633 3675536 __l2456O37 JJ9970~890
Notes (i) Depreciation charge for the year amounting 10 QR 33 164382 (201 1 QR 3303091 6) is included in tbe direct costs and an amount of QR 60055 (20 12 QR 36939)
has been capiulised under capital work in progress
(ii) The capital work in progress includes capitalised borrowing costs amounting to QR 125645 (20 12 QR 15358)
(ii i) The buildings are constructed on a plot ofland taken on a loog term operating lease
25
Aamal Company QS c
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 31 December 201 3
II PROPERTY PLANT AND EQUIPM ENT (continued)
C05I~
At 1 January 2012 Additions Acquired through business combinations (Note 4) Relating to d isposalswrite-off Transfer from capital work in progress Transfers
Buildings QR
137434400 435726
Leasehold improvemellls
QR
38137377 446J 04
144 103 ( 1539452)
Truck mLCers and molO
velricles QR
83427661 11464679
1697609 (631824)
Plant and machinery
QR
249335437 97264 85
35 14 132 (99498)
59705
Furniture fir ures and
office equipmem
QR
22845309 667586
192042 (3696457)
98000 (525526)
Computers and related
software
QR
158 19519 87 14 14
141837 (266 1733)
908078 (2 l4730)
Capitol work in progress
QR
12104889 451 53265
( 1065783) (59924)
Total (JR
55910459 8 68765259
5689723 (862 8964)
(800180)
AI 31 Dttember 2012 137870) 26 371881 32 95958 13 1 262536261 19580954 14864385 56132447 624 130436
Depreciation AI Jaouary2012 Charge for the year Acquired wough business combinations (Note 4) Relating to disposalswrite-off Transfers
9144666 6989249
)4 3 16620 3410618
144103
(96 812)
42558404 548 1613
1671942 (6242 52)
44555 290 2 1398849
2890797 (6 187 1)
12392584 3 182899
169005 (3558466)
(206013 )
12235266 2077633
136959 (2627283)
(J 0662)
135202830 42540861
5012806 (7840684)
(312635)
At 3 L December 201 2 161339J5 16902529 49087701 68783065 11 980009 11715953 174603 178
Nel canying amoWlts
At 31 December 201 2 12 173 6211 2028560 3 46870424 193753 196 7600945 3148432 56132447 449527258
26
12
13
Aamal Company QSC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 31 December 20 13
ACCOUNTS PA YABLE AND ACCRUALS
Trade accouots payable Advances from customers and tenants Accmals Social and sports activities levy Other payables
AJIOUNTS DUE TO RELATED PARTIES
Name
Arab Compaey for Fiber Products EI Sewedy EIC( lric Ho lding Egypiasl Egypt Egyptlech Egypt United Industri es Company WLL Johnson Controls Air condi tioning aod Refrigeration Qatar WLL pound1 Sewedy Cables Egypt Johnson Controls Air conditioning and Refrigeration rNC Dubai United Wire Company WL L Gelteo Company W LL - Gelteo Refr igera tion and Airconditioo ing CampC Lightway nc AI Shaab Group of Companies Other related pruties
NO M Related party transactio l)s a re disclosed in Note 26
2013 QR
320017657 30486837 26924669 41 761 843 25855567
445046573
2013 QR
18517474
4902528
6531231 6404578 3215821
2825884 75 7825
3467288 263715
1313247
48199591
2011 QR
26716268 1 27410234 222575 76 28954726 33)33852
379119069
2012 QR
18380528 91458 82 54 13849 1 11 6 135 5374039 35291 2020359 1693323 1064744
670 179
11 0873 12 18650
49737757
27
14
Aamal Company QSC
NOTES TO THE CONSOLIDATED f fNANCIAL STATEMENTS For the year ended 31 December 201 3
INTEREST BEARING LOANS AND BORROWINGS
NOles Malilrify
2013 QR
2012 QR
CoMl Loan 2 Loan ) Loac4 Loan 5 Loan 6 Loan 7 CoMB Loan 9 Bills discounted
(0 (ii) (iii) (iv) (v) (vi) (vii) (viii) ( ix) (x)
lune2014 Seplember2014 January 2015 November 2016 December 20 16 November 2017 Jllne20 l J December 20 7 OClober 20 19
172070387 440000000 50544000 40261 621 81387109 19920036
6] 43890 62626967 42522794
915676804
298324180 440000000 10 J088000 57955030
100 168750 2 1300492
407728 1 782871 1
35000000
1065742444
Less Defe rred finatlcing cost (771 503) (897148)
914905301 1064845296
Presented in the consolidated statement of financial positioo as fo llows 20)3 QR
201 2 QR
Current ponion Non-current ponion
749520820 165384481
825568489 239276807
914905301 1064845296
The dete rred financing costs consSt of arrangement fees The movements m the deferred financing costs were as fo llows
203 2012 QR QR
At I January 897148 332 661 Addjtions during the year 1 062565 912506 Amortised during the year (218amp210) (34801 9)
At 3 1 December 771503 89 7148
28
Aamal Company QS C
NOTES TO THE CONSOUDATED FlNANCIAL STATEMENTS For tbe year ended 31 December 2013
14 INTEREST BEARING LOANS AND BORROWINGS (continued)
Nolec
(i) Loao I i USD 93000000 impon 10n moi lily obtoined to refimnee he Icne~ of edit The 10 IT interest at commercial fate and the interest is paid at monthly intervals The fucility is repayable within ISO days including the usage period under letter ofc redits
(ii) Loan 2 is a secured bridge loan obtained to settle an existing loan and working capital requirements of the Company The loan carries interest al coOlJllercial rates and interest is 10 be paid on quarterly basis
(iii) Loan 3 was obtained for the pWpOse of financing capital ependiture and direct payment to suppliers contractors and 5ub-controctors The 10011 CMries interest at commercial rate and the inte rest is to be paid q Uar1erly The fac ility is repayable in IS quarterly iostallmenls starting I July 20 11 and ending I January 2015
(iv) Loan 4 was obla ined for conSlruclion o r an inveslmenl property The loan is seclJed by 0 primary mortgage over the some property and corporate guarantee of the Aamal Company QSC Tbe loan carries interest at commercial marke t rate and is payable in quarterly instalments
(v) Loan 5 represents a loan fOlcility obtained in two sepnrole tranches amounting to QR 309 825 000 (USD 85 million) for the purpose of refurbi shment and construction of fociJities io one of the investment properties The loan is repayable In 16 equal quanerly instalmcnlS for individua l tranche commencing from March 20 1J The loan carries interest at conunercial rJtes
(vi) Loan 6 represents secured loans obtained ffom a commercial bank in the previous periods for the purchase of heavy equipment and machines and were merged on 15 November 20 12 as a comb ined loan This loan is payable by 59 equal instalments of QR 426000 with (I last inSlalment of OR 438 326 with effect fro m 01 October 201 3 The loan carries interest at commercial market ra tes
(vii) Loan 7 is il tmst receipt banking facility obtained for the purchase of inventories This carried interest at conunercial market rates This loan was full y settled during the year
(vii i) Loan 8 represents secured loans obuined from a commercial bank in the previous periods for the purchase of delivery trucks and machinery and were merged on 22 October 2012 as a combined loan The loan carries inte rest at commercial market Tates and is payable by 59 equal insta lments o rQR 160000 with a last inSlOlmem ofQ R 128000 with effect from 3 1 December 2012
(ix) Loan 9 is an Islamic Financi ng Arrangement obtained for construction o f a manufacturing plam and as o f yearend ba lance represents partially drawn amount out of totil1 facility of QR 655 68000 The loan is secured by joint corvorate guarantee by the shareholders The loan carries profit at Islamic Financing rates and re-payable in quarterly instalments starting from the end of the 24 months gmce period from the date of loan drawn
(x) Bi ll discounting is a loan fac ility from banks The purpose of the arrangement is to discount bills locally and carries interest at current commercia l filte
15 EM PLOYEES END OF SERVICE BENEFITS
Movements in the provision reHectelt in the consolidated SLo1tement of financia l position were as fo llows 2013 201] QR QR
At I Jan uary 18111 763 17877937 Provision made during the year 4056969 4205499 Acquirelt through business combinations (Note 4) 349272 End of service benefits paid during the year (2210756) (4320945)
At 3 1 December 19957976 18 111763
29
Aamal Company Q5C
NOTES TO THE CONSOLIDATED FINANCIAL STATEMETS For tile y~ar ended 31 Dee~mber 2013
16 SHARE CAPITAL
2013 2012 QR Qq
AtI1l1)nud 60000)000 (20 2 544500JJOfn shares ofQR iii Cilch 60i)iQOOlOO 54450lt)0000
21)13 2012 Numher of
siMtS QR shares QR Issued Mtldfully paM At lJamld) 544SfWllOfJ 5445(100001) 495000000 49500000)0 1511C ofbonus S1i1-C ___ 5550~OOO 555000000 49SGOOOO 495000000
At 31 Decenef 6(OOampQllf1(1 ---14450O000 544~OOOOOO
All ampates m~ of a110 clss and caL equal voting rights
17 LEGAL Reuro5ERVE
As required by Qatar Comnertai COfrp7lnies Lav No5 of 2002 lOfp of the profit for the ye1J as a rru1imllli silould be mmsfened to legal re~erve The reserve is lot normay [lytiabe tor distribution except ill he cixcuJUstllrtUS stipulated m the above ~lemi0ntd GIW
IS HEVE1TE
2013 l)n QR QR
Sale of goods 1726893265 i709057~(iO
Renlal income UiO362322 133117509 S-ice income 858695 33940731 CornrrusslOlL Incentives and agency fces 44695S1 422~_632
212259$)33
19 DIRECT COSTS
2013 2)i2 QR
C 051 of inven(feS recognisedlIS an exptns 1522929956 497210830 Dind sL1ries lmd wages 601 [1336 5137856-8 Operating eXpenses on nml estate p~opet1les 36)711316 3041H504 fJepreciatiort (Kate I J) 33164382 B03091pound Operators marhgerrt6nt fees 14508588 li667989 Provisicn Qr obsolete and skwlt moving mvenlories (K)tc 8) 2380617 2208263 Other operating ilxpenses _31~3982 _ 3674946
1702139171 JS9653OI tgt
Aamal Compall-yQSC________________
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For lthe year ended 31 December 20 11
2G OTHER NeOiI
2013 20J3 QR QR
Interest mcume 2824216 2)314392 Profiv( loss) 00 disposal of property plant aoe eqUlpmem 737647 (l7362G) Eargain ptmnJse gain (Kote t) 8360793 MIsceJlaneous income 5723356
2013 2012 QR QR
ManllgetnUI hrQ empl(yees ws 55170302 55lt035middot1 Rent 23596799 2594915 Allowance for impaimlcot oUrsue aCQl1ot$ rc(Xjvalle (Nole 6) 129459(i 11613120 flBumcce ane profcampiitmJI fees 2IU9263 209J902 Corununication OOtHS 1935123 1649155 Trllining tid ouSfjt$s developmccl 950476 L095764 Re]X1in and mainle-nilnce 21)11SflS 2)2 I Poslag-c prjnting acri stationery 610299 541159shyvllsltdlancous expenses _~~~664 1lt2
-~~~ 125162812
22 fIN~lCE COSTS
2013 2amp2 QR QR
Inleres epen~ 42866312 5773U4B Am(vtisJliorgt ofdefcentrred financiog coStS __ 2l)tl26~~ gt3661
44930877----=
58063009
23 BASIC A~n nHUfED EARilNGS PER SHARi~
Basic trdTJogs per hue is caculatid 0y llividing the pwfill0( Ihc year attriouiabk (0- equity roldc-5 of the parent by lhi w~iglwxi avrage number of ordinary shares 0JstandirJg dulting tht_ year During Ihe year lil~ Conpmy i-sued and CBpii3lzed bonus shares lnd awmJingl) me previously ~eportod earnings per shac have blOM restatc(i
20i3 2012
Profit feT the year auributable to Cluity holderlt of the- paren (QR)
Weighted aVCTage number ofshares outstanding during the year (i)
Basic Jd diluted earnings per share (QR) 085
59985U413 shy
~~--~~~~- ~------J 1
23
Aamal Company QSc
NOTES TO THE CONSO LIDATED FfNANC[AL STATEMENTS For tbe year ended 3 l December 2013
BASIC AND DILUTED poundARNINCS PER SHARE (continued)
NOles (i) Th wigh d m nlg urnb of hres foc h P of lruling ~migs pee share h bee kulated
as follows 2013 20J2
QU3lifying shrues allhe begi ll1ling of the year 544500000 544500000 Effect of bonus shares issued and capitalised 55500000 55500000
600000000 600000000
Less T reasury shares (149587) (i357SI)
Weighted average number of shares at the end of the year 599850413 599864249
(ii) There were no potentia lly dilutiw shares outstanding at any time during tbe year and hence the diluted earnings per share is equal to the basic earnings per share
24 COItIMITMENTS
20 1] 2012 QR QR
Estimated capital expenditure approved and contracted for at the year eod but not provided for
Investment properties 2964000 8 139063 Property plant and equipment 16386500 63759762
19350500 71 898825
Operating lease commiIOlenlS under noncancellable lease agreemenlS
Payable wilhin one year 990806 702000
990806 702000
25 CONTINGENT UABILITlES
The Group had the following contingent liabi lities from which it is anticipated thai no malerial liabilities will arise
2013 2012 QR QR
Letters of guaramee 474551239 394255203
Letters of credit 7678499 194299384
NQles
(i) leHlaquogt of gu indud penonmnlaquo tend nd bid bonds d pymenlt g gi to suppliers and contractors by the Group in the ordina ry course of bus iness which will matme within twelve months fro m the reporting da te
(i i) Letters o f credit are provided by lodging documents to the bank tor purchase of trading goods fro m foreign suppliers wruch will maMC within thJee to six months from the date or tile Iransaclion
J2
26
Aamal Company QSc
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year eoded 31 December 2013
RELATED PARTY DISCLOSURES
Related party transactions Related parties represent major shareholders directors and key management persortOei of the Group and entities controlled joimly controlled or signjficamly innueoced by such parties Pricing policies md tenns of these tnlOSaclions are approved by the Group s management
Transactions with related parties induded in the consolidated financial stalemenls were as follows
20lJ 2012 QR QR
Sale o f goods and SClVices 419034048 415225221
Rental income 1980473 2069386
Purchase of goods and services 1591 38018 300835596
Rental expense 21 780G78 23397334
Bargain purchase gain 8360793
Net assets acquired 78803585
Relat ed party bal nnces AmountS due from and due to re lated parties are disclosed in Notes 7 and 13 respectively These balances do oot carry interest and are repayable OIl mulUlUy agreed dates generally within one year
The Group did not record any impairment of receivables reJatiog to amounts due from related pat1ies in either year This assessment is undertaken each fina ncial year through examining the ftnanc ial position of the related party and the market in which the related patty operates
Parent The Groups ultimate parent is Al Faisal Ho lding Company WLL
Compensa tion or key management personn el The remuneration of key management dming the year was as fullows
2013 2012 QR QR
Short-term benefi ts 7904794 1079595 Employees end of service benefits 408934 439776
8313 728 11235727
33
AamaJ Company QSC
NOTES TO THE CONSOLIDATED FINANCIAL 5T ATEMENTS For the year ended t Decernber 2013
Dilling the year 1he Group issued a XHlUS share of 10 928 of the paid tiP share capilal hdd ilS at 31 DiX2mber 2(JJ 2 mnmuning to OR 555000000 using retamed earnings as of3 December 2012 (20l2 Doe share for every ten shues held as of 31 Dcember Oll amuunting 10 QR 495OO()OOO ling reta1ned earmrgs 28 or 31 Decencer 2D II Jshy
18 SEGMENT INFORMATION
For J)iloogement PUIpltJM rhe Group i organised into business unit bused On LlJeir nature of Acttvitics lud nas fonY reportable segments and the Head Oftklt as bllow$
Propert Tbe segntn cOlists of City C~nler Qlta~ Brunch and Aamal Rea Esmte Branch whicb ll[c invoived in lampIiiog the faJ1ities of retail outlet conpex red e5ttlte nve(mltn$ and property remal buines~s
Trading mld distrib-wion The segmeul Involves wholesalB andlor rBtail distribution of phamlaceutlcai and consunable i1ems hume Epplianccs medica equimenl t-Tes ill1d lubricmtlaquo and II1UllitnEl printing The scgn(rtt includes 6c following entities
Eotl Sina Medical Branch
Aaen Medical Braudt
Amcill Troding and DistoolltlqO Branch bull Foot Care (erier HRnd) Good llre Pbannacy Bf4Uch bull Al FllfJdaq COllpafY wJ~L
InduSNol manuacturing TIle s0groent IOvolves Ulahuactrumg whole~we aliaor rewi dimibUlioti of dccnc cables lid tools ggregJ1es_ ready-IUx connole and cement bI0C~ lI1d provi$ion of servlCcent$ in rdation to iODllltroa Itvestment repair aJ-d Gonstruction of power plwts liiiding of LED ilgluitlg products und management of industnl enterpnses The segment ircludes be folloVting centntitis
bull Aam1 Cemert Industries LL AuraJ Redy1Yl(A BrQTlch
bull Doha Cables Qawf lLL Senyaf IoolJic1es Qatar Holding W LL Advanced Pipes ard Casfs CompQTly WJ L bull GuJfRoch Coroany WLL Ci~San Trading Company WLL hmovafive Lighting Compary WLL
Managed services le segment inyolvc~ provisloH of hOllseiltecpmg mi cleaning services fucditics n-anagemerJ services C1egy s(tvices ttl centfe sltrvicf)s buildiqg lnaintemHlelt aml acting as travel gens The 5cgnltnt includes the foUowing cnti(lcents
An13 ServJce Branch
amli TnlVeJa l5tmh
f-eco Gulf Co W LL
Jolinson Controls Qattl WJL
28
Aamal Company QSc
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended ) L December 20 13
SEGMENT INFORMATION (Co ntinued)
Head Office It provides corporate services to the branches and subsidiaries of the Group
The managiog d irector of the Group monitors the operating results o f its business units separately for the purpose of making decisions about resource allocation and perfonnance assessment Segment perfonnance is evaluated based Oil operating profit or loss of these segments Transfer pricing between operating segments are on anns length basis in a manoec similar to Iraosactions with third parties
Aamal Company QSC
NOTES TO THE CONSOLIDATED FINAN CIAL STATEMENTS For the year ended 3 1 December 20 13
28 SEGMENT INFORl1ATlON (continued)
Operating segments The operat ing segment after elimination or ioter-bra nch and inter-co mpany lrnnsaclioos is presented as follows
Trading (nd Industrial Managed For fh e year elided 31 December 2013 Properly disirjblli ioll manujocljlring services
QR QR QR QR Revenues
- h lemal parties 260360172 578909983 1231522768 S l802210 - Inter segments 1253914 6843 11 8 29639873 3445052 1
Heat Office QR
Eliminoions QR
(n187426) II
Tolal
QR
2J22595133
261614086 585753 lOI 126116264 1 8625273 1 (721 87426) 2122595133
Opera ti ng results Fair vallie gains
Profit I (loss) ror the year
Depreciotion
200811944
245051 107
445863051
2066290
86492834
86492834
4345438
22636250
22636250
33049 089
5157436
5157436
1760305
(47864882)
(47864882)
1334382
267233582
245051107
512 284689
42555504
36
Aamal Company QS
NOTES TO Tl CONSOLIDATED FfNANClAL STATEMENTS For the yeM ended 31 December 20 13
28 SEGMENf INFORMAnON (c)tltioucd)
FOf the yearrnrkti J f DccemOer 2(J12 QR
Revellues - ExlcmlJ partiel 2331 17 509 bull Inter segmcI11S 1168935
-- 234236434 --~- -~--
Openning results 18S2367t Fmt value gains J8S79-4~G
pront LOllS) for the rear 570616154
gt3659
No(
lnlermiddotgment revenues are eliminated on tQHs)idntiOH_
Tadiug ftfid disl d)Ntion
QR
S2S3l7661
324 j
5335493114 ~ -~-----
51384831
54384338
4J9R71(i
Indus idi mamfmturing
QR
1255694537
129U25lS4
56727059
56727059
32752742
slnltic(s QR
55216665 2939H31
S46lOJ96
7427414
7437
[908067
ilfild ()jice QR
(64(41976
Elimination QR
(74tHi2oJ Iii
Totul QR
206936372
2069336372
235721
(64641
131 f613
6245
42541)861
Amnal Company Q$l
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Por tnt yeartndeJ 31 De~embcr 2013
28 SEGMENT JNFORMATlON (contiutlld
Assc-ts and labilities
Tng alld lndtrstfw At31 December 2(113 distnbllrior manufacturIng senices HeadOJJicc EliminatioilS lola1
QR QR QR QR QR
Cumnl 3tS 227552338 620807979 61349 j 415 S()6)86922 (301636995) 1477366090 Noolucrcnt DSeIS 6411868160 12604763 622386238 4348876 (i624548 __p2438051 780
fotal asstl$ 6639420498 1194 1243194217 65698291 513Ql1470 ==-lt03H8l~O()) 853295-870 -~----~ ~---~ -
CUIT)llliabilitics 280995335 1(3511J60 6344(12777 2l0708lJ2 496261185 (3CH636995) 1249603264 Non-current iiatJlitics 7l70L5V2 8008485 HlDi16~43_ 3181668 t433799 ____ ilj534_~57 __ --Totul liahililics 353696897 ___~4159~4~ 734419720 ~4976~~~~~ 1434945711
---~~--~ -~-~~ - _2~~~4~~ (~~~~9~
C1pild expcndimn HI) WO743OOj 1397742_~471l2~--~50 ~51 ~1~623821~~1~_ -~----~------ -~
3amp
28
Aamal Company Q SC
NOTES TO THE CONSOLIDATED FfNANClAL STATEMENTS For the year ended 31 December 20 13
SEGMFNT INFORMATION (continued)
Assets and liabilities (continued)
AI 31 December 2012 Properly QR
Trading and d iSfriblllion
QR
Indusrial manufacfuring
QR
Managed senices QR
Currenl assels
Non-current assets
146491 186
6121 864484
2964425 12 903 7264
73468 1258
549267235
51387098 471 1439
Tolal assets 6268355670 305479776 1283948493 56098537
Head Office QR
468325024
6713643
475038667
Currentliabil iies
Non-current liabiLities 273444 748 1 J10 15024
86054583 7434286
669214261 1288 14977
2 1938953
287 1199
480393637 1253084
Totil lliabiliti cs 390459772 93488869 798029238 248 10 152 48J64672 1
Capila expendirure (ltII L 72865 878 1281254 6647 J356 7169 13 149045
Notes
(i)
(Ii)
Inter-segmeot balances are e limioafed 00 consolidatio n
Capi tal expendiTU res consist of additions 10 propeny plant and equip ment and iovestmenl properties
Eliminations QR
To wl QR
(273735776) (i )
(20308351(i)
1423591302
6689563230
(27576661 1) 8 113154532
(273135777) (i) 12573 10405
257388570
(273735177) 15 14698975
24 1484446
39
29
Aamal Company QSC
NOTES TO THE CONSOLIDATED FrNANCIAL STATEMENTS For the year ended 31 Dcltmber 1013
Fr-A]~ClAL RISK MANAGpoundMamp1H
Objccthes and policies fe Groups principal )uaucill liabilities comprise imltresl bctmllg loons and IxmowHgs baRlt ovetda1s amounts due to fclaled par1ies and tracte accounts payable The main pUlJXSi of thesc financial liabilities is 4J mise firmne or 610 Grmps operations The G0JP bas various fimmcial assets such as ttadc accounts receivable lInlOlmts due from related parties bark balances tltCntion receivable and other receivables which arisgt directly fran its cperuoonamp
The maiH ri~ks an3ing Joru (be Groups UnariCJlll illslrumenls jle market risk cretiJt nsk and hmdity risk Til BoarD ofDtrcctO$ reviews end agrees policies for mzrAgbg Caltt f hespound ri~k ihkh arc summariscd beloW
VIarktt risk yenfatket risk is the risk Um changes in market prices $Uch as intfcst rates and hreig lttmeocy ect14nge rilles Vltl1 affect the Groups profit eqwty Dr value tf its hoJdiI15 of financial instrl[Thnls rile objecivpoundj of marke1 risk mUnllgcrlcnt is to manage uld 1~ontr(ll tho tr))rket risk expo-sure vithir acceptable parfI-etcJ$ while optimising rerUID
Equit) price risk ampjuity prtce risk is the risk hilt the Group ampearnings will be affected as a rcmt (If luctttltions in fm vdue of ~qui-gt
mstwnents Eqlliry price risk arises from availabtetor~sale inv2strnems However the Groups exposure to eqmty price risk IS minima as II doesn hold sitl)iftrmt ailableAor-511le inYestrmmrs
[merest rate risk The Groups fimiruial poundS5ot ampId liaojlilies (at Rl $uJject to int~~ rate mk compnse brmk depoils interst bearing loans and bOITQwjags and bank overdr-afts At the reponwg dalt tbe [merest rale pronle of Ill Goups intexst bearing fbi4rdd instruments as fliows
11113 20i3 QR QR
Fued liIeryS refc insfrvrnellts
Fmmcial assets 113035962 111913394 FrOltwial liabilities --1~203712l) 1252t43~1
9)OI~ (13350972)
Fhlllting inireSI rate ns1lmlttrs Fanctl~ Isseis 127024345 ID43848o Fllllocial liabilities _-(i~9347~ (94))48926)
(836)64116)
The Groups exposure to t~ ris of changes in marXet interest fltltes relztes primariiy to the Groups financial assets and lizbitdic$ with t1Oltttirg interest mte~
lhe loEowing able demonstrates the ampmitivity nf the eonsolidattXI statemen1 of income 1) caonaly possible chonges in in1jfgtst rmes by 25 basis points with all othe vari)ble3 hdc umstant The sensitivity of the CooiK~ljclatid statement of inc(me $ the eft(ct of tb assumed changes in lnterdt rales for one year bf1sec on the floating rate financial assets and fimmcial hablhw$ held at 31 f~r The effect of deae-ascs in interest ral~ is cXp0Ctct to be equal and opposite to the effect oHlle increases sllQvro
Changes it Eftx OIl
00513 [oms profit QR
2013 Floating mterest Hlte instruments ----2$ bp (1649776)
2012 Flv-ating irkfiSt rale instrumenls +25 bp (209[9(1))
~--------- -~~ 40-middot------ _ _ shy
29
Aamal Company QSC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 3 1 December 2013
FINANCIAL RISK MANAGEMENT (continued)
Foreign currency risk Foreign currency risk is the risk lhilt the value of lhe fi nancial instruments will fluctuate due 10 changes in fore ign exchange rates
T rade aCcOlmts payable and accrued expenses include amounts due in foreign currencies mliniy US Dollars UAB Dirhams Great Britain Pounds (GB P) and Euros of which the Group has a currency risk primruily on the baJmces payable in Euros and GBP amoWlting 10 QR 14400634 (2012 QR 17214046)
The Group does not hedge its foreign currency exposure As both Qatari Riyal and UAE Dirhams are pegged to the US Dollar balances in US Dollars and UAE Dirhams are not considered to represent significant currency ris k to the Group
The table below indicates the Group s fore ign c urrency exposure on its monetary assets a nd liabilities The analysis calculates the effect o f a reasonably poss ib le move ment of the QR curre nc y rale against the Euro and GBP with all other variables held constant on the consolidated slate menl o f income (due to the fa ir va lue of currency sensitive monetary asse ts a nd liabilities) The e ffect o f decreases in fo reign c urre ncy exchange rates is expected to he equal and opposile 10 the e ffect of the increases shown
Incramp1se ill
f oreign cUlrency rate
0
the QR
Ellecl on profil
QR
2013 +5 (720032)
20 12 +5 (860 702)
C redit Tisk Credit risk is the risk that one party to a financial instrume nt wi ll fa il to discharge an obligation and cause the other party to incur a financial loss TIle Groups exposure to credit risk is indica ted by the carrying amoWlt o f its financia l asse ts whic h consist principally oftmde accollilts receivable retention receivable amounts due from related parties othe r receivables and bank baLances
The Group sells its products and prov ides services to vario us panies It is the G ro ups policy that all customers who wish to obtain on credit lerms are subject to credit verificalion procedures to ensure c redit Ilonhiness Each new customer is analysed individually for creditworthiness before the de livery o f products Of services Custo mm tbat fai l to met t the credi tworthiness may transact with the Group only o n prepayme nt basis Property rentals are mostl y received in ad vtnce or conlrlCled wi th post dated cheques 10 additio n receivable balances are monitored on an ongoing basis a nd the purchase limils are established for each c redit custoroer which are reviewed reguJarly based on the level o f past transactions and senlement The Groups max im wn exposure with regard to trade aCCOWlts receivab le net ofa llowance re nected allhe reporting date was ilS fo llows
2013 2012
Business SJgmelll QR QR
Property 15478832 19386326 Trading and distributio n 194343 597 179748274 Industrial ma nufac turing 183119753 131578668 Managed services 18069385 14547389
411 011 567 345260657
41
29
Aamal Company QSc
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For tbe year eoded 3 J December 20 13
FlNAJICIAL RISK MANAG EMENT (c-o Dtinued)
Credit risk (continued) With respect to credit risk arising from the other financi31 assets of the Group the Groups exposure to credit risk arises from default of the counterparty with a maximum exposure equal 10 the canying amount of these instruments as follows
2013 QR
202
QR
Bank balances Amounts due from related parties Retention and other receivables
436136756 214439950 48290351
36788129 t 171525363 74082203
698867057 613488857
The group reduces the expoSltre of credit risk arising from other financial assets by maintaining bank accounts in reputed banks and providing services only to creditworthy re lated parties
The management cons iders the bank balances and a mQUIIIS due from related parties as high grade fi nancial assets and lfade accounls receivable and other receivables as sundard grade financial assets When a finltmcial asset is identified 10 be impaired the managemoot downgrades such assets to impaired category and provides adequate allowances
Liquidity risk Liquidity risk is the risk that the Group will not be able to meet its fmancial obligations as they fu ll due The Groups 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 nonnal and stressed conditiom without incurring unacceptable losses or risking damage to the Groups reputa tion and is to maintain a balance belWeen continuity of fuoding and f1eilibility through the use of bank overdrafts and bank loans and borrowings
The Group monitors its risk to a shortage o f funds using a recuning liquidity plaOfling 1001 TIllS tool considers the manuiry o f financial assets (eg accounts receivable) and projected cash flows from operations The Groups teons ofsales or services require arooUIlts to be paid within 30-90 days from the invoiced dale
42
29
Aamal Company QSc
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For tbe year ended 3 1 December 2013
FrNANClAL ruSK MANAGEMENT (contiQued)
Uqujdity risk (continued) The table below summarises the ruaruriJy profile of the Groups financial 1iabililies a t 31 December based on contractual undiscountcd paymeots
2013 Interest bearing loans and borrowings Bank overdrafts Trade accowus payable Other payables Amounl~ due (0 related panles
201l Interest bearing loans and borrowings
Baok overdrafts Trade accounts payable Other payables Amounts due to related parties
On demand
QR
6836280
6836280
011 demand QR
2885090
2885090
Less than 3 months
QR
521324473
303638792
47406830
2530~480
898675575
Less thall 3
months
QR
469839033
10754JJIO 37543236
1964504 1
634568620
3 10 J2 mOlllh$
QR
239333328
16378865 20210580
2289~11l
298816884
3 to 12 monlhs
QR
365476972
159621 37 J 24745342
30092716
579936401
1to 5 years
QR
J 60092748
160092148
1 to 5 years
QR
248472226
248472226
gt 5 years
QR
25261598
25261 598
gt 5 years
QR
7648000
7648000
TOlaf
QR
947012147 6836280
320017657
67617410 48199591
1389681085
Tota
QR
109 1436231
1885090 267162681
622 88578
49737757
14735 10337
43
30
Aamal Company QSltc NOTES TO THE CONSOLIDATED FlANCIAL STATEMETS For the year ended 31 December 20 t3
21 F~ANClAL RlSK MAiAGEMElT (continued)
Capital management The Boards policy is to maintain a strong cepit1 base so as to rnainmin investor creditor and market ronfoonee and to SUSWlJ) fumre dcltclonnent Gf the buinest The Board of Directors rronitortl the tapital whkh tbe Group defines as wlal $parcloders equity excluding nonmiddotcornroliing imerests and the level of dividends to orrunury srarellOJdcfS
The Board also reeks to ITIaimain a balance between the higher (ctums (hat might be fA-~$ihle With higher leves of borrnwings end Lle edvnrJages and security named Sy it sOMd Cilpitai posi[ion The GfCup~ k1rget is to achievfl a return on slureholders equity (exclJding aonwurrolJiug iorcf(sts) greater lll(ll1 he wcighlcd average inres exxmse on mrerest bearing Ivens and oorrowing
The (lf0t-p nl)nDg-e ils cnpital structure and makes adjustneal lOll in light ofchang2s in economic nd bttincss cordjlons and shareholders expe1ationJo chmges veremiddot maCo HI Lleuro objecttves polilCS or proCCSSC3 during the years erded 31 D~mber 2013md 31 Dtccmlxr2Ql2
The Group monitors the capit2J using a gClting fatio which IS dep divided by caplla plus debL The GtOwgts policy is to keep ttJe ge-anng rmio bclew 40 Tbe Group iLdtdes withb debt imete-51 beagting loans ard ~OITORlngs less cash and cash equtVaknts Capltal includes eqmty attributable 10 the equity tolders oft~e parcrt
2013 QR
2(i2 QR
fmerest bearing loans and borrowings lcss- Cash and cas ltYJUvalcnts
9i4lJ05301 _~ (429JfJl4761
1004845296 (649)6201)
Net debt
Toa capital
Capita and net debt
699849045
~ringrttio
FAIR VALtES OF Fl~ANOAL f~STRUMETS
Finarcial iostrumenL~ cOlnprise tina~lctal assetS carl finailcialliabilities
Fmancial assets colJist of bank balance) short 1Cm bank dcposis amounL dve dom rc)ltted partilt)$ rekntion and other receivables and ttade accolmis rceivabe Finatlclll habiilics cgtmsist of banilt ovcrdratls jnerest bearing lOil1S and bOrowings amounts due (0 nliled partiG~ ane trade x-ounls payable
The- fair values of hese financial inStrumen1S except Jo-- imCfest bearing loam lHld bOlToving aproKimate lhdr cMryinJ vlhes due to the Slort temt mzrutiiles or these instrument
Tllc faiT value of iotcnst beating Nns and borrowin2s ae estimate( based on discoumed ltash flows twin int(s rale- cune-ntly nvailagtk fur tilt debt or sinuiar tetnlS an-a rell1lmng matunties
31
Aamal Company~Q=-ScC ______________~______
~OTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For fhe year ended 31 December 20 t3
SlGNIFICANT ASUMPTIONS ACCOUJTING JUDGElE1TS AND F8TIMATFS
impairment (If accoonts receivable n etrnwe of lhe collectible anoun of trade accounlgt reccvable is made when collection of the full lHl1OUt i~ nO looger probabk FOI nCividualty significitIl amounts this estimation is p~rformed on an indh-idllai a$[$ Amomts wHcb arc not indivldl11Uy significant but wluch are past due ZTe tsscssed collectively and an aJlQwaccc applied ucc()r~Jng to the length of lime past due based oc histnncal recovery nlJes
hnpalrment of inHntnries lavenoncs are held at tho lower of col and nol realisable value InIOn inventoncent$ becone old or 0-~amplete an estilTJte is mate of their net j alisable vulue For indiviolhlUy significant amountS this cstinaunrt is performec all aD lndividwl osis Amotlnts whieh are fl0t individually significan( btll which ltIre old at obsolete wx LltSessed wllecivdy md a provisior is applied sccnrding to the invenrory type and be dep)ee of ageing 0 cDsolescc1ce based on anticipUled selling prices
Classifigt1ltion of El Sew(gtdy Cable Qatar WLI ali a j(lint vwture pound1 Sovedy Cables Qatar is a limited hability company whose kgal fum confers SCprm11ior bernten tbe jXliiies 10 ~he jomi lfranpement Snd the Company Itself FurthenrlOre then IS no oontractua] arrmgelTeot or any oibe aus aod circumstriliCe$ that iocik41to tht he putic5 [0 the joint flJTIlrgernelit bave rights to the ssetl and obligrtdons fo~ the liabilities of the joint ilrrongement Acoordingly El Sewed- C[jbl~s Qamr WLL is dassifiecl 7S a joiut enrtrr of he GWtp
impairment of goodwill G0oovj)1 embedded in th~ cot 0 aquisitior of subsidiaries and eqmtj-iccounled iflV(stees ire teswt for irl1jXlirmnt aHuaily Tbe calculations of value [n use fO( cfish gecj~r)lilg units (loring to real nte projecg are rtost sensitive to tin IDHowing assumpti015
Grosgt i1wginmiddot Gross Ilmrgins arc lmsed on avrage values tuhje0d in (he [Xrioo preeedhli (e siaM of the budge xnod T1esC at( mcreased over the budgel period for mticipatltX efficiency Hnprovemots
DisC)unr r(es Discount rotes represent th cl1tent mark as~ssmetlt of the risks specific te ech cash geocroting unit regarding lhe time value of money ilnd mdividu)l risks of he tmtieriyilg assets whICh have not been inwrport1eti it the Citik flow estimates The dj~(OUrl flte tlkulation is based on the speclfte circurnsthLCes of lile Group and its opltllatJng segn)~nts (md derived (ff)rC it weighted avaage (XSt 0f apilaJ (WACC) Tb fACe (akw into uoount both deb and equity The 0$1 of equity is denved from dlC expected return 01 investmenl by the Groups investors TJc Gos10( deb is based on l1e borrvwings the Gmup IS obllsxl to service SC~lletllmiddotspecific r5k IS incorxt4too by applying individual bera facto The betn mctors ire evauatcentd annuaHy bhseci on pubJicly aVflllabe murked earn
Fair value ()fnHstmeni proputies The fuit laHe 0 nvestmel~ propertis is deltrrnlnzd b cxterrwl indepzfldell property valuers laving appr0priate recognised professional quabfiillions and recenl xperience H1 the localjl)n and G-tegory 0 the oroperty being valued
Useful hes of PfQPcrly plmr (llld zqulpment The Groups management detennints th estiunted useful jives Df It~ property plan and equipmnl fix calnurjng depreciation Thi5 e~timJte is 6lermind after cinsidring 1b expeelcd usage (1f the a5sclt [hysical l101t and (eas tedmiltal Dr com~ercia obsolesccnce
Gotlg Qncen
ibe Groups mangerncnt UiS made aJ assessmeot cf the 011115 ability (0 COllllOUC liS a going conct11l Imd is satsl1ed hat me Group ms the resources to contmue in business for he foreseeable fu1urc he1hennort he management is no aware oC lny material Hncertainties that lray CH~t signinchnt doubt tlPDfl the Groups ability 10 continue as a going umcem Therefore titpound lotlsolidatcd finilllcij stftemeols comirme to be prepltd on li g0ing concern basis
Aamal Company QSc
NOTES TO THE CONSOLIDATED FlNANC[AL STATEMENTS For the year ended 3 1 December 20 13
32 INCOME TAX
Certa in subsidiaries of the Group which have non-GCe ownership are subject to income tax under Qatar Income Tax Law No 2 1 of2009 The iocome tax is charged on the share of profits attributable to non-GCe shareholders For the purpose of these conso lidated fi nancial statements the income tax liability oftbe foreign shareholders has been excluded given that the non-GCe shareholders have agreed under the shareholder agreements signed with the Group to bear the fh lliiability and make necessary payments
33 COMPARATIVE INFORMATION
Certain comparative figw-es of the previous year have been reclassified 0 coofonn to the current years presentation However such reclassifications are oat materia and do not have an impact on tbe previously reported net profit other comprehensive income or the total equity for the comparative year
The impact from the resta tement of comparative infonnalion as a resuh of adoption of IFRS I I - Joint arrangements is detailed in Note 32 Changes in aCCQu(lting policies
46
Aamal Company QS C
CONSOUDATED STATEMENT OF CHANGES IN EQU ITY For the year ended 3 I December 20 13
Alfribulable (Q equitY hulders Q[the parent
Cumulative N OII-
Share Legal Treasllry chollgein Retained conrro lfing Tf capilal resenc shares fair value earnings Tolal inereslS equity
QR QR QR QR QR QR QR QR
Balance at 3 December 20 J I 4950000000 267955805 61 4024 670 583 1980475 14 1645505 5973625980
Boougt shares issued (Nole 27) 495000000 (495000000) Profit for the year 594892946 591 892916 2962054) 6245 13489
Other comprehensive income for the year (416) (41 6) 109998 109582
Treasury shares acquired througb business combinati on (2075865) (2075865) (2075865) Adjustmenl due to loss ofcontrol of a subsidiary (983 643) (983643) Derecognition of non-controlling interest due 10 liquicbtion of
a subsidiary 55932 55932
Transfer to legal reserve 59489296 (59489296) Con(ribUlion from non-colllrolling inte rest 59232919 592329 19
Contribution to socia l and sports activi ties fu nd ( 11612837) ( 156 12837) (1561 2837) Non-controlling interest acq uiJed without change ofcontrol (Note 4) (567208) (567208) (39842792) (404 I 00Cl0)
Balmce at 3 1 December 20 12
Bonus shares issued (Nole 27)
Profit for the year Other comprehensive income for the yeM
Transfer to legal reserve
Cootribut ion from non-controlling interest
Contribution to social and sports activities fund
544S00000Q
555000000
32 7445101
5068745 1
(2075865) (4 16)
4485
638248275
(55 5000000)
506874507
(506amp745 1)
( 12807 11 7)
64086 17095
506874507
4485
(12807 11 7)
189838462
54 10 182
15 35
70000
6598455557
512284689
6020
70000
( 128071 122
Ballnce at 31 Decem ber 2013 6000000000 378132551 (2075865) 4069 5266282 14 6901688970 195320 179 7098009149
The a(tached notes 1 to 33 fann an integra pan a fthese consolidated financial slatements
7
2
Aamal Company QSc
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 3 I December 20 13
CORPORATE IN FORMATION AND PRINCIPA L ACTlVIT IES
Aamal was funned on 13 January 2001 as a private shareho lding company with limited liability (W LL) under the COlrunerciaJ Registration Number 23245 in the Slate of Qatar On 12 Ju ly 2007 the private shareholders resolved to transfonn AamaJ into lt) Qaari Shareholding Company (O SC) (the Company) Accordi ngly the Company was listed on Qatar Exchange on 5 December 2007 The Companys registered office is at P O Box 224TI Doha Sttlle of Qatar
The Compaoy is organised inlo a head office (Aamal) cllld branches and operates in the State of Qatar The fo llowing table sets out the principal activi ties of the branches
Brancb Principal aellvities
C ity Center Qatar Branch Leasing the facilities of the re tail outlet complex in Ci ty Cen ter Doha
Aamal Real Estate Branch Residential and commercial real estate investment and property rentaL
Aamal Readymix Branch Production and sale o f readymix concrete
Ebn Sina Medica l Braoch Wholesa le and retail distribution of phannaceulicals aod general consumable products
Aamal Medical Branch Wholesale d istribution of medical eq uipment
Aamal Trading and Dis tributioo Sale of tyres lubricants batleries and home applian~s
Branch
Amnal Servi~s Branch Providing facilitie s management arld cleaning services
Aamal T ravels Branch Operating a travel agency
Aamal fur Indus trial Projects lndusllial investments Branch
Good Life Phannacy Branch Sale of phannaceuticals baby care products medicine and general cOllsumable products
Foot Care Center Branch Sale of footwear clinical activities and general commercial tradillg products
The consolidated financial statements were authorised for issue by the representatives of the B03Id of Direclors of Aamal Corupaoy QSc on 20 February 2014
BASlS OF CONSOLIDATION
The consolidated fioancial statements comprise the fioancial statements of AamaJ Company QS C (the Company) and its subsidiaries and joint controlled entity (together referred to as the Group)
Subsidiaries Subsidiaries are enli ties controlled by tbe Group The Group controls an entity when it is exposed to or has rights 10 variable returns of its involvement with the entity and has the abili ty to affect those returns through its power over tle entity The fi nancial statementS of subsidiaries are induded in the consolidated finarlcial statements ITom the date on which control commences unti l the date on which control ceases When the Group loses control over a subsidiary it dereognises the assets aoo liabilities o f the subsidiary and aoy related non-cootrolliog interest and other components of equity AllY resulting gain or loss is recognised in consolidated statement of income Any interest re ta ined in the fonne r subsidiary is measured 01 f3i r value when control is lost
8
2
Aamal Company QS c
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 31 December 2013
BASIS OF CONSOLfDA TiON (continued)
Subsidiaries (continued) Set oul below are Ihe Group s principal subsidiaries at 3 1 December 2013 Unless oUlenvise slated the subsidiaries as listed below have share capital consisting solely of ordinary shares wh ich are held directly by the group and be proportion of ownership intereSIS held equals 10 the votiug rights held by Group Tbe country of incorporation Of
registration is also their principal place of business
Comp(my name
Aamal Cement Industries W LL
MO Qat1 Company WLL
Senyar Indus tries Qatar Holding WLL
Doho Cables Qaw WlL
EccoGulf Compaoy WLL
Advanced Pipes and Casts eompmy WLL
Johnson Controls Qatar WL L
Country 0 lJCQr por ation
Qator
Qatar
Qatar
Qatar
Q 31ar
Qatar
Principal (lcfi ity
Development and mlUlagement of factori es and the prodllaion or curb sl~ne i llleriook slabs lIId cement bricks
Construction and repai r of power plant es tablislunent and man3gemenl of industrial enterprises aud ac ting as a representative for the imcmatiOllru companies
Management of subsidiaries and associates ovming of palen~ businesses and subleltiug Ulem and provision of investment port fo lio management for Its
subsidiaries and Msocialts UOkr the shareholders agreement signed between the Group and the other
shareholders the Group is able 10 appoint the chai rman and two other members 10 (he Boflrd of Direc tOfS (out of six members) and is able to govern the fin ancial and operating policies of Senyar Industries Qatar Holding WLL Accord ingly ~ company is considered as a subsidiary oCthe Group
Mailltenance and mallllfacture of electric cables equipmelll and lools Doha Cables QalaJ WLL is
91875 (eITectively) owned by Senyar hldush es QaUlr Holding WLL a subsidiary of tllC Group TIIe Group has (he power indi rectly through SenyM [ndus tJi cs Qatar Holding WLL 10 govern fi nancial and opera ting policies of Doha Cables Qatar WLL and accordingly the company was considered IS a subsidiary ofthe Group
OITers professional and bus iness process outsourcing and Cll )] center services
Manufacturing of Wide cement md amplass reinforced pipes systems for infrsslICture (lnd pipeline projects
The Gro up h~ the power 10 govern ~lot financial and opera1 ing policies or Adv3I1ced Pipes and Casts Company WLL by virtue of a sllarchokJers agreemeot TIlus the Company has been cotls ldcrOO as II subsidiary of the Group
Provision of racililies management service5 energy se-rvices md building maimetlaoce and cleanlg services to corporate cl icn1S
PlOporl ion oj
oWPersllip held by the
Non
Group COnroiling interest
99 1
60 40
50 500
459 54 J
5 1 490
50 50
51 49
9
2
Aamal Company QSC
OTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For toe year ended) J December 2013
BASIS OF CONSOUDA nON (continued)
Suhsidiaries (wntiourd)
Cmmffyoj fNgtpvniOil j irniJpvroliin ~__~ampiphdd~~
Nor G)1)Ji contfoifgtg
iMeregt
CmiddotSan TI~ing WLL Sdilamp lYJy1ng renting me Mltcentlopil12 [e~ tSite 30 invimenl w shams rnlilVigemc1t vf real lsta propeItilttl owning ille palent and tradcentmut and tnlding in iXjUiflfIfflt amJ vcilici$ 1he GroClp has tJe pcwer tv goem 6e ~inr8hl and ojJrtltllng
roicie_~ of ClSM by vifcle 0 a shlrcholdcrs 191e~mcentn(
745 25 1~i
nnoV1iv lightinf wmpany Qatar TNriing of Ught 2rrt1nz DiDd lEU Lwpj lmd 7r J) WLL olhT $hlil1g prrltwl
Twdiflg of of4 SiJpplk-s and providll$ prindna and 65 35 laniniltmJ sltrce~
Non-coufroUing illterests Non-controrling intel(SlS are measwed tj tleir propO(hOnile $hue Ot the tcquirees identifiabk net asscl III the JCqUiSlOt1 rote Chuegts in t1e Groups imcest in i $ubsiciwty hat do tot rcmltlo a loss of ~)I1a1)l xc accountd for as equity trnramplclions
Tamil-crions eUminnted on c)lwtidaticu lntngtgroup baiances Jue transactions 00 any unrealised income 1nd expenses ari$tng from intrnwgrOU tranSaOiQlls arc eiimmatcd UfiJeaiiHd gaina arising from ITaUstlclions ttlt equity-lKcoUl11uJ IlVtSlCCS are eliminatd 1gamst the investment 10 the extent oftlle Group interest in the inveMee Umaslised loses are eiiminatd II the same VllY us unrvalised gains hit only to Ille eXfeut that there is 10 evidence ofimpaimcentut
Illttn~ts in jOint arrangements iu)d associates Detais ofeach of ttc Groups Hutilrial Joint venlU)s fujltj assoeime~ at the end of the reponing period are 5 [OHOViS
Cmnirycgt PltJporlion qf Compao name infOjwNiIIO1 ewonlup Qltd
vOingjYwer htld by
tiff GrOlp
[I Sewed Cable QntM Tndllg in ele(mHnechmita CGlJ)ptnefllmd plOvicmg WLL rei) services El SWNed Cables )ilMr WLL is
49 JWoo (Wilt 55 tblre of rrofils (losses) hy StHyar lrdl11(rie~ Qal3t Hodirg WLt e 511b8idimy 0 ~he GOllp However (kw 10 ~ feiBtil shareholdergt agreewli pound ellWY has I~)mc a jOm vent( eTdive trmJ l January 20 wllkh is mC(t511rec Il1de the eqJity ngtU1l
rins $tngtdJBI S~ 1idJgt (law Ertity lS engaged l sled (b[iclli0ls Gf0Jp mtllpoundure Ea LC t11cent fl5sodau under cquhy nlctooo
Aamal Company QS c
NOTES TO THE CONSOLIDATED FlNANClAL STA TEMENTS For the year ended 31 December 2013
3 BASIS OF PREPARATION AND SUMMARY OF SfGNlflCA1T ACCO UNTING POLICIES
31 BASIS OF PREPARATION
The consolidated fi nancial statements have been prepared in accordance with lntema tional Financial Reporting Standards (IFRS) and the appLicable requirements ofQalar Commercial Companies law No5 of 2002
The consolidated financial statements have been presented in Qatari Riyals (QR) which is he Companys floclional and presenUll ion currency and have been rounded to tlle nearest Qatari Riyal TIle consolidated financial statements are prepared lUlder the historical cost convention modified to include he measurement a l fair value o f investment properties and available-for-sale investments
32 CHANGES IN ACCO UNTING POLICI ES
The [lccoWiting policies adopted are consistent wilh Ihose of the previous fi nancial year except for the following standards effe ctive for the annual period beginning on or lfter 1 Jlnuary 20 13 These standards and amendments other tM n the impact of (FRS II - Joint Arrnnge menlS noted below did not have aoy malenal impact to the Group
lAS I (amendment) - Presenfalion of items ofother comprehensive income The amendments to IAS I require that an emity present separate ly the items of ltN her comprehensive income that would be reclassified to profit or loss in the future if certain conditions are met from those that would nC ver be reclass ified to profit or loss
lAS J9 - Employee benefits (201) lAS 19 (201 1) changes the definition of short-tenn and other long-tenn employee benefits to clatify the di stinction between the two
lAS 28 (201 f) - fnvesfmem in Associates and Joint ventires lAS 28 (2011 ) supersedes lAS 28 (2008) lAS 28 (2011) makes the foHowing amendments Associues held for sale JFRS 5 Non-current Assets Held for Sale and Discontinued Operat ions applies 10 an investment or a portion of an investment in an associate or a joint venture that meets the criteria to be classified as held fo r sale For any retained portion of the investment tlwt has not beell classified as beld for sale the entity applies the equity method until disposal o f the portion held for sa l ~ After disposal any re tained interes t is accounted for using the equity method if the re tained interest continues to be an associate or a joint venture and 0 0 cessation of significant influence or jo int conltOl even ifan investment in an associate becomes an investment in a joint venture or vice versa Ihe entity does not fe-measure the retaincd interest
Amendments ft) fFRS 7on ofseftingjil1ancial assels and jinancialliabilities (2011) Disclosures - O ffsetti ng Financial Assets and Financial Liabilities (amendmems to FRS 1) introduces disclosures bout Ihe impact of oetting arrangements on an entity s fin ancial position Based on the new disclosure requirements the Group has to provide inforroation about what amounts have been offset in the consolidated statement of fimmcial position and the nature and extent of rights of set o ff under master netting aITlngements or simi lar a1Tlngernents
fFRS 10 - Consolidate1 financial SIOlemenlS and lAS 17 Separate Fillancial SfalemenS (2011) [FR S 10 introduces a single control model to determine whether an investee should be consolidated FRS 0 replaces the parts of previQlSly exis ting lAS 27 Consolidated and Separate Financial Statements that dealt wi th consolidated fin ancial statements and SIC-12 Consolidation - Special Purpose Entities This new contro l model fo cuses on whether the Group has power over an investee exposure or righlS to variable rerums from its involvement with the in veSlee lnd abili ty to use its power to affect those returns The Group has amended its accounting policy on consolidation in line with requirements of TFR S 10 and has re-assessed its consolidation conclusion
[FRS 12 - Disclosures ofimerests ill other entities IFRS 12 brings together into a single Sfandatd all the disclosure requirements about an enti ty s interests in subsidiaries jo int arrangements associates and unconsolidated structured entities It requires the disclosure of infonnation about the nature risks and financial effects of these interests
II
Aamal Company QSc
NOTES TO THE CONSOLIDATED FTNANClAL STATEMENTS For the year ended 3 1 December 201 3
3 BASIS OF PREPARATION AND SUMMARY Of SIGNIFICANT ACCOUNTrNC POLICIES (continued)
32 CHANGES IN ACCOUNTING POLlc ms (coDtinued)
IFRS IJ Fair ~alue measuremetll TFRS 13 provides a single source of guidance on how fair value is measured and replaces the faif value measurement guidance tha i is currently d ispersed thIo tlghool [FRS It unifies the definiti on of fair va lue as the price that would be received 10 sell an asset or paid to transfer a liability in an orderly transaction between market participants a t the measurement dale It replaces and expands the disclosure reltjuiremenlS about fair value measurements in other IFRSs including TFRS 7
Improvements (0 IFRSs (20 ) Improvements to IFRS issued in 20 11 contained numerous amendments to IFRS that the IASB considers nonshyurgent but necessary Improvements to lFRS comprise amendments that result il) accounting changes to presentation recognition or measurement purposes as well as tennioology or editorial amendments related to a varie) of individuallFRS standards
During the period the Group has adopted the fo llowing new s tandard which became effecti ve for the annual periods beginning on I January 201 3 which had a materi81 impact to ule Group
IFRS II Joint AlTwlgements As a result of adopting IFRS II the GrOlp has changed its ltlccoUJ)ting policy for interests in jo int a rrangemeots Uuder rFRS 11 the Group classifies its interest in jo int arrJngements as e imer j oint operations or joint ventures depending on the Groups rights to the assets and obligations for the liabil ities ofthe arrangements When maldng this assessmenl the group considers the strucltire of the arrangements the legal fonn of any separate vehicles the contrac tual tenns of the arrangements and other fact s and arrangements Previously the structure of tbe a rrangement was the sole foc us of classification The Group has re-evaluated its involve men t in ils o nly joint a rrangement El Sewedy Cables Qatar WLL ltlnd has recla ssified the investment from jointly controlled entity to joint venture Also the Group has discontinued with re rrospective effect the use o f the proportionilte consol idation method and adopted the equity method to account for joint venture in accordance mth IFRS I I
Summary oquulllitative impuct The following tables summarises the materia l impac ts rcsulting from the above change in accounting polic ies on the Groups financ ial position profit o r loss and cash flo ws
Effect of chnnge in 31 Decemb er2012 accounting policy
Cunem assets (278 880441 ) Non-current assets 1295 1346 Total assds (265929095)
Current liabilities (265072694) NonmiddotcWTent liabilities (856401) Total lin bill ties (265929095)
For the year ended 31 December 2012
Profit for the year
Net chflllge in cash and cash equivalents dlUing the year (99696J)
12
Aamal Company QSc
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 3 I December 2013
3 BASIS OF PREPARATION AND SUMMARY OF SlGNlf[CANT ACCOUNTING PO LICI ES (continued)
33 lASB STANDARDS AND lNTERPRETATIONS ISSUED BUT NOT ADOPTED
The following lASB standardsamendments hJve been issued but are not yet mandatory and have 1l0( been etrly adopted by the Group
Standard
Illterpretotion COnem EffeClive dale
TfRS9 Financia l InstrumentS (new standard) I Januruy20 17
IAS 32 Financia l Instruments O ffsetting (amendment) I January 20 14 JAS 36 Financia llnslnnnents Disclosure - non-fi nancial asse ts (amendment) I January 2014
The Group is considering the implications of the above standards and the till1ing (If adoption by the Group
34 SUM MARY OF SIGNIFICAJT ACCOUNTING POLICI ES
Bu siness combinnriO llS The Group accounts for business combinations using the acquisitio n method wben connol is Imasferroo to the Group The consideration ITansrerred n the acquisition is generally measured at fa ir value as are the identifiable net assets acquired Any goodwill that arises is tested annua lly for impairmeot AllYgain on a bargain purchase is recognised in pro fit or loss immediately Transaction COStS arc expensed as incurred except if rehated to the issue of debt or equity securities
The considera tion transferred does nOt include amounts related to the settlement of pre-existing re lationships Such amounts are recognised in profit or loss
Any contingent consideration payable is roeasured at fair va lue at the acquisition date If the contingent consdicrntion is classified as equity then it is oote nmeasured and settlement is accounted for within equity Otherwise subsequent changes in the fa ir value of the contingent consderafion are recognised iu profit or loss
Cash a nd eash equivalen ts For the purpose of the consolidaled statement or cash flo ws cash and cash equivalents consist of cash and bank balaoces ruld short teJTIl bank deposi ts wi th an original marurily of three months or less net of outstanding bank overdrafts
Accounts receivable Accounts receivable are stated at originill invoice amount less an allowance for any uncollectible amounts An estimate for doubttit debts is made when collection of the flilt amount is no longer probable Bad debts are wntlen off when (here is no possibility o f recovery
Inventories Inventories are stated at the lower of cost and net realisable value Costs are those expenses incurred in bringing each product to its present location and condition
Goods ror resalework in progress - Cost of di rect materials aJld labour plus attributable overheads based on a oormallevel ofac1i vity
Raw material and spare pan s PlIlchase cost on a weighted average basis
Net realisable value is based on estimated selling price less any further costs expocted to be incurred to completion and disposal
13
Aama Company QSc
NOTES TO THE CONSOLIDATED FINANC IAL STATEMENTS For tbe year ended 31 December 20 13
3 BASIS OF PREPARATION AND SUMMA RY OF SIGNIFICANT ACCOUNTfNC POLI CIES (contin ued)
34 SUMMARY OF SIGNIFICANT ACCO UNTLNG POLICIES (continued)
Interests in equity-aecoupled inveslecs The Groups interest in equity-accounted investees comprise interest in associates and joint venture
Associates are lhose entities in which the Group has significant influence but not control or joint control over the financia l and operating policies A joint vennu-c is an arrangement in which the Group has jo int ool1lrol whereby the Group has rights to the net assets of the arrangement rather thall rights to its assets and obugations for its liabilities
InlereSIS in associates and the joint venture are accoliDted for using the equity method They are recognised initially tit cost which includes transaction costs Subsequent to ini tial recognition the consolidated financ ial stateme nts ioc lude the Groups shrre of the profit or loss and other comprehensive income of equity-accounted investees unti l the dalc on which significant in Lluence or joint control ceases
The reponing d~les of the equity-accounted investees and the Group are identical and the equi ty-accounted investees accoWlting policies confonn to those used by the Group for like tmnsactions afld events in similar circumstances
Investmefl t properties umd aod buildings are considered as investment properties only when they are being held to earn ren tals or for capital appreciation or fo r both
Investment properties are measured ini tia lly at cost including traosaction costs and borrowing costs that are directty attributable to construc tion o f the 8sseL The carrying alRount includes the cost of replacing part of an existing investment property at the time that cost is incurred jf toe recognition cri teria are mel and excludes the costs of day-to-day servic ing of an investment property Sub~quent to inilial recognition investment propert ies are slated at fa ir value which reOects market conditions at the reporting date Gains or losses arising from changes in the fa ir values of investment properties are included in the consolidated statement of income in the yeltl r in which they arise
Investment properties are derecognised when either they have been disposed off or when the investment property is pennanently withdrawn 1T0m use and no fu ture economic benefit is expected from its disposal Any gains or losses on the retirement or disposa l of aD investment property are recognised in the consolidated statement of income in the year of retiremeOl or disposal
Property under construc tion is dealt with under lAS 40 and rttorded at cost less accumulated impairment losses until either its fair value becomes relia bly detenninable or cons(TUction is completed (whichever is earl ier) At that time it is reclassified as inves tment property and a fa ir value adjustment is recognised in the consolidated statemenlof income
Transfers are made to or fro m in vestment property onl y when there is a change in use For a transfer from investmen propeIT) to ovmer occupied proreIT) the deemed cost for subsequent accounting is the fair value at the date of change in use If owner occupied property ~omes an investment property the difference between the canying value aoo the fair value at the date oflransfer is rttognised as a revaluation reserve in the equity and is released to the consol idated sta tement of income llpon disposal of such propcny
14
Aamal Company QSc
NOTES TO THE CONSOLIDATED FrNANCIAL STATEMENTS For the year eDded 31 December 20 13
3 BASIS OF PREPARATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLI CIES (continued)
304 SUMMARY Of SIGNIFICANT ACCOUNTING POLICIES (continued)
Property plant and equipment Property plant and equipment is stated at cost including borrowing costs that are eligible for capitalisation and excluding the costs of day-to-day servicing less accumu lated depreciation and any imp~innem in value
Depreciation is provided on a straight line basis on all propelT) planl and equi pment The rales of depreciatioo are based upon the following eSImnelt useful lives
Buildings 20 years Leasehold improvements 2-8 years Truck mixers and motor vehicles 4-1 5 years Plant and ITIJchioery 8-2 5 years Furniture fixtures and office equipment 3-5 years Computers and related software 3-5 years Capital work in progress Not depreciated
The carrying amounts are reviewed for impain nellt when events or changes in circumstances indicate that the carrying value may not be recoverable If any such indication exists and where the carrying values exceed tbe estimated recoverable amouot the assets are wri tten down to their recoverable amount being the higher of their fair value less costs to sen and their value in use
Expendirure iocurred lO replace a component of an item of property plaot and equipment that is accotmted for separately is capitalised and the carrying amount of the component that is replaced is written off Other subsequent expenditure is capitalised only when it increases furure economic benefits of the related item of property plant and equiproent Al l other expendirure is recognised in the consolidated statement of income as the expense is Incurred
An item o f property plaot and equipment is dereeognised upon disposal or when no future economic benefi ts are expected from its use or disposal Any gain or loss arising on derecognilloo of the asset is iocluded in the consolidated stalemeot o f income io the year the asset is derecognised
The asset s residual values useful lives and method of depreciation are reviewed and adjusted if appropriate at each rnancial year end
Borrowing costs Borrowing costs direc tly attributable to the acquisition constmction or production of an asset that necessarily takes substalltjal period of time 10 get ready for its intended use or sale are capilalised as pan of the cost o f lhe respective assets All other borrowing costs are expensed in the year they incur BOlTOwiog COSts consist of the interest and other costs that the Group incurs in coomction with the borrowing of fund s
Accounts paytlble and accruBls Liabilities are recognised for amounts to be paid in the fuMe for goods or services received whether billed by the supplier or not
Interest bearing loans Bnd borrowings Interest bearing loaos and borrowings are recognised ini tiaJy at fai r value of the amounts borrowed less direc tly attributable transaction costs Subsequent to initial recognition interest bearing loons and borrowings are measured at amortised COSt using the effecti ve interest method with any differences between the cost and tinal settlement values being recognized in the conso lidated statement of income over the peliod of borrowings Instalments due within one year aI amortised cost are shown as a ctuTentliabiliry
Gains or losses are recogTlised in the consolidated sialement of income when (he liabililies are derecognised Interest relating (0 imerest bearing loans and borrowings is expensed in the year in which it is incWTed e(cept those qualify for capitalisation
15
Aamal Company QSC
NOTES TO THE CONSOLIDATED FfNANClAL STATEMENTS For tbe year eoded 31 December 201 3
J BASIS OF PRpoundPARATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
34 SUMMARY Of)SIGNIFICAtlT ACCOUNTING POLICI ES (continued)
TClaot deposits Tenant deposit liabilities are initially recognised at fair value and subsequently measured at amortised cost where material Any di fference between the initial fair vllue and the oominal amount is [eluded as a component of rental income and rocognised on a straight-line basis over the lease term
Derecognition or fiolocial nsstls and liabilities
a) Financial assets
A fi nanCIal asset (or w~re apphcabJe a part of a fin ancial asset or part of a group of SImilar financIal assets) IS derecogmsed where J bull The n ghts to receIve [5h flo ws from the asset have expIred bull The Group has trans f rred Its rights to receive cash flows from the ass or has assumed an obhg811On to pay the
reltelved cash flows I full Wlthout mfl tenal delay to a third party under a pass-through arrangement and elther (3) the Group has Ira sferred substantially aIthe nsKs and rewards of the asset or (b) Ihe Group has neuher transferred nor relain substantially ai the n sks and rewards of the asset but has tnlnsferred control of the asset
When the Group has tTa~fened its rights 10 receive cash flo ws from an asset or has entered into a pass-waugh arrangement and has nejlher trmsferred nor reta ined substantially all of the risks and rewards of the asset nor trnnsferred control of the asset the asset is recogoised to the extent of the Groups cOlilinuing involvement in Ihe
In that case the Group at 0 recognises an associmed liability The mnsferred asset and ihe associaled liabi lity are measured 00 a basis thai flects Ihe rights lnd obligations that the Group has retained Continuing involvement that takes the form of a guara tee over the transferred asset is measured at the lower of the original canying amount of Ihe asset and fbe maxim amoun o f consideration that the Groop could be required to repay
b) Financialliabiliti
A financial liabili ty is defogniSed when the obligation under the liabil ity is discharged or cancelled or expires Where an existing fio8 1lci I liability is replaced by another from the same lender on substantia ll y d ifferent lenns or the terms of an existin liabili ty are substantia lly modified such an exchange or modification is treated as a derecognition of the orig~al liabili ty and the recog1Jitioil of a new liability and the dirference io the respective carrying amounts is reco ised in the consolidated Slatement o f income
Impalr meot ood uncollec ibility of fina ncial assets An assessment is made al each repon ing date to determine whether there is objective evidence that a speci fic financial asset may be impaired If such evidence exists allY impainneOl loss is recogoised in the consolidated statement of income ImT t is detemtined as fo llows
(a) For assets earned a t fair value impainnellt is tbe difference between cost and fair va lue (b) For asseamp carried at COSt impairment is the difference between cost and lIle present value of future
cash flo1S discounted at lhe current market rate of rdurn for a simi lar finan cial asset (0) For asseq carried al amortised COSt impainneot is the difference between canying arnOWll and lhe
present Value of future cash flO M discowlled at the original effective iDlerest rate
Provisions Provisions are rewgnised hen the Group has an obl igation (legal or COnslnlctive) aris ing fro m a past event and the costs to settle the obl igalio are both probable and able to be reliably measured
16
Aamal Company QSc
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 31 December 2013
3 BAses OF PR EPARATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICI ES (colltinued)
34 SUMMARY OF S IGNIFICANT ACCOUNTING POLICIES (continued)
Employees eod of service benefits The Group provides end of service benefits to all employees in accordance wi th employment contracts and Qatar Labour Law The entitlement to these benefits is based upon the employees final salary aocl length of service subject to the completion of a minimum service period The expected costs of these benefits are accrued over the period ofemployment
Revenue Revenue is recognised to the extent thal it is probable that the economic benefits will flow to the Group and the revenue call be reliably measured Revenue is measured al the fair value of the consideration received excluding discoWlIS rebates and duty The following spec ific recognition criteria must also be met before revenue is recognised
Sale ofgoods Sales are recognised whcn significant risks and rewards of ownership of the goods have passed to the boyer and the amount of revenue cao be me3sured rcli3bly
Rental income Rental incorne from investment properties is accoWlted for on a time proportion basis over the period of tenancy Incentives for leases to enter into lease agreements are spread evenly over the lease teon even if the payments are not made 0 0 such basis Income arising Tom expenses recharged to tenants is recogn ised in the year in which the expenses can be contrac tually recei ved Service charges aud other such receipts are includcd gross o f related cosls in revenues as the Group acts as principal io this regard Premiwns received to terminate leases arc recognised in the consolidated statement of income when they arise
Service income Service income is recognised when the service is rendered and the outCQrne of the transactions can be estimated reliably
COlimission Commission is accounted for on an accrual basis when the right 10 receive the income is established
become on tra~el agencies [ncome on travel agencies is accounted for in the year in which the airline tickets are sold
IIIeresr income Joterest income is recognised as the interest accrues using the effective interest Clle method
Foreign currencies Transactions in foreign currencies ate recorded al tbe rale ruling at the date of the transaction Monetary assets and liabi lities dcoomioated io foreign currencies ace retranslated ill the raLe of exchange ruling at the reponing date All differences are recognised in the Statement ofinconlC
Use of estimates The preparation of (he Groups consolidated financial sta temenls in CQnfonnity with Intemltional Financial Reponing Standards ([fRS) requires management 10 rnake estimates and assumptions that affect the reponed amounts of assets and liabilities and disclosure of contingent asscts and liabili ties at the rcporting date and the reported amoUlils of revenues and expenses during Ihe reponing period Although these estimates are based on managements best knowtedge of current events nnd actions acnm results may ul timately differ fro m those estimates (Significant asswnptions nccounting judgments and estimates used in preparing these coosolidated fina ncial sta temenlS are disclosed in Note 31)
The estimates and underlying assumptions are reviewed regularly Revisions to accounting estimlIes are recognised in (he period in which the estimate is revised if the revision affects only that period or in th~ period of the revision and future periods if the revision affects both current and fu ture periods
17
Aamal Company QSC
NOTES TO THE CONSOLlDA TED FINANCIAL STATEMENTS For tbe year cnded 31 December 2013
3 BASI S OF PREPARATION AND SUMMARY OF SrGNIFICANT ACCOUNTING POLICIES (continued)
34 SUMMARY or SIGNIFICANT ACCOUNTING POLI CIES (continued)
Fair va lues A number of Groups accounting policies and disclosures require tJ1 C measurement of fair values for both financial and non-financial assets and liabil ities The Group has an established control framework with respect to the measuremeot of fair values When measuring the fair value of an asset or a liabili ly the Group uses market observable data for (be valuatiOD Fair values are categorised into different levels in a fair value hierarchy baCd on the inputs used in the valuation lechniques as follows
i) Leve l I - Unadjosted quoted prices io active markets for identica l assets and liabilities ji) Level 2 - Otheqobservable inputs not included within level 1 of the fair value hierarchy ii i) Level 3 - Unobtervable inputs (including enti ty s own data which are adjusted if necessary to retlect the
assumptions market participnllts would use in the circumstances) The Group recognises tralnSfers between levels of the fair value hierarchy at the end ofthe reporting period during which the change has ocdWTed_
Treasury shares When share capitl recognized in equity is repUIchased (by the Company or any of its subsidiaries) the amount of the consideration paid which includes direa ly altributable COSIS is recognized lIS a deduction from equity Wheo treasury shares are sold or reissued subsequently the amount received is recognized as no increase in equity and the resulting surplus or deficit on the transaction is presented io share premium
18
4
Aamal Company iQSc
NOTES TO THE ONSOLlDATED FINANCIAL STATEMENTS For the year ended 31 ecember 201 3
BUSINESS CO~BlNAnON
Acquisition o f Culf ROks Company VLL On 1 January 2012 the roup acquired 51 oflhe voting shares of Gulf Rocks Company WLL (Gul f Rocks) a limited Iiabiliry campan incorporated in Qatar and registered UJKier conunercial registration number 2249) The acquisition was made thT ugh Ci-San Trading WL L a subsidiary which is 50 owned by Aamal Group
I
The fai r val ue of lbe ideltifiable assets and liabilit ies of Gulf Rocks Co mpany WLL based on purchase price allocation exercise condlcd by tbe management as at the date of acquisition WJ S as follows
Fair value recognized on
acquisition QR
Assets I Cash and bank balances 14005495 ACC QUOiS receivable and wePayments I 749383 Amouots due from related plrties I
I oveotones
48311 190 5124 270
Available for sale investm~nlS 1985245 Plant and equipment 6769 17
81852500
Liabilit ies Accounts payable aJld accll1als 4724446 Amounts due to related parties 385070 Employees end of serviccibenefits (Note 15) 349272
5458788
Total identifiable net a5sellf
Purchase consideration trasferred Non-controll ing intereSt az-ising on business combination Bargain purcha5c gain rc~u ting from the tcquisilion
Allalysis ojcash flows OIl acquisition Net cash acquire11 Nith the subsidiary 14005495 Cash paid (30600000)
(16594505)
On I September 20 12 the Company acquired the balance 49 nfthe equiry of Gulf Rocks Accordingly the Group has 74 5 effective holdin4 in Gulf Rocks as at the reporting dale The excess nfthe purchase cons ideration over Ihe fair value o f net assets of GuJf Rocks acqui red from the nnn-controlHng interest has been recorded directly in the retained earnings of tbe Gr6up as at 31 December 201 2
QR Purchase consideration 404 10000 Less fuir value of oet asset~ acquiroo from the non-controlling Interest holder (39842792) EXce5s of purchllse cons idf ration over the fair value of net assets a(q uired 567208
19
5
Aamal Company QSC
NOTES TO THE (WNSOLlDATED FfNANClAL STATEMENTS For the year eoded 3 ) December 2013
CASH AND CASH EQUIVALENTS
For the pmvose of consolidated statement of cash flows cash and cash equivalents comprise the fo llowing balances
lon 2012 QR QR
Cash and bank accounts 330333904 282272895 Short lenn bank deposits 105802852 85608396 Cash and bank balances 436136756 367881 291
Bank overdrafts (6836280) (2885090)
Cash and cash equivalents 429300 476 364996120 1
The short tenn bank deposits are made for varying periods between one day aod three months depeoding on Ibe immedifltc cash requirements of the Group and earn interest at the respective short term deposit ra tes
6 ACCOUNTS RECEfVABLE AND PREPAYMENTS
2013 2012 QR QR
Trade aCColUlts receivable 411 011 567 345260657 Advances 0 suppliers and prepayments 50787921 629389J 5 Retention receivables 36217081 56943030 Other receivables 12073270 17 139173
5tO089839 4 82 28 1775
As at 31 December 2013 trade accountS receivoble amoWlting to QR 2690 1412 (201 2 OR 24984025) were impaired Movements in the allowance for impairment of trade aCColmts receivable were as follows
2013 202 QR QR
At 1 January 24984025 1 877085 Charge for [he year (Note 21) 2294590 13613 120 Amounts wriuen off (19949) (117368) Unused amotmts reversed (357254) (388812)
At 3 t December 26901412 24984025
20
6
1
lamal CompanyQSC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMEltS For the year ended 3 J December 2013
ACCotNTS RECEIVABLpound AND PREPAYMpoundNTS (contillued)
As at -1 I Dtcemxt the ageirg of unimpaired (ltlde accounb iltcivabk was as follows
P(HI duo
nor Up to 30 31-60 61middot90 Yi-jSj gt flO Tota impoirlt-fl days days days day doys
QR QR QR QR QR QR QR
1l13 411OJl$67 25l981960 32312165 2140966 19351fi43 16f)76888 60148545 2012 345260657 1695159B6 493lt)8566 2356$954 19494369 16908414 66374363
1JJJirtpai~ed receivable are expected no th bil5tS of past experienn) 10 be fully fcCi)evbc H is not the pngtctlce ofthcent Group to oblum collaleral over recejvablcI_
AMOLNTS DUE FROyl REL-TEO PARTIES
Name
AI ~aisnl Holding Company V_LL E Seweo Cabtes Qatn WL L Cnild -ftt Cvmlllny Al hz Retll E$vt rWesnnim Company WLL~ AllaZi Real Estale BrAnch EI Sewedy Electric Egypt WLL MuincrDJ1Ce Mwagmvont Group Qat3r W LL Good fe Cheffilt - The Pcarl
BuderPhtrnacy Al Faisallnlemadonal Tnl(i and Investment Company WLL AI-rabia Land Trnr~PQltit1g Company rLL ro Sewedy CabLes - Kuwuit Gcentttco hlttrnJmJilI Frijns StHytural Steel Middle East WLl Winer Wunderand Company WLL Al FtOH1H for Investment amp llllemtiOl1a Trading COntpAny WJ_L Q)lar Bahrain lmerOlnionai Cnero3 WLL Gulf EngJisb Sltl-Qo] Al Rayyao Tourism lve$lrnent Company W LL Other relater purties
2013 2012 QR QR
15412-1064 ll941Y70 34644615 ~li96858l
[()0405 14-45012 51 59197 9538116 15514113 4014727 236824$
1867526 LSOfd22
8(1012 10435r 311650 746395
15023 204450 459829
2iYHi 244940 186750
152170 143440 33500 7768(1
6259 1459lt) 758962-1
__2~61g~~_ 1~95Ji
bull 214109950 171525363
--__ shy
7
8
9
Aamal Company QSc
NOTES TO THE CONSOLIDATED FfNANClAL STATEMENTS For the year ended 3 1 December 2013
At10(JNTS DUE FROM RELATED PA RTIES (continued)
NO les (i) Transactions witll related parties are eam ed out through open account and Directors do not consider any
receivables to be past due or impaired
(ii) Related party transactions ore disclosed ill Note 26
INVENTORIES
Goods for rew le Raw materials and spare pans Work in pTOgresS Goods in transit
Less Provision fOI obsolete and slow moving invenlories
1013 QR
165499699 38388307 19944678 9671 8553
320551237 (3851692)
31 6699545
Movements in the provision for obsolete and slow moving inventories were as follov~
At I January Charge for the year (Note 19) Reversals Amounts wri tten off
At 31 December
E QUITY-ACCOUNTED INVESTEES
TIle Group has the followiog invesllnenfs in equity-accounted investees
Interests in joint venrure Interests in associa tes
At 31 December
G roup s snare of profits fr om the equity-ncco unted iovcstees arc AS follows
Profit share from in vestment iojotnt venture Profit share from investment in associates
202 QR
232597650 36608394 30622960
10521 9695
405048699 Q 145826)
40 I902873
203 QR
3145826 1 380617 (535695)
( 1139056)
385 1692
20 12 QR
2795992 2208263 (137995)
( 1720434)
3 145826
2013 QR
2012 QR
129462184 3644723
124124803 2545188
133106907 12666999 1
17330368 22869454 1169533 534050
18499901 23403504
22
10
Aama Company QSC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 31 December 201 3
9 EQUITY-ACCOUNTED INVESTEES (continued)
Counlry of incorportllion
Relationship Proportion ofownership and lotilfg power held by the Group
203 2012
EI S~wedy Cables Qatar W LL Frij ns Structural S teel Middle East WLL Al Ftfazdaq Company WLL
Qat~
Qatar Qatar
loint venture Associate Associate
55 20
55 20 35
Note With effect from 1 January 20 13 the mlnagemeot of the Group has reclassified the investment in Al Farazdaq Company W L-L from investment in associate to investment in subsidiary This is based on the transfer of share holding by the other shareholder whereby the conlroi o f AI FOl razdaq Company W LL bas been assigned 10 tbe Company
INVESTM ENT PROPERTIES
a) Reconciliation of carry ing amounl 2013 202 QR QR
AI I January 611334701 8 555 1835348 Additions 9568047 1727191 87 Transferred from property plant and equipment (Note II ) 34519828 Net gain iTo m fa if value adjlls tment 245051107 388792483
At 31 December 6402486000 6 11334701 8
b) Measurement of fair value
The fair values of the Groups inveS hnent properties as at 31 December 201 3 and 3 1 December 2012 have been arrived al on the basis of valuations carried Ollt on the respective dates by professionally qualified independent valuers not related to the Group The independent valuers have appropriate qUlli ficatioos and (eceJ11 experience in the valuation of properties in fhe relevant locations The fa ir value WltlS determined based on market comparable approach that reflocl s recent transaction prices for simillt1r properties and discounted cash flo w and income approach techniques
Details of the Group s iovestment properties and infonnation about the fa ir vn lue hierarchy as at ) I December 20 I J are as fo llows
IIvestment propenies
Level 3 fair vallie
Al I Janu ary 6 [ 13347018 Additions and trans fers from property plant and equipment 44087875
Gain included iu prom and loss Net gain from fair value lt1djuslmem 245051 107
AI J I December
The Group recognizes transfers between levels of fair value hierarchy as o f the end of the reponing period during whicb the transfer has occurred There were no transfers between the fai r va lue hierarchy during the year
23
10
Aamal Company QSc
NOTES TO THE ONSOLlDA TED FINANCIAL STATEMENTS For the year ended 3 I ecember 201 3
LNVESTM ENT ROPERTIES (contin ued)
b) Measuremen t 0 (air value (conti nued)
Vau t ion technique an significant unobservable in puts
The valuer has applied t e income capitali zation discounted cash flow and comparab le methods to detennine the market value of the lnve tment propen ies Significant unobservable inputs used included expected market rental growth rates (an average 425) occupancy rates (approximately 90 to 95) and risk adjusted discount rates (approximately 5 to 7 0) M y significant change in these inputs can impact lhe fair valuation of investment propcnies
24
Aamal Company QS c
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For che year ended 31 December 2013
11 PROPERTY PLAi~T AND EQUIPMENT
FumilUre Truck mixers fIXtures and Complllers
Leasehold and maor Plum (fd office and relaed eapiowork Buidings improvements vehicles machinery eqllipmcni sofMore in progmiddotcss Total
QR QR QR QR QR QR QJl QR
At I January 2013 137870126 371 88 132 9595813 1 262536261 19 580954 14864 385 561 32447 6241 30436 Additions 948)65 2618 100 5367399 859061 111 5268 137147581 148055774
Relating to d isposalswrite-off (1042642) (4390496) (77157L) (589150) ( 184075) (6977934) Transfer from capilal work in progress 1505 310 164 336 3601776 ( 150000) 1182741 (6304 163) Transrer to investment properlies (Note (0) (345 19828) (345 19828)
At J I Dttember 201 J 139375436 J7 258~ ~1 85735 270733865 19700865 169783 19 152456037 _73068~448
Depreciation AI I January 2013 16133915 J6902 529 49087707 68783 065 11 980009 tl71 595 3 174603 178 Charge for the year 7059805 3237150 5390767 12249797 2849162 1768823 42555504 Relating 10 disposalsJvri te-off (664709) (4 3 1716 1) (724322) (552939) ( 18 1993) (6441 124)
At 31 December 201 3 23193 720 19474 9 70 50161 313 90303540 14276232 13302783 2 107 17558
Net carrying amounts At 31 December 2013 116181J16 _17783221 44024422 180415325 5424633 3675536 __l2456O37 JJ9970~890
Notes (i) Depreciation charge for the year amounting 10 QR 33 164382 (201 1 QR 3303091 6) is included in tbe direct costs and an amount of QR 60055 (20 12 QR 36939)
has been capiulised under capital work in progress
(ii) The capital work in progress includes capitalised borrowing costs amounting to QR 125645 (20 12 QR 15358)
(ii i) The buildings are constructed on a plot ofland taken on a loog term operating lease
25
Aamal Company QS c
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 31 December 201 3
II PROPERTY PLANT AND EQUIPM ENT (continued)
C05I~
At 1 January 2012 Additions Acquired through business combinations (Note 4) Relating to d isposalswrite-off Transfer from capital work in progress Transfers
Buildings QR
137434400 435726
Leasehold improvemellls
QR
38137377 446J 04
144 103 ( 1539452)
Truck mLCers and molO
velricles QR
83427661 11464679
1697609 (631824)
Plant and machinery
QR
249335437 97264 85
35 14 132 (99498)
59705
Furniture fir ures and
office equipmem
QR
22845309 667586
192042 (3696457)
98000 (525526)
Computers and related
software
QR
158 19519 87 14 14
141837 (266 1733)
908078 (2 l4730)
Capitol work in progress
QR
12104889 451 53265
( 1065783) (59924)
Total (JR
55910459 8 68765259
5689723 (862 8964)
(800180)
AI 31 Dttember 2012 137870) 26 371881 32 95958 13 1 262536261 19580954 14864385 56132447 624 130436
Depreciation AI Jaouary2012 Charge for the year Acquired wough business combinations (Note 4) Relating to disposalswrite-off Transfers
9144666 6989249
)4 3 16620 3410618
144103
(96 812)
42558404 548 1613
1671942 (6242 52)
44555 290 2 1398849
2890797 (6 187 1)
12392584 3 182899
169005 (3558466)
(206013 )
12235266 2077633
136959 (2627283)
(J 0662)
135202830 42540861
5012806 (7840684)
(312635)
At 3 L December 201 2 161339J5 16902529 49087701 68783065 11 980009 11715953 174603 178
Nel canying amoWlts
At 31 December 201 2 12 173 6211 2028560 3 46870424 193753 196 7600945 3148432 56132447 449527258
26
12
13
Aamal Company QSC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 31 December 20 13
ACCOUNTS PA YABLE AND ACCRUALS
Trade accouots payable Advances from customers and tenants Accmals Social and sports activities levy Other payables
AJIOUNTS DUE TO RELATED PARTIES
Name
Arab Compaey for Fiber Products EI Sewedy EIC( lric Ho lding Egypiasl Egypt Egyptlech Egypt United Industri es Company WLL Johnson Controls Air condi tioning aod Refrigeration Qatar WLL pound1 Sewedy Cables Egypt Johnson Controls Air conditioning and Refrigeration rNC Dubai United Wire Company WL L Gelteo Company W LL - Gelteo Refr igera tion and Airconditioo ing CampC Lightway nc AI Shaab Group of Companies Other related pruties
NO M Related party transactio l)s a re disclosed in Note 26
2013 QR
320017657 30486837 26924669 41 761 843 25855567
445046573
2013 QR
18517474
4902528
6531231 6404578 3215821
2825884 75 7825
3467288 263715
1313247
48199591
2011 QR
26716268 1 27410234 222575 76 28954726 33)33852
379119069
2012 QR
18380528 91458 82 54 13849 1 11 6 135 5374039 35291 2020359 1693323 1064744
670 179
11 0873 12 18650
49737757
27
14
Aamal Company QSC
NOTES TO THE CONSOLIDATED f fNANCIAL STATEMENTS For the year ended 31 December 201 3
INTEREST BEARING LOANS AND BORROWINGS
NOles Malilrify
2013 QR
2012 QR
CoMl Loan 2 Loan ) Loac4 Loan 5 Loan 6 Loan 7 CoMB Loan 9 Bills discounted
(0 (ii) (iii) (iv) (v) (vi) (vii) (viii) ( ix) (x)
lune2014 Seplember2014 January 2015 November 2016 December 20 16 November 2017 Jllne20 l J December 20 7 OClober 20 19
172070387 440000000 50544000 40261 621 81387109 19920036
6] 43890 62626967 42522794
915676804
298324180 440000000 10 J088000 57955030
100 168750 2 1300492
407728 1 782871 1
35000000
1065742444
Less Defe rred finatlcing cost (771 503) (897148)
914905301 1064845296
Presented in the consolidated statement of financial positioo as fo llows 20)3 QR
201 2 QR
Current ponion Non-current ponion
749520820 165384481
825568489 239276807
914905301 1064845296
The dete rred financing costs consSt of arrangement fees The movements m the deferred financing costs were as fo llows
203 2012 QR QR
At I January 897148 332 661 Addjtions during the year 1 062565 912506 Amortised during the year (218amp210) (34801 9)
At 3 1 December 771503 89 7148
28
Aamal Company QS C
NOTES TO THE CONSOUDATED FlNANCIAL STATEMENTS For tbe year ended 31 December 2013
14 INTEREST BEARING LOANS AND BORROWINGS (continued)
Nolec
(i) Loao I i USD 93000000 impon 10n moi lily obtoined to refimnee he Icne~ of edit The 10 IT interest at commercial fate and the interest is paid at monthly intervals The fucility is repayable within ISO days including the usage period under letter ofc redits
(ii) Loan 2 is a secured bridge loan obtained to settle an existing loan and working capital requirements of the Company The loan carries interest al coOlJllercial rates and interest is 10 be paid on quarterly basis
(iii) Loan 3 was obtained for the pWpOse of financing capital ependiture and direct payment to suppliers contractors and 5ub-controctors The 10011 CMries interest at commercial rate and the inte rest is to be paid q Uar1erly The fac ility is repayable in IS quarterly iostallmenls starting I July 20 11 and ending I January 2015
(iv) Loan 4 was obla ined for conSlruclion o r an inveslmenl property The loan is seclJed by 0 primary mortgage over the some property and corporate guarantee of the Aamal Company QSC Tbe loan carries interest at commercial marke t rate and is payable in quarterly instalments
(v) Loan 5 represents a loan fOlcility obtained in two sepnrole tranches amounting to QR 309 825 000 (USD 85 million) for the purpose of refurbi shment and construction of fociJities io one of the investment properties The loan is repayable In 16 equal quanerly instalmcnlS for individua l tranche commencing from March 20 1J The loan carries interest at conunercial rJtes
(vi) Loan 6 represents secured loans obtained ffom a commercial bank in the previous periods for the purchase of heavy equipment and machines and were merged on 15 November 20 12 as a comb ined loan This loan is payable by 59 equal instalments of QR 426000 with (I last inSlalment of OR 438 326 with effect fro m 01 October 201 3 The loan carries interest at commercial market ra tes
(vii) Loan 7 is il tmst receipt banking facility obtained for the purchase of inventories This carried interest at conunercial market rates This loan was full y settled during the year
(vii i) Loan 8 represents secured loans obuined from a commercial bank in the previous periods for the purchase of delivery trucks and machinery and were merged on 22 October 2012 as a combined loan The loan carries inte rest at commercial market Tates and is payable by 59 equal insta lments o rQR 160000 with a last inSlOlmem ofQ R 128000 with effect from 3 1 December 2012
(ix) Loan 9 is an Islamic Financi ng Arrangement obtained for construction o f a manufacturing plam and as o f yearend ba lance represents partially drawn amount out of totil1 facility of QR 655 68000 The loan is secured by joint corvorate guarantee by the shareholders The loan carries profit at Islamic Financing rates and re-payable in quarterly instalments starting from the end of the 24 months gmce period from the date of loan drawn
(x) Bi ll discounting is a loan fac ility from banks The purpose of the arrangement is to discount bills locally and carries interest at current commercia l filte
15 EM PLOYEES END OF SERVICE BENEFITS
Movements in the provision reHectelt in the consolidated SLo1tement of financia l position were as fo llows 2013 201] QR QR
At I Jan uary 18111 763 17877937 Provision made during the year 4056969 4205499 Acquirelt through business combinations (Note 4) 349272 End of service benefits paid during the year (2210756) (4320945)
At 3 1 December 19957976 18 111763
29
Aamal Company Q5C
NOTES TO THE CONSOLIDATED FINANCIAL STATEMETS For tile y~ar ended 31 Dee~mber 2013
16 SHARE CAPITAL
2013 2012 QR Qq
AtI1l1)nud 60000)000 (20 2 544500JJOfn shares ofQR iii Cilch 60i)iQOOlOO 54450lt)0000
21)13 2012 Numher of
siMtS QR shares QR Issued Mtldfully paM At lJamld) 544SfWllOfJ 5445(100001) 495000000 49500000)0 1511C ofbonus S1i1-C ___ 5550~OOO 555000000 49SGOOOO 495000000
At 31 Decenef 6(OOampQllf1(1 ---14450O000 544~OOOOOO
All ampates m~ of a110 clss and caL equal voting rights
17 LEGAL Reuro5ERVE
As required by Qatar Comnertai COfrp7lnies Lav No5 of 2002 lOfp of the profit for the ye1J as a rru1imllli silould be mmsfened to legal re~erve The reserve is lot normay [lytiabe tor distribution except ill he cixcuJUstllrtUS stipulated m the above ~lemi0ntd GIW
IS HEVE1TE
2013 l)n QR QR
Sale of goods 1726893265 i709057~(iO
Renlal income UiO362322 133117509 S-ice income 858695 33940731 CornrrusslOlL Incentives and agency fces 44695S1 422~_632
212259$)33
19 DIRECT COSTS
2013 2)i2 QR
C 051 of inven(feS recognisedlIS an exptns 1522929956 497210830 Dind sL1ries lmd wages 601 [1336 5137856-8 Operating eXpenses on nml estate p~opet1les 36)711316 3041H504 fJepreciatiort (Kate I J) 33164382 B03091pound Operators marhgerrt6nt fees 14508588 li667989 Provisicn Qr obsolete and skwlt moving mvenlories (K)tc 8) 2380617 2208263 Other operating ilxpenses _31~3982 _ 3674946
1702139171 JS9653OI tgt
Aamal Compall-yQSC________________
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For lthe year ended 31 December 20 11
2G OTHER NeOiI
2013 20J3 QR QR
Interest mcume 2824216 2)314392 Profiv( loss) 00 disposal of property plant aoe eqUlpmem 737647 (l7362G) Eargain ptmnJse gain (Kote t) 8360793 MIsceJlaneous income 5723356
2013 2012 QR QR
ManllgetnUI hrQ empl(yees ws 55170302 55lt035middot1 Rent 23596799 2594915 Allowance for impaimlcot oUrsue aCQl1ot$ rc(Xjvalle (Nole 6) 129459(i 11613120 flBumcce ane profcampiitmJI fees 2IU9263 209J902 Corununication OOtHS 1935123 1649155 Trllining tid ouSfjt$s developmccl 950476 L095764 Re]X1in and mainle-nilnce 21)11SflS 2)2 I Poslag-c prjnting acri stationery 610299 541159shyvllsltdlancous expenses _~~~664 1lt2
-~~~ 125162812
22 fIN~lCE COSTS
2013 2amp2 QR QR
Inleres epen~ 42866312 5773U4B Am(vtisJliorgt ofdefcentrred financiog coStS __ 2l)tl26~~ gt3661
44930877----=
58063009
23 BASIC A~n nHUfED EARilNGS PER SHARi~
Basic trdTJogs per hue is caculatid 0y llividing the pwfill0( Ihc year attriouiabk (0- equity roldc-5 of the parent by lhi w~iglwxi avrage number of ordinary shares 0JstandirJg dulting tht_ year During Ihe year lil~ Conpmy i-sued and CBpii3lzed bonus shares lnd awmJingl) me previously ~eportod earnings per shac have blOM restatc(i
20i3 2012
Profit feT the year auributable to Cluity holderlt of the- paren (QR)
Weighted aVCTage number ofshares outstanding during the year (i)
Basic Jd diluted earnings per share (QR) 085
59985U413 shy
~~--~~~~- ~------J 1
23
Aamal Company QSc
NOTES TO THE CONSO LIDATED FfNANC[AL STATEMENTS For tbe year ended 3 l December 2013
BASIC AND DILUTED poundARNINCS PER SHARE (continued)
NOles (i) Th wigh d m nlg urnb of hres foc h P of lruling ~migs pee share h bee kulated
as follows 2013 20J2
QU3lifying shrues allhe begi ll1ling of the year 544500000 544500000 Effect of bonus shares issued and capitalised 55500000 55500000
600000000 600000000
Less T reasury shares (149587) (i357SI)
Weighted average number of shares at the end of the year 599850413 599864249
(ii) There were no potentia lly dilutiw shares outstanding at any time during tbe year and hence the diluted earnings per share is equal to the basic earnings per share
24 COItIMITMENTS
20 1] 2012 QR QR
Estimated capital expenditure approved and contracted for at the year eod but not provided for
Investment properties 2964000 8 139063 Property plant and equipment 16386500 63759762
19350500 71 898825
Operating lease commiIOlenlS under noncancellable lease agreemenlS
Payable wilhin one year 990806 702000
990806 702000
25 CONTINGENT UABILITlES
The Group had the following contingent liabi lities from which it is anticipated thai no malerial liabilities will arise
2013 2012 QR QR
Letters of guaramee 474551239 394255203
Letters of credit 7678499 194299384
NQles
(i) leHlaquogt of gu indud penonmnlaquo tend nd bid bonds d pymenlt g gi to suppliers and contractors by the Group in the ordina ry course of bus iness which will matme within twelve months fro m the reporting da te
(i i) Letters o f credit are provided by lodging documents to the bank tor purchase of trading goods fro m foreign suppliers wruch will maMC within thJee to six months from the date or tile Iransaclion
J2
26
Aamal Company QSc
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year eoded 31 December 2013
RELATED PARTY DISCLOSURES
Related party transactions Related parties represent major shareholders directors and key management persortOei of the Group and entities controlled joimly controlled or signjficamly innueoced by such parties Pricing policies md tenns of these tnlOSaclions are approved by the Group s management
Transactions with related parties induded in the consolidated financial stalemenls were as follows
20lJ 2012 QR QR
Sale o f goods and SClVices 419034048 415225221
Rental income 1980473 2069386
Purchase of goods and services 1591 38018 300835596
Rental expense 21 780G78 23397334
Bargain purchase gain 8360793
Net assets acquired 78803585
Relat ed party bal nnces AmountS due from and due to re lated parties are disclosed in Notes 7 and 13 respectively These balances do oot carry interest and are repayable OIl mulUlUy agreed dates generally within one year
The Group did not record any impairment of receivables reJatiog to amounts due from related pat1ies in either year This assessment is undertaken each fina ncial year through examining the ftnanc ial position of the related party and the market in which the related patty operates
Parent The Groups ultimate parent is Al Faisal Ho lding Company WLL
Compensa tion or key management personn el The remuneration of key management dming the year was as fullows
2013 2012 QR QR
Short-term benefi ts 7904794 1079595 Employees end of service benefits 408934 439776
8313 728 11235727
33
AamaJ Company QSC
NOTES TO THE CONSOLIDATED FINANCIAL 5T ATEMENTS For the year ended t Decernber 2013
Dilling the year 1he Group issued a XHlUS share of 10 928 of the paid tiP share capilal hdd ilS at 31 DiX2mber 2(JJ 2 mnmuning to OR 555000000 using retamed earnings as of3 December 2012 (20l2 Doe share for every ten shues held as of 31 Dcember Oll amuunting 10 QR 495OO()OOO ling reta1ned earmrgs 28 or 31 Decencer 2D II Jshy
18 SEGMENT INFORMATION
For J)iloogement PUIpltJM rhe Group i organised into business unit bused On LlJeir nature of Acttvitics lud nas fonY reportable segments and the Head Oftklt as bllow$
Propert Tbe segntn cOlists of City C~nler Qlta~ Brunch and Aamal Rea Esmte Branch whicb ll[c invoived in lampIiiog the faJ1ities of retail outlet conpex red e5ttlte nve(mltn$ and property remal buines~s
Trading mld distrib-wion The segmeul Involves wholesalB andlor rBtail distribution of phamlaceutlcai and consunable i1ems hume Epplianccs medica equimenl t-Tes ill1d lubricmtlaquo and II1UllitnEl printing The scgn(rtt includes 6c following entities
Eotl Sina Medical Branch
Aaen Medical Braudt
Amcill Troding and DistoolltlqO Branch bull Foot Care (erier HRnd) Good llre Pbannacy Bf4Uch bull Al FllfJdaq COllpafY wJ~L
InduSNol manuacturing TIle s0groent IOvolves Ulahuactrumg whole~we aliaor rewi dimibUlioti of dccnc cables lid tools ggregJ1es_ ready-IUx connole and cement bI0C~ lI1d provi$ion of servlCcent$ in rdation to iODllltroa Itvestment repair aJ-d Gonstruction of power plwts liiiding of LED ilgluitlg products und management of industnl enterpnses The segment ircludes be folloVting centntitis
bull Aam1 Cemert Industries LL AuraJ Redy1Yl(A BrQTlch
bull Doha Cables Qawf lLL Senyaf IoolJic1es Qatar Holding W LL Advanced Pipes ard Casfs CompQTly WJ L bull GuJfRoch Coroany WLL Ci~San Trading Company WLL hmovafive Lighting Compary WLL
Managed services le segment inyolvc~ provisloH of hOllseiltecpmg mi cleaning services fucditics n-anagemerJ services C1egy s(tvices ttl centfe sltrvicf)s buildiqg lnaintemHlelt aml acting as travel gens The 5cgnltnt includes the foUowing cnti(lcents
An13 ServJce Branch
amli TnlVeJa l5tmh
f-eco Gulf Co W LL
Jolinson Controls Qattl WJL
28
Aamal Company QSc
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended ) L December 20 13
SEGMENT INFORMATION (Co ntinued)
Head Office It provides corporate services to the branches and subsidiaries of the Group
The managiog d irector of the Group monitors the operating results o f its business units separately for the purpose of making decisions about resource allocation and perfonnance assessment Segment perfonnance is evaluated based Oil operating profit or loss of these segments Transfer pricing between operating segments are on anns length basis in a manoec similar to Iraosactions with third parties
Aamal Company QSC
NOTES TO THE CONSOLIDATED FINAN CIAL STATEMENTS For the year ended 3 1 December 20 13
28 SEGMENT INFORl1ATlON (continued)
Operating segments The operat ing segment after elimination or ioter-bra nch and inter-co mpany lrnnsaclioos is presented as follows
Trading (nd Industrial Managed For fh e year elided 31 December 2013 Properly disirjblli ioll manujocljlring services
QR QR QR QR Revenues
- h lemal parties 260360172 578909983 1231522768 S l802210 - Inter segments 1253914 6843 11 8 29639873 3445052 1
Heat Office QR
Eliminoions QR
(n187426) II
Tolal
QR
2J22595133
261614086 585753 lOI 126116264 1 8625273 1 (721 87426) 2122595133
Opera ti ng results Fair vallie gains
Profit I (loss) ror the year
Depreciotion
200811944
245051 107
445863051
2066290
86492834
86492834
4345438
22636250
22636250
33049 089
5157436
5157436
1760305
(47864882)
(47864882)
1334382
267233582
245051107
512 284689
42555504
36
Aamal Company QS
NOTES TO Tl CONSOLIDATED FfNANClAL STATEMENTS For the yeM ended 31 December 20 13
28 SEGMENf INFORMAnON (c)tltioucd)
FOf the yearrnrkti J f DccemOer 2(J12 QR
Revellues - ExlcmlJ partiel 2331 17 509 bull Inter segmcI11S 1168935
-- 234236434 --~- -~--
Openning results 18S2367t Fmt value gains J8S79-4~G
pront LOllS) for the rear 570616154
gt3659
No(
lnlermiddotgment revenues are eliminated on tQHs)idntiOH_
Tadiug ftfid disl d)Ntion
QR
S2S3l7661
324 j
5335493114 ~ -~-----
51384831
54384338
4J9R71(i
Indus idi mamfmturing
QR
1255694537
129U25lS4
56727059
56727059
32752742
slnltic(s QR
55216665 2939H31
S46lOJ96
7427414
7437
[908067
ilfild ()jice QR
(64(41976
Elimination QR
(74tHi2oJ Iii
Totul QR
206936372
2069336372
235721
(64641
131 f613
6245
42541)861
Amnal Company Q$l
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Por tnt yeartndeJ 31 De~embcr 2013
28 SEGMENT JNFORMATlON (contiutlld
Assc-ts and labilities
Tng alld lndtrstfw At31 December 2(113 distnbllrior manufacturIng senices HeadOJJicc EliminatioilS lola1
QR QR QR QR QR
Cumnl 3tS 227552338 620807979 61349 j 415 S()6)86922 (301636995) 1477366090 Noolucrcnt DSeIS 6411868160 12604763 622386238 4348876 (i624548 __p2438051 780
fotal asstl$ 6639420498 1194 1243194217 65698291 513Ql1470 ==-lt03H8l~O()) 853295-870 -~----~ ~---~ -
CUIT)llliabilitics 280995335 1(3511J60 6344(12777 2l0708lJ2 496261185 (3CH636995) 1249603264 Non-current iiatJlitics 7l70L5V2 8008485 HlDi16~43_ 3181668 t433799 ____ ilj534_~57 __ --Totul liahililics 353696897 ___~4159~4~ 734419720 ~4976~~~~~ 1434945711
---~~--~ -~-~~ - _2~~~4~~ (~~~~9~
C1pild expcndimn HI) WO743OOj 1397742_~471l2~--~50 ~51 ~1~623821~~1~_ -~----~------ -~
3amp
28
Aamal Company Q SC
NOTES TO THE CONSOLIDATED FfNANClAL STATEMENTS For the year ended 31 December 20 13
SEGMFNT INFORMATION (continued)
Assets and liabilities (continued)
AI 31 December 2012 Properly QR
Trading and d iSfriblllion
QR
Indusrial manufacfuring
QR
Managed senices QR
Currenl assels
Non-current assets
146491 186
6121 864484
2964425 12 903 7264
73468 1258
549267235
51387098 471 1439
Tolal assets 6268355670 305479776 1283948493 56098537
Head Office QR
468325024
6713643
475038667
Currentliabil iies
Non-current liabiLities 273444 748 1 J10 15024
86054583 7434286
669214261 1288 14977
2 1938953
287 1199
480393637 1253084
Totil lliabiliti cs 390459772 93488869 798029238 248 10 152 48J64672 1
Capila expendirure (ltII L 72865 878 1281254 6647 J356 7169 13 149045
Notes
(i)
(Ii)
Inter-segmeot balances are e limioafed 00 consolidatio n
Capi tal expendiTU res consist of additions 10 propeny plant and equip ment and iovestmenl properties
Eliminations QR
To wl QR
(273735776) (i )
(20308351(i)
1423591302
6689563230
(27576661 1) 8 113154532
(273135777) (i) 12573 10405
257388570
(273735177) 15 14698975
24 1484446
39
29
Aamal Company QSC
NOTES TO THE CONSOLIDATED FrNANCIAL STATEMENTS For the year ended 31 Dcltmber 1013
Fr-A]~ClAL RISK MANAGpoundMamp1H
Objccthes and policies fe Groups principal )uaucill liabilities comprise imltresl bctmllg loons and IxmowHgs baRlt ovetda1s amounts due to fclaled par1ies and tracte accounts payable The main pUlJXSi of thesc financial liabilities is 4J mise firmne or 610 Grmps operations The G0JP bas various fimmcial assets such as ttadc accounts receivable lInlOlmts due from related parties bark balances tltCntion receivable and other receivables which arisgt directly fran its cperuoonamp
The maiH ri~ks an3ing Joru (be Groups UnariCJlll illslrumenls jle market risk cretiJt nsk and hmdity risk Til BoarD ofDtrcctO$ reviews end agrees policies for mzrAgbg Caltt f hespound ri~k ihkh arc summariscd beloW
VIarktt risk yenfatket risk is the risk Um changes in market prices $Uch as intfcst rates and hreig lttmeocy ect14nge rilles Vltl1 affect the Groups profit eqwty Dr value tf its hoJdiI15 of financial instrl[Thnls rile objecivpoundj of marke1 risk mUnllgcrlcnt is to manage uld 1~ontr(ll tho tr))rket risk expo-sure vithir acceptable parfI-etcJ$ while optimising rerUID
Equit) price risk ampjuity prtce risk is the risk hilt the Group ampearnings will be affected as a rcmt (If luctttltions in fm vdue of ~qui-gt
mstwnents Eqlliry price risk arises from availabtetor~sale inv2strnems However the Groups exposure to eqmty price risk IS minima as II doesn hold sitl)iftrmt ailableAor-511le inYestrmmrs
[merest rate risk The Groups fimiruial poundS5ot ampId liaojlilies (at Rl $uJject to int~~ rate mk compnse brmk depoils interst bearing loans and bOITQwjags and bank overdr-afts At the reponwg dalt tbe [merest rale pronle of Ill Goups intexst bearing fbi4rdd instruments as fliows
11113 20i3 QR QR
Fued liIeryS refc insfrvrnellts
Fmmcial assets 113035962 111913394 FrOltwial liabilities --1~203712l) 1252t43~1
9)OI~ (13350972)
Fhlllting inireSI rate ns1lmlttrs Fanctl~ Isseis 127024345 ID43848o Fllllocial liabilities _-(i~9347~ (94))48926)
(836)64116)
The Groups exposure to t~ ris of changes in marXet interest fltltes relztes primariiy to the Groups financial assets and lizbitdic$ with t1Oltttirg interest mte~
lhe loEowing able demonstrates the ampmitivity nf the eonsolidattXI statemen1 of income 1) caonaly possible chonges in in1jfgtst rmes by 25 basis points with all othe vari)ble3 hdc umstant The sensitivity of the CooiK~ljclatid statement of inc(me $ the eft(ct of tb assumed changes in lnterdt rales for one year bf1sec on the floating rate financial assets and fimmcial hablhw$ held at 31 f~r The effect of deae-ascs in interest ral~ is cXp0Ctct to be equal and opposite to the effect oHlle increases sllQvro
Changes it Eftx OIl
00513 [oms profit QR
2013 Floating mterest Hlte instruments ----2$ bp (1649776)
2012 Flv-ating irkfiSt rale instrumenls +25 bp (209[9(1))
~--------- -~~ 40-middot------ _ _ shy
29
Aamal Company QSC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 3 1 December 2013
FINANCIAL RISK MANAGEMENT (continued)
Foreign currency risk Foreign currency risk is the risk lhilt the value of lhe fi nancial instruments will fluctuate due 10 changes in fore ign exchange rates
T rade aCcOlmts payable and accrued expenses include amounts due in foreign currencies mliniy US Dollars UAB Dirhams Great Britain Pounds (GB P) and Euros of which the Group has a currency risk primruily on the baJmces payable in Euros and GBP amoWlting 10 QR 14400634 (2012 QR 17214046)
The Group does not hedge its foreign currency exposure As both Qatari Riyal and UAE Dirhams are pegged to the US Dollar balances in US Dollars and UAE Dirhams are not considered to represent significant currency ris k to the Group
The table below indicates the Group s fore ign c urrency exposure on its monetary assets a nd liabilities The analysis calculates the effect o f a reasonably poss ib le move ment of the QR curre nc y rale against the Euro and GBP with all other variables held constant on the consolidated slate menl o f income (due to the fa ir va lue of currency sensitive monetary asse ts a nd liabilities) The e ffect o f decreases in fo reign c urre ncy exchange rates is expected to he equal and opposile 10 the e ffect of the increases shown
Incramp1se ill
f oreign cUlrency rate
0
the QR
Ellecl on profil
QR
2013 +5 (720032)
20 12 +5 (860 702)
C redit Tisk Credit risk is the risk that one party to a financial instrume nt wi ll fa il to discharge an obligation and cause the other party to incur a financial loss TIle Groups exposure to credit risk is indica ted by the carrying amoWlt o f its financia l asse ts whic h consist principally oftmde accollilts receivable retention receivable amounts due from related parties othe r receivables and bank baLances
The Group sells its products and prov ides services to vario us panies It is the G ro ups policy that all customers who wish to obtain on credit lerms are subject to credit verificalion procedures to ensure c redit Ilonhiness Each new customer is analysed individually for creditworthiness before the de livery o f products Of services Custo mm tbat fai l to met t the credi tworthiness may transact with the Group only o n prepayme nt basis Property rentals are mostl y received in ad vtnce or conlrlCled wi th post dated cheques 10 additio n receivable balances are monitored on an ongoing basis a nd the purchase limils are established for each c redit custoroer which are reviewed reguJarly based on the level o f past transactions and senlement The Groups max im wn exposure with regard to trade aCCOWlts receivab le net ofa llowance re nected allhe reporting date was ilS fo llows
2013 2012
Business SJgmelll QR QR
Property 15478832 19386326 Trading and distributio n 194343 597 179748274 Industrial ma nufac turing 183119753 131578668 Managed services 18069385 14547389
411 011 567 345260657
41
29
Aamal Company QSc
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For tbe year eoded 3 J December 20 13
FlNAJICIAL RISK MANAG EMENT (c-o Dtinued)
Credit risk (continued) With respect to credit risk arising from the other financi31 assets of the Group the Groups exposure to credit risk arises from default of the counterparty with a maximum exposure equal 10 the canying amount of these instruments as follows
2013 QR
202
QR
Bank balances Amounts due from related parties Retention and other receivables
436136756 214439950 48290351
36788129 t 171525363 74082203
698867057 613488857
The group reduces the expoSltre of credit risk arising from other financial assets by maintaining bank accounts in reputed banks and providing services only to creditworthy re lated parties
The management cons iders the bank balances and a mQUIIIS due from related parties as high grade fi nancial assets and lfade accounls receivable and other receivables as sundard grade financial assets When a finltmcial asset is identified 10 be impaired the managemoot downgrades such assets to impaired category and provides adequate allowances
Liquidity risk Liquidity risk is the risk that the Group will not be able to meet its fmancial obligations as they fu ll due The Groups 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 nonnal and stressed conditiom without incurring unacceptable losses or risking damage to the Groups reputa tion and is to maintain a balance belWeen continuity of fuoding and f1eilibility through the use of bank overdrafts and bank loans and borrowings
The Group monitors its risk to a shortage o f funds using a recuning liquidity plaOfling 1001 TIllS tool considers the manuiry o f financial assets (eg accounts receivable) and projected cash flows from operations The Groups teons ofsales or services require arooUIlts to be paid within 30-90 days from the invoiced dale
42
29
Aamal Company QSc
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For tbe year ended 3 1 December 2013
FrNANClAL ruSK MANAGEMENT (contiQued)
Uqujdity risk (continued) The table below summarises the ruaruriJy profile of the Groups financial 1iabililies a t 31 December based on contractual undiscountcd paymeots
2013 Interest bearing loans and borrowings Bank overdrafts Trade accowus payable Other payables Amounl~ due (0 related panles
201l Interest bearing loans and borrowings
Baok overdrafts Trade accounts payable Other payables Amounts due to related parties
On demand
QR
6836280
6836280
011 demand QR
2885090
2885090
Less than 3 months
QR
521324473
303638792
47406830
2530~480
898675575
Less thall 3
months
QR
469839033
10754JJIO 37543236
1964504 1
634568620
3 10 J2 mOlllh$
QR
239333328
16378865 20210580
2289~11l
298816884
3 to 12 monlhs
QR
365476972
159621 37 J 24745342
30092716
579936401
1to 5 years
QR
J 60092748
160092148
1 to 5 years
QR
248472226
248472226
gt 5 years
QR
25261598
25261 598
gt 5 years
QR
7648000
7648000
TOlaf
QR
947012147 6836280
320017657
67617410 48199591
1389681085
Tota
QR
109 1436231
1885090 267162681
622 88578
49737757
14735 10337
43
30
Aamal Company QSltc NOTES TO THE CONSOLIDATED FlANCIAL STATEMETS For the year ended 31 December 20 t3
21 F~ANClAL RlSK MAiAGEMElT (continued)
Capital management The Boards policy is to maintain a strong cepit1 base so as to rnainmin investor creditor and market ronfoonee and to SUSWlJ) fumre dcltclonnent Gf the buinest The Board of Directors rronitortl the tapital whkh tbe Group defines as wlal $parcloders equity excluding nonmiddotcornroliing imerests and the level of dividends to orrunury srarellOJdcfS
The Board also reeks to ITIaimain a balance between the higher (ctums (hat might be fA-~$ihle With higher leves of borrnwings end Lle edvnrJages and security named Sy it sOMd Cilpitai posi[ion The GfCup~ k1rget is to achievfl a return on slureholders equity (exclJding aonwurrolJiug iorcf(sts) greater lll(ll1 he wcighlcd average inres exxmse on mrerest bearing Ivens and oorrowing
The (lf0t-p nl)nDg-e ils cnpital structure and makes adjustneal lOll in light ofchang2s in economic nd bttincss cordjlons and shareholders expe1ationJo chmges veremiddot maCo HI Lleuro objecttves polilCS or proCCSSC3 during the years erded 31 D~mber 2013md 31 Dtccmlxr2Ql2
The Group monitors the capit2J using a gClting fatio which IS dep divided by caplla plus debL The GtOwgts policy is to keep ttJe ge-anng rmio bclew 40 Tbe Group iLdtdes withb debt imete-51 beagting loans ard ~OITORlngs less cash and cash equtVaknts Capltal includes eqmty attributable 10 the equity tolders oft~e parcrt
2013 QR
2(i2 QR
fmerest bearing loans and borrowings lcss- Cash and cas ltYJUvalcnts
9i4lJ05301 _~ (429JfJl4761
1004845296 (649)6201)
Net debt
Toa capital
Capita and net debt
699849045
~ringrttio
FAIR VALtES OF Fl~ANOAL f~STRUMETS
Finarcial iostrumenL~ cOlnprise tina~lctal assetS carl finailcialliabilities
Fmancial assets colJist of bank balance) short 1Cm bank dcposis amounL dve dom rc)ltted partilt)$ rekntion and other receivables and ttade accolmis rceivabe Finatlclll habiilics cgtmsist of banilt ovcrdratls jnerest bearing lOil1S and bOrowings amounts due (0 nliled partiG~ ane trade x-ounls payable
The- fair values of hese financial inStrumen1S except Jo-- imCfest bearing loam lHld bOlToving aproKimate lhdr cMryinJ vlhes due to the Slort temt mzrutiiles or these instrument
Tllc faiT value of iotcnst beating Nns and borrowin2s ae estimate( based on discoumed ltash flows twin int(s rale- cune-ntly nvailagtk fur tilt debt or sinuiar tetnlS an-a rell1lmng matunties
31
Aamal Company~Q=-ScC ______________~______
~OTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For fhe year ended 31 December 20 t3
SlGNIFICANT ASUMPTIONS ACCOUJTING JUDGElE1TS AND F8TIMATFS
impairment (If accoonts receivable n etrnwe of lhe collectible anoun of trade accounlgt reccvable is made when collection of the full lHl1OUt i~ nO looger probabk FOI nCividualty significitIl amounts this estimation is p~rformed on an indh-idllai a$[$ Amomts wHcb arc not indivldl11Uy significant but wluch are past due ZTe tsscssed collectively and an aJlQwaccc applied ucc()r~Jng to the length of lime past due based oc histnncal recovery nlJes
hnpalrment of inHntnries lavenoncs are held at tho lower of col and nol realisable value InIOn inventoncent$ becone old or 0-~amplete an estilTJte is mate of their net j alisable vulue For indiviolhlUy significant amountS this cstinaunrt is performec all aD lndividwl osis Amotlnts whieh are fl0t individually significan( btll which ltIre old at obsolete wx LltSessed wllecivdy md a provisior is applied sccnrding to the invenrory type and be dep)ee of ageing 0 cDsolescc1ce based on anticipUled selling prices
Classifigt1ltion of El Sew(gtdy Cable Qatar WLI ali a j(lint vwture pound1 Sovedy Cables Qatar is a limited hability company whose kgal fum confers SCprm11ior bernten tbe jXliiies 10 ~he jomi lfranpement Snd the Company Itself FurthenrlOre then IS no oontractua] arrmgelTeot or any oibe aus aod circumstriliCe$ that iocik41to tht he putic5 [0 the joint flJTIlrgernelit bave rights to the ssetl and obligrtdons fo~ the liabilities of the joint ilrrongement Acoordingly El Sewed- C[jbl~s Qamr WLL is dassifiecl 7S a joiut enrtrr of he GWtp
impairment of goodwill G0oovj)1 embedded in th~ cot 0 aquisitior of subsidiaries and eqmtj-iccounled iflV(stees ire teswt for irl1jXlirmnt aHuaily Tbe calculations of value [n use fO( cfish gecj~r)lilg units (loring to real nte projecg are rtost sensitive to tin IDHowing assumpti015
Grosgt i1wginmiddot Gross Ilmrgins arc lmsed on avrage values tuhje0d in (he [Xrioo preeedhli (e siaM of the budge xnod T1esC at( mcreased over the budgel period for mticipatltX efficiency Hnprovemots
DisC)unr r(es Discount rotes represent th cl1tent mark as~ssmetlt of the risks specific te ech cash geocroting unit regarding lhe time value of money ilnd mdividu)l risks of he tmtieriyilg assets whICh have not been inwrport1eti it the Citik flow estimates The dj~(OUrl flte tlkulation is based on the speclfte circurnsthLCes of lile Group and its opltllatJng segn)~nts (md derived (ff)rC it weighted avaage (XSt 0f apilaJ (WACC) Tb fACe (akw into uoount both deb and equity The 0$1 of equity is denved from dlC expected return 01 investmenl by the Groups investors TJc Gos10( deb is based on l1e borrvwings the Gmup IS obllsxl to service SC~lletllmiddotspecific r5k IS incorxt4too by applying individual bera facto The betn mctors ire evauatcentd annuaHy bhseci on pubJicly aVflllabe murked earn
Fair value ()fnHstmeni proputies The fuit laHe 0 nvestmel~ propertis is deltrrnlnzd b cxterrwl indepzfldell property valuers laving appr0priate recognised professional quabfiillions and recenl xperience H1 the localjl)n and G-tegory 0 the oroperty being valued
Useful hes of PfQPcrly plmr (llld zqulpment The Groups management detennints th estiunted useful jives Df It~ property plan and equipmnl fix calnurjng depreciation Thi5 e~timJte is 6lermind after cinsidring 1b expeelcd usage (1f the a5sclt [hysical l101t and (eas tedmiltal Dr com~ercia obsolesccnce
Gotlg Qncen
ibe Groups mangerncnt UiS made aJ assessmeot cf the 011115 ability (0 COllllOUC liS a going conct11l Imd is satsl1ed hat me Group ms the resources to contmue in business for he foreseeable fu1urc he1hennort he management is no aware oC lny material Hncertainties that lray CH~t signinchnt doubt tlPDfl the Groups ability 10 continue as a going umcem Therefore titpound lotlsolidatcd finilllcij stftemeols comirme to be prepltd on li g0ing concern basis
Aamal Company QSc
NOTES TO THE CONSOLIDATED FlNANC[AL STATEMENTS For the year ended 3 1 December 20 13
32 INCOME TAX
Certa in subsidiaries of the Group which have non-GCe ownership are subject to income tax under Qatar Income Tax Law No 2 1 of2009 The iocome tax is charged on the share of profits attributable to non-GCe shareholders For the purpose of these conso lidated fi nancial statements the income tax liability oftbe foreign shareholders has been excluded given that the non-GCe shareholders have agreed under the shareholder agreements signed with the Group to bear the fh lliiability and make necessary payments
33 COMPARATIVE INFORMATION
Certain comparative figw-es of the previous year have been reclassified 0 coofonn to the current years presentation However such reclassifications are oat materia and do not have an impact on tbe previously reported net profit other comprehensive income or the total equity for the comparative year
The impact from the resta tement of comparative infonnalion as a resuh of adoption of IFRS I I - Joint arrangements is detailed in Note 32 Changes in aCCQu(lting policies
46
2
Aamal Company QSc
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 3 I December 20 13
CORPORATE IN FORMATION AND PRINCIPA L ACTlVIT IES
Aamal was funned on 13 January 2001 as a private shareho lding company with limited liability (W LL) under the COlrunerciaJ Registration Number 23245 in the Slate of Qatar On 12 Ju ly 2007 the private shareholders resolved to transfonn AamaJ into lt) Qaari Shareholding Company (O SC) (the Company) Accordi ngly the Company was listed on Qatar Exchange on 5 December 2007 The Companys registered office is at P O Box 224TI Doha Sttlle of Qatar
The Compaoy is organised inlo a head office (Aamal) cllld branches and operates in the State of Qatar The fo llowing table sets out the principal activi ties of the branches
Brancb Principal aellvities
C ity Center Qatar Branch Leasing the facilities of the re tail outlet complex in Ci ty Cen ter Doha
Aamal Real Estate Branch Residential and commercial real estate investment and property rentaL
Aamal Readymix Branch Production and sale o f readymix concrete
Ebn Sina Medica l Braoch Wholesa le and retail distribution of phannaceulicals aod general consumable products
Aamal Medical Branch Wholesale d istribution of medical eq uipment
Aamal Trading and Dis tributioo Sale of tyres lubricants batleries and home applian~s
Branch
Amnal Servi~s Branch Providing facilitie s management arld cleaning services
Aamal T ravels Branch Operating a travel agency
Aamal fur Indus trial Projects lndusllial investments Branch
Good Life Phannacy Branch Sale of phannaceuticals baby care products medicine and general cOllsumable products
Foot Care Center Branch Sale of footwear clinical activities and general commercial tradillg products
The consolidated financial statements were authorised for issue by the representatives of the B03Id of Direclors of Aamal Corupaoy QSc on 20 February 2014
BASlS OF CONSOLIDATION
The consolidated fioancial statements comprise the fioancial statements of AamaJ Company QS C (the Company) and its subsidiaries and joint controlled entity (together referred to as the Group)
Subsidiaries Subsidiaries are enli ties controlled by tbe Group The Group controls an entity when it is exposed to or has rights 10 variable returns of its involvement with the entity and has the abili ty to affect those returns through its power over tle entity The fi nancial statementS of subsidiaries are induded in the consolidated finarlcial statements ITom the date on which control commences unti l the date on which control ceases When the Group loses control over a subsidiary it dereognises the assets aoo liabilities o f the subsidiary and aoy related non-cootrolliog interest and other components of equity AllY resulting gain or loss is recognised in consolidated statement of income Any interest re ta ined in the fonne r subsidiary is measured 01 f3i r value when control is lost
8
2
Aamal Company QS c
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 31 December 2013
BASIS OF CONSOLfDA TiON (continued)
Subsidiaries (continued) Set oul below are Ihe Group s principal subsidiaries at 3 1 December 2013 Unless oUlenvise slated the subsidiaries as listed below have share capital consisting solely of ordinary shares wh ich are held directly by the group and be proportion of ownership intereSIS held equals 10 the votiug rights held by Group Tbe country of incorporation Of
registration is also their principal place of business
Comp(my name
Aamal Cement Industries W LL
MO Qat1 Company WLL
Senyar Indus tries Qatar Holding WLL
Doho Cables Qaw WlL
EccoGulf Compaoy WLL
Advanced Pipes and Casts eompmy WLL
Johnson Controls Qatar WL L
Country 0 lJCQr por ation
Qator
Qatar
Qatar
Qatar
Q 31ar
Qatar
Principal (lcfi ity
Development and mlUlagement of factori es and the prodllaion or curb sl~ne i llleriook slabs lIId cement bricks
Construction and repai r of power plant es tablislunent and man3gemenl of industrial enterprises aud ac ting as a representative for the imcmatiOllru companies
Management of subsidiaries and associates ovming of palen~ businesses and subleltiug Ulem and provision of investment port fo lio management for Its
subsidiaries and Msocialts UOkr the shareholders agreement signed between the Group and the other
shareholders the Group is able 10 appoint the chai rman and two other members 10 (he Boflrd of Direc tOfS (out of six members) and is able to govern the fin ancial and operating policies of Senyar Industries Qatar Holding WLL Accord ingly ~ company is considered as a subsidiary oCthe Group
Mailltenance and mallllfacture of electric cables equipmelll and lools Doha Cables QalaJ WLL is
91875 (eITectively) owned by Senyar hldush es QaUlr Holding WLL a subsidiary of tllC Group TIIe Group has (he power indi rectly through SenyM [ndus tJi cs Qatar Holding WLL 10 govern fi nancial and opera ting policies of Doha Cables Qatar WLL and accordingly the company was considered IS a subsidiary ofthe Group
OITers professional and bus iness process outsourcing and Cll )] center services
Manufacturing of Wide cement md amplass reinforced pipes systems for infrsslICture (lnd pipeline projects
The Gro up h~ the power 10 govern ~lot financial and opera1 ing policies or Adv3I1ced Pipes and Casts Company WLL by virtue of a sllarchokJers agreemeot TIlus the Company has been cotls ldcrOO as II subsidiary of the Group
Provision of racililies management service5 energy se-rvices md building maimetlaoce and cleanlg services to corporate cl icn1S
PlOporl ion oj
oWPersllip held by the
Non
Group COnroiling interest
99 1
60 40
50 500
459 54 J
5 1 490
50 50
51 49
9
2
Aamal Company QSC
OTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For toe year ended) J December 2013
BASIS OF CONSOUDA nON (continued)
Suhsidiaries (wntiourd)
Cmmffyoj fNgtpvniOil j irniJpvroliin ~__~ampiphdd~~
Nor G)1)Ji contfoifgtg
iMeregt
CmiddotSan TI~ing WLL Sdilamp lYJy1ng renting me Mltcentlopil12 [e~ tSite 30 invimenl w shams rnlilVigemc1t vf real lsta propeItilttl owning ille palent and tradcentmut and tnlding in iXjUiflfIfflt amJ vcilici$ 1he GroClp has tJe pcwer tv goem 6e ~inr8hl and ojJrtltllng
roicie_~ of ClSM by vifcle 0 a shlrcholdcrs 191e~mcentn(
745 25 1~i
nnoV1iv lightinf wmpany Qatar TNriing of Ught 2rrt1nz DiDd lEU Lwpj lmd 7r J) WLL olhT $hlil1g prrltwl
Twdiflg of of4 SiJpplk-s and providll$ prindna and 65 35 laniniltmJ sltrce~
Non-coufroUing illterests Non-controrling intel(SlS are measwed tj tleir propO(hOnile $hue Ot the tcquirees identifiabk net asscl III the JCqUiSlOt1 rote Chuegts in t1e Groups imcest in i $ubsiciwty hat do tot rcmltlo a loss of ~)I1a1)l xc accountd for as equity trnramplclions
Tamil-crions eUminnted on c)lwtidaticu lntngtgroup baiances Jue transactions 00 any unrealised income 1nd expenses ari$tng from intrnwgrOU tranSaOiQlls arc eiimmatcd UfiJeaiiHd gaina arising from ITaUstlclions ttlt equity-lKcoUl11uJ IlVtSlCCS are eliminatd 1gamst the investment 10 the extent oftlle Group interest in the inveMee Umaslised loses are eiiminatd II the same VllY us unrvalised gains hit only to Ille eXfeut that there is 10 evidence ofimpaimcentut
Illttn~ts in jOint arrangements iu)d associates Detais ofeach of ttc Groups Hutilrial Joint venlU)s fujltj assoeime~ at the end of the reponing period are 5 [OHOViS
Cmnirycgt PltJporlion qf Compao name infOjwNiIIO1 ewonlup Qltd
vOingjYwer htld by
tiff GrOlp
[I Sewed Cable QntM Tndllg in ele(mHnechmita CGlJ)ptnefllmd plOvicmg WLL rei) services El SWNed Cables )ilMr WLL is
49 JWoo (Wilt 55 tblre of rrofils (losses) hy StHyar lrdl11(rie~ Qal3t Hodirg WLt e 511b8idimy 0 ~he GOllp However (kw 10 ~ feiBtil shareholdergt agreewli pound ellWY has I~)mc a jOm vent( eTdive trmJ l January 20 wllkh is mC(t511rec Il1de the eqJity ngtU1l
rins $tngtdJBI S~ 1idJgt (law Ertity lS engaged l sled (b[iclli0ls Gf0Jp mtllpoundure Ea LC t11cent fl5sodau under cquhy nlctooo
Aamal Company QS c
NOTES TO THE CONSOLIDATED FlNANClAL STA TEMENTS For the year ended 31 December 2013
3 BASIS OF PREPARATION AND SUMMARY OF SfGNlflCA1T ACCO UNTING POLICIES
31 BASIS OF PREPARATION
The consolidated fi nancial statements have been prepared in accordance with lntema tional Financial Reporting Standards (IFRS) and the appLicable requirements ofQalar Commercial Companies law No5 of 2002
The consolidated financial statements have been presented in Qatari Riyals (QR) which is he Companys floclional and presenUll ion currency and have been rounded to tlle nearest Qatari Riyal TIle consolidated financial statements are prepared lUlder the historical cost convention modified to include he measurement a l fair value o f investment properties and available-for-sale investments
32 CHANGES IN ACCO UNTING POLICI ES
The [lccoWiting policies adopted are consistent wilh Ihose of the previous fi nancial year except for the following standards effe ctive for the annual period beginning on or lfter 1 Jlnuary 20 13 These standards and amendments other tM n the impact of (FRS II - Joint Arrnnge menlS noted below did not have aoy malenal impact to the Group
lAS I (amendment) - Presenfalion of items ofother comprehensive income The amendments to IAS I require that an emity present separate ly the items of ltN her comprehensive income that would be reclassified to profit or loss in the future if certain conditions are met from those that would nC ver be reclass ified to profit or loss
lAS J9 - Employee benefits (201) lAS 19 (201 1) changes the definition of short-tenn and other long-tenn employee benefits to clatify the di stinction between the two
lAS 28 (201 f) - fnvesfmem in Associates and Joint ventires lAS 28 (2011 ) supersedes lAS 28 (2008) lAS 28 (2011) makes the foHowing amendments Associues held for sale JFRS 5 Non-current Assets Held for Sale and Discontinued Operat ions applies 10 an investment or a portion of an investment in an associate or a joint venture that meets the criteria to be classified as held fo r sale For any retained portion of the investment tlwt has not beell classified as beld for sale the entity applies the equity method until disposal o f the portion held for sa l ~ After disposal any re tained interes t is accounted for using the equity method if the re tained interest continues to be an associate or a joint venture and 0 0 cessation of significant influence or jo int conltOl even ifan investment in an associate becomes an investment in a joint venture or vice versa Ihe entity does not fe-measure the retaincd interest
Amendments ft) fFRS 7on ofseftingjil1ancial assels and jinancialliabilities (2011) Disclosures - O ffsetti ng Financial Assets and Financial Liabilities (amendmems to FRS 1) introduces disclosures bout Ihe impact of oetting arrangements on an entity s fin ancial position Based on the new disclosure requirements the Group has to provide inforroation about what amounts have been offset in the consolidated statement of fimmcial position and the nature and extent of rights of set o ff under master netting aITlngements or simi lar a1Tlngernents
fFRS 10 - Consolidate1 financial SIOlemenlS and lAS 17 Separate Fillancial SfalemenS (2011) [FR S 10 introduces a single control model to determine whether an investee should be consolidated FRS 0 replaces the parts of previQlSly exis ting lAS 27 Consolidated and Separate Financial Statements that dealt wi th consolidated fin ancial statements and SIC-12 Consolidation - Special Purpose Entities This new contro l model fo cuses on whether the Group has power over an investee exposure or righlS to variable rerums from its involvement with the in veSlee lnd abili ty to use its power to affect those returns The Group has amended its accounting policy on consolidation in line with requirements of TFR S 10 and has re-assessed its consolidation conclusion
[FRS 12 - Disclosures ofimerests ill other entities IFRS 12 brings together into a single Sfandatd all the disclosure requirements about an enti ty s interests in subsidiaries jo int arrangements associates and unconsolidated structured entities It requires the disclosure of infonnation about the nature risks and financial effects of these interests
II
Aamal Company QSc
NOTES TO THE CONSOLIDATED FTNANClAL STATEMENTS For the year ended 3 1 December 201 3
3 BASIS OF PREPARATION AND SUMMARY Of SIGNIFICANT ACCOUNTrNC POLICIES (continued)
32 CHANGES IN ACCOUNTING POLlc ms (coDtinued)
IFRS IJ Fair ~alue measuremetll TFRS 13 provides a single source of guidance on how fair value is measured and replaces the faif value measurement guidance tha i is currently d ispersed thIo tlghool [FRS It unifies the definiti on of fair va lue as the price that would be received 10 sell an asset or paid to transfer a liability in an orderly transaction between market participants a t the measurement dale It replaces and expands the disclosure reltjuiremenlS about fair value measurements in other IFRSs including TFRS 7
Improvements (0 IFRSs (20 ) Improvements to IFRS issued in 20 11 contained numerous amendments to IFRS that the IASB considers nonshyurgent but necessary Improvements to lFRS comprise amendments that result il) accounting changes to presentation recognition or measurement purposes as well as tennioology or editorial amendments related to a varie) of individuallFRS standards
During the period the Group has adopted the fo llowing new s tandard which became effecti ve for the annual periods beginning on I January 201 3 which had a materi81 impact to ule Group
IFRS II Joint AlTwlgements As a result of adopting IFRS II the GrOlp has changed its ltlccoUJ)ting policy for interests in jo int a rrangemeots Uuder rFRS 11 the Group classifies its interest in jo int arrJngements as e imer j oint operations or joint ventures depending on the Groups rights to the assets and obligations for the liabil ities ofthe arrangements When maldng this assessmenl the group considers the strucltire of the arrangements the legal fonn of any separate vehicles the contrac tual tenns of the arrangements and other fact s and arrangements Previously the structure of tbe a rrangement was the sole foc us of classification The Group has re-evaluated its involve men t in ils o nly joint a rrangement El Sewedy Cables Qatar WLL ltlnd has recla ssified the investment from jointly controlled entity to joint venture Also the Group has discontinued with re rrospective effect the use o f the proportionilte consol idation method and adopted the equity method to account for joint venture in accordance mth IFRS I I
Summary oquulllitative impuct The following tables summarises the materia l impac ts rcsulting from the above change in accounting polic ies on the Groups financ ial position profit o r loss and cash flo ws
Effect of chnnge in 31 Decemb er2012 accounting policy
Cunem assets (278 880441 ) Non-current assets 1295 1346 Total assds (265929095)
Current liabilities (265072694) NonmiddotcWTent liabilities (856401) Total lin bill ties (265929095)
For the year ended 31 December 2012
Profit for the year
Net chflllge in cash and cash equivalents dlUing the year (99696J)
12
Aamal Company QSc
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 3 I December 2013
3 BASIS OF PREPARATION AND SUMMARY OF SlGNlf[CANT ACCOUNTING PO LICI ES (continued)
33 lASB STANDARDS AND lNTERPRETATIONS ISSUED BUT NOT ADOPTED
The following lASB standardsamendments hJve been issued but are not yet mandatory and have 1l0( been etrly adopted by the Group
Standard
Illterpretotion COnem EffeClive dale
TfRS9 Financia l InstrumentS (new standard) I Januruy20 17
IAS 32 Financia l Instruments O ffsetting (amendment) I January 20 14 JAS 36 Financia llnslnnnents Disclosure - non-fi nancial asse ts (amendment) I January 2014
The Group is considering the implications of the above standards and the till1ing (If adoption by the Group
34 SUM MARY OF SIGNIFICAJT ACCOUNTING POLICI ES
Bu siness combinnriO llS The Group accounts for business combinations using the acquisitio n method wben connol is Imasferroo to the Group The consideration ITansrerred n the acquisition is generally measured at fa ir value as are the identifiable net assets acquired Any goodwill that arises is tested annua lly for impairmeot AllYgain on a bargain purchase is recognised in pro fit or loss immediately Transaction COStS arc expensed as incurred except if rehated to the issue of debt or equity securities
The considera tion transferred does nOt include amounts related to the settlement of pre-existing re lationships Such amounts are recognised in profit or loss
Any contingent consideration payable is roeasured at fair va lue at the acquisition date If the contingent consdicrntion is classified as equity then it is oote nmeasured and settlement is accounted for within equity Otherwise subsequent changes in the fa ir value of the contingent consderafion are recognised iu profit or loss
Cash a nd eash equivalen ts For the purpose of the consolidaled statement or cash flo ws cash and cash equivalents consist of cash and bank balaoces ruld short teJTIl bank deposi ts wi th an original marurily of three months or less net of outstanding bank overdrafts
Accounts receivable Accounts receivable are stated at originill invoice amount less an allowance for any uncollectible amounts An estimate for doubttit debts is made when collection of the flilt amount is no longer probable Bad debts are wntlen off when (here is no possibility o f recovery
Inventories Inventories are stated at the lower of cost and net realisable value Costs are those expenses incurred in bringing each product to its present location and condition
Goods ror resalework in progress - Cost of di rect materials aJld labour plus attributable overheads based on a oormallevel ofac1i vity
Raw material and spare pan s PlIlchase cost on a weighted average basis
Net realisable value is based on estimated selling price less any further costs expocted to be incurred to completion and disposal
13
Aama Company QSc
NOTES TO THE CONSOLIDATED FINANC IAL STATEMENTS For tbe year ended 31 December 20 13
3 BASIS OF PREPARATION AND SUMMA RY OF SIGNIFICANT ACCOUNTfNC POLI CIES (contin ued)
34 SUMMARY OF SIGNIFICANT ACCO UNTLNG POLICIES (continued)
Interests in equity-aecoupled inveslecs The Groups interest in equity-accounted investees comprise interest in associates and joint venture
Associates are lhose entities in which the Group has significant influence but not control or joint control over the financia l and operating policies A joint vennu-c is an arrangement in which the Group has jo int ool1lrol whereby the Group has rights to the net assets of the arrangement rather thall rights to its assets and obugations for its liabilities
InlereSIS in associates and the joint venture are accoliDted for using the equity method They are recognised initially tit cost which includes transaction costs Subsequent to ini tial recognition the consolidated financ ial stateme nts ioc lude the Groups shrre of the profit or loss and other comprehensive income of equity-accounted investees unti l the dalc on which significant in Lluence or joint control ceases
The reponing d~les of the equity-accounted investees and the Group are identical and the equi ty-accounted investees accoWlting policies confonn to those used by the Group for like tmnsactions afld events in similar circumstances
Investmefl t properties umd aod buildings are considered as investment properties only when they are being held to earn ren tals or for capital appreciation or fo r both
Investment properties are measured ini tia lly at cost including traosaction costs and borrowing costs that are directty attributable to construc tion o f the 8sseL The carrying alRount includes the cost of replacing part of an existing investment property at the time that cost is incurred jf toe recognition cri teria are mel and excludes the costs of day-to-day servic ing of an investment property Sub~quent to inilial recognition investment propert ies are slated at fa ir value which reOects market conditions at the reporting date Gains or losses arising from changes in the fa ir values of investment properties are included in the consolidated statement of income in the yeltl r in which they arise
Investment properties are derecognised when either they have been disposed off or when the investment property is pennanently withdrawn 1T0m use and no fu ture economic benefit is expected from its disposal Any gains or losses on the retirement or disposa l of aD investment property are recognised in the consolidated statement of income in the year of retiremeOl or disposal
Property under construc tion is dealt with under lAS 40 and rttorded at cost less accumulated impairment losses until either its fair value becomes relia bly detenninable or cons(TUction is completed (whichever is earl ier) At that time it is reclassified as inves tment property and a fa ir value adjustment is recognised in the consolidated statemenlof income
Transfers are made to or fro m in vestment property onl y when there is a change in use For a transfer from investmen propeIT) to ovmer occupied proreIT) the deemed cost for subsequent accounting is the fair value at the date of change in use If owner occupied property ~omes an investment property the difference between the canying value aoo the fair value at the date oflransfer is rttognised as a revaluation reserve in the equity and is released to the consol idated sta tement of income llpon disposal of such propcny
14
Aamal Company QSc
NOTES TO THE CONSOLIDATED FrNANCIAL STATEMENTS For the year eDded 31 December 20 13
3 BASIS OF PREPARATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLI CIES (continued)
304 SUMMARY Of SIGNIFICANT ACCOUNTING POLICIES (continued)
Property plant and equipment Property plant and equipment is stated at cost including borrowing costs that are eligible for capitalisation and excluding the costs of day-to-day servicing less accumu lated depreciation and any imp~innem in value
Depreciation is provided on a straight line basis on all propelT) planl and equi pment The rales of depreciatioo are based upon the following eSImnelt useful lives
Buildings 20 years Leasehold improvements 2-8 years Truck mixers and motor vehicles 4-1 5 years Plant and ITIJchioery 8-2 5 years Furniture fixtures and office equipment 3-5 years Computers and related software 3-5 years Capital work in progress Not depreciated
The carrying amounts are reviewed for impain nellt when events or changes in circumstances indicate that the carrying value may not be recoverable If any such indication exists and where the carrying values exceed tbe estimated recoverable amouot the assets are wri tten down to their recoverable amount being the higher of their fair value less costs to sen and their value in use
Expendirure iocurred lO replace a component of an item of property plaot and equipment that is accotmted for separately is capitalised and the carrying amount of the component that is replaced is written off Other subsequent expenditure is capitalised only when it increases furure economic benefits of the related item of property plant and equiproent Al l other expendirure is recognised in the consolidated statement of income as the expense is Incurred
An item o f property plaot and equipment is dereeognised upon disposal or when no future economic benefi ts are expected from its use or disposal Any gain or loss arising on derecognilloo of the asset is iocluded in the consolidated stalemeot o f income io the year the asset is derecognised
The asset s residual values useful lives and method of depreciation are reviewed and adjusted if appropriate at each rnancial year end
Borrowing costs Borrowing costs direc tly attributable to the acquisition constmction or production of an asset that necessarily takes substalltjal period of time 10 get ready for its intended use or sale are capilalised as pan of the cost o f lhe respective assets All other borrowing costs are expensed in the year they incur BOlTOwiog COSts consist of the interest and other costs that the Group incurs in coomction with the borrowing of fund s
Accounts paytlble and accruBls Liabilities are recognised for amounts to be paid in the fuMe for goods or services received whether billed by the supplier or not
Interest bearing loans Bnd borrowings Interest bearing loaos and borrowings are recognised ini tiaJy at fai r value of the amounts borrowed less direc tly attributable transaction costs Subsequent to initial recognition interest bearing loons and borrowings are measured at amortised COSt using the effecti ve interest method with any differences between the cost and tinal settlement values being recognized in the conso lidated statement of income over the peliod of borrowings Instalments due within one year aI amortised cost are shown as a ctuTentliabiliry
Gains or losses are recogTlised in the consolidated sialement of income when (he liabililies are derecognised Interest relating (0 imerest bearing loans and borrowings is expensed in the year in which it is incWTed e(cept those qualify for capitalisation
15
Aamal Company QSC
NOTES TO THE CONSOLIDATED FfNANClAL STATEMENTS For tbe year eoded 31 December 201 3
J BASIS OF PRpoundPARATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
34 SUMMARY Of)SIGNIFICAtlT ACCOUNTING POLICI ES (continued)
TClaot deposits Tenant deposit liabilities are initially recognised at fair value and subsequently measured at amortised cost where material Any di fference between the initial fair vllue and the oominal amount is [eluded as a component of rental income and rocognised on a straight-line basis over the lease term
Derecognition or fiolocial nsstls and liabilities
a) Financial assets
A fi nanCIal asset (or w~re apphcabJe a part of a fin ancial asset or part of a group of SImilar financIal assets) IS derecogmsed where J bull The n ghts to receIve [5h flo ws from the asset have expIred bull The Group has trans f rred Its rights to receive cash flows from the ass or has assumed an obhg811On to pay the
reltelved cash flows I full Wlthout mfl tenal delay to a third party under a pass-through arrangement and elther (3) the Group has Ira sferred substantially aIthe nsKs and rewards of the asset or (b) Ihe Group has neuher transferred nor relain substantially ai the n sks and rewards of the asset but has tnlnsferred control of the asset
When the Group has tTa~fened its rights 10 receive cash flo ws from an asset or has entered into a pass-waugh arrangement and has nejlher trmsferred nor reta ined substantially all of the risks and rewards of the asset nor trnnsferred control of the asset the asset is recogoised to the extent of the Groups cOlilinuing involvement in Ihe
In that case the Group at 0 recognises an associmed liability The mnsferred asset and ihe associaled liabi lity are measured 00 a basis thai flects Ihe rights lnd obligations that the Group has retained Continuing involvement that takes the form of a guara tee over the transferred asset is measured at the lower of the original canying amount of Ihe asset and fbe maxim amoun o f consideration that the Groop could be required to repay
b) Financialliabiliti
A financial liabili ty is defogniSed when the obligation under the liabil ity is discharged or cancelled or expires Where an existing fio8 1lci I liability is replaced by another from the same lender on substantia ll y d ifferent lenns or the terms of an existin liabili ty are substantia lly modified such an exchange or modification is treated as a derecognition of the orig~al liabili ty and the recog1Jitioil of a new liability and the dirference io the respective carrying amounts is reco ised in the consolidated Slatement o f income
Impalr meot ood uncollec ibility of fina ncial assets An assessment is made al each repon ing date to determine whether there is objective evidence that a speci fic financial asset may be impaired If such evidence exists allY impainneOl loss is recogoised in the consolidated statement of income ImT t is detemtined as fo llows
(a) For assets earned a t fair value impainnellt is tbe difference between cost and fair va lue (b) For asseamp carried at COSt impairment is the difference between cost and lIle present value of future
cash flo1S discounted at lhe current market rate of rdurn for a simi lar finan cial asset (0) For asseq carried al amortised COSt impainneot is the difference between canying arnOWll and lhe
present Value of future cash flO M discowlled at the original effective iDlerest rate
Provisions Provisions are rewgnised hen the Group has an obl igation (legal or COnslnlctive) aris ing fro m a past event and the costs to settle the obl igalio are both probable and able to be reliably measured
16
Aamal Company QSc
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 31 December 2013
3 BAses OF PR EPARATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICI ES (colltinued)
34 SUMMARY OF S IGNIFICANT ACCOUNTING POLICIES (continued)
Employees eod of service benefits The Group provides end of service benefits to all employees in accordance wi th employment contracts and Qatar Labour Law The entitlement to these benefits is based upon the employees final salary aocl length of service subject to the completion of a minimum service period The expected costs of these benefits are accrued over the period ofemployment
Revenue Revenue is recognised to the extent thal it is probable that the economic benefits will flow to the Group and the revenue call be reliably measured Revenue is measured al the fair value of the consideration received excluding discoWlIS rebates and duty The following spec ific recognition criteria must also be met before revenue is recognised
Sale ofgoods Sales are recognised whcn significant risks and rewards of ownership of the goods have passed to the boyer and the amount of revenue cao be me3sured rcli3bly
Rental income Rental incorne from investment properties is accoWlted for on a time proportion basis over the period of tenancy Incentives for leases to enter into lease agreements are spread evenly over the lease teon even if the payments are not made 0 0 such basis Income arising Tom expenses recharged to tenants is recogn ised in the year in which the expenses can be contrac tually recei ved Service charges aud other such receipts are includcd gross o f related cosls in revenues as the Group acts as principal io this regard Premiwns received to terminate leases arc recognised in the consolidated statement of income when they arise
Service income Service income is recognised when the service is rendered and the outCQrne of the transactions can be estimated reliably
COlimission Commission is accounted for on an accrual basis when the right 10 receive the income is established
become on tra~el agencies [ncome on travel agencies is accounted for in the year in which the airline tickets are sold
IIIeresr income Joterest income is recognised as the interest accrues using the effective interest Clle method
Foreign currencies Transactions in foreign currencies ate recorded al tbe rale ruling at the date of the transaction Monetary assets and liabi lities dcoomioated io foreign currencies ace retranslated ill the raLe of exchange ruling at the reponing date All differences are recognised in the Statement ofinconlC
Use of estimates The preparation of (he Groups consolidated financial sta temenls in CQnfonnity with Intemltional Financial Reponing Standards ([fRS) requires management 10 rnake estimates and assumptions that affect the reponed amounts of assets and liabilities and disclosure of contingent asscts and liabili ties at the rcporting date and the reported amoUlils of revenues and expenses during Ihe reponing period Although these estimates are based on managements best knowtedge of current events nnd actions acnm results may ul timately differ fro m those estimates (Significant asswnptions nccounting judgments and estimates used in preparing these coosolidated fina ncial sta temenlS are disclosed in Note 31)
The estimates and underlying assumptions are reviewed regularly Revisions to accounting estimlIes are recognised in (he period in which the estimate is revised if the revision affects only that period or in th~ period of the revision and future periods if the revision affects both current and fu ture periods
17
Aamal Company QSC
NOTES TO THE CONSOLlDA TED FINANCIAL STATEMENTS For tbe year cnded 31 December 2013
3 BASI S OF PREPARATION AND SUMMARY OF SrGNIFICANT ACCOUNTING POLICIES (continued)
34 SUMMARY or SIGNIFICANT ACCOUNTING POLI CIES (continued)
Fair va lues A number of Groups accounting policies and disclosures require tJ1 C measurement of fair values for both financial and non-financial assets and liabil ities The Group has an established control framework with respect to the measuremeot of fair values When measuring the fair value of an asset or a liabili ly the Group uses market observable data for (be valuatiOD Fair values are categorised into different levels in a fair value hierarchy baCd on the inputs used in the valuation lechniques as follows
i) Leve l I - Unadjosted quoted prices io active markets for identica l assets and liabilities ji) Level 2 - Otheqobservable inputs not included within level 1 of the fair value hierarchy ii i) Level 3 - Unobtervable inputs (including enti ty s own data which are adjusted if necessary to retlect the
assumptions market participnllts would use in the circumstances) The Group recognises tralnSfers between levels of the fair value hierarchy at the end ofthe reporting period during which the change has ocdWTed_
Treasury shares When share capitl recognized in equity is repUIchased (by the Company or any of its subsidiaries) the amount of the consideration paid which includes direa ly altributable COSIS is recognized lIS a deduction from equity Wheo treasury shares are sold or reissued subsequently the amount received is recognized as no increase in equity and the resulting surplus or deficit on the transaction is presented io share premium
18
4
Aamal Company iQSc
NOTES TO THE ONSOLlDATED FINANCIAL STATEMENTS For the year ended 31 ecember 201 3
BUSINESS CO~BlNAnON
Acquisition o f Culf ROks Company VLL On 1 January 2012 the roup acquired 51 oflhe voting shares of Gulf Rocks Company WLL (Gul f Rocks) a limited Iiabiliry campan incorporated in Qatar and registered UJKier conunercial registration number 2249) The acquisition was made thT ugh Ci-San Trading WL L a subsidiary which is 50 owned by Aamal Group
I
The fai r val ue of lbe ideltifiable assets and liabilit ies of Gulf Rocks Co mpany WLL based on purchase price allocation exercise condlcd by tbe management as at the date of acquisition WJ S as follows
Fair value recognized on
acquisition QR
Assets I Cash and bank balances 14005495 ACC QUOiS receivable and wePayments I 749383 Amouots due from related plrties I
I oveotones
48311 190 5124 270
Available for sale investm~nlS 1985245 Plant and equipment 6769 17
81852500
Liabilit ies Accounts payable aJld accll1als 4724446 Amounts due to related parties 385070 Employees end of serviccibenefits (Note 15) 349272
5458788
Total identifiable net a5sellf
Purchase consideration trasferred Non-controll ing intereSt az-ising on business combination Bargain purcha5c gain rc~u ting from the tcquisilion
Allalysis ojcash flows OIl acquisition Net cash acquire11 Nith the subsidiary 14005495 Cash paid (30600000)
(16594505)
On I September 20 12 the Company acquired the balance 49 nfthe equiry of Gulf Rocks Accordingly the Group has 74 5 effective holdin4 in Gulf Rocks as at the reporting dale The excess nfthe purchase cons ideration over Ihe fair value o f net assets of GuJf Rocks acqui red from the nnn-controlHng interest has been recorded directly in the retained earnings of tbe Gr6up as at 31 December 201 2
QR Purchase consideration 404 10000 Less fuir value of oet asset~ acquiroo from the non-controlling Interest holder (39842792) EXce5s of purchllse cons idf ration over the fair value of net assets a(q uired 567208
19
5
Aamal Company QSC
NOTES TO THE (WNSOLlDATED FfNANClAL STATEMENTS For the year eoded 3 ) December 2013
CASH AND CASH EQUIVALENTS
For the pmvose of consolidated statement of cash flows cash and cash equivalents comprise the fo llowing balances
lon 2012 QR QR
Cash and bank accounts 330333904 282272895 Short lenn bank deposits 105802852 85608396 Cash and bank balances 436136756 367881 291
Bank overdrafts (6836280) (2885090)
Cash and cash equivalents 429300 476 364996120 1
The short tenn bank deposits are made for varying periods between one day aod three months depeoding on Ibe immedifltc cash requirements of the Group and earn interest at the respective short term deposit ra tes
6 ACCOUNTS RECEfVABLE AND PREPAYMENTS
2013 2012 QR QR
Trade aCColUlts receivable 411 011 567 345260657 Advances 0 suppliers and prepayments 50787921 629389J 5 Retention receivables 36217081 56943030 Other receivables 12073270 17 139173
5tO089839 4 82 28 1775
As at 31 December 2013 trade accountS receivoble amoWlting to QR 2690 1412 (201 2 OR 24984025) were impaired Movements in the allowance for impairment of trade aCColmts receivable were as follows
2013 202 QR QR
At 1 January 24984025 1 877085 Charge for [he year (Note 21) 2294590 13613 120 Amounts wriuen off (19949) (117368) Unused amotmts reversed (357254) (388812)
At 3 t December 26901412 24984025
20
6
1
lamal CompanyQSC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMEltS For the year ended 3 J December 2013
ACCotNTS RECEIVABLpound AND PREPAYMpoundNTS (contillued)
As at -1 I Dtcemxt the ageirg of unimpaired (ltlde accounb iltcivabk was as follows
P(HI duo
nor Up to 30 31-60 61middot90 Yi-jSj gt flO Tota impoirlt-fl days days days day doys
QR QR QR QR QR QR QR
1l13 411OJl$67 25l981960 32312165 2140966 19351fi43 16f)76888 60148545 2012 345260657 1695159B6 493lt)8566 2356$954 19494369 16908414 66374363
1JJJirtpai~ed receivable are expected no th bil5tS of past experienn) 10 be fully fcCi)evbc H is not the pngtctlce ofthcent Group to oblum collaleral over recejvablcI_
AMOLNTS DUE FROyl REL-TEO PARTIES
Name
AI ~aisnl Holding Company V_LL E Seweo Cabtes Qatn WL L Cnild -ftt Cvmlllny Al hz Retll E$vt rWesnnim Company WLL~ AllaZi Real Estale BrAnch EI Sewedy Electric Egypt WLL MuincrDJ1Ce Mwagmvont Group Qat3r W LL Good fe Cheffilt - The Pcarl
BuderPhtrnacy Al Faisallnlemadonal Tnl(i and Investment Company WLL AI-rabia Land Trnr~PQltit1g Company rLL ro Sewedy CabLes - Kuwuit Gcentttco hlttrnJmJilI Frijns StHytural Steel Middle East WLl Winer Wunderand Company WLL Al FtOH1H for Investment amp llllemtiOl1a Trading COntpAny WJ_L Q)lar Bahrain lmerOlnionai Cnero3 WLL Gulf EngJisb Sltl-Qo] Al Rayyao Tourism lve$lrnent Company W LL Other relater purties
2013 2012 QR QR
15412-1064 ll941Y70 34644615 ~li96858l
[()0405 14-45012 51 59197 9538116 15514113 4014727 236824$
1867526 LSOfd22
8(1012 10435r 311650 746395
15023 204450 459829
2iYHi 244940 186750
152170 143440 33500 7768(1
6259 1459lt) 758962-1
__2~61g~~_ 1~95Ji
bull 214109950 171525363
--__ shy
7
8
9
Aamal Company QSc
NOTES TO THE CONSOLIDATED FfNANClAL STATEMENTS For the year ended 3 1 December 2013
At10(JNTS DUE FROM RELATED PA RTIES (continued)
NO les (i) Transactions witll related parties are eam ed out through open account and Directors do not consider any
receivables to be past due or impaired
(ii) Related party transactions ore disclosed ill Note 26
INVENTORIES
Goods for rew le Raw materials and spare pans Work in pTOgresS Goods in transit
Less Provision fOI obsolete and slow moving invenlories
1013 QR
165499699 38388307 19944678 9671 8553
320551237 (3851692)
31 6699545
Movements in the provision for obsolete and slow moving inventories were as follov~
At I January Charge for the year (Note 19) Reversals Amounts wri tten off
At 31 December
E QUITY-ACCOUNTED INVESTEES
TIle Group has the followiog invesllnenfs in equity-accounted investees
Interests in joint venrure Interests in associa tes
At 31 December
G roup s snare of profits fr om the equity-ncco unted iovcstees arc AS follows
Profit share from in vestment iojotnt venture Profit share from investment in associates
202 QR
232597650 36608394 30622960
10521 9695
405048699 Q 145826)
40 I902873
203 QR
3145826 1 380617 (535695)
( 1139056)
385 1692
20 12 QR
2795992 2208263 (137995)
( 1720434)
3 145826
2013 QR
2012 QR
129462184 3644723
124124803 2545188
133106907 12666999 1
17330368 22869454 1169533 534050
18499901 23403504
22
10
Aama Company QSC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 31 December 201 3
9 EQUITY-ACCOUNTED INVESTEES (continued)
Counlry of incorportllion
Relationship Proportion ofownership and lotilfg power held by the Group
203 2012
EI S~wedy Cables Qatar W LL Frij ns Structural S teel Middle East WLL Al Ftfazdaq Company WLL
Qat~
Qatar Qatar
loint venture Associate Associate
55 20
55 20 35
Note With effect from 1 January 20 13 the mlnagemeot of the Group has reclassified the investment in Al Farazdaq Company W L-L from investment in associate to investment in subsidiary This is based on the transfer of share holding by the other shareholder whereby the conlroi o f AI FOl razdaq Company W LL bas been assigned 10 tbe Company
INVESTM ENT PROPERTIES
a) Reconciliation of carry ing amounl 2013 202 QR QR
AI I January 611334701 8 555 1835348 Additions 9568047 1727191 87 Transferred from property plant and equipment (Note II ) 34519828 Net gain iTo m fa if value adjlls tment 245051107 388792483
At 31 December 6402486000 6 11334701 8
b) Measurement of fair value
The fair values of the Groups inveS hnent properties as at 31 December 201 3 and 3 1 December 2012 have been arrived al on the basis of valuations carried Ollt on the respective dates by professionally qualified independent valuers not related to the Group The independent valuers have appropriate qUlli ficatioos and (eceJ11 experience in the valuation of properties in fhe relevant locations The fa ir value WltlS determined based on market comparable approach that reflocl s recent transaction prices for simillt1r properties and discounted cash flo w and income approach techniques
Details of the Group s iovestment properties and infonnation about the fa ir vn lue hierarchy as at ) I December 20 I J are as fo llows
IIvestment propenies
Level 3 fair vallie
Al I Janu ary 6 [ 13347018 Additions and trans fers from property plant and equipment 44087875
Gain included iu prom and loss Net gain from fair value lt1djuslmem 245051 107
AI J I December
The Group recognizes transfers between levels of fair value hierarchy as o f the end of the reponing period during whicb the transfer has occurred There were no transfers between the fai r va lue hierarchy during the year
23
10
Aamal Company QSc
NOTES TO THE ONSOLlDA TED FINANCIAL STATEMENTS For the year ended 3 I ecember 201 3
LNVESTM ENT ROPERTIES (contin ued)
b) Measuremen t 0 (air value (conti nued)
Vau t ion technique an significant unobservable in puts
The valuer has applied t e income capitali zation discounted cash flow and comparab le methods to detennine the market value of the lnve tment propen ies Significant unobservable inputs used included expected market rental growth rates (an average 425) occupancy rates (approximately 90 to 95) and risk adjusted discount rates (approximately 5 to 7 0) M y significant change in these inputs can impact lhe fair valuation of investment propcnies
24
Aamal Company QS c
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For che year ended 31 December 2013
11 PROPERTY PLAi~T AND EQUIPMENT
FumilUre Truck mixers fIXtures and Complllers
Leasehold and maor Plum (fd office and relaed eapiowork Buidings improvements vehicles machinery eqllipmcni sofMore in progmiddotcss Total
QR QR QR QR QR QR QJl QR
At I January 2013 137870126 371 88 132 9595813 1 262536261 19 580954 14864 385 561 32447 6241 30436 Additions 948)65 2618 100 5367399 859061 111 5268 137147581 148055774
Relating to d isposalswrite-off (1042642) (4390496) (77157L) (589150) ( 184075) (6977934) Transfer from capilal work in progress 1505 310 164 336 3601776 ( 150000) 1182741 (6304 163) Transrer to investment properlies (Note (0) (345 19828) (345 19828)
At J I Dttember 201 J 139375436 J7 258~ ~1 85735 270733865 19700865 169783 19 152456037 _73068~448
Depreciation AI I January 2013 16133915 J6902 529 49087707 68783 065 11 980009 tl71 595 3 174603 178 Charge for the year 7059805 3237150 5390767 12249797 2849162 1768823 42555504 Relating 10 disposalsJvri te-off (664709) (4 3 1716 1) (724322) (552939) ( 18 1993) (6441 124)
At 31 December 201 3 23193 720 19474 9 70 50161 313 90303540 14276232 13302783 2 107 17558
Net carrying amounts At 31 December 2013 116181J16 _17783221 44024422 180415325 5424633 3675536 __l2456O37 JJ9970~890
Notes (i) Depreciation charge for the year amounting 10 QR 33 164382 (201 1 QR 3303091 6) is included in tbe direct costs and an amount of QR 60055 (20 12 QR 36939)
has been capiulised under capital work in progress
(ii) The capital work in progress includes capitalised borrowing costs amounting to QR 125645 (20 12 QR 15358)
(ii i) The buildings are constructed on a plot ofland taken on a loog term operating lease
25
Aamal Company QS c
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 31 December 201 3
II PROPERTY PLANT AND EQUIPM ENT (continued)
C05I~
At 1 January 2012 Additions Acquired through business combinations (Note 4) Relating to d isposalswrite-off Transfer from capital work in progress Transfers
Buildings QR
137434400 435726
Leasehold improvemellls
QR
38137377 446J 04
144 103 ( 1539452)
Truck mLCers and molO
velricles QR
83427661 11464679
1697609 (631824)
Plant and machinery
QR
249335437 97264 85
35 14 132 (99498)
59705
Furniture fir ures and
office equipmem
QR
22845309 667586
192042 (3696457)
98000 (525526)
Computers and related
software
QR
158 19519 87 14 14
141837 (266 1733)
908078 (2 l4730)
Capitol work in progress
QR
12104889 451 53265
( 1065783) (59924)
Total (JR
55910459 8 68765259
5689723 (862 8964)
(800180)
AI 31 Dttember 2012 137870) 26 371881 32 95958 13 1 262536261 19580954 14864385 56132447 624 130436
Depreciation AI Jaouary2012 Charge for the year Acquired wough business combinations (Note 4) Relating to disposalswrite-off Transfers
9144666 6989249
)4 3 16620 3410618
144103
(96 812)
42558404 548 1613
1671942 (6242 52)
44555 290 2 1398849
2890797 (6 187 1)
12392584 3 182899
169005 (3558466)
(206013 )
12235266 2077633
136959 (2627283)
(J 0662)
135202830 42540861
5012806 (7840684)
(312635)
At 3 L December 201 2 161339J5 16902529 49087701 68783065 11 980009 11715953 174603 178
Nel canying amoWlts
At 31 December 201 2 12 173 6211 2028560 3 46870424 193753 196 7600945 3148432 56132447 449527258
26
12
13
Aamal Company QSC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 31 December 20 13
ACCOUNTS PA YABLE AND ACCRUALS
Trade accouots payable Advances from customers and tenants Accmals Social and sports activities levy Other payables
AJIOUNTS DUE TO RELATED PARTIES
Name
Arab Compaey for Fiber Products EI Sewedy EIC( lric Ho lding Egypiasl Egypt Egyptlech Egypt United Industri es Company WLL Johnson Controls Air condi tioning aod Refrigeration Qatar WLL pound1 Sewedy Cables Egypt Johnson Controls Air conditioning and Refrigeration rNC Dubai United Wire Company WL L Gelteo Company W LL - Gelteo Refr igera tion and Airconditioo ing CampC Lightway nc AI Shaab Group of Companies Other related pruties
NO M Related party transactio l)s a re disclosed in Note 26
2013 QR
320017657 30486837 26924669 41 761 843 25855567
445046573
2013 QR
18517474
4902528
6531231 6404578 3215821
2825884 75 7825
3467288 263715
1313247
48199591
2011 QR
26716268 1 27410234 222575 76 28954726 33)33852
379119069
2012 QR
18380528 91458 82 54 13849 1 11 6 135 5374039 35291 2020359 1693323 1064744
670 179
11 0873 12 18650
49737757
27
14
Aamal Company QSC
NOTES TO THE CONSOLIDATED f fNANCIAL STATEMENTS For the year ended 31 December 201 3
INTEREST BEARING LOANS AND BORROWINGS
NOles Malilrify
2013 QR
2012 QR
CoMl Loan 2 Loan ) Loac4 Loan 5 Loan 6 Loan 7 CoMB Loan 9 Bills discounted
(0 (ii) (iii) (iv) (v) (vi) (vii) (viii) ( ix) (x)
lune2014 Seplember2014 January 2015 November 2016 December 20 16 November 2017 Jllne20 l J December 20 7 OClober 20 19
172070387 440000000 50544000 40261 621 81387109 19920036
6] 43890 62626967 42522794
915676804
298324180 440000000 10 J088000 57955030
100 168750 2 1300492
407728 1 782871 1
35000000
1065742444
Less Defe rred finatlcing cost (771 503) (897148)
914905301 1064845296
Presented in the consolidated statement of financial positioo as fo llows 20)3 QR
201 2 QR
Current ponion Non-current ponion
749520820 165384481
825568489 239276807
914905301 1064845296
The dete rred financing costs consSt of arrangement fees The movements m the deferred financing costs were as fo llows
203 2012 QR QR
At I January 897148 332 661 Addjtions during the year 1 062565 912506 Amortised during the year (218amp210) (34801 9)
At 3 1 December 771503 89 7148
28
Aamal Company QS C
NOTES TO THE CONSOUDATED FlNANCIAL STATEMENTS For tbe year ended 31 December 2013
14 INTEREST BEARING LOANS AND BORROWINGS (continued)
Nolec
(i) Loao I i USD 93000000 impon 10n moi lily obtoined to refimnee he Icne~ of edit The 10 IT interest at commercial fate and the interest is paid at monthly intervals The fucility is repayable within ISO days including the usage period under letter ofc redits
(ii) Loan 2 is a secured bridge loan obtained to settle an existing loan and working capital requirements of the Company The loan carries interest al coOlJllercial rates and interest is 10 be paid on quarterly basis
(iii) Loan 3 was obtained for the pWpOse of financing capital ependiture and direct payment to suppliers contractors and 5ub-controctors The 10011 CMries interest at commercial rate and the inte rest is to be paid q Uar1erly The fac ility is repayable in IS quarterly iostallmenls starting I July 20 11 and ending I January 2015
(iv) Loan 4 was obla ined for conSlruclion o r an inveslmenl property The loan is seclJed by 0 primary mortgage over the some property and corporate guarantee of the Aamal Company QSC Tbe loan carries interest at commercial marke t rate and is payable in quarterly instalments
(v) Loan 5 represents a loan fOlcility obtained in two sepnrole tranches amounting to QR 309 825 000 (USD 85 million) for the purpose of refurbi shment and construction of fociJities io one of the investment properties The loan is repayable In 16 equal quanerly instalmcnlS for individua l tranche commencing from March 20 1J The loan carries interest at conunercial rJtes
(vi) Loan 6 represents secured loans obtained ffom a commercial bank in the previous periods for the purchase of heavy equipment and machines and were merged on 15 November 20 12 as a comb ined loan This loan is payable by 59 equal instalments of QR 426000 with (I last inSlalment of OR 438 326 with effect fro m 01 October 201 3 The loan carries interest at commercial market ra tes
(vii) Loan 7 is il tmst receipt banking facility obtained for the purchase of inventories This carried interest at conunercial market rates This loan was full y settled during the year
(vii i) Loan 8 represents secured loans obuined from a commercial bank in the previous periods for the purchase of delivery trucks and machinery and were merged on 22 October 2012 as a combined loan The loan carries inte rest at commercial market Tates and is payable by 59 equal insta lments o rQR 160000 with a last inSlOlmem ofQ R 128000 with effect from 3 1 December 2012
(ix) Loan 9 is an Islamic Financi ng Arrangement obtained for construction o f a manufacturing plam and as o f yearend ba lance represents partially drawn amount out of totil1 facility of QR 655 68000 The loan is secured by joint corvorate guarantee by the shareholders The loan carries profit at Islamic Financing rates and re-payable in quarterly instalments starting from the end of the 24 months gmce period from the date of loan drawn
(x) Bi ll discounting is a loan fac ility from banks The purpose of the arrangement is to discount bills locally and carries interest at current commercia l filte
15 EM PLOYEES END OF SERVICE BENEFITS
Movements in the provision reHectelt in the consolidated SLo1tement of financia l position were as fo llows 2013 201] QR QR
At I Jan uary 18111 763 17877937 Provision made during the year 4056969 4205499 Acquirelt through business combinations (Note 4) 349272 End of service benefits paid during the year (2210756) (4320945)
At 3 1 December 19957976 18 111763
29
Aamal Company Q5C
NOTES TO THE CONSOLIDATED FINANCIAL STATEMETS For tile y~ar ended 31 Dee~mber 2013
16 SHARE CAPITAL
2013 2012 QR Qq
AtI1l1)nud 60000)000 (20 2 544500JJOfn shares ofQR iii Cilch 60i)iQOOlOO 54450lt)0000
21)13 2012 Numher of
siMtS QR shares QR Issued Mtldfully paM At lJamld) 544SfWllOfJ 5445(100001) 495000000 49500000)0 1511C ofbonus S1i1-C ___ 5550~OOO 555000000 49SGOOOO 495000000
At 31 Decenef 6(OOampQllf1(1 ---14450O000 544~OOOOOO
All ampates m~ of a110 clss and caL equal voting rights
17 LEGAL Reuro5ERVE
As required by Qatar Comnertai COfrp7lnies Lav No5 of 2002 lOfp of the profit for the ye1J as a rru1imllli silould be mmsfened to legal re~erve The reserve is lot normay [lytiabe tor distribution except ill he cixcuJUstllrtUS stipulated m the above ~lemi0ntd GIW
IS HEVE1TE
2013 l)n QR QR
Sale of goods 1726893265 i709057~(iO
Renlal income UiO362322 133117509 S-ice income 858695 33940731 CornrrusslOlL Incentives and agency fces 44695S1 422~_632
212259$)33
19 DIRECT COSTS
2013 2)i2 QR
C 051 of inven(feS recognisedlIS an exptns 1522929956 497210830 Dind sL1ries lmd wages 601 [1336 5137856-8 Operating eXpenses on nml estate p~opet1les 36)711316 3041H504 fJepreciatiort (Kate I J) 33164382 B03091pound Operators marhgerrt6nt fees 14508588 li667989 Provisicn Qr obsolete and skwlt moving mvenlories (K)tc 8) 2380617 2208263 Other operating ilxpenses _31~3982 _ 3674946
1702139171 JS9653OI tgt
Aamal Compall-yQSC________________
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For lthe year ended 31 December 20 11
2G OTHER NeOiI
2013 20J3 QR QR
Interest mcume 2824216 2)314392 Profiv( loss) 00 disposal of property plant aoe eqUlpmem 737647 (l7362G) Eargain ptmnJse gain (Kote t) 8360793 MIsceJlaneous income 5723356
2013 2012 QR QR
ManllgetnUI hrQ empl(yees ws 55170302 55lt035middot1 Rent 23596799 2594915 Allowance for impaimlcot oUrsue aCQl1ot$ rc(Xjvalle (Nole 6) 129459(i 11613120 flBumcce ane profcampiitmJI fees 2IU9263 209J902 Corununication OOtHS 1935123 1649155 Trllining tid ouSfjt$s developmccl 950476 L095764 Re]X1in and mainle-nilnce 21)11SflS 2)2 I Poslag-c prjnting acri stationery 610299 541159shyvllsltdlancous expenses _~~~664 1lt2
-~~~ 125162812
22 fIN~lCE COSTS
2013 2amp2 QR QR
Inleres epen~ 42866312 5773U4B Am(vtisJliorgt ofdefcentrred financiog coStS __ 2l)tl26~~ gt3661
44930877----=
58063009
23 BASIC A~n nHUfED EARilNGS PER SHARi~
Basic trdTJogs per hue is caculatid 0y llividing the pwfill0( Ihc year attriouiabk (0- equity roldc-5 of the parent by lhi w~iglwxi avrage number of ordinary shares 0JstandirJg dulting tht_ year During Ihe year lil~ Conpmy i-sued and CBpii3lzed bonus shares lnd awmJingl) me previously ~eportod earnings per shac have blOM restatc(i
20i3 2012
Profit feT the year auributable to Cluity holderlt of the- paren (QR)
Weighted aVCTage number ofshares outstanding during the year (i)
Basic Jd diluted earnings per share (QR) 085
59985U413 shy
~~--~~~~- ~------J 1
23
Aamal Company QSc
NOTES TO THE CONSO LIDATED FfNANC[AL STATEMENTS For tbe year ended 3 l December 2013
BASIC AND DILUTED poundARNINCS PER SHARE (continued)
NOles (i) Th wigh d m nlg urnb of hres foc h P of lruling ~migs pee share h bee kulated
as follows 2013 20J2
QU3lifying shrues allhe begi ll1ling of the year 544500000 544500000 Effect of bonus shares issued and capitalised 55500000 55500000
600000000 600000000
Less T reasury shares (149587) (i357SI)
Weighted average number of shares at the end of the year 599850413 599864249
(ii) There were no potentia lly dilutiw shares outstanding at any time during tbe year and hence the diluted earnings per share is equal to the basic earnings per share
24 COItIMITMENTS
20 1] 2012 QR QR
Estimated capital expenditure approved and contracted for at the year eod but not provided for
Investment properties 2964000 8 139063 Property plant and equipment 16386500 63759762
19350500 71 898825
Operating lease commiIOlenlS under noncancellable lease agreemenlS
Payable wilhin one year 990806 702000
990806 702000
25 CONTINGENT UABILITlES
The Group had the following contingent liabi lities from which it is anticipated thai no malerial liabilities will arise
2013 2012 QR QR
Letters of guaramee 474551239 394255203
Letters of credit 7678499 194299384
NQles
(i) leHlaquogt of gu indud penonmnlaquo tend nd bid bonds d pymenlt g gi to suppliers and contractors by the Group in the ordina ry course of bus iness which will matme within twelve months fro m the reporting da te
(i i) Letters o f credit are provided by lodging documents to the bank tor purchase of trading goods fro m foreign suppliers wruch will maMC within thJee to six months from the date or tile Iransaclion
J2
26
Aamal Company QSc
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year eoded 31 December 2013
RELATED PARTY DISCLOSURES
Related party transactions Related parties represent major shareholders directors and key management persortOei of the Group and entities controlled joimly controlled or signjficamly innueoced by such parties Pricing policies md tenns of these tnlOSaclions are approved by the Group s management
Transactions with related parties induded in the consolidated financial stalemenls were as follows
20lJ 2012 QR QR
Sale o f goods and SClVices 419034048 415225221
Rental income 1980473 2069386
Purchase of goods and services 1591 38018 300835596
Rental expense 21 780G78 23397334
Bargain purchase gain 8360793
Net assets acquired 78803585
Relat ed party bal nnces AmountS due from and due to re lated parties are disclosed in Notes 7 and 13 respectively These balances do oot carry interest and are repayable OIl mulUlUy agreed dates generally within one year
The Group did not record any impairment of receivables reJatiog to amounts due from related pat1ies in either year This assessment is undertaken each fina ncial year through examining the ftnanc ial position of the related party and the market in which the related patty operates
Parent The Groups ultimate parent is Al Faisal Ho lding Company WLL
Compensa tion or key management personn el The remuneration of key management dming the year was as fullows
2013 2012 QR QR
Short-term benefi ts 7904794 1079595 Employees end of service benefits 408934 439776
8313 728 11235727
33
AamaJ Company QSC
NOTES TO THE CONSOLIDATED FINANCIAL 5T ATEMENTS For the year ended t Decernber 2013
Dilling the year 1he Group issued a XHlUS share of 10 928 of the paid tiP share capilal hdd ilS at 31 DiX2mber 2(JJ 2 mnmuning to OR 555000000 using retamed earnings as of3 December 2012 (20l2 Doe share for every ten shues held as of 31 Dcember Oll amuunting 10 QR 495OO()OOO ling reta1ned earmrgs 28 or 31 Decencer 2D II Jshy
18 SEGMENT INFORMATION
For J)iloogement PUIpltJM rhe Group i organised into business unit bused On LlJeir nature of Acttvitics lud nas fonY reportable segments and the Head Oftklt as bllow$
Propert Tbe segntn cOlists of City C~nler Qlta~ Brunch and Aamal Rea Esmte Branch whicb ll[c invoived in lampIiiog the faJ1ities of retail outlet conpex red e5ttlte nve(mltn$ and property remal buines~s
Trading mld distrib-wion The segmeul Involves wholesalB andlor rBtail distribution of phamlaceutlcai and consunable i1ems hume Epplianccs medica equimenl t-Tes ill1d lubricmtlaquo and II1UllitnEl printing The scgn(rtt includes 6c following entities
Eotl Sina Medical Branch
Aaen Medical Braudt
Amcill Troding and DistoolltlqO Branch bull Foot Care (erier HRnd) Good llre Pbannacy Bf4Uch bull Al FllfJdaq COllpafY wJ~L
InduSNol manuacturing TIle s0groent IOvolves Ulahuactrumg whole~we aliaor rewi dimibUlioti of dccnc cables lid tools ggregJ1es_ ready-IUx connole and cement bI0C~ lI1d provi$ion of servlCcent$ in rdation to iODllltroa Itvestment repair aJ-d Gonstruction of power plwts liiiding of LED ilgluitlg products und management of industnl enterpnses The segment ircludes be folloVting centntitis
bull Aam1 Cemert Industries LL AuraJ Redy1Yl(A BrQTlch
bull Doha Cables Qawf lLL Senyaf IoolJic1es Qatar Holding W LL Advanced Pipes ard Casfs CompQTly WJ L bull GuJfRoch Coroany WLL Ci~San Trading Company WLL hmovafive Lighting Compary WLL
Managed services le segment inyolvc~ provisloH of hOllseiltecpmg mi cleaning services fucditics n-anagemerJ services C1egy s(tvices ttl centfe sltrvicf)s buildiqg lnaintemHlelt aml acting as travel gens The 5cgnltnt includes the foUowing cnti(lcents
An13 ServJce Branch
amli TnlVeJa l5tmh
f-eco Gulf Co W LL
Jolinson Controls Qattl WJL
28
Aamal Company QSc
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended ) L December 20 13
SEGMENT INFORMATION (Co ntinued)
Head Office It provides corporate services to the branches and subsidiaries of the Group
The managiog d irector of the Group monitors the operating results o f its business units separately for the purpose of making decisions about resource allocation and perfonnance assessment Segment perfonnance is evaluated based Oil operating profit or loss of these segments Transfer pricing between operating segments are on anns length basis in a manoec similar to Iraosactions with third parties
Aamal Company QSC
NOTES TO THE CONSOLIDATED FINAN CIAL STATEMENTS For the year ended 3 1 December 20 13
28 SEGMENT INFORl1ATlON (continued)
Operating segments The operat ing segment after elimination or ioter-bra nch and inter-co mpany lrnnsaclioos is presented as follows
Trading (nd Industrial Managed For fh e year elided 31 December 2013 Properly disirjblli ioll manujocljlring services
QR QR QR QR Revenues
- h lemal parties 260360172 578909983 1231522768 S l802210 - Inter segments 1253914 6843 11 8 29639873 3445052 1
Heat Office QR
Eliminoions QR
(n187426) II
Tolal
QR
2J22595133
261614086 585753 lOI 126116264 1 8625273 1 (721 87426) 2122595133
Opera ti ng results Fair vallie gains
Profit I (loss) ror the year
Depreciotion
200811944
245051 107
445863051
2066290
86492834
86492834
4345438
22636250
22636250
33049 089
5157436
5157436
1760305
(47864882)
(47864882)
1334382
267233582
245051107
512 284689
42555504
36
Aamal Company QS
NOTES TO Tl CONSOLIDATED FfNANClAL STATEMENTS For the yeM ended 31 December 20 13
28 SEGMENf INFORMAnON (c)tltioucd)
FOf the yearrnrkti J f DccemOer 2(J12 QR
Revellues - ExlcmlJ partiel 2331 17 509 bull Inter segmcI11S 1168935
-- 234236434 --~- -~--
Openning results 18S2367t Fmt value gains J8S79-4~G
pront LOllS) for the rear 570616154
gt3659
No(
lnlermiddotgment revenues are eliminated on tQHs)idntiOH_
Tadiug ftfid disl d)Ntion
QR
S2S3l7661
324 j
5335493114 ~ -~-----
51384831
54384338
4J9R71(i
Indus idi mamfmturing
QR
1255694537
129U25lS4
56727059
56727059
32752742
slnltic(s QR
55216665 2939H31
S46lOJ96
7427414
7437
[908067
ilfild ()jice QR
(64(41976
Elimination QR
(74tHi2oJ Iii
Totul QR
206936372
2069336372
235721
(64641
131 f613
6245
42541)861
Amnal Company Q$l
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Por tnt yeartndeJ 31 De~embcr 2013
28 SEGMENT JNFORMATlON (contiutlld
Assc-ts and labilities
Tng alld lndtrstfw At31 December 2(113 distnbllrior manufacturIng senices HeadOJJicc EliminatioilS lola1
QR QR QR QR QR
Cumnl 3tS 227552338 620807979 61349 j 415 S()6)86922 (301636995) 1477366090 Noolucrcnt DSeIS 6411868160 12604763 622386238 4348876 (i624548 __p2438051 780
fotal asstl$ 6639420498 1194 1243194217 65698291 513Ql1470 ==-lt03H8l~O()) 853295-870 -~----~ ~---~ -
CUIT)llliabilitics 280995335 1(3511J60 6344(12777 2l0708lJ2 496261185 (3CH636995) 1249603264 Non-current iiatJlitics 7l70L5V2 8008485 HlDi16~43_ 3181668 t433799 ____ ilj534_~57 __ --Totul liahililics 353696897 ___~4159~4~ 734419720 ~4976~~~~~ 1434945711
---~~--~ -~-~~ - _2~~~4~~ (~~~~9~
C1pild expcndimn HI) WO743OOj 1397742_~471l2~--~50 ~51 ~1~623821~~1~_ -~----~------ -~
3amp
28
Aamal Company Q SC
NOTES TO THE CONSOLIDATED FfNANClAL STATEMENTS For the year ended 31 December 20 13
SEGMFNT INFORMATION (continued)
Assets and liabilities (continued)
AI 31 December 2012 Properly QR
Trading and d iSfriblllion
QR
Indusrial manufacfuring
QR
Managed senices QR
Currenl assels
Non-current assets
146491 186
6121 864484
2964425 12 903 7264
73468 1258
549267235
51387098 471 1439
Tolal assets 6268355670 305479776 1283948493 56098537
Head Office QR
468325024
6713643
475038667
Currentliabil iies
Non-current liabiLities 273444 748 1 J10 15024
86054583 7434286
669214261 1288 14977
2 1938953
287 1199
480393637 1253084
Totil lliabiliti cs 390459772 93488869 798029238 248 10 152 48J64672 1
Capila expendirure (ltII L 72865 878 1281254 6647 J356 7169 13 149045
Notes
(i)
(Ii)
Inter-segmeot balances are e limioafed 00 consolidatio n
Capi tal expendiTU res consist of additions 10 propeny plant and equip ment and iovestmenl properties
Eliminations QR
To wl QR
(273735776) (i )
(20308351(i)
1423591302
6689563230
(27576661 1) 8 113154532
(273135777) (i) 12573 10405
257388570
(273735177) 15 14698975
24 1484446
39
29
Aamal Company QSC
NOTES TO THE CONSOLIDATED FrNANCIAL STATEMENTS For the year ended 31 Dcltmber 1013
Fr-A]~ClAL RISK MANAGpoundMamp1H
Objccthes and policies fe Groups principal )uaucill liabilities comprise imltresl bctmllg loons and IxmowHgs baRlt ovetda1s amounts due to fclaled par1ies and tracte accounts payable The main pUlJXSi of thesc financial liabilities is 4J mise firmne or 610 Grmps operations The G0JP bas various fimmcial assets such as ttadc accounts receivable lInlOlmts due from related parties bark balances tltCntion receivable and other receivables which arisgt directly fran its cperuoonamp
The maiH ri~ks an3ing Joru (be Groups UnariCJlll illslrumenls jle market risk cretiJt nsk and hmdity risk Til BoarD ofDtrcctO$ reviews end agrees policies for mzrAgbg Caltt f hespound ri~k ihkh arc summariscd beloW
VIarktt risk yenfatket risk is the risk Um changes in market prices $Uch as intfcst rates and hreig lttmeocy ect14nge rilles Vltl1 affect the Groups profit eqwty Dr value tf its hoJdiI15 of financial instrl[Thnls rile objecivpoundj of marke1 risk mUnllgcrlcnt is to manage uld 1~ontr(ll tho tr))rket risk expo-sure vithir acceptable parfI-etcJ$ while optimising rerUID
Equit) price risk ampjuity prtce risk is the risk hilt the Group ampearnings will be affected as a rcmt (If luctttltions in fm vdue of ~qui-gt
mstwnents Eqlliry price risk arises from availabtetor~sale inv2strnems However the Groups exposure to eqmty price risk IS minima as II doesn hold sitl)iftrmt ailableAor-511le inYestrmmrs
[merest rate risk The Groups fimiruial poundS5ot ampId liaojlilies (at Rl $uJject to int~~ rate mk compnse brmk depoils interst bearing loans and bOITQwjags and bank overdr-afts At the reponwg dalt tbe [merest rale pronle of Ill Goups intexst bearing fbi4rdd instruments as fliows
11113 20i3 QR QR
Fued liIeryS refc insfrvrnellts
Fmmcial assets 113035962 111913394 FrOltwial liabilities --1~203712l) 1252t43~1
9)OI~ (13350972)
Fhlllting inireSI rate ns1lmlttrs Fanctl~ Isseis 127024345 ID43848o Fllllocial liabilities _-(i~9347~ (94))48926)
(836)64116)
The Groups exposure to t~ ris of changes in marXet interest fltltes relztes primariiy to the Groups financial assets and lizbitdic$ with t1Oltttirg interest mte~
lhe loEowing able demonstrates the ampmitivity nf the eonsolidattXI statemen1 of income 1) caonaly possible chonges in in1jfgtst rmes by 25 basis points with all othe vari)ble3 hdc umstant The sensitivity of the CooiK~ljclatid statement of inc(me $ the eft(ct of tb assumed changes in lnterdt rales for one year bf1sec on the floating rate financial assets and fimmcial hablhw$ held at 31 f~r The effect of deae-ascs in interest ral~ is cXp0Ctct to be equal and opposite to the effect oHlle increases sllQvro
Changes it Eftx OIl
00513 [oms profit QR
2013 Floating mterest Hlte instruments ----2$ bp (1649776)
2012 Flv-ating irkfiSt rale instrumenls +25 bp (209[9(1))
~--------- -~~ 40-middot------ _ _ shy
29
Aamal Company QSC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 3 1 December 2013
FINANCIAL RISK MANAGEMENT (continued)
Foreign currency risk Foreign currency risk is the risk lhilt the value of lhe fi nancial instruments will fluctuate due 10 changes in fore ign exchange rates
T rade aCcOlmts payable and accrued expenses include amounts due in foreign currencies mliniy US Dollars UAB Dirhams Great Britain Pounds (GB P) and Euros of which the Group has a currency risk primruily on the baJmces payable in Euros and GBP amoWlting 10 QR 14400634 (2012 QR 17214046)
The Group does not hedge its foreign currency exposure As both Qatari Riyal and UAE Dirhams are pegged to the US Dollar balances in US Dollars and UAE Dirhams are not considered to represent significant currency ris k to the Group
The table below indicates the Group s fore ign c urrency exposure on its monetary assets a nd liabilities The analysis calculates the effect o f a reasonably poss ib le move ment of the QR curre nc y rale against the Euro and GBP with all other variables held constant on the consolidated slate menl o f income (due to the fa ir va lue of currency sensitive monetary asse ts a nd liabilities) The e ffect o f decreases in fo reign c urre ncy exchange rates is expected to he equal and opposile 10 the e ffect of the increases shown
Incramp1se ill
f oreign cUlrency rate
0
the QR
Ellecl on profil
QR
2013 +5 (720032)
20 12 +5 (860 702)
C redit Tisk Credit risk is the risk that one party to a financial instrume nt wi ll fa il to discharge an obligation and cause the other party to incur a financial loss TIle Groups exposure to credit risk is indica ted by the carrying amoWlt o f its financia l asse ts whic h consist principally oftmde accollilts receivable retention receivable amounts due from related parties othe r receivables and bank baLances
The Group sells its products and prov ides services to vario us panies It is the G ro ups policy that all customers who wish to obtain on credit lerms are subject to credit verificalion procedures to ensure c redit Ilonhiness Each new customer is analysed individually for creditworthiness before the de livery o f products Of services Custo mm tbat fai l to met t the credi tworthiness may transact with the Group only o n prepayme nt basis Property rentals are mostl y received in ad vtnce or conlrlCled wi th post dated cheques 10 additio n receivable balances are monitored on an ongoing basis a nd the purchase limils are established for each c redit custoroer which are reviewed reguJarly based on the level o f past transactions and senlement The Groups max im wn exposure with regard to trade aCCOWlts receivab le net ofa llowance re nected allhe reporting date was ilS fo llows
2013 2012
Business SJgmelll QR QR
Property 15478832 19386326 Trading and distributio n 194343 597 179748274 Industrial ma nufac turing 183119753 131578668 Managed services 18069385 14547389
411 011 567 345260657
41
29
Aamal Company QSc
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For tbe year eoded 3 J December 20 13
FlNAJICIAL RISK MANAG EMENT (c-o Dtinued)
Credit risk (continued) With respect to credit risk arising from the other financi31 assets of the Group the Groups exposure to credit risk arises from default of the counterparty with a maximum exposure equal 10 the canying amount of these instruments as follows
2013 QR
202
QR
Bank balances Amounts due from related parties Retention and other receivables
436136756 214439950 48290351
36788129 t 171525363 74082203
698867057 613488857
The group reduces the expoSltre of credit risk arising from other financial assets by maintaining bank accounts in reputed banks and providing services only to creditworthy re lated parties
The management cons iders the bank balances and a mQUIIIS due from related parties as high grade fi nancial assets and lfade accounls receivable and other receivables as sundard grade financial assets When a finltmcial asset is identified 10 be impaired the managemoot downgrades such assets to impaired category and provides adequate allowances
Liquidity risk Liquidity risk is the risk that the Group will not be able to meet its fmancial obligations as they fu ll due The Groups 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 nonnal and stressed conditiom without incurring unacceptable losses or risking damage to the Groups reputa tion and is to maintain a balance belWeen continuity of fuoding and f1eilibility through the use of bank overdrafts and bank loans and borrowings
The Group monitors its risk to a shortage o f funds using a recuning liquidity plaOfling 1001 TIllS tool considers the manuiry o f financial assets (eg accounts receivable) and projected cash flows from operations The Groups teons ofsales or services require arooUIlts to be paid within 30-90 days from the invoiced dale
42
29
Aamal Company QSc
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For tbe year ended 3 1 December 2013
FrNANClAL ruSK MANAGEMENT (contiQued)
Uqujdity risk (continued) The table below summarises the ruaruriJy profile of the Groups financial 1iabililies a t 31 December based on contractual undiscountcd paymeots
2013 Interest bearing loans and borrowings Bank overdrafts Trade accowus payable Other payables Amounl~ due (0 related panles
201l Interest bearing loans and borrowings
Baok overdrafts Trade accounts payable Other payables Amounts due to related parties
On demand
QR
6836280
6836280
011 demand QR
2885090
2885090
Less than 3 months
QR
521324473
303638792
47406830
2530~480
898675575
Less thall 3
months
QR
469839033
10754JJIO 37543236
1964504 1
634568620
3 10 J2 mOlllh$
QR
239333328
16378865 20210580
2289~11l
298816884
3 to 12 monlhs
QR
365476972
159621 37 J 24745342
30092716
579936401
1to 5 years
QR
J 60092748
160092148
1 to 5 years
QR
248472226
248472226
gt 5 years
QR
25261598
25261 598
gt 5 years
QR
7648000
7648000
TOlaf
QR
947012147 6836280
320017657
67617410 48199591
1389681085
Tota
QR
109 1436231
1885090 267162681
622 88578
49737757
14735 10337
43
30
Aamal Company QSltc NOTES TO THE CONSOLIDATED FlANCIAL STATEMETS For the year ended 31 December 20 t3
21 F~ANClAL RlSK MAiAGEMElT (continued)
Capital management The Boards policy is to maintain a strong cepit1 base so as to rnainmin investor creditor and market ronfoonee and to SUSWlJ) fumre dcltclonnent Gf the buinest The Board of Directors rronitortl the tapital whkh tbe Group defines as wlal $parcloders equity excluding nonmiddotcornroliing imerests and the level of dividends to orrunury srarellOJdcfS
The Board also reeks to ITIaimain a balance between the higher (ctums (hat might be fA-~$ihle With higher leves of borrnwings end Lle edvnrJages and security named Sy it sOMd Cilpitai posi[ion The GfCup~ k1rget is to achievfl a return on slureholders equity (exclJding aonwurrolJiug iorcf(sts) greater lll(ll1 he wcighlcd average inres exxmse on mrerest bearing Ivens and oorrowing
The (lf0t-p nl)nDg-e ils cnpital structure and makes adjustneal lOll in light ofchang2s in economic nd bttincss cordjlons and shareholders expe1ationJo chmges veremiddot maCo HI Lleuro objecttves polilCS or proCCSSC3 during the years erded 31 D~mber 2013md 31 Dtccmlxr2Ql2
The Group monitors the capit2J using a gClting fatio which IS dep divided by caplla plus debL The GtOwgts policy is to keep ttJe ge-anng rmio bclew 40 Tbe Group iLdtdes withb debt imete-51 beagting loans ard ~OITORlngs less cash and cash equtVaknts Capltal includes eqmty attributable 10 the equity tolders oft~e parcrt
2013 QR
2(i2 QR
fmerest bearing loans and borrowings lcss- Cash and cas ltYJUvalcnts
9i4lJ05301 _~ (429JfJl4761
1004845296 (649)6201)
Net debt
Toa capital
Capita and net debt
699849045
~ringrttio
FAIR VALtES OF Fl~ANOAL f~STRUMETS
Finarcial iostrumenL~ cOlnprise tina~lctal assetS carl finailcialliabilities
Fmancial assets colJist of bank balance) short 1Cm bank dcposis amounL dve dom rc)ltted partilt)$ rekntion and other receivables and ttade accolmis rceivabe Finatlclll habiilics cgtmsist of banilt ovcrdratls jnerest bearing lOil1S and bOrowings amounts due (0 nliled partiG~ ane trade x-ounls payable
The- fair values of hese financial inStrumen1S except Jo-- imCfest bearing loam lHld bOlToving aproKimate lhdr cMryinJ vlhes due to the Slort temt mzrutiiles or these instrument
Tllc faiT value of iotcnst beating Nns and borrowin2s ae estimate( based on discoumed ltash flows twin int(s rale- cune-ntly nvailagtk fur tilt debt or sinuiar tetnlS an-a rell1lmng matunties
31
Aamal Company~Q=-ScC ______________~______
~OTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For fhe year ended 31 December 20 t3
SlGNIFICANT ASUMPTIONS ACCOUJTING JUDGElE1TS AND F8TIMATFS
impairment (If accoonts receivable n etrnwe of lhe collectible anoun of trade accounlgt reccvable is made when collection of the full lHl1OUt i~ nO looger probabk FOI nCividualty significitIl amounts this estimation is p~rformed on an indh-idllai a$[$ Amomts wHcb arc not indivldl11Uy significant but wluch are past due ZTe tsscssed collectively and an aJlQwaccc applied ucc()r~Jng to the length of lime past due based oc histnncal recovery nlJes
hnpalrment of inHntnries lavenoncs are held at tho lower of col and nol realisable value InIOn inventoncent$ becone old or 0-~amplete an estilTJte is mate of their net j alisable vulue For indiviolhlUy significant amountS this cstinaunrt is performec all aD lndividwl osis Amotlnts whieh are fl0t individually significan( btll which ltIre old at obsolete wx LltSessed wllecivdy md a provisior is applied sccnrding to the invenrory type and be dep)ee of ageing 0 cDsolescc1ce based on anticipUled selling prices
Classifigt1ltion of El Sew(gtdy Cable Qatar WLI ali a j(lint vwture pound1 Sovedy Cables Qatar is a limited hability company whose kgal fum confers SCprm11ior bernten tbe jXliiies 10 ~he jomi lfranpement Snd the Company Itself FurthenrlOre then IS no oontractua] arrmgelTeot or any oibe aus aod circumstriliCe$ that iocik41to tht he putic5 [0 the joint flJTIlrgernelit bave rights to the ssetl and obligrtdons fo~ the liabilities of the joint ilrrongement Acoordingly El Sewed- C[jbl~s Qamr WLL is dassifiecl 7S a joiut enrtrr of he GWtp
impairment of goodwill G0oovj)1 embedded in th~ cot 0 aquisitior of subsidiaries and eqmtj-iccounled iflV(stees ire teswt for irl1jXlirmnt aHuaily Tbe calculations of value [n use fO( cfish gecj~r)lilg units (loring to real nte projecg are rtost sensitive to tin IDHowing assumpti015
Grosgt i1wginmiddot Gross Ilmrgins arc lmsed on avrage values tuhje0d in (he [Xrioo preeedhli (e siaM of the budge xnod T1esC at( mcreased over the budgel period for mticipatltX efficiency Hnprovemots
DisC)unr r(es Discount rotes represent th cl1tent mark as~ssmetlt of the risks specific te ech cash geocroting unit regarding lhe time value of money ilnd mdividu)l risks of he tmtieriyilg assets whICh have not been inwrport1eti it the Citik flow estimates The dj~(OUrl flte tlkulation is based on the speclfte circurnsthLCes of lile Group and its opltllatJng segn)~nts (md derived (ff)rC it weighted avaage (XSt 0f apilaJ (WACC) Tb fACe (akw into uoount both deb and equity The 0$1 of equity is denved from dlC expected return 01 investmenl by the Groups investors TJc Gos10( deb is based on l1e borrvwings the Gmup IS obllsxl to service SC~lletllmiddotspecific r5k IS incorxt4too by applying individual bera facto The betn mctors ire evauatcentd annuaHy bhseci on pubJicly aVflllabe murked earn
Fair value ()fnHstmeni proputies The fuit laHe 0 nvestmel~ propertis is deltrrnlnzd b cxterrwl indepzfldell property valuers laving appr0priate recognised professional quabfiillions and recenl xperience H1 the localjl)n and G-tegory 0 the oroperty being valued
Useful hes of PfQPcrly plmr (llld zqulpment The Groups management detennints th estiunted useful jives Df It~ property plan and equipmnl fix calnurjng depreciation Thi5 e~timJte is 6lermind after cinsidring 1b expeelcd usage (1f the a5sclt [hysical l101t and (eas tedmiltal Dr com~ercia obsolesccnce
Gotlg Qncen
ibe Groups mangerncnt UiS made aJ assessmeot cf the 011115 ability (0 COllllOUC liS a going conct11l Imd is satsl1ed hat me Group ms the resources to contmue in business for he foreseeable fu1urc he1hennort he management is no aware oC lny material Hncertainties that lray CH~t signinchnt doubt tlPDfl the Groups ability 10 continue as a going umcem Therefore titpound lotlsolidatcd finilllcij stftemeols comirme to be prepltd on li g0ing concern basis
Aamal Company QSc
NOTES TO THE CONSOLIDATED FlNANC[AL STATEMENTS For the year ended 3 1 December 20 13
32 INCOME TAX
Certa in subsidiaries of the Group which have non-GCe ownership are subject to income tax under Qatar Income Tax Law No 2 1 of2009 The iocome tax is charged on the share of profits attributable to non-GCe shareholders For the purpose of these conso lidated fi nancial statements the income tax liability oftbe foreign shareholders has been excluded given that the non-GCe shareholders have agreed under the shareholder agreements signed with the Group to bear the fh lliiability and make necessary payments
33 COMPARATIVE INFORMATION
Certain comparative figw-es of the previous year have been reclassified 0 coofonn to the current years presentation However such reclassifications are oat materia and do not have an impact on tbe previously reported net profit other comprehensive income or the total equity for the comparative year
The impact from the resta tement of comparative infonnalion as a resuh of adoption of IFRS I I - Joint arrangements is detailed in Note 32 Changes in aCCQu(lting policies
46
2
Aamal Company QS c
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 31 December 2013
BASIS OF CONSOLfDA TiON (continued)
Subsidiaries (continued) Set oul below are Ihe Group s principal subsidiaries at 3 1 December 2013 Unless oUlenvise slated the subsidiaries as listed below have share capital consisting solely of ordinary shares wh ich are held directly by the group and be proportion of ownership intereSIS held equals 10 the votiug rights held by Group Tbe country of incorporation Of
registration is also their principal place of business
Comp(my name
Aamal Cement Industries W LL
MO Qat1 Company WLL
Senyar Indus tries Qatar Holding WLL
Doho Cables Qaw WlL
EccoGulf Compaoy WLL
Advanced Pipes and Casts eompmy WLL
Johnson Controls Qatar WL L
Country 0 lJCQr por ation
Qator
Qatar
Qatar
Qatar
Q 31ar
Qatar
Principal (lcfi ity
Development and mlUlagement of factori es and the prodllaion or curb sl~ne i llleriook slabs lIId cement bricks
Construction and repai r of power plant es tablislunent and man3gemenl of industrial enterprises aud ac ting as a representative for the imcmatiOllru companies
Management of subsidiaries and associates ovming of palen~ businesses and subleltiug Ulem and provision of investment port fo lio management for Its
subsidiaries and Msocialts UOkr the shareholders agreement signed between the Group and the other
shareholders the Group is able 10 appoint the chai rman and two other members 10 (he Boflrd of Direc tOfS (out of six members) and is able to govern the fin ancial and operating policies of Senyar Industries Qatar Holding WLL Accord ingly ~ company is considered as a subsidiary oCthe Group
Mailltenance and mallllfacture of electric cables equipmelll and lools Doha Cables QalaJ WLL is
91875 (eITectively) owned by Senyar hldush es QaUlr Holding WLL a subsidiary of tllC Group TIIe Group has (he power indi rectly through SenyM [ndus tJi cs Qatar Holding WLL 10 govern fi nancial and opera ting policies of Doha Cables Qatar WLL and accordingly the company was considered IS a subsidiary ofthe Group
OITers professional and bus iness process outsourcing and Cll )] center services
Manufacturing of Wide cement md amplass reinforced pipes systems for infrsslICture (lnd pipeline projects
The Gro up h~ the power 10 govern ~lot financial and opera1 ing policies or Adv3I1ced Pipes and Casts Company WLL by virtue of a sllarchokJers agreemeot TIlus the Company has been cotls ldcrOO as II subsidiary of the Group
Provision of racililies management service5 energy se-rvices md building maimetlaoce and cleanlg services to corporate cl icn1S
PlOporl ion oj
oWPersllip held by the
Non
Group COnroiling interest
99 1
60 40
50 500
459 54 J
5 1 490
50 50
51 49
9
2
Aamal Company QSC
OTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For toe year ended) J December 2013
BASIS OF CONSOUDA nON (continued)
Suhsidiaries (wntiourd)
Cmmffyoj fNgtpvniOil j irniJpvroliin ~__~ampiphdd~~
Nor G)1)Ji contfoifgtg
iMeregt
CmiddotSan TI~ing WLL Sdilamp lYJy1ng renting me Mltcentlopil12 [e~ tSite 30 invimenl w shams rnlilVigemc1t vf real lsta propeItilttl owning ille palent and tradcentmut and tnlding in iXjUiflfIfflt amJ vcilici$ 1he GroClp has tJe pcwer tv goem 6e ~inr8hl and ojJrtltllng
roicie_~ of ClSM by vifcle 0 a shlrcholdcrs 191e~mcentn(
745 25 1~i
nnoV1iv lightinf wmpany Qatar TNriing of Ught 2rrt1nz DiDd lEU Lwpj lmd 7r J) WLL olhT $hlil1g prrltwl
Twdiflg of of4 SiJpplk-s and providll$ prindna and 65 35 laniniltmJ sltrce~
Non-coufroUing illterests Non-controrling intel(SlS are measwed tj tleir propO(hOnile $hue Ot the tcquirees identifiabk net asscl III the JCqUiSlOt1 rote Chuegts in t1e Groups imcest in i $ubsiciwty hat do tot rcmltlo a loss of ~)I1a1)l xc accountd for as equity trnramplclions
Tamil-crions eUminnted on c)lwtidaticu lntngtgroup baiances Jue transactions 00 any unrealised income 1nd expenses ari$tng from intrnwgrOU tranSaOiQlls arc eiimmatcd UfiJeaiiHd gaina arising from ITaUstlclions ttlt equity-lKcoUl11uJ IlVtSlCCS are eliminatd 1gamst the investment 10 the extent oftlle Group interest in the inveMee Umaslised loses are eiiminatd II the same VllY us unrvalised gains hit only to Ille eXfeut that there is 10 evidence ofimpaimcentut
Illttn~ts in jOint arrangements iu)d associates Detais ofeach of ttc Groups Hutilrial Joint venlU)s fujltj assoeime~ at the end of the reponing period are 5 [OHOViS
Cmnirycgt PltJporlion qf Compao name infOjwNiIIO1 ewonlup Qltd
vOingjYwer htld by
tiff GrOlp
[I Sewed Cable QntM Tndllg in ele(mHnechmita CGlJ)ptnefllmd plOvicmg WLL rei) services El SWNed Cables )ilMr WLL is
49 JWoo (Wilt 55 tblre of rrofils (losses) hy StHyar lrdl11(rie~ Qal3t Hodirg WLt e 511b8idimy 0 ~he GOllp However (kw 10 ~ feiBtil shareholdergt agreewli pound ellWY has I~)mc a jOm vent( eTdive trmJ l January 20 wllkh is mC(t511rec Il1de the eqJity ngtU1l
rins $tngtdJBI S~ 1idJgt (law Ertity lS engaged l sled (b[iclli0ls Gf0Jp mtllpoundure Ea LC t11cent fl5sodau under cquhy nlctooo
Aamal Company QS c
NOTES TO THE CONSOLIDATED FlNANClAL STA TEMENTS For the year ended 31 December 2013
3 BASIS OF PREPARATION AND SUMMARY OF SfGNlflCA1T ACCO UNTING POLICIES
31 BASIS OF PREPARATION
The consolidated fi nancial statements have been prepared in accordance with lntema tional Financial Reporting Standards (IFRS) and the appLicable requirements ofQalar Commercial Companies law No5 of 2002
The consolidated financial statements have been presented in Qatari Riyals (QR) which is he Companys floclional and presenUll ion currency and have been rounded to tlle nearest Qatari Riyal TIle consolidated financial statements are prepared lUlder the historical cost convention modified to include he measurement a l fair value o f investment properties and available-for-sale investments
32 CHANGES IN ACCO UNTING POLICI ES
The [lccoWiting policies adopted are consistent wilh Ihose of the previous fi nancial year except for the following standards effe ctive for the annual period beginning on or lfter 1 Jlnuary 20 13 These standards and amendments other tM n the impact of (FRS II - Joint Arrnnge menlS noted below did not have aoy malenal impact to the Group
lAS I (amendment) - Presenfalion of items ofother comprehensive income The amendments to IAS I require that an emity present separate ly the items of ltN her comprehensive income that would be reclassified to profit or loss in the future if certain conditions are met from those that would nC ver be reclass ified to profit or loss
lAS J9 - Employee benefits (201) lAS 19 (201 1) changes the definition of short-tenn and other long-tenn employee benefits to clatify the di stinction between the two
lAS 28 (201 f) - fnvesfmem in Associates and Joint ventires lAS 28 (2011 ) supersedes lAS 28 (2008) lAS 28 (2011) makes the foHowing amendments Associues held for sale JFRS 5 Non-current Assets Held for Sale and Discontinued Operat ions applies 10 an investment or a portion of an investment in an associate or a joint venture that meets the criteria to be classified as held fo r sale For any retained portion of the investment tlwt has not beell classified as beld for sale the entity applies the equity method until disposal o f the portion held for sa l ~ After disposal any re tained interes t is accounted for using the equity method if the re tained interest continues to be an associate or a joint venture and 0 0 cessation of significant influence or jo int conltOl even ifan investment in an associate becomes an investment in a joint venture or vice versa Ihe entity does not fe-measure the retaincd interest
Amendments ft) fFRS 7on ofseftingjil1ancial assels and jinancialliabilities (2011) Disclosures - O ffsetti ng Financial Assets and Financial Liabilities (amendmems to FRS 1) introduces disclosures bout Ihe impact of oetting arrangements on an entity s fin ancial position Based on the new disclosure requirements the Group has to provide inforroation about what amounts have been offset in the consolidated statement of fimmcial position and the nature and extent of rights of set o ff under master netting aITlngements or simi lar a1Tlngernents
fFRS 10 - Consolidate1 financial SIOlemenlS and lAS 17 Separate Fillancial SfalemenS (2011) [FR S 10 introduces a single control model to determine whether an investee should be consolidated FRS 0 replaces the parts of previQlSly exis ting lAS 27 Consolidated and Separate Financial Statements that dealt wi th consolidated fin ancial statements and SIC-12 Consolidation - Special Purpose Entities This new contro l model fo cuses on whether the Group has power over an investee exposure or righlS to variable rerums from its involvement with the in veSlee lnd abili ty to use its power to affect those returns The Group has amended its accounting policy on consolidation in line with requirements of TFR S 10 and has re-assessed its consolidation conclusion
[FRS 12 - Disclosures ofimerests ill other entities IFRS 12 brings together into a single Sfandatd all the disclosure requirements about an enti ty s interests in subsidiaries jo int arrangements associates and unconsolidated structured entities It requires the disclosure of infonnation about the nature risks and financial effects of these interests
II
Aamal Company QSc
NOTES TO THE CONSOLIDATED FTNANClAL STATEMENTS For the year ended 3 1 December 201 3
3 BASIS OF PREPARATION AND SUMMARY Of SIGNIFICANT ACCOUNTrNC POLICIES (continued)
32 CHANGES IN ACCOUNTING POLlc ms (coDtinued)
IFRS IJ Fair ~alue measuremetll TFRS 13 provides a single source of guidance on how fair value is measured and replaces the faif value measurement guidance tha i is currently d ispersed thIo tlghool [FRS It unifies the definiti on of fair va lue as the price that would be received 10 sell an asset or paid to transfer a liability in an orderly transaction between market participants a t the measurement dale It replaces and expands the disclosure reltjuiremenlS about fair value measurements in other IFRSs including TFRS 7
Improvements (0 IFRSs (20 ) Improvements to IFRS issued in 20 11 contained numerous amendments to IFRS that the IASB considers nonshyurgent but necessary Improvements to lFRS comprise amendments that result il) accounting changes to presentation recognition or measurement purposes as well as tennioology or editorial amendments related to a varie) of individuallFRS standards
During the period the Group has adopted the fo llowing new s tandard which became effecti ve for the annual periods beginning on I January 201 3 which had a materi81 impact to ule Group
IFRS II Joint AlTwlgements As a result of adopting IFRS II the GrOlp has changed its ltlccoUJ)ting policy for interests in jo int a rrangemeots Uuder rFRS 11 the Group classifies its interest in jo int arrJngements as e imer j oint operations or joint ventures depending on the Groups rights to the assets and obligations for the liabil ities ofthe arrangements When maldng this assessmenl the group considers the strucltire of the arrangements the legal fonn of any separate vehicles the contrac tual tenns of the arrangements and other fact s and arrangements Previously the structure of tbe a rrangement was the sole foc us of classification The Group has re-evaluated its involve men t in ils o nly joint a rrangement El Sewedy Cables Qatar WLL ltlnd has recla ssified the investment from jointly controlled entity to joint venture Also the Group has discontinued with re rrospective effect the use o f the proportionilte consol idation method and adopted the equity method to account for joint venture in accordance mth IFRS I I
Summary oquulllitative impuct The following tables summarises the materia l impac ts rcsulting from the above change in accounting polic ies on the Groups financ ial position profit o r loss and cash flo ws
Effect of chnnge in 31 Decemb er2012 accounting policy
Cunem assets (278 880441 ) Non-current assets 1295 1346 Total assds (265929095)
Current liabilities (265072694) NonmiddotcWTent liabilities (856401) Total lin bill ties (265929095)
For the year ended 31 December 2012
Profit for the year
Net chflllge in cash and cash equivalents dlUing the year (99696J)
12
Aamal Company QSc
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 3 I December 2013
3 BASIS OF PREPARATION AND SUMMARY OF SlGNlf[CANT ACCOUNTING PO LICI ES (continued)
33 lASB STANDARDS AND lNTERPRETATIONS ISSUED BUT NOT ADOPTED
The following lASB standardsamendments hJve been issued but are not yet mandatory and have 1l0( been etrly adopted by the Group
Standard
Illterpretotion COnem EffeClive dale
TfRS9 Financia l InstrumentS (new standard) I Januruy20 17
IAS 32 Financia l Instruments O ffsetting (amendment) I January 20 14 JAS 36 Financia llnslnnnents Disclosure - non-fi nancial asse ts (amendment) I January 2014
The Group is considering the implications of the above standards and the till1ing (If adoption by the Group
34 SUM MARY OF SIGNIFICAJT ACCOUNTING POLICI ES
Bu siness combinnriO llS The Group accounts for business combinations using the acquisitio n method wben connol is Imasferroo to the Group The consideration ITansrerred n the acquisition is generally measured at fa ir value as are the identifiable net assets acquired Any goodwill that arises is tested annua lly for impairmeot AllYgain on a bargain purchase is recognised in pro fit or loss immediately Transaction COStS arc expensed as incurred except if rehated to the issue of debt or equity securities
The considera tion transferred does nOt include amounts related to the settlement of pre-existing re lationships Such amounts are recognised in profit or loss
Any contingent consideration payable is roeasured at fair va lue at the acquisition date If the contingent consdicrntion is classified as equity then it is oote nmeasured and settlement is accounted for within equity Otherwise subsequent changes in the fa ir value of the contingent consderafion are recognised iu profit or loss
Cash a nd eash equivalen ts For the purpose of the consolidaled statement or cash flo ws cash and cash equivalents consist of cash and bank balaoces ruld short teJTIl bank deposi ts wi th an original marurily of three months or less net of outstanding bank overdrafts
Accounts receivable Accounts receivable are stated at originill invoice amount less an allowance for any uncollectible amounts An estimate for doubttit debts is made when collection of the flilt amount is no longer probable Bad debts are wntlen off when (here is no possibility o f recovery
Inventories Inventories are stated at the lower of cost and net realisable value Costs are those expenses incurred in bringing each product to its present location and condition
Goods ror resalework in progress - Cost of di rect materials aJld labour plus attributable overheads based on a oormallevel ofac1i vity
Raw material and spare pan s PlIlchase cost on a weighted average basis
Net realisable value is based on estimated selling price less any further costs expocted to be incurred to completion and disposal
13
Aama Company QSc
NOTES TO THE CONSOLIDATED FINANC IAL STATEMENTS For tbe year ended 31 December 20 13
3 BASIS OF PREPARATION AND SUMMA RY OF SIGNIFICANT ACCOUNTfNC POLI CIES (contin ued)
34 SUMMARY OF SIGNIFICANT ACCO UNTLNG POLICIES (continued)
Interests in equity-aecoupled inveslecs The Groups interest in equity-accounted investees comprise interest in associates and joint venture
Associates are lhose entities in which the Group has significant influence but not control or joint control over the financia l and operating policies A joint vennu-c is an arrangement in which the Group has jo int ool1lrol whereby the Group has rights to the net assets of the arrangement rather thall rights to its assets and obugations for its liabilities
InlereSIS in associates and the joint venture are accoliDted for using the equity method They are recognised initially tit cost which includes transaction costs Subsequent to ini tial recognition the consolidated financ ial stateme nts ioc lude the Groups shrre of the profit or loss and other comprehensive income of equity-accounted investees unti l the dalc on which significant in Lluence or joint control ceases
The reponing d~les of the equity-accounted investees and the Group are identical and the equi ty-accounted investees accoWlting policies confonn to those used by the Group for like tmnsactions afld events in similar circumstances
Investmefl t properties umd aod buildings are considered as investment properties only when they are being held to earn ren tals or for capital appreciation or fo r both
Investment properties are measured ini tia lly at cost including traosaction costs and borrowing costs that are directty attributable to construc tion o f the 8sseL The carrying alRount includes the cost of replacing part of an existing investment property at the time that cost is incurred jf toe recognition cri teria are mel and excludes the costs of day-to-day servic ing of an investment property Sub~quent to inilial recognition investment propert ies are slated at fa ir value which reOects market conditions at the reporting date Gains or losses arising from changes in the fa ir values of investment properties are included in the consolidated statement of income in the yeltl r in which they arise
Investment properties are derecognised when either they have been disposed off or when the investment property is pennanently withdrawn 1T0m use and no fu ture economic benefit is expected from its disposal Any gains or losses on the retirement or disposa l of aD investment property are recognised in the consolidated statement of income in the year of retiremeOl or disposal
Property under construc tion is dealt with under lAS 40 and rttorded at cost less accumulated impairment losses until either its fair value becomes relia bly detenninable or cons(TUction is completed (whichever is earl ier) At that time it is reclassified as inves tment property and a fa ir value adjustment is recognised in the consolidated statemenlof income
Transfers are made to or fro m in vestment property onl y when there is a change in use For a transfer from investmen propeIT) to ovmer occupied proreIT) the deemed cost for subsequent accounting is the fair value at the date of change in use If owner occupied property ~omes an investment property the difference between the canying value aoo the fair value at the date oflransfer is rttognised as a revaluation reserve in the equity and is released to the consol idated sta tement of income llpon disposal of such propcny
14
Aamal Company QSc
NOTES TO THE CONSOLIDATED FrNANCIAL STATEMENTS For the year eDded 31 December 20 13
3 BASIS OF PREPARATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLI CIES (continued)
304 SUMMARY Of SIGNIFICANT ACCOUNTING POLICIES (continued)
Property plant and equipment Property plant and equipment is stated at cost including borrowing costs that are eligible for capitalisation and excluding the costs of day-to-day servicing less accumu lated depreciation and any imp~innem in value
Depreciation is provided on a straight line basis on all propelT) planl and equi pment The rales of depreciatioo are based upon the following eSImnelt useful lives
Buildings 20 years Leasehold improvements 2-8 years Truck mixers and motor vehicles 4-1 5 years Plant and ITIJchioery 8-2 5 years Furniture fixtures and office equipment 3-5 years Computers and related software 3-5 years Capital work in progress Not depreciated
The carrying amounts are reviewed for impain nellt when events or changes in circumstances indicate that the carrying value may not be recoverable If any such indication exists and where the carrying values exceed tbe estimated recoverable amouot the assets are wri tten down to their recoverable amount being the higher of their fair value less costs to sen and their value in use
Expendirure iocurred lO replace a component of an item of property plaot and equipment that is accotmted for separately is capitalised and the carrying amount of the component that is replaced is written off Other subsequent expenditure is capitalised only when it increases furure economic benefits of the related item of property plant and equiproent Al l other expendirure is recognised in the consolidated statement of income as the expense is Incurred
An item o f property plaot and equipment is dereeognised upon disposal or when no future economic benefi ts are expected from its use or disposal Any gain or loss arising on derecognilloo of the asset is iocluded in the consolidated stalemeot o f income io the year the asset is derecognised
The asset s residual values useful lives and method of depreciation are reviewed and adjusted if appropriate at each rnancial year end
Borrowing costs Borrowing costs direc tly attributable to the acquisition constmction or production of an asset that necessarily takes substalltjal period of time 10 get ready for its intended use or sale are capilalised as pan of the cost o f lhe respective assets All other borrowing costs are expensed in the year they incur BOlTOwiog COSts consist of the interest and other costs that the Group incurs in coomction with the borrowing of fund s
Accounts paytlble and accruBls Liabilities are recognised for amounts to be paid in the fuMe for goods or services received whether billed by the supplier or not
Interest bearing loans Bnd borrowings Interest bearing loaos and borrowings are recognised ini tiaJy at fai r value of the amounts borrowed less direc tly attributable transaction costs Subsequent to initial recognition interest bearing loons and borrowings are measured at amortised COSt using the effecti ve interest method with any differences between the cost and tinal settlement values being recognized in the conso lidated statement of income over the peliod of borrowings Instalments due within one year aI amortised cost are shown as a ctuTentliabiliry
Gains or losses are recogTlised in the consolidated sialement of income when (he liabililies are derecognised Interest relating (0 imerest bearing loans and borrowings is expensed in the year in which it is incWTed e(cept those qualify for capitalisation
15
Aamal Company QSC
NOTES TO THE CONSOLIDATED FfNANClAL STATEMENTS For tbe year eoded 31 December 201 3
J BASIS OF PRpoundPARATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
34 SUMMARY Of)SIGNIFICAtlT ACCOUNTING POLICI ES (continued)
TClaot deposits Tenant deposit liabilities are initially recognised at fair value and subsequently measured at amortised cost where material Any di fference between the initial fair vllue and the oominal amount is [eluded as a component of rental income and rocognised on a straight-line basis over the lease term
Derecognition or fiolocial nsstls and liabilities
a) Financial assets
A fi nanCIal asset (or w~re apphcabJe a part of a fin ancial asset or part of a group of SImilar financIal assets) IS derecogmsed where J bull The n ghts to receIve [5h flo ws from the asset have expIred bull The Group has trans f rred Its rights to receive cash flows from the ass or has assumed an obhg811On to pay the
reltelved cash flows I full Wlthout mfl tenal delay to a third party under a pass-through arrangement and elther (3) the Group has Ira sferred substantially aIthe nsKs and rewards of the asset or (b) Ihe Group has neuher transferred nor relain substantially ai the n sks and rewards of the asset but has tnlnsferred control of the asset
When the Group has tTa~fened its rights 10 receive cash flo ws from an asset or has entered into a pass-waugh arrangement and has nejlher trmsferred nor reta ined substantially all of the risks and rewards of the asset nor trnnsferred control of the asset the asset is recogoised to the extent of the Groups cOlilinuing involvement in Ihe
In that case the Group at 0 recognises an associmed liability The mnsferred asset and ihe associaled liabi lity are measured 00 a basis thai flects Ihe rights lnd obligations that the Group has retained Continuing involvement that takes the form of a guara tee over the transferred asset is measured at the lower of the original canying amount of Ihe asset and fbe maxim amoun o f consideration that the Groop could be required to repay
b) Financialliabiliti
A financial liabili ty is defogniSed when the obligation under the liabil ity is discharged or cancelled or expires Where an existing fio8 1lci I liability is replaced by another from the same lender on substantia ll y d ifferent lenns or the terms of an existin liabili ty are substantia lly modified such an exchange or modification is treated as a derecognition of the orig~al liabili ty and the recog1Jitioil of a new liability and the dirference io the respective carrying amounts is reco ised in the consolidated Slatement o f income
Impalr meot ood uncollec ibility of fina ncial assets An assessment is made al each repon ing date to determine whether there is objective evidence that a speci fic financial asset may be impaired If such evidence exists allY impainneOl loss is recogoised in the consolidated statement of income ImT t is detemtined as fo llows
(a) For assets earned a t fair value impainnellt is tbe difference between cost and fair va lue (b) For asseamp carried at COSt impairment is the difference between cost and lIle present value of future
cash flo1S discounted at lhe current market rate of rdurn for a simi lar finan cial asset (0) For asseq carried al amortised COSt impainneot is the difference between canying arnOWll and lhe
present Value of future cash flO M discowlled at the original effective iDlerest rate
Provisions Provisions are rewgnised hen the Group has an obl igation (legal or COnslnlctive) aris ing fro m a past event and the costs to settle the obl igalio are both probable and able to be reliably measured
16
Aamal Company QSc
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 31 December 2013
3 BAses OF PR EPARATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICI ES (colltinued)
34 SUMMARY OF S IGNIFICANT ACCOUNTING POLICIES (continued)
Employees eod of service benefits The Group provides end of service benefits to all employees in accordance wi th employment contracts and Qatar Labour Law The entitlement to these benefits is based upon the employees final salary aocl length of service subject to the completion of a minimum service period The expected costs of these benefits are accrued over the period ofemployment
Revenue Revenue is recognised to the extent thal it is probable that the economic benefits will flow to the Group and the revenue call be reliably measured Revenue is measured al the fair value of the consideration received excluding discoWlIS rebates and duty The following spec ific recognition criteria must also be met before revenue is recognised
Sale ofgoods Sales are recognised whcn significant risks and rewards of ownership of the goods have passed to the boyer and the amount of revenue cao be me3sured rcli3bly
Rental income Rental incorne from investment properties is accoWlted for on a time proportion basis over the period of tenancy Incentives for leases to enter into lease agreements are spread evenly over the lease teon even if the payments are not made 0 0 such basis Income arising Tom expenses recharged to tenants is recogn ised in the year in which the expenses can be contrac tually recei ved Service charges aud other such receipts are includcd gross o f related cosls in revenues as the Group acts as principal io this regard Premiwns received to terminate leases arc recognised in the consolidated statement of income when they arise
Service income Service income is recognised when the service is rendered and the outCQrne of the transactions can be estimated reliably
COlimission Commission is accounted for on an accrual basis when the right 10 receive the income is established
become on tra~el agencies [ncome on travel agencies is accounted for in the year in which the airline tickets are sold
IIIeresr income Joterest income is recognised as the interest accrues using the effective interest Clle method
Foreign currencies Transactions in foreign currencies ate recorded al tbe rale ruling at the date of the transaction Monetary assets and liabi lities dcoomioated io foreign currencies ace retranslated ill the raLe of exchange ruling at the reponing date All differences are recognised in the Statement ofinconlC
Use of estimates The preparation of (he Groups consolidated financial sta temenls in CQnfonnity with Intemltional Financial Reponing Standards ([fRS) requires management 10 rnake estimates and assumptions that affect the reponed amounts of assets and liabilities and disclosure of contingent asscts and liabili ties at the rcporting date and the reported amoUlils of revenues and expenses during Ihe reponing period Although these estimates are based on managements best knowtedge of current events nnd actions acnm results may ul timately differ fro m those estimates (Significant asswnptions nccounting judgments and estimates used in preparing these coosolidated fina ncial sta temenlS are disclosed in Note 31)
The estimates and underlying assumptions are reviewed regularly Revisions to accounting estimlIes are recognised in (he period in which the estimate is revised if the revision affects only that period or in th~ period of the revision and future periods if the revision affects both current and fu ture periods
17
Aamal Company QSC
NOTES TO THE CONSOLlDA TED FINANCIAL STATEMENTS For tbe year cnded 31 December 2013
3 BASI S OF PREPARATION AND SUMMARY OF SrGNIFICANT ACCOUNTING POLICIES (continued)
34 SUMMARY or SIGNIFICANT ACCOUNTING POLI CIES (continued)
Fair va lues A number of Groups accounting policies and disclosures require tJ1 C measurement of fair values for both financial and non-financial assets and liabil ities The Group has an established control framework with respect to the measuremeot of fair values When measuring the fair value of an asset or a liabili ly the Group uses market observable data for (be valuatiOD Fair values are categorised into different levels in a fair value hierarchy baCd on the inputs used in the valuation lechniques as follows
i) Leve l I - Unadjosted quoted prices io active markets for identica l assets and liabilities ji) Level 2 - Otheqobservable inputs not included within level 1 of the fair value hierarchy ii i) Level 3 - Unobtervable inputs (including enti ty s own data which are adjusted if necessary to retlect the
assumptions market participnllts would use in the circumstances) The Group recognises tralnSfers between levels of the fair value hierarchy at the end ofthe reporting period during which the change has ocdWTed_
Treasury shares When share capitl recognized in equity is repUIchased (by the Company or any of its subsidiaries) the amount of the consideration paid which includes direa ly altributable COSIS is recognized lIS a deduction from equity Wheo treasury shares are sold or reissued subsequently the amount received is recognized as no increase in equity and the resulting surplus or deficit on the transaction is presented io share premium
18
4
Aamal Company iQSc
NOTES TO THE ONSOLlDATED FINANCIAL STATEMENTS For the year ended 31 ecember 201 3
BUSINESS CO~BlNAnON
Acquisition o f Culf ROks Company VLL On 1 January 2012 the roup acquired 51 oflhe voting shares of Gulf Rocks Company WLL (Gul f Rocks) a limited Iiabiliry campan incorporated in Qatar and registered UJKier conunercial registration number 2249) The acquisition was made thT ugh Ci-San Trading WL L a subsidiary which is 50 owned by Aamal Group
I
The fai r val ue of lbe ideltifiable assets and liabilit ies of Gulf Rocks Co mpany WLL based on purchase price allocation exercise condlcd by tbe management as at the date of acquisition WJ S as follows
Fair value recognized on
acquisition QR
Assets I Cash and bank balances 14005495 ACC QUOiS receivable and wePayments I 749383 Amouots due from related plrties I
I oveotones
48311 190 5124 270
Available for sale investm~nlS 1985245 Plant and equipment 6769 17
81852500
Liabilit ies Accounts payable aJld accll1als 4724446 Amounts due to related parties 385070 Employees end of serviccibenefits (Note 15) 349272
5458788
Total identifiable net a5sellf
Purchase consideration trasferred Non-controll ing intereSt az-ising on business combination Bargain purcha5c gain rc~u ting from the tcquisilion
Allalysis ojcash flows OIl acquisition Net cash acquire11 Nith the subsidiary 14005495 Cash paid (30600000)
(16594505)
On I September 20 12 the Company acquired the balance 49 nfthe equiry of Gulf Rocks Accordingly the Group has 74 5 effective holdin4 in Gulf Rocks as at the reporting dale The excess nfthe purchase cons ideration over Ihe fair value o f net assets of GuJf Rocks acqui red from the nnn-controlHng interest has been recorded directly in the retained earnings of tbe Gr6up as at 31 December 201 2
QR Purchase consideration 404 10000 Less fuir value of oet asset~ acquiroo from the non-controlling Interest holder (39842792) EXce5s of purchllse cons idf ration over the fair value of net assets a(q uired 567208
19
5
Aamal Company QSC
NOTES TO THE (WNSOLlDATED FfNANClAL STATEMENTS For the year eoded 3 ) December 2013
CASH AND CASH EQUIVALENTS
For the pmvose of consolidated statement of cash flows cash and cash equivalents comprise the fo llowing balances
lon 2012 QR QR
Cash and bank accounts 330333904 282272895 Short lenn bank deposits 105802852 85608396 Cash and bank balances 436136756 367881 291
Bank overdrafts (6836280) (2885090)
Cash and cash equivalents 429300 476 364996120 1
The short tenn bank deposits are made for varying periods between one day aod three months depeoding on Ibe immedifltc cash requirements of the Group and earn interest at the respective short term deposit ra tes
6 ACCOUNTS RECEfVABLE AND PREPAYMENTS
2013 2012 QR QR
Trade aCColUlts receivable 411 011 567 345260657 Advances 0 suppliers and prepayments 50787921 629389J 5 Retention receivables 36217081 56943030 Other receivables 12073270 17 139173
5tO089839 4 82 28 1775
As at 31 December 2013 trade accountS receivoble amoWlting to QR 2690 1412 (201 2 OR 24984025) were impaired Movements in the allowance for impairment of trade aCColmts receivable were as follows
2013 202 QR QR
At 1 January 24984025 1 877085 Charge for [he year (Note 21) 2294590 13613 120 Amounts wriuen off (19949) (117368) Unused amotmts reversed (357254) (388812)
At 3 t December 26901412 24984025
20
6
1
lamal CompanyQSC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMEltS For the year ended 3 J December 2013
ACCotNTS RECEIVABLpound AND PREPAYMpoundNTS (contillued)
As at -1 I Dtcemxt the ageirg of unimpaired (ltlde accounb iltcivabk was as follows
P(HI duo
nor Up to 30 31-60 61middot90 Yi-jSj gt flO Tota impoirlt-fl days days days day doys
QR QR QR QR QR QR QR
1l13 411OJl$67 25l981960 32312165 2140966 19351fi43 16f)76888 60148545 2012 345260657 1695159B6 493lt)8566 2356$954 19494369 16908414 66374363
1JJJirtpai~ed receivable are expected no th bil5tS of past experienn) 10 be fully fcCi)evbc H is not the pngtctlce ofthcent Group to oblum collaleral over recejvablcI_
AMOLNTS DUE FROyl REL-TEO PARTIES
Name
AI ~aisnl Holding Company V_LL E Seweo Cabtes Qatn WL L Cnild -ftt Cvmlllny Al hz Retll E$vt rWesnnim Company WLL~ AllaZi Real Estale BrAnch EI Sewedy Electric Egypt WLL MuincrDJ1Ce Mwagmvont Group Qat3r W LL Good fe Cheffilt - The Pcarl
BuderPhtrnacy Al Faisallnlemadonal Tnl(i and Investment Company WLL AI-rabia Land Trnr~PQltit1g Company rLL ro Sewedy CabLes - Kuwuit Gcentttco hlttrnJmJilI Frijns StHytural Steel Middle East WLl Winer Wunderand Company WLL Al FtOH1H for Investment amp llllemtiOl1a Trading COntpAny WJ_L Q)lar Bahrain lmerOlnionai Cnero3 WLL Gulf EngJisb Sltl-Qo] Al Rayyao Tourism lve$lrnent Company W LL Other relater purties
2013 2012 QR QR
15412-1064 ll941Y70 34644615 ~li96858l
[()0405 14-45012 51 59197 9538116 15514113 4014727 236824$
1867526 LSOfd22
8(1012 10435r 311650 746395
15023 204450 459829
2iYHi 244940 186750
152170 143440 33500 7768(1
6259 1459lt) 758962-1
__2~61g~~_ 1~95Ji
bull 214109950 171525363
--__ shy
7
8
9
Aamal Company QSc
NOTES TO THE CONSOLIDATED FfNANClAL STATEMENTS For the year ended 3 1 December 2013
At10(JNTS DUE FROM RELATED PA RTIES (continued)
NO les (i) Transactions witll related parties are eam ed out through open account and Directors do not consider any
receivables to be past due or impaired
(ii) Related party transactions ore disclosed ill Note 26
INVENTORIES
Goods for rew le Raw materials and spare pans Work in pTOgresS Goods in transit
Less Provision fOI obsolete and slow moving invenlories
1013 QR
165499699 38388307 19944678 9671 8553
320551237 (3851692)
31 6699545
Movements in the provision for obsolete and slow moving inventories were as follov~
At I January Charge for the year (Note 19) Reversals Amounts wri tten off
At 31 December
E QUITY-ACCOUNTED INVESTEES
TIle Group has the followiog invesllnenfs in equity-accounted investees
Interests in joint venrure Interests in associa tes
At 31 December
G roup s snare of profits fr om the equity-ncco unted iovcstees arc AS follows
Profit share from in vestment iojotnt venture Profit share from investment in associates
202 QR
232597650 36608394 30622960
10521 9695
405048699 Q 145826)
40 I902873
203 QR
3145826 1 380617 (535695)
( 1139056)
385 1692
20 12 QR
2795992 2208263 (137995)
( 1720434)
3 145826
2013 QR
2012 QR
129462184 3644723
124124803 2545188
133106907 12666999 1
17330368 22869454 1169533 534050
18499901 23403504
22
10
Aama Company QSC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 31 December 201 3
9 EQUITY-ACCOUNTED INVESTEES (continued)
Counlry of incorportllion
Relationship Proportion ofownership and lotilfg power held by the Group
203 2012
EI S~wedy Cables Qatar W LL Frij ns Structural S teel Middle East WLL Al Ftfazdaq Company WLL
Qat~
Qatar Qatar
loint venture Associate Associate
55 20
55 20 35
Note With effect from 1 January 20 13 the mlnagemeot of the Group has reclassified the investment in Al Farazdaq Company W L-L from investment in associate to investment in subsidiary This is based on the transfer of share holding by the other shareholder whereby the conlroi o f AI FOl razdaq Company W LL bas been assigned 10 tbe Company
INVESTM ENT PROPERTIES
a) Reconciliation of carry ing amounl 2013 202 QR QR
AI I January 611334701 8 555 1835348 Additions 9568047 1727191 87 Transferred from property plant and equipment (Note II ) 34519828 Net gain iTo m fa if value adjlls tment 245051107 388792483
At 31 December 6402486000 6 11334701 8
b) Measurement of fair value
The fair values of the Groups inveS hnent properties as at 31 December 201 3 and 3 1 December 2012 have been arrived al on the basis of valuations carried Ollt on the respective dates by professionally qualified independent valuers not related to the Group The independent valuers have appropriate qUlli ficatioos and (eceJ11 experience in the valuation of properties in fhe relevant locations The fa ir value WltlS determined based on market comparable approach that reflocl s recent transaction prices for simillt1r properties and discounted cash flo w and income approach techniques
Details of the Group s iovestment properties and infonnation about the fa ir vn lue hierarchy as at ) I December 20 I J are as fo llows
IIvestment propenies
Level 3 fair vallie
Al I Janu ary 6 [ 13347018 Additions and trans fers from property plant and equipment 44087875
Gain included iu prom and loss Net gain from fair value lt1djuslmem 245051 107
AI J I December
The Group recognizes transfers between levels of fair value hierarchy as o f the end of the reponing period during whicb the transfer has occurred There were no transfers between the fai r va lue hierarchy during the year
23
10
Aamal Company QSc
NOTES TO THE ONSOLlDA TED FINANCIAL STATEMENTS For the year ended 3 I ecember 201 3
LNVESTM ENT ROPERTIES (contin ued)
b) Measuremen t 0 (air value (conti nued)
Vau t ion technique an significant unobservable in puts
The valuer has applied t e income capitali zation discounted cash flow and comparab le methods to detennine the market value of the lnve tment propen ies Significant unobservable inputs used included expected market rental growth rates (an average 425) occupancy rates (approximately 90 to 95) and risk adjusted discount rates (approximately 5 to 7 0) M y significant change in these inputs can impact lhe fair valuation of investment propcnies
24
Aamal Company QS c
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For che year ended 31 December 2013
11 PROPERTY PLAi~T AND EQUIPMENT
FumilUre Truck mixers fIXtures and Complllers
Leasehold and maor Plum (fd office and relaed eapiowork Buidings improvements vehicles machinery eqllipmcni sofMore in progmiddotcss Total
QR QR QR QR QR QR QJl QR
At I January 2013 137870126 371 88 132 9595813 1 262536261 19 580954 14864 385 561 32447 6241 30436 Additions 948)65 2618 100 5367399 859061 111 5268 137147581 148055774
Relating to d isposalswrite-off (1042642) (4390496) (77157L) (589150) ( 184075) (6977934) Transfer from capilal work in progress 1505 310 164 336 3601776 ( 150000) 1182741 (6304 163) Transrer to investment properlies (Note (0) (345 19828) (345 19828)
At J I Dttember 201 J 139375436 J7 258~ ~1 85735 270733865 19700865 169783 19 152456037 _73068~448
Depreciation AI I January 2013 16133915 J6902 529 49087707 68783 065 11 980009 tl71 595 3 174603 178 Charge for the year 7059805 3237150 5390767 12249797 2849162 1768823 42555504 Relating 10 disposalsJvri te-off (664709) (4 3 1716 1) (724322) (552939) ( 18 1993) (6441 124)
At 31 December 201 3 23193 720 19474 9 70 50161 313 90303540 14276232 13302783 2 107 17558
Net carrying amounts At 31 December 2013 116181J16 _17783221 44024422 180415325 5424633 3675536 __l2456O37 JJ9970~890
Notes (i) Depreciation charge for the year amounting 10 QR 33 164382 (201 1 QR 3303091 6) is included in tbe direct costs and an amount of QR 60055 (20 12 QR 36939)
has been capiulised under capital work in progress
(ii) The capital work in progress includes capitalised borrowing costs amounting to QR 125645 (20 12 QR 15358)
(ii i) The buildings are constructed on a plot ofland taken on a loog term operating lease
25
Aamal Company QS c
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 31 December 201 3
II PROPERTY PLANT AND EQUIPM ENT (continued)
C05I~
At 1 January 2012 Additions Acquired through business combinations (Note 4) Relating to d isposalswrite-off Transfer from capital work in progress Transfers
Buildings QR
137434400 435726
Leasehold improvemellls
QR
38137377 446J 04
144 103 ( 1539452)
Truck mLCers and molO
velricles QR
83427661 11464679
1697609 (631824)
Plant and machinery
QR
249335437 97264 85
35 14 132 (99498)
59705
Furniture fir ures and
office equipmem
QR
22845309 667586
192042 (3696457)
98000 (525526)
Computers and related
software
QR
158 19519 87 14 14
141837 (266 1733)
908078 (2 l4730)
Capitol work in progress
QR
12104889 451 53265
( 1065783) (59924)
Total (JR
55910459 8 68765259
5689723 (862 8964)
(800180)
AI 31 Dttember 2012 137870) 26 371881 32 95958 13 1 262536261 19580954 14864385 56132447 624 130436
Depreciation AI Jaouary2012 Charge for the year Acquired wough business combinations (Note 4) Relating to disposalswrite-off Transfers
9144666 6989249
)4 3 16620 3410618
144103
(96 812)
42558404 548 1613
1671942 (6242 52)
44555 290 2 1398849
2890797 (6 187 1)
12392584 3 182899
169005 (3558466)
(206013 )
12235266 2077633
136959 (2627283)
(J 0662)
135202830 42540861
5012806 (7840684)
(312635)
At 3 L December 201 2 161339J5 16902529 49087701 68783065 11 980009 11715953 174603 178
Nel canying amoWlts
At 31 December 201 2 12 173 6211 2028560 3 46870424 193753 196 7600945 3148432 56132447 449527258
26
12
13
Aamal Company QSC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 31 December 20 13
ACCOUNTS PA YABLE AND ACCRUALS
Trade accouots payable Advances from customers and tenants Accmals Social and sports activities levy Other payables
AJIOUNTS DUE TO RELATED PARTIES
Name
Arab Compaey for Fiber Products EI Sewedy EIC( lric Ho lding Egypiasl Egypt Egyptlech Egypt United Industri es Company WLL Johnson Controls Air condi tioning aod Refrigeration Qatar WLL pound1 Sewedy Cables Egypt Johnson Controls Air conditioning and Refrigeration rNC Dubai United Wire Company WL L Gelteo Company W LL - Gelteo Refr igera tion and Airconditioo ing CampC Lightway nc AI Shaab Group of Companies Other related pruties
NO M Related party transactio l)s a re disclosed in Note 26
2013 QR
320017657 30486837 26924669 41 761 843 25855567
445046573
2013 QR
18517474
4902528
6531231 6404578 3215821
2825884 75 7825
3467288 263715
1313247
48199591
2011 QR
26716268 1 27410234 222575 76 28954726 33)33852
379119069
2012 QR
18380528 91458 82 54 13849 1 11 6 135 5374039 35291 2020359 1693323 1064744
670 179
11 0873 12 18650
49737757
27
14
Aamal Company QSC
NOTES TO THE CONSOLIDATED f fNANCIAL STATEMENTS For the year ended 31 December 201 3
INTEREST BEARING LOANS AND BORROWINGS
NOles Malilrify
2013 QR
2012 QR
CoMl Loan 2 Loan ) Loac4 Loan 5 Loan 6 Loan 7 CoMB Loan 9 Bills discounted
(0 (ii) (iii) (iv) (v) (vi) (vii) (viii) ( ix) (x)
lune2014 Seplember2014 January 2015 November 2016 December 20 16 November 2017 Jllne20 l J December 20 7 OClober 20 19
172070387 440000000 50544000 40261 621 81387109 19920036
6] 43890 62626967 42522794
915676804
298324180 440000000 10 J088000 57955030
100 168750 2 1300492
407728 1 782871 1
35000000
1065742444
Less Defe rred finatlcing cost (771 503) (897148)
914905301 1064845296
Presented in the consolidated statement of financial positioo as fo llows 20)3 QR
201 2 QR
Current ponion Non-current ponion
749520820 165384481
825568489 239276807
914905301 1064845296
The dete rred financing costs consSt of arrangement fees The movements m the deferred financing costs were as fo llows
203 2012 QR QR
At I January 897148 332 661 Addjtions during the year 1 062565 912506 Amortised during the year (218amp210) (34801 9)
At 3 1 December 771503 89 7148
28
Aamal Company QS C
NOTES TO THE CONSOUDATED FlNANCIAL STATEMENTS For tbe year ended 31 December 2013
14 INTEREST BEARING LOANS AND BORROWINGS (continued)
Nolec
(i) Loao I i USD 93000000 impon 10n moi lily obtoined to refimnee he Icne~ of edit The 10 IT interest at commercial fate and the interest is paid at monthly intervals The fucility is repayable within ISO days including the usage period under letter ofc redits
(ii) Loan 2 is a secured bridge loan obtained to settle an existing loan and working capital requirements of the Company The loan carries interest al coOlJllercial rates and interest is 10 be paid on quarterly basis
(iii) Loan 3 was obtained for the pWpOse of financing capital ependiture and direct payment to suppliers contractors and 5ub-controctors The 10011 CMries interest at commercial rate and the inte rest is to be paid q Uar1erly The fac ility is repayable in IS quarterly iostallmenls starting I July 20 11 and ending I January 2015
(iv) Loan 4 was obla ined for conSlruclion o r an inveslmenl property The loan is seclJed by 0 primary mortgage over the some property and corporate guarantee of the Aamal Company QSC Tbe loan carries interest at commercial marke t rate and is payable in quarterly instalments
(v) Loan 5 represents a loan fOlcility obtained in two sepnrole tranches amounting to QR 309 825 000 (USD 85 million) for the purpose of refurbi shment and construction of fociJities io one of the investment properties The loan is repayable In 16 equal quanerly instalmcnlS for individua l tranche commencing from March 20 1J The loan carries interest at conunercial rJtes
(vi) Loan 6 represents secured loans obtained ffom a commercial bank in the previous periods for the purchase of heavy equipment and machines and were merged on 15 November 20 12 as a comb ined loan This loan is payable by 59 equal instalments of QR 426000 with (I last inSlalment of OR 438 326 with effect fro m 01 October 201 3 The loan carries interest at commercial market ra tes
(vii) Loan 7 is il tmst receipt banking facility obtained for the purchase of inventories This carried interest at conunercial market rates This loan was full y settled during the year
(vii i) Loan 8 represents secured loans obuined from a commercial bank in the previous periods for the purchase of delivery trucks and machinery and were merged on 22 October 2012 as a combined loan The loan carries inte rest at commercial market Tates and is payable by 59 equal insta lments o rQR 160000 with a last inSlOlmem ofQ R 128000 with effect from 3 1 December 2012
(ix) Loan 9 is an Islamic Financi ng Arrangement obtained for construction o f a manufacturing plam and as o f yearend ba lance represents partially drawn amount out of totil1 facility of QR 655 68000 The loan is secured by joint corvorate guarantee by the shareholders The loan carries profit at Islamic Financing rates and re-payable in quarterly instalments starting from the end of the 24 months gmce period from the date of loan drawn
(x) Bi ll discounting is a loan fac ility from banks The purpose of the arrangement is to discount bills locally and carries interest at current commercia l filte
15 EM PLOYEES END OF SERVICE BENEFITS
Movements in the provision reHectelt in the consolidated SLo1tement of financia l position were as fo llows 2013 201] QR QR
At I Jan uary 18111 763 17877937 Provision made during the year 4056969 4205499 Acquirelt through business combinations (Note 4) 349272 End of service benefits paid during the year (2210756) (4320945)
At 3 1 December 19957976 18 111763
29
Aamal Company Q5C
NOTES TO THE CONSOLIDATED FINANCIAL STATEMETS For tile y~ar ended 31 Dee~mber 2013
16 SHARE CAPITAL
2013 2012 QR Qq
AtI1l1)nud 60000)000 (20 2 544500JJOfn shares ofQR iii Cilch 60i)iQOOlOO 54450lt)0000
21)13 2012 Numher of
siMtS QR shares QR Issued Mtldfully paM At lJamld) 544SfWllOfJ 5445(100001) 495000000 49500000)0 1511C ofbonus S1i1-C ___ 5550~OOO 555000000 49SGOOOO 495000000
At 31 Decenef 6(OOampQllf1(1 ---14450O000 544~OOOOOO
All ampates m~ of a110 clss and caL equal voting rights
17 LEGAL Reuro5ERVE
As required by Qatar Comnertai COfrp7lnies Lav No5 of 2002 lOfp of the profit for the ye1J as a rru1imllli silould be mmsfened to legal re~erve The reserve is lot normay [lytiabe tor distribution except ill he cixcuJUstllrtUS stipulated m the above ~lemi0ntd GIW
IS HEVE1TE
2013 l)n QR QR
Sale of goods 1726893265 i709057~(iO
Renlal income UiO362322 133117509 S-ice income 858695 33940731 CornrrusslOlL Incentives and agency fces 44695S1 422~_632
212259$)33
19 DIRECT COSTS
2013 2)i2 QR
C 051 of inven(feS recognisedlIS an exptns 1522929956 497210830 Dind sL1ries lmd wages 601 [1336 5137856-8 Operating eXpenses on nml estate p~opet1les 36)711316 3041H504 fJepreciatiort (Kate I J) 33164382 B03091pound Operators marhgerrt6nt fees 14508588 li667989 Provisicn Qr obsolete and skwlt moving mvenlories (K)tc 8) 2380617 2208263 Other operating ilxpenses _31~3982 _ 3674946
1702139171 JS9653OI tgt
Aamal Compall-yQSC________________
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For lthe year ended 31 December 20 11
2G OTHER NeOiI
2013 20J3 QR QR
Interest mcume 2824216 2)314392 Profiv( loss) 00 disposal of property plant aoe eqUlpmem 737647 (l7362G) Eargain ptmnJse gain (Kote t) 8360793 MIsceJlaneous income 5723356
2013 2012 QR QR
ManllgetnUI hrQ empl(yees ws 55170302 55lt035middot1 Rent 23596799 2594915 Allowance for impaimlcot oUrsue aCQl1ot$ rc(Xjvalle (Nole 6) 129459(i 11613120 flBumcce ane profcampiitmJI fees 2IU9263 209J902 Corununication OOtHS 1935123 1649155 Trllining tid ouSfjt$s developmccl 950476 L095764 Re]X1in and mainle-nilnce 21)11SflS 2)2 I Poslag-c prjnting acri stationery 610299 541159shyvllsltdlancous expenses _~~~664 1lt2
-~~~ 125162812
22 fIN~lCE COSTS
2013 2amp2 QR QR
Inleres epen~ 42866312 5773U4B Am(vtisJliorgt ofdefcentrred financiog coStS __ 2l)tl26~~ gt3661
44930877----=
58063009
23 BASIC A~n nHUfED EARilNGS PER SHARi~
Basic trdTJogs per hue is caculatid 0y llividing the pwfill0( Ihc year attriouiabk (0- equity roldc-5 of the parent by lhi w~iglwxi avrage number of ordinary shares 0JstandirJg dulting tht_ year During Ihe year lil~ Conpmy i-sued and CBpii3lzed bonus shares lnd awmJingl) me previously ~eportod earnings per shac have blOM restatc(i
20i3 2012
Profit feT the year auributable to Cluity holderlt of the- paren (QR)
Weighted aVCTage number ofshares outstanding during the year (i)
Basic Jd diluted earnings per share (QR) 085
59985U413 shy
~~--~~~~- ~------J 1
23
Aamal Company QSc
NOTES TO THE CONSO LIDATED FfNANC[AL STATEMENTS For tbe year ended 3 l December 2013
BASIC AND DILUTED poundARNINCS PER SHARE (continued)
NOles (i) Th wigh d m nlg urnb of hres foc h P of lruling ~migs pee share h bee kulated
as follows 2013 20J2
QU3lifying shrues allhe begi ll1ling of the year 544500000 544500000 Effect of bonus shares issued and capitalised 55500000 55500000
600000000 600000000
Less T reasury shares (149587) (i357SI)
Weighted average number of shares at the end of the year 599850413 599864249
(ii) There were no potentia lly dilutiw shares outstanding at any time during tbe year and hence the diluted earnings per share is equal to the basic earnings per share
24 COItIMITMENTS
20 1] 2012 QR QR
Estimated capital expenditure approved and contracted for at the year eod but not provided for
Investment properties 2964000 8 139063 Property plant and equipment 16386500 63759762
19350500 71 898825
Operating lease commiIOlenlS under noncancellable lease agreemenlS
Payable wilhin one year 990806 702000
990806 702000
25 CONTINGENT UABILITlES
The Group had the following contingent liabi lities from which it is anticipated thai no malerial liabilities will arise
2013 2012 QR QR
Letters of guaramee 474551239 394255203
Letters of credit 7678499 194299384
NQles
(i) leHlaquogt of gu indud penonmnlaquo tend nd bid bonds d pymenlt g gi to suppliers and contractors by the Group in the ordina ry course of bus iness which will matme within twelve months fro m the reporting da te
(i i) Letters o f credit are provided by lodging documents to the bank tor purchase of trading goods fro m foreign suppliers wruch will maMC within thJee to six months from the date or tile Iransaclion
J2
26
Aamal Company QSc
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year eoded 31 December 2013
RELATED PARTY DISCLOSURES
Related party transactions Related parties represent major shareholders directors and key management persortOei of the Group and entities controlled joimly controlled or signjficamly innueoced by such parties Pricing policies md tenns of these tnlOSaclions are approved by the Group s management
Transactions with related parties induded in the consolidated financial stalemenls were as follows
20lJ 2012 QR QR
Sale o f goods and SClVices 419034048 415225221
Rental income 1980473 2069386
Purchase of goods and services 1591 38018 300835596
Rental expense 21 780G78 23397334
Bargain purchase gain 8360793
Net assets acquired 78803585
Relat ed party bal nnces AmountS due from and due to re lated parties are disclosed in Notes 7 and 13 respectively These balances do oot carry interest and are repayable OIl mulUlUy agreed dates generally within one year
The Group did not record any impairment of receivables reJatiog to amounts due from related pat1ies in either year This assessment is undertaken each fina ncial year through examining the ftnanc ial position of the related party and the market in which the related patty operates
Parent The Groups ultimate parent is Al Faisal Ho lding Company WLL
Compensa tion or key management personn el The remuneration of key management dming the year was as fullows
2013 2012 QR QR
Short-term benefi ts 7904794 1079595 Employees end of service benefits 408934 439776
8313 728 11235727
33
AamaJ Company QSC
NOTES TO THE CONSOLIDATED FINANCIAL 5T ATEMENTS For the year ended t Decernber 2013
Dilling the year 1he Group issued a XHlUS share of 10 928 of the paid tiP share capilal hdd ilS at 31 DiX2mber 2(JJ 2 mnmuning to OR 555000000 using retamed earnings as of3 December 2012 (20l2 Doe share for every ten shues held as of 31 Dcember Oll amuunting 10 QR 495OO()OOO ling reta1ned earmrgs 28 or 31 Decencer 2D II Jshy
18 SEGMENT INFORMATION
For J)iloogement PUIpltJM rhe Group i organised into business unit bused On LlJeir nature of Acttvitics lud nas fonY reportable segments and the Head Oftklt as bllow$
Propert Tbe segntn cOlists of City C~nler Qlta~ Brunch and Aamal Rea Esmte Branch whicb ll[c invoived in lampIiiog the faJ1ities of retail outlet conpex red e5ttlte nve(mltn$ and property remal buines~s
Trading mld distrib-wion The segmeul Involves wholesalB andlor rBtail distribution of phamlaceutlcai and consunable i1ems hume Epplianccs medica equimenl t-Tes ill1d lubricmtlaquo and II1UllitnEl printing The scgn(rtt includes 6c following entities
Eotl Sina Medical Branch
Aaen Medical Braudt
Amcill Troding and DistoolltlqO Branch bull Foot Care (erier HRnd) Good llre Pbannacy Bf4Uch bull Al FllfJdaq COllpafY wJ~L
InduSNol manuacturing TIle s0groent IOvolves Ulahuactrumg whole~we aliaor rewi dimibUlioti of dccnc cables lid tools ggregJ1es_ ready-IUx connole and cement bI0C~ lI1d provi$ion of servlCcent$ in rdation to iODllltroa Itvestment repair aJ-d Gonstruction of power plwts liiiding of LED ilgluitlg products und management of industnl enterpnses The segment ircludes be folloVting centntitis
bull Aam1 Cemert Industries LL AuraJ Redy1Yl(A BrQTlch
bull Doha Cables Qawf lLL Senyaf IoolJic1es Qatar Holding W LL Advanced Pipes ard Casfs CompQTly WJ L bull GuJfRoch Coroany WLL Ci~San Trading Company WLL hmovafive Lighting Compary WLL
Managed services le segment inyolvc~ provisloH of hOllseiltecpmg mi cleaning services fucditics n-anagemerJ services C1egy s(tvices ttl centfe sltrvicf)s buildiqg lnaintemHlelt aml acting as travel gens The 5cgnltnt includes the foUowing cnti(lcents
An13 ServJce Branch
amli TnlVeJa l5tmh
f-eco Gulf Co W LL
Jolinson Controls Qattl WJL
28
Aamal Company QSc
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended ) L December 20 13
SEGMENT INFORMATION (Co ntinued)
Head Office It provides corporate services to the branches and subsidiaries of the Group
The managiog d irector of the Group monitors the operating results o f its business units separately for the purpose of making decisions about resource allocation and perfonnance assessment Segment perfonnance is evaluated based Oil operating profit or loss of these segments Transfer pricing between operating segments are on anns length basis in a manoec similar to Iraosactions with third parties
Aamal Company QSC
NOTES TO THE CONSOLIDATED FINAN CIAL STATEMENTS For the year ended 3 1 December 20 13
28 SEGMENT INFORl1ATlON (continued)
Operating segments The operat ing segment after elimination or ioter-bra nch and inter-co mpany lrnnsaclioos is presented as follows
Trading (nd Industrial Managed For fh e year elided 31 December 2013 Properly disirjblli ioll manujocljlring services
QR QR QR QR Revenues
- h lemal parties 260360172 578909983 1231522768 S l802210 - Inter segments 1253914 6843 11 8 29639873 3445052 1
Heat Office QR
Eliminoions QR
(n187426) II
Tolal
QR
2J22595133
261614086 585753 lOI 126116264 1 8625273 1 (721 87426) 2122595133
Opera ti ng results Fair vallie gains
Profit I (loss) ror the year
Depreciotion
200811944
245051 107
445863051
2066290
86492834
86492834
4345438
22636250
22636250
33049 089
5157436
5157436
1760305
(47864882)
(47864882)
1334382
267233582
245051107
512 284689
42555504
36
Aamal Company QS
NOTES TO Tl CONSOLIDATED FfNANClAL STATEMENTS For the yeM ended 31 December 20 13
28 SEGMENf INFORMAnON (c)tltioucd)
FOf the yearrnrkti J f DccemOer 2(J12 QR
Revellues - ExlcmlJ partiel 2331 17 509 bull Inter segmcI11S 1168935
-- 234236434 --~- -~--
Openning results 18S2367t Fmt value gains J8S79-4~G
pront LOllS) for the rear 570616154
gt3659
No(
lnlermiddotgment revenues are eliminated on tQHs)idntiOH_
Tadiug ftfid disl d)Ntion
QR
S2S3l7661
324 j
5335493114 ~ -~-----
51384831
54384338
4J9R71(i
Indus idi mamfmturing
QR
1255694537
129U25lS4
56727059
56727059
32752742
slnltic(s QR
55216665 2939H31
S46lOJ96
7427414
7437
[908067
ilfild ()jice QR
(64(41976
Elimination QR
(74tHi2oJ Iii
Totul QR
206936372
2069336372
235721
(64641
131 f613
6245
42541)861
Amnal Company Q$l
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Por tnt yeartndeJ 31 De~embcr 2013
28 SEGMENT JNFORMATlON (contiutlld
Assc-ts and labilities
Tng alld lndtrstfw At31 December 2(113 distnbllrior manufacturIng senices HeadOJJicc EliminatioilS lola1
QR QR QR QR QR
Cumnl 3tS 227552338 620807979 61349 j 415 S()6)86922 (301636995) 1477366090 Noolucrcnt DSeIS 6411868160 12604763 622386238 4348876 (i624548 __p2438051 780
fotal asstl$ 6639420498 1194 1243194217 65698291 513Ql1470 ==-lt03H8l~O()) 853295-870 -~----~ ~---~ -
CUIT)llliabilitics 280995335 1(3511J60 6344(12777 2l0708lJ2 496261185 (3CH636995) 1249603264 Non-current iiatJlitics 7l70L5V2 8008485 HlDi16~43_ 3181668 t433799 ____ ilj534_~57 __ --Totul liahililics 353696897 ___~4159~4~ 734419720 ~4976~~~~~ 1434945711
---~~--~ -~-~~ - _2~~~4~~ (~~~~9~
C1pild expcndimn HI) WO743OOj 1397742_~471l2~--~50 ~51 ~1~623821~~1~_ -~----~------ -~
3amp
28
Aamal Company Q SC
NOTES TO THE CONSOLIDATED FfNANClAL STATEMENTS For the year ended 31 December 20 13
SEGMFNT INFORMATION (continued)
Assets and liabilities (continued)
AI 31 December 2012 Properly QR
Trading and d iSfriblllion
QR
Indusrial manufacfuring
QR
Managed senices QR
Currenl assels
Non-current assets
146491 186
6121 864484
2964425 12 903 7264
73468 1258
549267235
51387098 471 1439
Tolal assets 6268355670 305479776 1283948493 56098537
Head Office QR
468325024
6713643
475038667
Currentliabil iies
Non-current liabiLities 273444 748 1 J10 15024
86054583 7434286
669214261 1288 14977
2 1938953
287 1199
480393637 1253084
Totil lliabiliti cs 390459772 93488869 798029238 248 10 152 48J64672 1
Capila expendirure (ltII L 72865 878 1281254 6647 J356 7169 13 149045
Notes
(i)
(Ii)
Inter-segmeot balances are e limioafed 00 consolidatio n
Capi tal expendiTU res consist of additions 10 propeny plant and equip ment and iovestmenl properties
Eliminations QR
To wl QR
(273735776) (i )
(20308351(i)
1423591302
6689563230
(27576661 1) 8 113154532
(273135777) (i) 12573 10405
257388570
(273735177) 15 14698975
24 1484446
39
29
Aamal Company QSC
NOTES TO THE CONSOLIDATED FrNANCIAL STATEMENTS For the year ended 31 Dcltmber 1013
Fr-A]~ClAL RISK MANAGpoundMamp1H
Objccthes and policies fe Groups principal )uaucill liabilities comprise imltresl bctmllg loons and IxmowHgs baRlt ovetda1s amounts due to fclaled par1ies and tracte accounts payable The main pUlJXSi of thesc financial liabilities is 4J mise firmne or 610 Grmps operations The G0JP bas various fimmcial assets such as ttadc accounts receivable lInlOlmts due from related parties bark balances tltCntion receivable and other receivables which arisgt directly fran its cperuoonamp
The maiH ri~ks an3ing Joru (be Groups UnariCJlll illslrumenls jle market risk cretiJt nsk and hmdity risk Til BoarD ofDtrcctO$ reviews end agrees policies for mzrAgbg Caltt f hespound ri~k ihkh arc summariscd beloW
VIarktt risk yenfatket risk is the risk Um changes in market prices $Uch as intfcst rates and hreig lttmeocy ect14nge rilles Vltl1 affect the Groups profit eqwty Dr value tf its hoJdiI15 of financial instrl[Thnls rile objecivpoundj of marke1 risk mUnllgcrlcnt is to manage uld 1~ontr(ll tho tr))rket risk expo-sure vithir acceptable parfI-etcJ$ while optimising rerUID
Equit) price risk ampjuity prtce risk is the risk hilt the Group ampearnings will be affected as a rcmt (If luctttltions in fm vdue of ~qui-gt
mstwnents Eqlliry price risk arises from availabtetor~sale inv2strnems However the Groups exposure to eqmty price risk IS minima as II doesn hold sitl)iftrmt ailableAor-511le inYestrmmrs
[merest rate risk The Groups fimiruial poundS5ot ampId liaojlilies (at Rl $uJject to int~~ rate mk compnse brmk depoils interst bearing loans and bOITQwjags and bank overdr-afts At the reponwg dalt tbe [merest rale pronle of Ill Goups intexst bearing fbi4rdd instruments as fliows
11113 20i3 QR QR
Fued liIeryS refc insfrvrnellts
Fmmcial assets 113035962 111913394 FrOltwial liabilities --1~203712l) 1252t43~1
9)OI~ (13350972)
Fhlllting inireSI rate ns1lmlttrs Fanctl~ Isseis 127024345 ID43848o Fllllocial liabilities _-(i~9347~ (94))48926)
(836)64116)
The Groups exposure to t~ ris of changes in marXet interest fltltes relztes primariiy to the Groups financial assets and lizbitdic$ with t1Oltttirg interest mte~
lhe loEowing able demonstrates the ampmitivity nf the eonsolidattXI statemen1 of income 1) caonaly possible chonges in in1jfgtst rmes by 25 basis points with all othe vari)ble3 hdc umstant The sensitivity of the CooiK~ljclatid statement of inc(me $ the eft(ct of tb assumed changes in lnterdt rales for one year bf1sec on the floating rate financial assets and fimmcial hablhw$ held at 31 f~r The effect of deae-ascs in interest ral~ is cXp0Ctct to be equal and opposite to the effect oHlle increases sllQvro
Changes it Eftx OIl
00513 [oms profit QR
2013 Floating mterest Hlte instruments ----2$ bp (1649776)
2012 Flv-ating irkfiSt rale instrumenls +25 bp (209[9(1))
~--------- -~~ 40-middot------ _ _ shy
29
Aamal Company QSC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 3 1 December 2013
FINANCIAL RISK MANAGEMENT (continued)
Foreign currency risk Foreign currency risk is the risk lhilt the value of lhe fi nancial instruments will fluctuate due 10 changes in fore ign exchange rates
T rade aCcOlmts payable and accrued expenses include amounts due in foreign currencies mliniy US Dollars UAB Dirhams Great Britain Pounds (GB P) and Euros of which the Group has a currency risk primruily on the baJmces payable in Euros and GBP amoWlting 10 QR 14400634 (2012 QR 17214046)
The Group does not hedge its foreign currency exposure As both Qatari Riyal and UAE Dirhams are pegged to the US Dollar balances in US Dollars and UAE Dirhams are not considered to represent significant currency ris k to the Group
The table below indicates the Group s fore ign c urrency exposure on its monetary assets a nd liabilities The analysis calculates the effect o f a reasonably poss ib le move ment of the QR curre nc y rale against the Euro and GBP with all other variables held constant on the consolidated slate menl o f income (due to the fa ir va lue of currency sensitive monetary asse ts a nd liabilities) The e ffect o f decreases in fo reign c urre ncy exchange rates is expected to he equal and opposile 10 the e ffect of the increases shown
Incramp1se ill
f oreign cUlrency rate
0
the QR
Ellecl on profil
QR
2013 +5 (720032)
20 12 +5 (860 702)
C redit Tisk Credit risk is the risk that one party to a financial instrume nt wi ll fa il to discharge an obligation and cause the other party to incur a financial loss TIle Groups exposure to credit risk is indica ted by the carrying amoWlt o f its financia l asse ts whic h consist principally oftmde accollilts receivable retention receivable amounts due from related parties othe r receivables and bank baLances
The Group sells its products and prov ides services to vario us panies It is the G ro ups policy that all customers who wish to obtain on credit lerms are subject to credit verificalion procedures to ensure c redit Ilonhiness Each new customer is analysed individually for creditworthiness before the de livery o f products Of services Custo mm tbat fai l to met t the credi tworthiness may transact with the Group only o n prepayme nt basis Property rentals are mostl y received in ad vtnce or conlrlCled wi th post dated cheques 10 additio n receivable balances are monitored on an ongoing basis a nd the purchase limils are established for each c redit custoroer which are reviewed reguJarly based on the level o f past transactions and senlement The Groups max im wn exposure with regard to trade aCCOWlts receivab le net ofa llowance re nected allhe reporting date was ilS fo llows
2013 2012
Business SJgmelll QR QR
Property 15478832 19386326 Trading and distributio n 194343 597 179748274 Industrial ma nufac turing 183119753 131578668 Managed services 18069385 14547389
411 011 567 345260657
41
29
Aamal Company QSc
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For tbe year eoded 3 J December 20 13
FlNAJICIAL RISK MANAG EMENT (c-o Dtinued)
Credit risk (continued) With respect to credit risk arising from the other financi31 assets of the Group the Groups exposure to credit risk arises from default of the counterparty with a maximum exposure equal 10 the canying amount of these instruments as follows
2013 QR
202
QR
Bank balances Amounts due from related parties Retention and other receivables
436136756 214439950 48290351
36788129 t 171525363 74082203
698867057 613488857
The group reduces the expoSltre of credit risk arising from other financial assets by maintaining bank accounts in reputed banks and providing services only to creditworthy re lated parties
The management cons iders the bank balances and a mQUIIIS due from related parties as high grade fi nancial assets and lfade accounls receivable and other receivables as sundard grade financial assets When a finltmcial asset is identified 10 be impaired the managemoot downgrades such assets to impaired category and provides adequate allowances
Liquidity risk Liquidity risk is the risk that the Group will not be able to meet its fmancial obligations as they fu ll due The Groups 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 nonnal and stressed conditiom without incurring unacceptable losses or risking damage to the Groups reputa tion and is to maintain a balance belWeen continuity of fuoding and f1eilibility through the use of bank overdrafts and bank loans and borrowings
The Group monitors its risk to a shortage o f funds using a recuning liquidity plaOfling 1001 TIllS tool considers the manuiry o f financial assets (eg accounts receivable) and projected cash flows from operations The Groups teons ofsales or services require arooUIlts to be paid within 30-90 days from the invoiced dale
42
29
Aamal Company QSc
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For tbe year ended 3 1 December 2013
FrNANClAL ruSK MANAGEMENT (contiQued)
Uqujdity risk (continued) The table below summarises the ruaruriJy profile of the Groups financial 1iabililies a t 31 December based on contractual undiscountcd paymeots
2013 Interest bearing loans and borrowings Bank overdrafts Trade accowus payable Other payables Amounl~ due (0 related panles
201l Interest bearing loans and borrowings
Baok overdrafts Trade accounts payable Other payables Amounts due to related parties
On demand
QR
6836280
6836280
011 demand QR
2885090
2885090
Less than 3 months
QR
521324473
303638792
47406830
2530~480
898675575
Less thall 3
months
QR
469839033
10754JJIO 37543236
1964504 1
634568620
3 10 J2 mOlllh$
QR
239333328
16378865 20210580
2289~11l
298816884
3 to 12 monlhs
QR
365476972
159621 37 J 24745342
30092716
579936401
1to 5 years
QR
J 60092748
160092148
1 to 5 years
QR
248472226
248472226
gt 5 years
QR
25261598
25261 598
gt 5 years
QR
7648000
7648000
TOlaf
QR
947012147 6836280
320017657
67617410 48199591
1389681085
Tota
QR
109 1436231
1885090 267162681
622 88578
49737757
14735 10337
43
30
Aamal Company QSltc NOTES TO THE CONSOLIDATED FlANCIAL STATEMETS For the year ended 31 December 20 t3
21 F~ANClAL RlSK MAiAGEMElT (continued)
Capital management The Boards policy is to maintain a strong cepit1 base so as to rnainmin investor creditor and market ronfoonee and to SUSWlJ) fumre dcltclonnent Gf the buinest The Board of Directors rronitortl the tapital whkh tbe Group defines as wlal $parcloders equity excluding nonmiddotcornroliing imerests and the level of dividends to orrunury srarellOJdcfS
The Board also reeks to ITIaimain a balance between the higher (ctums (hat might be fA-~$ihle With higher leves of borrnwings end Lle edvnrJages and security named Sy it sOMd Cilpitai posi[ion The GfCup~ k1rget is to achievfl a return on slureholders equity (exclJding aonwurrolJiug iorcf(sts) greater lll(ll1 he wcighlcd average inres exxmse on mrerest bearing Ivens and oorrowing
The (lf0t-p nl)nDg-e ils cnpital structure and makes adjustneal lOll in light ofchang2s in economic nd bttincss cordjlons and shareholders expe1ationJo chmges veremiddot maCo HI Lleuro objecttves polilCS or proCCSSC3 during the years erded 31 D~mber 2013md 31 Dtccmlxr2Ql2
The Group monitors the capit2J using a gClting fatio which IS dep divided by caplla plus debL The GtOwgts policy is to keep ttJe ge-anng rmio bclew 40 Tbe Group iLdtdes withb debt imete-51 beagting loans ard ~OITORlngs less cash and cash equtVaknts Capltal includes eqmty attributable 10 the equity tolders oft~e parcrt
2013 QR
2(i2 QR
fmerest bearing loans and borrowings lcss- Cash and cas ltYJUvalcnts
9i4lJ05301 _~ (429JfJl4761
1004845296 (649)6201)
Net debt
Toa capital
Capita and net debt
699849045
~ringrttio
FAIR VALtES OF Fl~ANOAL f~STRUMETS
Finarcial iostrumenL~ cOlnprise tina~lctal assetS carl finailcialliabilities
Fmancial assets colJist of bank balance) short 1Cm bank dcposis amounL dve dom rc)ltted partilt)$ rekntion and other receivables and ttade accolmis rceivabe Finatlclll habiilics cgtmsist of banilt ovcrdratls jnerest bearing lOil1S and bOrowings amounts due (0 nliled partiG~ ane trade x-ounls payable
The- fair values of hese financial inStrumen1S except Jo-- imCfest bearing loam lHld bOlToving aproKimate lhdr cMryinJ vlhes due to the Slort temt mzrutiiles or these instrument
Tllc faiT value of iotcnst beating Nns and borrowin2s ae estimate( based on discoumed ltash flows twin int(s rale- cune-ntly nvailagtk fur tilt debt or sinuiar tetnlS an-a rell1lmng matunties
31
Aamal Company~Q=-ScC ______________~______
~OTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For fhe year ended 31 December 20 t3
SlGNIFICANT ASUMPTIONS ACCOUJTING JUDGElE1TS AND F8TIMATFS
impairment (If accoonts receivable n etrnwe of lhe collectible anoun of trade accounlgt reccvable is made when collection of the full lHl1OUt i~ nO looger probabk FOI nCividualty significitIl amounts this estimation is p~rformed on an indh-idllai a$[$ Amomts wHcb arc not indivldl11Uy significant but wluch are past due ZTe tsscssed collectively and an aJlQwaccc applied ucc()r~Jng to the length of lime past due based oc histnncal recovery nlJes
hnpalrment of inHntnries lavenoncs are held at tho lower of col and nol realisable value InIOn inventoncent$ becone old or 0-~amplete an estilTJte is mate of their net j alisable vulue For indiviolhlUy significant amountS this cstinaunrt is performec all aD lndividwl osis Amotlnts whieh are fl0t individually significan( btll which ltIre old at obsolete wx LltSessed wllecivdy md a provisior is applied sccnrding to the invenrory type and be dep)ee of ageing 0 cDsolescc1ce based on anticipUled selling prices
Classifigt1ltion of El Sew(gtdy Cable Qatar WLI ali a j(lint vwture pound1 Sovedy Cables Qatar is a limited hability company whose kgal fum confers SCprm11ior bernten tbe jXliiies 10 ~he jomi lfranpement Snd the Company Itself FurthenrlOre then IS no oontractua] arrmgelTeot or any oibe aus aod circumstriliCe$ that iocik41to tht he putic5 [0 the joint flJTIlrgernelit bave rights to the ssetl and obligrtdons fo~ the liabilities of the joint ilrrongement Acoordingly El Sewed- C[jbl~s Qamr WLL is dassifiecl 7S a joiut enrtrr of he GWtp
impairment of goodwill G0oovj)1 embedded in th~ cot 0 aquisitior of subsidiaries and eqmtj-iccounled iflV(stees ire teswt for irl1jXlirmnt aHuaily Tbe calculations of value [n use fO( cfish gecj~r)lilg units (loring to real nte projecg are rtost sensitive to tin IDHowing assumpti015
Grosgt i1wginmiddot Gross Ilmrgins arc lmsed on avrage values tuhje0d in (he [Xrioo preeedhli (e siaM of the budge xnod T1esC at( mcreased over the budgel period for mticipatltX efficiency Hnprovemots
DisC)unr r(es Discount rotes represent th cl1tent mark as~ssmetlt of the risks specific te ech cash geocroting unit regarding lhe time value of money ilnd mdividu)l risks of he tmtieriyilg assets whICh have not been inwrport1eti it the Citik flow estimates The dj~(OUrl flte tlkulation is based on the speclfte circurnsthLCes of lile Group and its opltllatJng segn)~nts (md derived (ff)rC it weighted avaage (XSt 0f apilaJ (WACC) Tb fACe (akw into uoount both deb and equity The 0$1 of equity is denved from dlC expected return 01 investmenl by the Groups investors TJc Gos10( deb is based on l1e borrvwings the Gmup IS obllsxl to service SC~lletllmiddotspecific r5k IS incorxt4too by applying individual bera facto The betn mctors ire evauatcentd annuaHy bhseci on pubJicly aVflllabe murked earn
Fair value ()fnHstmeni proputies The fuit laHe 0 nvestmel~ propertis is deltrrnlnzd b cxterrwl indepzfldell property valuers laving appr0priate recognised professional quabfiillions and recenl xperience H1 the localjl)n and G-tegory 0 the oroperty being valued
Useful hes of PfQPcrly plmr (llld zqulpment The Groups management detennints th estiunted useful jives Df It~ property plan and equipmnl fix calnurjng depreciation Thi5 e~timJte is 6lermind after cinsidring 1b expeelcd usage (1f the a5sclt [hysical l101t and (eas tedmiltal Dr com~ercia obsolesccnce
Gotlg Qncen
ibe Groups mangerncnt UiS made aJ assessmeot cf the 011115 ability (0 COllllOUC liS a going conct11l Imd is satsl1ed hat me Group ms the resources to contmue in business for he foreseeable fu1urc he1hennort he management is no aware oC lny material Hncertainties that lray CH~t signinchnt doubt tlPDfl the Groups ability 10 continue as a going umcem Therefore titpound lotlsolidatcd finilllcij stftemeols comirme to be prepltd on li g0ing concern basis
Aamal Company QSc
NOTES TO THE CONSOLIDATED FlNANC[AL STATEMENTS For the year ended 3 1 December 20 13
32 INCOME TAX
Certa in subsidiaries of the Group which have non-GCe ownership are subject to income tax under Qatar Income Tax Law No 2 1 of2009 The iocome tax is charged on the share of profits attributable to non-GCe shareholders For the purpose of these conso lidated fi nancial statements the income tax liability oftbe foreign shareholders has been excluded given that the non-GCe shareholders have agreed under the shareholder agreements signed with the Group to bear the fh lliiability and make necessary payments
33 COMPARATIVE INFORMATION
Certain comparative figw-es of the previous year have been reclassified 0 coofonn to the current years presentation However such reclassifications are oat materia and do not have an impact on tbe previously reported net profit other comprehensive income or the total equity for the comparative year
The impact from the resta tement of comparative infonnalion as a resuh of adoption of IFRS I I - Joint arrangements is detailed in Note 32 Changes in aCCQu(lting policies
46
2
Aamal Company QSC
OTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For toe year ended) J December 2013
BASIS OF CONSOUDA nON (continued)
Suhsidiaries (wntiourd)
Cmmffyoj fNgtpvniOil j irniJpvroliin ~__~ampiphdd~~
Nor G)1)Ji contfoifgtg
iMeregt
CmiddotSan TI~ing WLL Sdilamp lYJy1ng renting me Mltcentlopil12 [e~ tSite 30 invimenl w shams rnlilVigemc1t vf real lsta propeItilttl owning ille palent and tradcentmut and tnlding in iXjUiflfIfflt amJ vcilici$ 1he GroClp has tJe pcwer tv goem 6e ~inr8hl and ojJrtltllng
roicie_~ of ClSM by vifcle 0 a shlrcholdcrs 191e~mcentn(
745 25 1~i
nnoV1iv lightinf wmpany Qatar TNriing of Ught 2rrt1nz DiDd lEU Lwpj lmd 7r J) WLL olhT $hlil1g prrltwl
Twdiflg of of4 SiJpplk-s and providll$ prindna and 65 35 laniniltmJ sltrce~
Non-coufroUing illterests Non-controrling intel(SlS are measwed tj tleir propO(hOnile $hue Ot the tcquirees identifiabk net asscl III the JCqUiSlOt1 rote Chuegts in t1e Groups imcest in i $ubsiciwty hat do tot rcmltlo a loss of ~)I1a1)l xc accountd for as equity trnramplclions
Tamil-crions eUminnted on c)lwtidaticu lntngtgroup baiances Jue transactions 00 any unrealised income 1nd expenses ari$tng from intrnwgrOU tranSaOiQlls arc eiimmatcd UfiJeaiiHd gaina arising from ITaUstlclions ttlt equity-lKcoUl11uJ IlVtSlCCS are eliminatd 1gamst the investment 10 the extent oftlle Group interest in the inveMee Umaslised loses are eiiminatd II the same VllY us unrvalised gains hit only to Ille eXfeut that there is 10 evidence ofimpaimcentut
Illttn~ts in jOint arrangements iu)d associates Detais ofeach of ttc Groups Hutilrial Joint venlU)s fujltj assoeime~ at the end of the reponing period are 5 [OHOViS
Cmnirycgt PltJporlion qf Compao name infOjwNiIIO1 ewonlup Qltd
vOingjYwer htld by
tiff GrOlp
[I Sewed Cable QntM Tndllg in ele(mHnechmita CGlJ)ptnefllmd plOvicmg WLL rei) services El SWNed Cables )ilMr WLL is
49 JWoo (Wilt 55 tblre of rrofils (losses) hy StHyar lrdl11(rie~ Qal3t Hodirg WLt e 511b8idimy 0 ~he GOllp However (kw 10 ~ feiBtil shareholdergt agreewli pound ellWY has I~)mc a jOm vent( eTdive trmJ l January 20 wllkh is mC(t511rec Il1de the eqJity ngtU1l
rins $tngtdJBI S~ 1idJgt (law Ertity lS engaged l sled (b[iclli0ls Gf0Jp mtllpoundure Ea LC t11cent fl5sodau under cquhy nlctooo
Aamal Company QS c
NOTES TO THE CONSOLIDATED FlNANClAL STA TEMENTS For the year ended 31 December 2013
3 BASIS OF PREPARATION AND SUMMARY OF SfGNlflCA1T ACCO UNTING POLICIES
31 BASIS OF PREPARATION
The consolidated fi nancial statements have been prepared in accordance with lntema tional Financial Reporting Standards (IFRS) and the appLicable requirements ofQalar Commercial Companies law No5 of 2002
The consolidated financial statements have been presented in Qatari Riyals (QR) which is he Companys floclional and presenUll ion currency and have been rounded to tlle nearest Qatari Riyal TIle consolidated financial statements are prepared lUlder the historical cost convention modified to include he measurement a l fair value o f investment properties and available-for-sale investments
32 CHANGES IN ACCO UNTING POLICI ES
The [lccoWiting policies adopted are consistent wilh Ihose of the previous fi nancial year except for the following standards effe ctive for the annual period beginning on or lfter 1 Jlnuary 20 13 These standards and amendments other tM n the impact of (FRS II - Joint Arrnnge menlS noted below did not have aoy malenal impact to the Group
lAS I (amendment) - Presenfalion of items ofother comprehensive income The amendments to IAS I require that an emity present separate ly the items of ltN her comprehensive income that would be reclassified to profit or loss in the future if certain conditions are met from those that would nC ver be reclass ified to profit or loss
lAS J9 - Employee benefits (201) lAS 19 (201 1) changes the definition of short-tenn and other long-tenn employee benefits to clatify the di stinction between the two
lAS 28 (201 f) - fnvesfmem in Associates and Joint ventires lAS 28 (2011 ) supersedes lAS 28 (2008) lAS 28 (2011) makes the foHowing amendments Associues held for sale JFRS 5 Non-current Assets Held for Sale and Discontinued Operat ions applies 10 an investment or a portion of an investment in an associate or a joint venture that meets the criteria to be classified as held fo r sale For any retained portion of the investment tlwt has not beell classified as beld for sale the entity applies the equity method until disposal o f the portion held for sa l ~ After disposal any re tained interes t is accounted for using the equity method if the re tained interest continues to be an associate or a joint venture and 0 0 cessation of significant influence or jo int conltOl even ifan investment in an associate becomes an investment in a joint venture or vice versa Ihe entity does not fe-measure the retaincd interest
Amendments ft) fFRS 7on ofseftingjil1ancial assels and jinancialliabilities (2011) Disclosures - O ffsetti ng Financial Assets and Financial Liabilities (amendmems to FRS 1) introduces disclosures bout Ihe impact of oetting arrangements on an entity s fin ancial position Based on the new disclosure requirements the Group has to provide inforroation about what amounts have been offset in the consolidated statement of fimmcial position and the nature and extent of rights of set o ff under master netting aITlngements or simi lar a1Tlngernents
fFRS 10 - Consolidate1 financial SIOlemenlS and lAS 17 Separate Fillancial SfalemenS (2011) [FR S 10 introduces a single control model to determine whether an investee should be consolidated FRS 0 replaces the parts of previQlSly exis ting lAS 27 Consolidated and Separate Financial Statements that dealt wi th consolidated fin ancial statements and SIC-12 Consolidation - Special Purpose Entities This new contro l model fo cuses on whether the Group has power over an investee exposure or righlS to variable rerums from its involvement with the in veSlee lnd abili ty to use its power to affect those returns The Group has amended its accounting policy on consolidation in line with requirements of TFR S 10 and has re-assessed its consolidation conclusion
[FRS 12 - Disclosures ofimerests ill other entities IFRS 12 brings together into a single Sfandatd all the disclosure requirements about an enti ty s interests in subsidiaries jo int arrangements associates and unconsolidated structured entities It requires the disclosure of infonnation about the nature risks and financial effects of these interests
II
Aamal Company QSc
NOTES TO THE CONSOLIDATED FTNANClAL STATEMENTS For the year ended 3 1 December 201 3
3 BASIS OF PREPARATION AND SUMMARY Of SIGNIFICANT ACCOUNTrNC POLICIES (continued)
32 CHANGES IN ACCOUNTING POLlc ms (coDtinued)
IFRS IJ Fair ~alue measuremetll TFRS 13 provides a single source of guidance on how fair value is measured and replaces the faif value measurement guidance tha i is currently d ispersed thIo tlghool [FRS It unifies the definiti on of fair va lue as the price that would be received 10 sell an asset or paid to transfer a liability in an orderly transaction between market participants a t the measurement dale It replaces and expands the disclosure reltjuiremenlS about fair value measurements in other IFRSs including TFRS 7
Improvements (0 IFRSs (20 ) Improvements to IFRS issued in 20 11 contained numerous amendments to IFRS that the IASB considers nonshyurgent but necessary Improvements to lFRS comprise amendments that result il) accounting changes to presentation recognition or measurement purposes as well as tennioology or editorial amendments related to a varie) of individuallFRS standards
During the period the Group has adopted the fo llowing new s tandard which became effecti ve for the annual periods beginning on I January 201 3 which had a materi81 impact to ule Group
IFRS II Joint AlTwlgements As a result of adopting IFRS II the GrOlp has changed its ltlccoUJ)ting policy for interests in jo int a rrangemeots Uuder rFRS 11 the Group classifies its interest in jo int arrJngements as e imer j oint operations or joint ventures depending on the Groups rights to the assets and obligations for the liabil ities ofthe arrangements When maldng this assessmenl the group considers the strucltire of the arrangements the legal fonn of any separate vehicles the contrac tual tenns of the arrangements and other fact s and arrangements Previously the structure of tbe a rrangement was the sole foc us of classification The Group has re-evaluated its involve men t in ils o nly joint a rrangement El Sewedy Cables Qatar WLL ltlnd has recla ssified the investment from jointly controlled entity to joint venture Also the Group has discontinued with re rrospective effect the use o f the proportionilte consol idation method and adopted the equity method to account for joint venture in accordance mth IFRS I I
Summary oquulllitative impuct The following tables summarises the materia l impac ts rcsulting from the above change in accounting polic ies on the Groups financ ial position profit o r loss and cash flo ws
Effect of chnnge in 31 Decemb er2012 accounting policy
Cunem assets (278 880441 ) Non-current assets 1295 1346 Total assds (265929095)
Current liabilities (265072694) NonmiddotcWTent liabilities (856401) Total lin bill ties (265929095)
For the year ended 31 December 2012
Profit for the year
Net chflllge in cash and cash equivalents dlUing the year (99696J)
12
Aamal Company QSc
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 3 I December 2013
3 BASIS OF PREPARATION AND SUMMARY OF SlGNlf[CANT ACCOUNTING PO LICI ES (continued)
33 lASB STANDARDS AND lNTERPRETATIONS ISSUED BUT NOT ADOPTED
The following lASB standardsamendments hJve been issued but are not yet mandatory and have 1l0( been etrly adopted by the Group
Standard
Illterpretotion COnem EffeClive dale
TfRS9 Financia l InstrumentS (new standard) I Januruy20 17
IAS 32 Financia l Instruments O ffsetting (amendment) I January 20 14 JAS 36 Financia llnslnnnents Disclosure - non-fi nancial asse ts (amendment) I January 2014
The Group is considering the implications of the above standards and the till1ing (If adoption by the Group
34 SUM MARY OF SIGNIFICAJT ACCOUNTING POLICI ES
Bu siness combinnriO llS The Group accounts for business combinations using the acquisitio n method wben connol is Imasferroo to the Group The consideration ITansrerred n the acquisition is generally measured at fa ir value as are the identifiable net assets acquired Any goodwill that arises is tested annua lly for impairmeot AllYgain on a bargain purchase is recognised in pro fit or loss immediately Transaction COStS arc expensed as incurred except if rehated to the issue of debt or equity securities
The considera tion transferred does nOt include amounts related to the settlement of pre-existing re lationships Such amounts are recognised in profit or loss
Any contingent consideration payable is roeasured at fair va lue at the acquisition date If the contingent consdicrntion is classified as equity then it is oote nmeasured and settlement is accounted for within equity Otherwise subsequent changes in the fa ir value of the contingent consderafion are recognised iu profit or loss
Cash a nd eash equivalen ts For the purpose of the consolidaled statement or cash flo ws cash and cash equivalents consist of cash and bank balaoces ruld short teJTIl bank deposi ts wi th an original marurily of three months or less net of outstanding bank overdrafts
Accounts receivable Accounts receivable are stated at originill invoice amount less an allowance for any uncollectible amounts An estimate for doubttit debts is made when collection of the flilt amount is no longer probable Bad debts are wntlen off when (here is no possibility o f recovery
Inventories Inventories are stated at the lower of cost and net realisable value Costs are those expenses incurred in bringing each product to its present location and condition
Goods ror resalework in progress - Cost of di rect materials aJld labour plus attributable overheads based on a oormallevel ofac1i vity
Raw material and spare pan s PlIlchase cost on a weighted average basis
Net realisable value is based on estimated selling price less any further costs expocted to be incurred to completion and disposal
13
Aama Company QSc
NOTES TO THE CONSOLIDATED FINANC IAL STATEMENTS For tbe year ended 31 December 20 13
3 BASIS OF PREPARATION AND SUMMA RY OF SIGNIFICANT ACCOUNTfNC POLI CIES (contin ued)
34 SUMMARY OF SIGNIFICANT ACCO UNTLNG POLICIES (continued)
Interests in equity-aecoupled inveslecs The Groups interest in equity-accounted investees comprise interest in associates and joint venture
Associates are lhose entities in which the Group has significant influence but not control or joint control over the financia l and operating policies A joint vennu-c is an arrangement in which the Group has jo int ool1lrol whereby the Group has rights to the net assets of the arrangement rather thall rights to its assets and obugations for its liabilities
InlereSIS in associates and the joint venture are accoliDted for using the equity method They are recognised initially tit cost which includes transaction costs Subsequent to ini tial recognition the consolidated financ ial stateme nts ioc lude the Groups shrre of the profit or loss and other comprehensive income of equity-accounted investees unti l the dalc on which significant in Lluence or joint control ceases
The reponing d~les of the equity-accounted investees and the Group are identical and the equi ty-accounted investees accoWlting policies confonn to those used by the Group for like tmnsactions afld events in similar circumstances
Investmefl t properties umd aod buildings are considered as investment properties only when they are being held to earn ren tals or for capital appreciation or fo r both
Investment properties are measured ini tia lly at cost including traosaction costs and borrowing costs that are directty attributable to construc tion o f the 8sseL The carrying alRount includes the cost of replacing part of an existing investment property at the time that cost is incurred jf toe recognition cri teria are mel and excludes the costs of day-to-day servic ing of an investment property Sub~quent to inilial recognition investment propert ies are slated at fa ir value which reOects market conditions at the reporting date Gains or losses arising from changes in the fa ir values of investment properties are included in the consolidated statement of income in the yeltl r in which they arise
Investment properties are derecognised when either they have been disposed off or when the investment property is pennanently withdrawn 1T0m use and no fu ture economic benefit is expected from its disposal Any gains or losses on the retirement or disposa l of aD investment property are recognised in the consolidated statement of income in the year of retiremeOl or disposal
Property under construc tion is dealt with under lAS 40 and rttorded at cost less accumulated impairment losses until either its fair value becomes relia bly detenninable or cons(TUction is completed (whichever is earl ier) At that time it is reclassified as inves tment property and a fa ir value adjustment is recognised in the consolidated statemenlof income
Transfers are made to or fro m in vestment property onl y when there is a change in use For a transfer from investmen propeIT) to ovmer occupied proreIT) the deemed cost for subsequent accounting is the fair value at the date of change in use If owner occupied property ~omes an investment property the difference between the canying value aoo the fair value at the date oflransfer is rttognised as a revaluation reserve in the equity and is released to the consol idated sta tement of income llpon disposal of such propcny
14
Aamal Company QSc
NOTES TO THE CONSOLIDATED FrNANCIAL STATEMENTS For the year eDded 31 December 20 13
3 BASIS OF PREPARATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLI CIES (continued)
304 SUMMARY Of SIGNIFICANT ACCOUNTING POLICIES (continued)
Property plant and equipment Property plant and equipment is stated at cost including borrowing costs that are eligible for capitalisation and excluding the costs of day-to-day servicing less accumu lated depreciation and any imp~innem in value
Depreciation is provided on a straight line basis on all propelT) planl and equi pment The rales of depreciatioo are based upon the following eSImnelt useful lives
Buildings 20 years Leasehold improvements 2-8 years Truck mixers and motor vehicles 4-1 5 years Plant and ITIJchioery 8-2 5 years Furniture fixtures and office equipment 3-5 years Computers and related software 3-5 years Capital work in progress Not depreciated
The carrying amounts are reviewed for impain nellt when events or changes in circumstances indicate that the carrying value may not be recoverable If any such indication exists and where the carrying values exceed tbe estimated recoverable amouot the assets are wri tten down to their recoverable amount being the higher of their fair value less costs to sen and their value in use
Expendirure iocurred lO replace a component of an item of property plaot and equipment that is accotmted for separately is capitalised and the carrying amount of the component that is replaced is written off Other subsequent expenditure is capitalised only when it increases furure economic benefits of the related item of property plant and equiproent Al l other expendirure is recognised in the consolidated statement of income as the expense is Incurred
An item o f property plaot and equipment is dereeognised upon disposal or when no future economic benefi ts are expected from its use or disposal Any gain or loss arising on derecognilloo of the asset is iocluded in the consolidated stalemeot o f income io the year the asset is derecognised
The asset s residual values useful lives and method of depreciation are reviewed and adjusted if appropriate at each rnancial year end
Borrowing costs Borrowing costs direc tly attributable to the acquisition constmction or production of an asset that necessarily takes substalltjal period of time 10 get ready for its intended use or sale are capilalised as pan of the cost o f lhe respective assets All other borrowing costs are expensed in the year they incur BOlTOwiog COSts consist of the interest and other costs that the Group incurs in coomction with the borrowing of fund s
Accounts paytlble and accruBls Liabilities are recognised for amounts to be paid in the fuMe for goods or services received whether billed by the supplier or not
Interest bearing loans Bnd borrowings Interest bearing loaos and borrowings are recognised ini tiaJy at fai r value of the amounts borrowed less direc tly attributable transaction costs Subsequent to initial recognition interest bearing loons and borrowings are measured at amortised COSt using the effecti ve interest method with any differences between the cost and tinal settlement values being recognized in the conso lidated statement of income over the peliod of borrowings Instalments due within one year aI amortised cost are shown as a ctuTentliabiliry
Gains or losses are recogTlised in the consolidated sialement of income when (he liabililies are derecognised Interest relating (0 imerest bearing loans and borrowings is expensed in the year in which it is incWTed e(cept those qualify for capitalisation
15
Aamal Company QSC
NOTES TO THE CONSOLIDATED FfNANClAL STATEMENTS For tbe year eoded 31 December 201 3
J BASIS OF PRpoundPARATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
34 SUMMARY Of)SIGNIFICAtlT ACCOUNTING POLICI ES (continued)
TClaot deposits Tenant deposit liabilities are initially recognised at fair value and subsequently measured at amortised cost where material Any di fference between the initial fair vllue and the oominal amount is [eluded as a component of rental income and rocognised on a straight-line basis over the lease term
Derecognition or fiolocial nsstls and liabilities
a) Financial assets
A fi nanCIal asset (or w~re apphcabJe a part of a fin ancial asset or part of a group of SImilar financIal assets) IS derecogmsed where J bull The n ghts to receIve [5h flo ws from the asset have expIred bull The Group has trans f rred Its rights to receive cash flows from the ass or has assumed an obhg811On to pay the
reltelved cash flows I full Wlthout mfl tenal delay to a third party under a pass-through arrangement and elther (3) the Group has Ira sferred substantially aIthe nsKs and rewards of the asset or (b) Ihe Group has neuher transferred nor relain substantially ai the n sks and rewards of the asset but has tnlnsferred control of the asset
When the Group has tTa~fened its rights 10 receive cash flo ws from an asset or has entered into a pass-waugh arrangement and has nejlher trmsferred nor reta ined substantially all of the risks and rewards of the asset nor trnnsferred control of the asset the asset is recogoised to the extent of the Groups cOlilinuing involvement in Ihe
In that case the Group at 0 recognises an associmed liability The mnsferred asset and ihe associaled liabi lity are measured 00 a basis thai flects Ihe rights lnd obligations that the Group has retained Continuing involvement that takes the form of a guara tee over the transferred asset is measured at the lower of the original canying amount of Ihe asset and fbe maxim amoun o f consideration that the Groop could be required to repay
b) Financialliabiliti
A financial liabili ty is defogniSed when the obligation under the liabil ity is discharged or cancelled or expires Where an existing fio8 1lci I liability is replaced by another from the same lender on substantia ll y d ifferent lenns or the terms of an existin liabili ty are substantia lly modified such an exchange or modification is treated as a derecognition of the orig~al liabili ty and the recog1Jitioil of a new liability and the dirference io the respective carrying amounts is reco ised in the consolidated Slatement o f income
Impalr meot ood uncollec ibility of fina ncial assets An assessment is made al each repon ing date to determine whether there is objective evidence that a speci fic financial asset may be impaired If such evidence exists allY impainneOl loss is recogoised in the consolidated statement of income ImT t is detemtined as fo llows
(a) For assets earned a t fair value impainnellt is tbe difference between cost and fair va lue (b) For asseamp carried at COSt impairment is the difference between cost and lIle present value of future
cash flo1S discounted at lhe current market rate of rdurn for a simi lar finan cial asset (0) For asseq carried al amortised COSt impainneot is the difference between canying arnOWll and lhe
present Value of future cash flO M discowlled at the original effective iDlerest rate
Provisions Provisions are rewgnised hen the Group has an obl igation (legal or COnslnlctive) aris ing fro m a past event and the costs to settle the obl igalio are both probable and able to be reliably measured
16
Aamal Company QSc
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 31 December 2013
3 BAses OF PR EPARATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICI ES (colltinued)
34 SUMMARY OF S IGNIFICANT ACCOUNTING POLICIES (continued)
Employees eod of service benefits The Group provides end of service benefits to all employees in accordance wi th employment contracts and Qatar Labour Law The entitlement to these benefits is based upon the employees final salary aocl length of service subject to the completion of a minimum service period The expected costs of these benefits are accrued over the period ofemployment
Revenue Revenue is recognised to the extent thal it is probable that the economic benefits will flow to the Group and the revenue call be reliably measured Revenue is measured al the fair value of the consideration received excluding discoWlIS rebates and duty The following spec ific recognition criteria must also be met before revenue is recognised
Sale ofgoods Sales are recognised whcn significant risks and rewards of ownership of the goods have passed to the boyer and the amount of revenue cao be me3sured rcli3bly
Rental income Rental incorne from investment properties is accoWlted for on a time proportion basis over the period of tenancy Incentives for leases to enter into lease agreements are spread evenly over the lease teon even if the payments are not made 0 0 such basis Income arising Tom expenses recharged to tenants is recogn ised in the year in which the expenses can be contrac tually recei ved Service charges aud other such receipts are includcd gross o f related cosls in revenues as the Group acts as principal io this regard Premiwns received to terminate leases arc recognised in the consolidated statement of income when they arise
Service income Service income is recognised when the service is rendered and the outCQrne of the transactions can be estimated reliably
COlimission Commission is accounted for on an accrual basis when the right 10 receive the income is established
become on tra~el agencies [ncome on travel agencies is accounted for in the year in which the airline tickets are sold
IIIeresr income Joterest income is recognised as the interest accrues using the effective interest Clle method
Foreign currencies Transactions in foreign currencies ate recorded al tbe rale ruling at the date of the transaction Monetary assets and liabi lities dcoomioated io foreign currencies ace retranslated ill the raLe of exchange ruling at the reponing date All differences are recognised in the Statement ofinconlC
Use of estimates The preparation of (he Groups consolidated financial sta temenls in CQnfonnity with Intemltional Financial Reponing Standards ([fRS) requires management 10 rnake estimates and assumptions that affect the reponed amounts of assets and liabilities and disclosure of contingent asscts and liabili ties at the rcporting date and the reported amoUlils of revenues and expenses during Ihe reponing period Although these estimates are based on managements best knowtedge of current events nnd actions acnm results may ul timately differ fro m those estimates (Significant asswnptions nccounting judgments and estimates used in preparing these coosolidated fina ncial sta temenlS are disclosed in Note 31)
The estimates and underlying assumptions are reviewed regularly Revisions to accounting estimlIes are recognised in (he period in which the estimate is revised if the revision affects only that period or in th~ period of the revision and future periods if the revision affects both current and fu ture periods
17
Aamal Company QSC
NOTES TO THE CONSOLlDA TED FINANCIAL STATEMENTS For tbe year cnded 31 December 2013
3 BASI S OF PREPARATION AND SUMMARY OF SrGNIFICANT ACCOUNTING POLICIES (continued)
34 SUMMARY or SIGNIFICANT ACCOUNTING POLI CIES (continued)
Fair va lues A number of Groups accounting policies and disclosures require tJ1 C measurement of fair values for both financial and non-financial assets and liabil ities The Group has an established control framework with respect to the measuremeot of fair values When measuring the fair value of an asset or a liabili ly the Group uses market observable data for (be valuatiOD Fair values are categorised into different levels in a fair value hierarchy baCd on the inputs used in the valuation lechniques as follows
i) Leve l I - Unadjosted quoted prices io active markets for identica l assets and liabilities ji) Level 2 - Otheqobservable inputs not included within level 1 of the fair value hierarchy ii i) Level 3 - Unobtervable inputs (including enti ty s own data which are adjusted if necessary to retlect the
assumptions market participnllts would use in the circumstances) The Group recognises tralnSfers between levels of the fair value hierarchy at the end ofthe reporting period during which the change has ocdWTed_
Treasury shares When share capitl recognized in equity is repUIchased (by the Company or any of its subsidiaries) the amount of the consideration paid which includes direa ly altributable COSIS is recognized lIS a deduction from equity Wheo treasury shares are sold or reissued subsequently the amount received is recognized as no increase in equity and the resulting surplus or deficit on the transaction is presented io share premium
18
4
Aamal Company iQSc
NOTES TO THE ONSOLlDATED FINANCIAL STATEMENTS For the year ended 31 ecember 201 3
BUSINESS CO~BlNAnON
Acquisition o f Culf ROks Company VLL On 1 January 2012 the roup acquired 51 oflhe voting shares of Gulf Rocks Company WLL (Gul f Rocks) a limited Iiabiliry campan incorporated in Qatar and registered UJKier conunercial registration number 2249) The acquisition was made thT ugh Ci-San Trading WL L a subsidiary which is 50 owned by Aamal Group
I
The fai r val ue of lbe ideltifiable assets and liabilit ies of Gulf Rocks Co mpany WLL based on purchase price allocation exercise condlcd by tbe management as at the date of acquisition WJ S as follows
Fair value recognized on
acquisition QR
Assets I Cash and bank balances 14005495 ACC QUOiS receivable and wePayments I 749383 Amouots due from related plrties I
I oveotones
48311 190 5124 270
Available for sale investm~nlS 1985245 Plant and equipment 6769 17
81852500
Liabilit ies Accounts payable aJld accll1als 4724446 Amounts due to related parties 385070 Employees end of serviccibenefits (Note 15) 349272
5458788
Total identifiable net a5sellf
Purchase consideration trasferred Non-controll ing intereSt az-ising on business combination Bargain purcha5c gain rc~u ting from the tcquisilion
Allalysis ojcash flows OIl acquisition Net cash acquire11 Nith the subsidiary 14005495 Cash paid (30600000)
(16594505)
On I September 20 12 the Company acquired the balance 49 nfthe equiry of Gulf Rocks Accordingly the Group has 74 5 effective holdin4 in Gulf Rocks as at the reporting dale The excess nfthe purchase cons ideration over Ihe fair value o f net assets of GuJf Rocks acqui red from the nnn-controlHng interest has been recorded directly in the retained earnings of tbe Gr6up as at 31 December 201 2
QR Purchase consideration 404 10000 Less fuir value of oet asset~ acquiroo from the non-controlling Interest holder (39842792) EXce5s of purchllse cons idf ration over the fair value of net assets a(q uired 567208
19
5
Aamal Company QSC
NOTES TO THE (WNSOLlDATED FfNANClAL STATEMENTS For the year eoded 3 ) December 2013
CASH AND CASH EQUIVALENTS
For the pmvose of consolidated statement of cash flows cash and cash equivalents comprise the fo llowing balances
lon 2012 QR QR
Cash and bank accounts 330333904 282272895 Short lenn bank deposits 105802852 85608396 Cash and bank balances 436136756 367881 291
Bank overdrafts (6836280) (2885090)
Cash and cash equivalents 429300 476 364996120 1
The short tenn bank deposits are made for varying periods between one day aod three months depeoding on Ibe immedifltc cash requirements of the Group and earn interest at the respective short term deposit ra tes
6 ACCOUNTS RECEfVABLE AND PREPAYMENTS
2013 2012 QR QR
Trade aCColUlts receivable 411 011 567 345260657 Advances 0 suppliers and prepayments 50787921 629389J 5 Retention receivables 36217081 56943030 Other receivables 12073270 17 139173
5tO089839 4 82 28 1775
As at 31 December 2013 trade accountS receivoble amoWlting to QR 2690 1412 (201 2 OR 24984025) were impaired Movements in the allowance for impairment of trade aCColmts receivable were as follows
2013 202 QR QR
At 1 January 24984025 1 877085 Charge for [he year (Note 21) 2294590 13613 120 Amounts wriuen off (19949) (117368) Unused amotmts reversed (357254) (388812)
At 3 t December 26901412 24984025
20
6
1
lamal CompanyQSC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMEltS For the year ended 3 J December 2013
ACCotNTS RECEIVABLpound AND PREPAYMpoundNTS (contillued)
As at -1 I Dtcemxt the ageirg of unimpaired (ltlde accounb iltcivabk was as follows
P(HI duo
nor Up to 30 31-60 61middot90 Yi-jSj gt flO Tota impoirlt-fl days days days day doys
QR QR QR QR QR QR QR
1l13 411OJl$67 25l981960 32312165 2140966 19351fi43 16f)76888 60148545 2012 345260657 1695159B6 493lt)8566 2356$954 19494369 16908414 66374363
1JJJirtpai~ed receivable are expected no th bil5tS of past experienn) 10 be fully fcCi)evbc H is not the pngtctlce ofthcent Group to oblum collaleral over recejvablcI_
AMOLNTS DUE FROyl REL-TEO PARTIES
Name
AI ~aisnl Holding Company V_LL E Seweo Cabtes Qatn WL L Cnild -ftt Cvmlllny Al hz Retll E$vt rWesnnim Company WLL~ AllaZi Real Estale BrAnch EI Sewedy Electric Egypt WLL MuincrDJ1Ce Mwagmvont Group Qat3r W LL Good fe Cheffilt - The Pcarl
BuderPhtrnacy Al Faisallnlemadonal Tnl(i and Investment Company WLL AI-rabia Land Trnr~PQltit1g Company rLL ro Sewedy CabLes - Kuwuit Gcentttco hlttrnJmJilI Frijns StHytural Steel Middle East WLl Winer Wunderand Company WLL Al FtOH1H for Investment amp llllemtiOl1a Trading COntpAny WJ_L Q)lar Bahrain lmerOlnionai Cnero3 WLL Gulf EngJisb Sltl-Qo] Al Rayyao Tourism lve$lrnent Company W LL Other relater purties
2013 2012 QR QR
15412-1064 ll941Y70 34644615 ~li96858l
[()0405 14-45012 51 59197 9538116 15514113 4014727 236824$
1867526 LSOfd22
8(1012 10435r 311650 746395
15023 204450 459829
2iYHi 244940 186750
152170 143440 33500 7768(1
6259 1459lt) 758962-1
__2~61g~~_ 1~95Ji
bull 214109950 171525363
--__ shy
7
8
9
Aamal Company QSc
NOTES TO THE CONSOLIDATED FfNANClAL STATEMENTS For the year ended 3 1 December 2013
At10(JNTS DUE FROM RELATED PA RTIES (continued)
NO les (i) Transactions witll related parties are eam ed out through open account and Directors do not consider any
receivables to be past due or impaired
(ii) Related party transactions ore disclosed ill Note 26
INVENTORIES
Goods for rew le Raw materials and spare pans Work in pTOgresS Goods in transit
Less Provision fOI obsolete and slow moving invenlories
1013 QR
165499699 38388307 19944678 9671 8553
320551237 (3851692)
31 6699545
Movements in the provision for obsolete and slow moving inventories were as follov~
At I January Charge for the year (Note 19) Reversals Amounts wri tten off
At 31 December
E QUITY-ACCOUNTED INVESTEES
TIle Group has the followiog invesllnenfs in equity-accounted investees
Interests in joint venrure Interests in associa tes
At 31 December
G roup s snare of profits fr om the equity-ncco unted iovcstees arc AS follows
Profit share from in vestment iojotnt venture Profit share from investment in associates
202 QR
232597650 36608394 30622960
10521 9695
405048699 Q 145826)
40 I902873
203 QR
3145826 1 380617 (535695)
( 1139056)
385 1692
20 12 QR
2795992 2208263 (137995)
( 1720434)
3 145826
2013 QR
2012 QR
129462184 3644723
124124803 2545188
133106907 12666999 1
17330368 22869454 1169533 534050
18499901 23403504
22
10
Aama Company QSC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 31 December 201 3
9 EQUITY-ACCOUNTED INVESTEES (continued)
Counlry of incorportllion
Relationship Proportion ofownership and lotilfg power held by the Group
203 2012
EI S~wedy Cables Qatar W LL Frij ns Structural S teel Middle East WLL Al Ftfazdaq Company WLL
Qat~
Qatar Qatar
loint venture Associate Associate
55 20
55 20 35
Note With effect from 1 January 20 13 the mlnagemeot of the Group has reclassified the investment in Al Farazdaq Company W L-L from investment in associate to investment in subsidiary This is based on the transfer of share holding by the other shareholder whereby the conlroi o f AI FOl razdaq Company W LL bas been assigned 10 tbe Company
INVESTM ENT PROPERTIES
a) Reconciliation of carry ing amounl 2013 202 QR QR
AI I January 611334701 8 555 1835348 Additions 9568047 1727191 87 Transferred from property plant and equipment (Note II ) 34519828 Net gain iTo m fa if value adjlls tment 245051107 388792483
At 31 December 6402486000 6 11334701 8
b) Measurement of fair value
The fair values of the Groups inveS hnent properties as at 31 December 201 3 and 3 1 December 2012 have been arrived al on the basis of valuations carried Ollt on the respective dates by professionally qualified independent valuers not related to the Group The independent valuers have appropriate qUlli ficatioos and (eceJ11 experience in the valuation of properties in fhe relevant locations The fa ir value WltlS determined based on market comparable approach that reflocl s recent transaction prices for simillt1r properties and discounted cash flo w and income approach techniques
Details of the Group s iovestment properties and infonnation about the fa ir vn lue hierarchy as at ) I December 20 I J are as fo llows
IIvestment propenies
Level 3 fair vallie
Al I Janu ary 6 [ 13347018 Additions and trans fers from property plant and equipment 44087875
Gain included iu prom and loss Net gain from fair value lt1djuslmem 245051 107
AI J I December
The Group recognizes transfers between levels of fair value hierarchy as o f the end of the reponing period during whicb the transfer has occurred There were no transfers between the fai r va lue hierarchy during the year
23
10
Aamal Company QSc
NOTES TO THE ONSOLlDA TED FINANCIAL STATEMENTS For the year ended 3 I ecember 201 3
LNVESTM ENT ROPERTIES (contin ued)
b) Measuremen t 0 (air value (conti nued)
Vau t ion technique an significant unobservable in puts
The valuer has applied t e income capitali zation discounted cash flow and comparab le methods to detennine the market value of the lnve tment propen ies Significant unobservable inputs used included expected market rental growth rates (an average 425) occupancy rates (approximately 90 to 95) and risk adjusted discount rates (approximately 5 to 7 0) M y significant change in these inputs can impact lhe fair valuation of investment propcnies
24
Aamal Company QS c
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For che year ended 31 December 2013
11 PROPERTY PLAi~T AND EQUIPMENT
FumilUre Truck mixers fIXtures and Complllers
Leasehold and maor Plum (fd office and relaed eapiowork Buidings improvements vehicles machinery eqllipmcni sofMore in progmiddotcss Total
QR QR QR QR QR QR QJl QR
At I January 2013 137870126 371 88 132 9595813 1 262536261 19 580954 14864 385 561 32447 6241 30436 Additions 948)65 2618 100 5367399 859061 111 5268 137147581 148055774
Relating to d isposalswrite-off (1042642) (4390496) (77157L) (589150) ( 184075) (6977934) Transfer from capilal work in progress 1505 310 164 336 3601776 ( 150000) 1182741 (6304 163) Transrer to investment properlies (Note (0) (345 19828) (345 19828)
At J I Dttember 201 J 139375436 J7 258~ ~1 85735 270733865 19700865 169783 19 152456037 _73068~448
Depreciation AI I January 2013 16133915 J6902 529 49087707 68783 065 11 980009 tl71 595 3 174603 178 Charge for the year 7059805 3237150 5390767 12249797 2849162 1768823 42555504 Relating 10 disposalsJvri te-off (664709) (4 3 1716 1) (724322) (552939) ( 18 1993) (6441 124)
At 31 December 201 3 23193 720 19474 9 70 50161 313 90303540 14276232 13302783 2 107 17558
Net carrying amounts At 31 December 2013 116181J16 _17783221 44024422 180415325 5424633 3675536 __l2456O37 JJ9970~890
Notes (i) Depreciation charge for the year amounting 10 QR 33 164382 (201 1 QR 3303091 6) is included in tbe direct costs and an amount of QR 60055 (20 12 QR 36939)
has been capiulised under capital work in progress
(ii) The capital work in progress includes capitalised borrowing costs amounting to QR 125645 (20 12 QR 15358)
(ii i) The buildings are constructed on a plot ofland taken on a loog term operating lease
25
Aamal Company QS c
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 31 December 201 3
II PROPERTY PLANT AND EQUIPM ENT (continued)
C05I~
At 1 January 2012 Additions Acquired through business combinations (Note 4) Relating to d isposalswrite-off Transfer from capital work in progress Transfers
Buildings QR
137434400 435726
Leasehold improvemellls
QR
38137377 446J 04
144 103 ( 1539452)
Truck mLCers and molO
velricles QR
83427661 11464679
1697609 (631824)
Plant and machinery
QR
249335437 97264 85
35 14 132 (99498)
59705
Furniture fir ures and
office equipmem
QR
22845309 667586
192042 (3696457)
98000 (525526)
Computers and related
software
QR
158 19519 87 14 14
141837 (266 1733)
908078 (2 l4730)
Capitol work in progress
QR
12104889 451 53265
( 1065783) (59924)
Total (JR
55910459 8 68765259
5689723 (862 8964)
(800180)
AI 31 Dttember 2012 137870) 26 371881 32 95958 13 1 262536261 19580954 14864385 56132447 624 130436
Depreciation AI Jaouary2012 Charge for the year Acquired wough business combinations (Note 4) Relating to disposalswrite-off Transfers
9144666 6989249
)4 3 16620 3410618
144103
(96 812)
42558404 548 1613
1671942 (6242 52)
44555 290 2 1398849
2890797 (6 187 1)
12392584 3 182899
169005 (3558466)
(206013 )
12235266 2077633
136959 (2627283)
(J 0662)
135202830 42540861
5012806 (7840684)
(312635)
At 3 L December 201 2 161339J5 16902529 49087701 68783065 11 980009 11715953 174603 178
Nel canying amoWlts
At 31 December 201 2 12 173 6211 2028560 3 46870424 193753 196 7600945 3148432 56132447 449527258
26
12
13
Aamal Company QSC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 31 December 20 13
ACCOUNTS PA YABLE AND ACCRUALS
Trade accouots payable Advances from customers and tenants Accmals Social and sports activities levy Other payables
AJIOUNTS DUE TO RELATED PARTIES
Name
Arab Compaey for Fiber Products EI Sewedy EIC( lric Ho lding Egypiasl Egypt Egyptlech Egypt United Industri es Company WLL Johnson Controls Air condi tioning aod Refrigeration Qatar WLL pound1 Sewedy Cables Egypt Johnson Controls Air conditioning and Refrigeration rNC Dubai United Wire Company WL L Gelteo Company W LL - Gelteo Refr igera tion and Airconditioo ing CampC Lightway nc AI Shaab Group of Companies Other related pruties
NO M Related party transactio l)s a re disclosed in Note 26
2013 QR
320017657 30486837 26924669 41 761 843 25855567
445046573
2013 QR
18517474
4902528
6531231 6404578 3215821
2825884 75 7825
3467288 263715
1313247
48199591
2011 QR
26716268 1 27410234 222575 76 28954726 33)33852
379119069
2012 QR
18380528 91458 82 54 13849 1 11 6 135 5374039 35291 2020359 1693323 1064744
670 179
11 0873 12 18650
49737757
27
14
Aamal Company QSC
NOTES TO THE CONSOLIDATED f fNANCIAL STATEMENTS For the year ended 31 December 201 3
INTEREST BEARING LOANS AND BORROWINGS
NOles Malilrify
2013 QR
2012 QR
CoMl Loan 2 Loan ) Loac4 Loan 5 Loan 6 Loan 7 CoMB Loan 9 Bills discounted
(0 (ii) (iii) (iv) (v) (vi) (vii) (viii) ( ix) (x)
lune2014 Seplember2014 January 2015 November 2016 December 20 16 November 2017 Jllne20 l J December 20 7 OClober 20 19
172070387 440000000 50544000 40261 621 81387109 19920036
6] 43890 62626967 42522794
915676804
298324180 440000000 10 J088000 57955030
100 168750 2 1300492
407728 1 782871 1
35000000
1065742444
Less Defe rred finatlcing cost (771 503) (897148)
914905301 1064845296
Presented in the consolidated statement of financial positioo as fo llows 20)3 QR
201 2 QR
Current ponion Non-current ponion
749520820 165384481
825568489 239276807
914905301 1064845296
The dete rred financing costs consSt of arrangement fees The movements m the deferred financing costs were as fo llows
203 2012 QR QR
At I January 897148 332 661 Addjtions during the year 1 062565 912506 Amortised during the year (218amp210) (34801 9)
At 3 1 December 771503 89 7148
28
Aamal Company QS C
NOTES TO THE CONSOUDATED FlNANCIAL STATEMENTS For tbe year ended 31 December 2013
14 INTEREST BEARING LOANS AND BORROWINGS (continued)
Nolec
(i) Loao I i USD 93000000 impon 10n moi lily obtoined to refimnee he Icne~ of edit The 10 IT interest at commercial fate and the interest is paid at monthly intervals The fucility is repayable within ISO days including the usage period under letter ofc redits
(ii) Loan 2 is a secured bridge loan obtained to settle an existing loan and working capital requirements of the Company The loan carries interest al coOlJllercial rates and interest is 10 be paid on quarterly basis
(iii) Loan 3 was obtained for the pWpOse of financing capital ependiture and direct payment to suppliers contractors and 5ub-controctors The 10011 CMries interest at commercial rate and the inte rest is to be paid q Uar1erly The fac ility is repayable in IS quarterly iostallmenls starting I July 20 11 and ending I January 2015
(iv) Loan 4 was obla ined for conSlruclion o r an inveslmenl property The loan is seclJed by 0 primary mortgage over the some property and corporate guarantee of the Aamal Company QSC Tbe loan carries interest at commercial marke t rate and is payable in quarterly instalments
(v) Loan 5 represents a loan fOlcility obtained in two sepnrole tranches amounting to QR 309 825 000 (USD 85 million) for the purpose of refurbi shment and construction of fociJities io one of the investment properties The loan is repayable In 16 equal quanerly instalmcnlS for individua l tranche commencing from March 20 1J The loan carries interest at conunercial rJtes
(vi) Loan 6 represents secured loans obtained ffom a commercial bank in the previous periods for the purchase of heavy equipment and machines and were merged on 15 November 20 12 as a comb ined loan This loan is payable by 59 equal instalments of QR 426000 with (I last inSlalment of OR 438 326 with effect fro m 01 October 201 3 The loan carries interest at commercial market ra tes
(vii) Loan 7 is il tmst receipt banking facility obtained for the purchase of inventories This carried interest at conunercial market rates This loan was full y settled during the year
(vii i) Loan 8 represents secured loans obuined from a commercial bank in the previous periods for the purchase of delivery trucks and machinery and were merged on 22 October 2012 as a combined loan The loan carries inte rest at commercial market Tates and is payable by 59 equal insta lments o rQR 160000 with a last inSlOlmem ofQ R 128000 with effect from 3 1 December 2012
(ix) Loan 9 is an Islamic Financi ng Arrangement obtained for construction o f a manufacturing plam and as o f yearend ba lance represents partially drawn amount out of totil1 facility of QR 655 68000 The loan is secured by joint corvorate guarantee by the shareholders The loan carries profit at Islamic Financing rates and re-payable in quarterly instalments starting from the end of the 24 months gmce period from the date of loan drawn
(x) Bi ll discounting is a loan fac ility from banks The purpose of the arrangement is to discount bills locally and carries interest at current commercia l filte
15 EM PLOYEES END OF SERVICE BENEFITS
Movements in the provision reHectelt in the consolidated SLo1tement of financia l position were as fo llows 2013 201] QR QR
At I Jan uary 18111 763 17877937 Provision made during the year 4056969 4205499 Acquirelt through business combinations (Note 4) 349272 End of service benefits paid during the year (2210756) (4320945)
At 3 1 December 19957976 18 111763
29
Aamal Company Q5C
NOTES TO THE CONSOLIDATED FINANCIAL STATEMETS For tile y~ar ended 31 Dee~mber 2013
16 SHARE CAPITAL
2013 2012 QR Qq
AtI1l1)nud 60000)000 (20 2 544500JJOfn shares ofQR iii Cilch 60i)iQOOlOO 54450lt)0000
21)13 2012 Numher of
siMtS QR shares QR Issued Mtldfully paM At lJamld) 544SfWllOfJ 5445(100001) 495000000 49500000)0 1511C ofbonus S1i1-C ___ 5550~OOO 555000000 49SGOOOO 495000000
At 31 Decenef 6(OOampQllf1(1 ---14450O000 544~OOOOOO
All ampates m~ of a110 clss and caL equal voting rights
17 LEGAL Reuro5ERVE
As required by Qatar Comnertai COfrp7lnies Lav No5 of 2002 lOfp of the profit for the ye1J as a rru1imllli silould be mmsfened to legal re~erve The reserve is lot normay [lytiabe tor distribution except ill he cixcuJUstllrtUS stipulated m the above ~lemi0ntd GIW
IS HEVE1TE
2013 l)n QR QR
Sale of goods 1726893265 i709057~(iO
Renlal income UiO362322 133117509 S-ice income 858695 33940731 CornrrusslOlL Incentives and agency fces 44695S1 422~_632
212259$)33
19 DIRECT COSTS
2013 2)i2 QR
C 051 of inven(feS recognisedlIS an exptns 1522929956 497210830 Dind sL1ries lmd wages 601 [1336 5137856-8 Operating eXpenses on nml estate p~opet1les 36)711316 3041H504 fJepreciatiort (Kate I J) 33164382 B03091pound Operators marhgerrt6nt fees 14508588 li667989 Provisicn Qr obsolete and skwlt moving mvenlories (K)tc 8) 2380617 2208263 Other operating ilxpenses _31~3982 _ 3674946
1702139171 JS9653OI tgt
Aamal Compall-yQSC________________
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For lthe year ended 31 December 20 11
2G OTHER NeOiI
2013 20J3 QR QR
Interest mcume 2824216 2)314392 Profiv( loss) 00 disposal of property plant aoe eqUlpmem 737647 (l7362G) Eargain ptmnJse gain (Kote t) 8360793 MIsceJlaneous income 5723356
2013 2012 QR QR
ManllgetnUI hrQ empl(yees ws 55170302 55lt035middot1 Rent 23596799 2594915 Allowance for impaimlcot oUrsue aCQl1ot$ rc(Xjvalle (Nole 6) 129459(i 11613120 flBumcce ane profcampiitmJI fees 2IU9263 209J902 Corununication OOtHS 1935123 1649155 Trllining tid ouSfjt$s developmccl 950476 L095764 Re]X1in and mainle-nilnce 21)11SflS 2)2 I Poslag-c prjnting acri stationery 610299 541159shyvllsltdlancous expenses _~~~664 1lt2
-~~~ 125162812
22 fIN~lCE COSTS
2013 2amp2 QR QR
Inleres epen~ 42866312 5773U4B Am(vtisJliorgt ofdefcentrred financiog coStS __ 2l)tl26~~ gt3661
44930877----=
58063009
23 BASIC A~n nHUfED EARilNGS PER SHARi~
Basic trdTJogs per hue is caculatid 0y llividing the pwfill0( Ihc year attriouiabk (0- equity roldc-5 of the parent by lhi w~iglwxi avrage number of ordinary shares 0JstandirJg dulting tht_ year During Ihe year lil~ Conpmy i-sued and CBpii3lzed bonus shares lnd awmJingl) me previously ~eportod earnings per shac have blOM restatc(i
20i3 2012
Profit feT the year auributable to Cluity holderlt of the- paren (QR)
Weighted aVCTage number ofshares outstanding during the year (i)
Basic Jd diluted earnings per share (QR) 085
59985U413 shy
~~--~~~~- ~------J 1
23
Aamal Company QSc
NOTES TO THE CONSO LIDATED FfNANC[AL STATEMENTS For tbe year ended 3 l December 2013
BASIC AND DILUTED poundARNINCS PER SHARE (continued)
NOles (i) Th wigh d m nlg urnb of hres foc h P of lruling ~migs pee share h bee kulated
as follows 2013 20J2
QU3lifying shrues allhe begi ll1ling of the year 544500000 544500000 Effect of bonus shares issued and capitalised 55500000 55500000
600000000 600000000
Less T reasury shares (149587) (i357SI)
Weighted average number of shares at the end of the year 599850413 599864249
(ii) There were no potentia lly dilutiw shares outstanding at any time during tbe year and hence the diluted earnings per share is equal to the basic earnings per share
24 COItIMITMENTS
20 1] 2012 QR QR
Estimated capital expenditure approved and contracted for at the year eod but not provided for
Investment properties 2964000 8 139063 Property plant and equipment 16386500 63759762
19350500 71 898825
Operating lease commiIOlenlS under noncancellable lease agreemenlS
Payable wilhin one year 990806 702000
990806 702000
25 CONTINGENT UABILITlES
The Group had the following contingent liabi lities from which it is anticipated thai no malerial liabilities will arise
2013 2012 QR QR
Letters of guaramee 474551239 394255203
Letters of credit 7678499 194299384
NQles
(i) leHlaquogt of gu indud penonmnlaquo tend nd bid bonds d pymenlt g gi to suppliers and contractors by the Group in the ordina ry course of bus iness which will matme within twelve months fro m the reporting da te
(i i) Letters o f credit are provided by lodging documents to the bank tor purchase of trading goods fro m foreign suppliers wruch will maMC within thJee to six months from the date or tile Iransaclion
J2
26
Aamal Company QSc
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year eoded 31 December 2013
RELATED PARTY DISCLOSURES
Related party transactions Related parties represent major shareholders directors and key management persortOei of the Group and entities controlled joimly controlled or signjficamly innueoced by such parties Pricing policies md tenns of these tnlOSaclions are approved by the Group s management
Transactions with related parties induded in the consolidated financial stalemenls were as follows
20lJ 2012 QR QR
Sale o f goods and SClVices 419034048 415225221
Rental income 1980473 2069386
Purchase of goods and services 1591 38018 300835596
Rental expense 21 780G78 23397334
Bargain purchase gain 8360793
Net assets acquired 78803585
Relat ed party bal nnces AmountS due from and due to re lated parties are disclosed in Notes 7 and 13 respectively These balances do oot carry interest and are repayable OIl mulUlUy agreed dates generally within one year
The Group did not record any impairment of receivables reJatiog to amounts due from related pat1ies in either year This assessment is undertaken each fina ncial year through examining the ftnanc ial position of the related party and the market in which the related patty operates
Parent The Groups ultimate parent is Al Faisal Ho lding Company WLL
Compensa tion or key management personn el The remuneration of key management dming the year was as fullows
2013 2012 QR QR
Short-term benefi ts 7904794 1079595 Employees end of service benefits 408934 439776
8313 728 11235727
33
AamaJ Company QSC
NOTES TO THE CONSOLIDATED FINANCIAL 5T ATEMENTS For the year ended t Decernber 2013
Dilling the year 1he Group issued a XHlUS share of 10 928 of the paid tiP share capilal hdd ilS at 31 DiX2mber 2(JJ 2 mnmuning to OR 555000000 using retamed earnings as of3 December 2012 (20l2 Doe share for every ten shues held as of 31 Dcember Oll amuunting 10 QR 495OO()OOO ling reta1ned earmrgs 28 or 31 Decencer 2D II Jshy
18 SEGMENT INFORMATION
For J)iloogement PUIpltJM rhe Group i organised into business unit bused On LlJeir nature of Acttvitics lud nas fonY reportable segments and the Head Oftklt as bllow$
Propert Tbe segntn cOlists of City C~nler Qlta~ Brunch and Aamal Rea Esmte Branch whicb ll[c invoived in lampIiiog the faJ1ities of retail outlet conpex red e5ttlte nve(mltn$ and property remal buines~s
Trading mld distrib-wion The segmeul Involves wholesalB andlor rBtail distribution of phamlaceutlcai and consunable i1ems hume Epplianccs medica equimenl t-Tes ill1d lubricmtlaquo and II1UllitnEl printing The scgn(rtt includes 6c following entities
Eotl Sina Medical Branch
Aaen Medical Braudt
Amcill Troding and DistoolltlqO Branch bull Foot Care (erier HRnd) Good llre Pbannacy Bf4Uch bull Al FllfJdaq COllpafY wJ~L
InduSNol manuacturing TIle s0groent IOvolves Ulahuactrumg whole~we aliaor rewi dimibUlioti of dccnc cables lid tools ggregJ1es_ ready-IUx connole and cement bI0C~ lI1d provi$ion of servlCcent$ in rdation to iODllltroa Itvestment repair aJ-d Gonstruction of power plwts liiiding of LED ilgluitlg products und management of industnl enterpnses The segment ircludes be folloVting centntitis
bull Aam1 Cemert Industries LL AuraJ Redy1Yl(A BrQTlch
bull Doha Cables Qawf lLL Senyaf IoolJic1es Qatar Holding W LL Advanced Pipes ard Casfs CompQTly WJ L bull GuJfRoch Coroany WLL Ci~San Trading Company WLL hmovafive Lighting Compary WLL
Managed services le segment inyolvc~ provisloH of hOllseiltecpmg mi cleaning services fucditics n-anagemerJ services C1egy s(tvices ttl centfe sltrvicf)s buildiqg lnaintemHlelt aml acting as travel gens The 5cgnltnt includes the foUowing cnti(lcents
An13 ServJce Branch
amli TnlVeJa l5tmh
f-eco Gulf Co W LL
Jolinson Controls Qattl WJL
28
Aamal Company QSc
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended ) L December 20 13
SEGMENT INFORMATION (Co ntinued)
Head Office It provides corporate services to the branches and subsidiaries of the Group
The managiog d irector of the Group monitors the operating results o f its business units separately for the purpose of making decisions about resource allocation and perfonnance assessment Segment perfonnance is evaluated based Oil operating profit or loss of these segments Transfer pricing between operating segments are on anns length basis in a manoec similar to Iraosactions with third parties
Aamal Company QSC
NOTES TO THE CONSOLIDATED FINAN CIAL STATEMENTS For the year ended 3 1 December 20 13
28 SEGMENT INFORl1ATlON (continued)
Operating segments The operat ing segment after elimination or ioter-bra nch and inter-co mpany lrnnsaclioos is presented as follows
Trading (nd Industrial Managed For fh e year elided 31 December 2013 Properly disirjblli ioll manujocljlring services
QR QR QR QR Revenues
- h lemal parties 260360172 578909983 1231522768 S l802210 - Inter segments 1253914 6843 11 8 29639873 3445052 1
Heat Office QR
Eliminoions QR
(n187426) II
Tolal
QR
2J22595133
261614086 585753 lOI 126116264 1 8625273 1 (721 87426) 2122595133
Opera ti ng results Fair vallie gains
Profit I (loss) ror the year
Depreciotion
200811944
245051 107
445863051
2066290
86492834
86492834
4345438
22636250
22636250
33049 089
5157436
5157436
1760305
(47864882)
(47864882)
1334382
267233582
245051107
512 284689
42555504
36
Aamal Company QS
NOTES TO Tl CONSOLIDATED FfNANClAL STATEMENTS For the yeM ended 31 December 20 13
28 SEGMENf INFORMAnON (c)tltioucd)
FOf the yearrnrkti J f DccemOer 2(J12 QR
Revellues - ExlcmlJ partiel 2331 17 509 bull Inter segmcI11S 1168935
-- 234236434 --~- -~--
Openning results 18S2367t Fmt value gains J8S79-4~G
pront LOllS) for the rear 570616154
gt3659
No(
lnlermiddotgment revenues are eliminated on tQHs)idntiOH_
Tadiug ftfid disl d)Ntion
QR
S2S3l7661
324 j
5335493114 ~ -~-----
51384831
54384338
4J9R71(i
Indus idi mamfmturing
QR
1255694537
129U25lS4
56727059
56727059
32752742
slnltic(s QR
55216665 2939H31
S46lOJ96
7427414
7437
[908067
ilfild ()jice QR
(64(41976
Elimination QR
(74tHi2oJ Iii
Totul QR
206936372
2069336372
235721
(64641
131 f613
6245
42541)861
Amnal Company Q$l
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Por tnt yeartndeJ 31 De~embcr 2013
28 SEGMENT JNFORMATlON (contiutlld
Assc-ts and labilities
Tng alld lndtrstfw At31 December 2(113 distnbllrior manufacturIng senices HeadOJJicc EliminatioilS lola1
QR QR QR QR QR
Cumnl 3tS 227552338 620807979 61349 j 415 S()6)86922 (301636995) 1477366090 Noolucrcnt DSeIS 6411868160 12604763 622386238 4348876 (i624548 __p2438051 780
fotal asstl$ 6639420498 1194 1243194217 65698291 513Ql1470 ==-lt03H8l~O()) 853295-870 -~----~ ~---~ -
CUIT)llliabilitics 280995335 1(3511J60 6344(12777 2l0708lJ2 496261185 (3CH636995) 1249603264 Non-current iiatJlitics 7l70L5V2 8008485 HlDi16~43_ 3181668 t433799 ____ ilj534_~57 __ --Totul liahililics 353696897 ___~4159~4~ 734419720 ~4976~~~~~ 1434945711
---~~--~ -~-~~ - _2~~~4~~ (~~~~9~
C1pild expcndimn HI) WO743OOj 1397742_~471l2~--~50 ~51 ~1~623821~~1~_ -~----~------ -~
3amp
28
Aamal Company Q SC
NOTES TO THE CONSOLIDATED FfNANClAL STATEMENTS For the year ended 31 December 20 13
SEGMFNT INFORMATION (continued)
Assets and liabilities (continued)
AI 31 December 2012 Properly QR
Trading and d iSfriblllion
QR
Indusrial manufacfuring
QR
Managed senices QR
Currenl assels
Non-current assets
146491 186
6121 864484
2964425 12 903 7264
73468 1258
549267235
51387098 471 1439
Tolal assets 6268355670 305479776 1283948493 56098537
Head Office QR
468325024
6713643
475038667
Currentliabil iies
Non-current liabiLities 273444 748 1 J10 15024
86054583 7434286
669214261 1288 14977
2 1938953
287 1199
480393637 1253084
Totil lliabiliti cs 390459772 93488869 798029238 248 10 152 48J64672 1
Capila expendirure (ltII L 72865 878 1281254 6647 J356 7169 13 149045
Notes
(i)
(Ii)
Inter-segmeot balances are e limioafed 00 consolidatio n
Capi tal expendiTU res consist of additions 10 propeny plant and equip ment and iovestmenl properties
Eliminations QR
To wl QR
(273735776) (i )
(20308351(i)
1423591302
6689563230
(27576661 1) 8 113154532
(273135777) (i) 12573 10405
257388570
(273735177) 15 14698975
24 1484446
39
29
Aamal Company QSC
NOTES TO THE CONSOLIDATED FrNANCIAL STATEMENTS For the year ended 31 Dcltmber 1013
Fr-A]~ClAL RISK MANAGpoundMamp1H
Objccthes and policies fe Groups principal )uaucill liabilities comprise imltresl bctmllg loons and IxmowHgs baRlt ovetda1s amounts due to fclaled par1ies and tracte accounts payable The main pUlJXSi of thesc financial liabilities is 4J mise firmne or 610 Grmps operations The G0JP bas various fimmcial assets such as ttadc accounts receivable lInlOlmts due from related parties bark balances tltCntion receivable and other receivables which arisgt directly fran its cperuoonamp
The maiH ri~ks an3ing Joru (be Groups UnariCJlll illslrumenls jle market risk cretiJt nsk and hmdity risk Til BoarD ofDtrcctO$ reviews end agrees policies for mzrAgbg Caltt f hespound ri~k ihkh arc summariscd beloW
VIarktt risk yenfatket risk is the risk Um changes in market prices $Uch as intfcst rates and hreig lttmeocy ect14nge rilles Vltl1 affect the Groups profit eqwty Dr value tf its hoJdiI15 of financial instrl[Thnls rile objecivpoundj of marke1 risk mUnllgcrlcnt is to manage uld 1~ontr(ll tho tr))rket risk expo-sure vithir acceptable parfI-etcJ$ while optimising rerUID
Equit) price risk ampjuity prtce risk is the risk hilt the Group ampearnings will be affected as a rcmt (If luctttltions in fm vdue of ~qui-gt
mstwnents Eqlliry price risk arises from availabtetor~sale inv2strnems However the Groups exposure to eqmty price risk IS minima as II doesn hold sitl)iftrmt ailableAor-511le inYestrmmrs
[merest rate risk The Groups fimiruial poundS5ot ampId liaojlilies (at Rl $uJject to int~~ rate mk compnse brmk depoils interst bearing loans and bOITQwjags and bank overdr-afts At the reponwg dalt tbe [merest rale pronle of Ill Goups intexst bearing fbi4rdd instruments as fliows
11113 20i3 QR QR
Fued liIeryS refc insfrvrnellts
Fmmcial assets 113035962 111913394 FrOltwial liabilities --1~203712l) 1252t43~1
9)OI~ (13350972)
Fhlllting inireSI rate ns1lmlttrs Fanctl~ Isseis 127024345 ID43848o Fllllocial liabilities _-(i~9347~ (94))48926)
(836)64116)
The Groups exposure to t~ ris of changes in marXet interest fltltes relztes primariiy to the Groups financial assets and lizbitdic$ with t1Oltttirg interest mte~
lhe loEowing able demonstrates the ampmitivity nf the eonsolidattXI statemen1 of income 1) caonaly possible chonges in in1jfgtst rmes by 25 basis points with all othe vari)ble3 hdc umstant The sensitivity of the CooiK~ljclatid statement of inc(me $ the eft(ct of tb assumed changes in lnterdt rales for one year bf1sec on the floating rate financial assets and fimmcial hablhw$ held at 31 f~r The effect of deae-ascs in interest ral~ is cXp0Ctct to be equal and opposite to the effect oHlle increases sllQvro
Changes it Eftx OIl
00513 [oms profit QR
2013 Floating mterest Hlte instruments ----2$ bp (1649776)
2012 Flv-ating irkfiSt rale instrumenls +25 bp (209[9(1))
~--------- -~~ 40-middot------ _ _ shy
29
Aamal Company QSC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 3 1 December 2013
FINANCIAL RISK MANAGEMENT (continued)
Foreign currency risk Foreign currency risk is the risk lhilt the value of lhe fi nancial instruments will fluctuate due 10 changes in fore ign exchange rates
T rade aCcOlmts payable and accrued expenses include amounts due in foreign currencies mliniy US Dollars UAB Dirhams Great Britain Pounds (GB P) and Euros of which the Group has a currency risk primruily on the baJmces payable in Euros and GBP amoWlting 10 QR 14400634 (2012 QR 17214046)
The Group does not hedge its foreign currency exposure As both Qatari Riyal and UAE Dirhams are pegged to the US Dollar balances in US Dollars and UAE Dirhams are not considered to represent significant currency ris k to the Group
The table below indicates the Group s fore ign c urrency exposure on its monetary assets a nd liabilities The analysis calculates the effect o f a reasonably poss ib le move ment of the QR curre nc y rale against the Euro and GBP with all other variables held constant on the consolidated slate menl o f income (due to the fa ir va lue of currency sensitive monetary asse ts a nd liabilities) The e ffect o f decreases in fo reign c urre ncy exchange rates is expected to he equal and opposile 10 the e ffect of the increases shown
Incramp1se ill
f oreign cUlrency rate
0
the QR
Ellecl on profil
QR
2013 +5 (720032)
20 12 +5 (860 702)
C redit Tisk Credit risk is the risk that one party to a financial instrume nt wi ll fa il to discharge an obligation and cause the other party to incur a financial loss TIle Groups exposure to credit risk is indica ted by the carrying amoWlt o f its financia l asse ts whic h consist principally oftmde accollilts receivable retention receivable amounts due from related parties othe r receivables and bank baLances
The Group sells its products and prov ides services to vario us panies It is the G ro ups policy that all customers who wish to obtain on credit lerms are subject to credit verificalion procedures to ensure c redit Ilonhiness Each new customer is analysed individually for creditworthiness before the de livery o f products Of services Custo mm tbat fai l to met t the credi tworthiness may transact with the Group only o n prepayme nt basis Property rentals are mostl y received in ad vtnce or conlrlCled wi th post dated cheques 10 additio n receivable balances are monitored on an ongoing basis a nd the purchase limils are established for each c redit custoroer which are reviewed reguJarly based on the level o f past transactions and senlement The Groups max im wn exposure with regard to trade aCCOWlts receivab le net ofa llowance re nected allhe reporting date was ilS fo llows
2013 2012
Business SJgmelll QR QR
Property 15478832 19386326 Trading and distributio n 194343 597 179748274 Industrial ma nufac turing 183119753 131578668 Managed services 18069385 14547389
411 011 567 345260657
41
29
Aamal Company QSc
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For tbe year eoded 3 J December 20 13
FlNAJICIAL RISK MANAG EMENT (c-o Dtinued)
Credit risk (continued) With respect to credit risk arising from the other financi31 assets of the Group the Groups exposure to credit risk arises from default of the counterparty with a maximum exposure equal 10 the canying amount of these instruments as follows
2013 QR
202
QR
Bank balances Amounts due from related parties Retention and other receivables
436136756 214439950 48290351
36788129 t 171525363 74082203
698867057 613488857
The group reduces the expoSltre of credit risk arising from other financial assets by maintaining bank accounts in reputed banks and providing services only to creditworthy re lated parties
The management cons iders the bank balances and a mQUIIIS due from related parties as high grade fi nancial assets and lfade accounls receivable and other receivables as sundard grade financial assets When a finltmcial asset is identified 10 be impaired the managemoot downgrades such assets to impaired category and provides adequate allowances
Liquidity risk Liquidity risk is the risk that the Group will not be able to meet its fmancial obligations as they fu ll due The Groups 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 nonnal and stressed conditiom without incurring unacceptable losses or risking damage to the Groups reputa tion and is to maintain a balance belWeen continuity of fuoding and f1eilibility through the use of bank overdrafts and bank loans and borrowings
The Group monitors its risk to a shortage o f funds using a recuning liquidity plaOfling 1001 TIllS tool considers the manuiry o f financial assets (eg accounts receivable) and projected cash flows from operations The Groups teons ofsales or services require arooUIlts to be paid within 30-90 days from the invoiced dale
42
29
Aamal Company QSc
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For tbe year ended 3 1 December 2013
FrNANClAL ruSK MANAGEMENT (contiQued)
Uqujdity risk (continued) The table below summarises the ruaruriJy profile of the Groups financial 1iabililies a t 31 December based on contractual undiscountcd paymeots
2013 Interest bearing loans and borrowings Bank overdrafts Trade accowus payable Other payables Amounl~ due (0 related panles
201l Interest bearing loans and borrowings
Baok overdrafts Trade accounts payable Other payables Amounts due to related parties
On demand
QR
6836280
6836280
011 demand QR
2885090
2885090
Less than 3 months
QR
521324473
303638792
47406830
2530~480
898675575
Less thall 3
months
QR
469839033
10754JJIO 37543236
1964504 1
634568620
3 10 J2 mOlllh$
QR
239333328
16378865 20210580
2289~11l
298816884
3 to 12 monlhs
QR
365476972
159621 37 J 24745342
30092716
579936401
1to 5 years
QR
J 60092748
160092148
1 to 5 years
QR
248472226
248472226
gt 5 years
QR
25261598
25261 598
gt 5 years
QR
7648000
7648000
TOlaf
QR
947012147 6836280
320017657
67617410 48199591
1389681085
Tota
QR
109 1436231
1885090 267162681
622 88578
49737757
14735 10337
43
30
Aamal Company QSltc NOTES TO THE CONSOLIDATED FlANCIAL STATEMETS For the year ended 31 December 20 t3
21 F~ANClAL RlSK MAiAGEMElT (continued)
Capital management The Boards policy is to maintain a strong cepit1 base so as to rnainmin investor creditor and market ronfoonee and to SUSWlJ) fumre dcltclonnent Gf the buinest The Board of Directors rronitortl the tapital whkh tbe Group defines as wlal $parcloders equity excluding nonmiddotcornroliing imerests and the level of dividends to orrunury srarellOJdcfS
The Board also reeks to ITIaimain a balance between the higher (ctums (hat might be fA-~$ihle With higher leves of borrnwings end Lle edvnrJages and security named Sy it sOMd Cilpitai posi[ion The GfCup~ k1rget is to achievfl a return on slureholders equity (exclJding aonwurrolJiug iorcf(sts) greater lll(ll1 he wcighlcd average inres exxmse on mrerest bearing Ivens and oorrowing
The (lf0t-p nl)nDg-e ils cnpital structure and makes adjustneal lOll in light ofchang2s in economic nd bttincss cordjlons and shareholders expe1ationJo chmges veremiddot maCo HI Lleuro objecttves polilCS or proCCSSC3 during the years erded 31 D~mber 2013md 31 Dtccmlxr2Ql2
The Group monitors the capit2J using a gClting fatio which IS dep divided by caplla plus debL The GtOwgts policy is to keep ttJe ge-anng rmio bclew 40 Tbe Group iLdtdes withb debt imete-51 beagting loans ard ~OITORlngs less cash and cash equtVaknts Capltal includes eqmty attributable 10 the equity tolders oft~e parcrt
2013 QR
2(i2 QR
fmerest bearing loans and borrowings lcss- Cash and cas ltYJUvalcnts
9i4lJ05301 _~ (429JfJl4761
1004845296 (649)6201)
Net debt
Toa capital
Capita and net debt
699849045
~ringrttio
FAIR VALtES OF Fl~ANOAL f~STRUMETS
Finarcial iostrumenL~ cOlnprise tina~lctal assetS carl finailcialliabilities
Fmancial assets colJist of bank balance) short 1Cm bank dcposis amounL dve dom rc)ltted partilt)$ rekntion and other receivables and ttade accolmis rceivabe Finatlclll habiilics cgtmsist of banilt ovcrdratls jnerest bearing lOil1S and bOrowings amounts due (0 nliled partiG~ ane trade x-ounls payable
The- fair values of hese financial inStrumen1S except Jo-- imCfest bearing loam lHld bOlToving aproKimate lhdr cMryinJ vlhes due to the Slort temt mzrutiiles or these instrument
Tllc faiT value of iotcnst beating Nns and borrowin2s ae estimate( based on discoumed ltash flows twin int(s rale- cune-ntly nvailagtk fur tilt debt or sinuiar tetnlS an-a rell1lmng matunties
31
Aamal Company~Q=-ScC ______________~______
~OTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For fhe year ended 31 December 20 t3
SlGNIFICANT ASUMPTIONS ACCOUJTING JUDGElE1TS AND F8TIMATFS
impairment (If accoonts receivable n etrnwe of lhe collectible anoun of trade accounlgt reccvable is made when collection of the full lHl1OUt i~ nO looger probabk FOI nCividualty significitIl amounts this estimation is p~rformed on an indh-idllai a$[$ Amomts wHcb arc not indivldl11Uy significant but wluch are past due ZTe tsscssed collectively and an aJlQwaccc applied ucc()r~Jng to the length of lime past due based oc histnncal recovery nlJes
hnpalrment of inHntnries lavenoncs are held at tho lower of col and nol realisable value InIOn inventoncent$ becone old or 0-~amplete an estilTJte is mate of their net j alisable vulue For indiviolhlUy significant amountS this cstinaunrt is performec all aD lndividwl osis Amotlnts whieh are fl0t individually significan( btll which ltIre old at obsolete wx LltSessed wllecivdy md a provisior is applied sccnrding to the invenrory type and be dep)ee of ageing 0 cDsolescc1ce based on anticipUled selling prices
Classifigt1ltion of El Sew(gtdy Cable Qatar WLI ali a j(lint vwture pound1 Sovedy Cables Qatar is a limited hability company whose kgal fum confers SCprm11ior bernten tbe jXliiies 10 ~he jomi lfranpement Snd the Company Itself FurthenrlOre then IS no oontractua] arrmgelTeot or any oibe aus aod circumstriliCe$ that iocik41to tht he putic5 [0 the joint flJTIlrgernelit bave rights to the ssetl and obligrtdons fo~ the liabilities of the joint ilrrongement Acoordingly El Sewed- C[jbl~s Qamr WLL is dassifiecl 7S a joiut enrtrr of he GWtp
impairment of goodwill G0oovj)1 embedded in th~ cot 0 aquisitior of subsidiaries and eqmtj-iccounled iflV(stees ire teswt for irl1jXlirmnt aHuaily Tbe calculations of value [n use fO( cfish gecj~r)lilg units (loring to real nte projecg are rtost sensitive to tin IDHowing assumpti015
Grosgt i1wginmiddot Gross Ilmrgins arc lmsed on avrage values tuhje0d in (he [Xrioo preeedhli (e siaM of the budge xnod T1esC at( mcreased over the budgel period for mticipatltX efficiency Hnprovemots
DisC)unr r(es Discount rotes represent th cl1tent mark as~ssmetlt of the risks specific te ech cash geocroting unit regarding lhe time value of money ilnd mdividu)l risks of he tmtieriyilg assets whICh have not been inwrport1eti it the Citik flow estimates The dj~(OUrl flte tlkulation is based on the speclfte circurnsthLCes of lile Group and its opltllatJng segn)~nts (md derived (ff)rC it weighted avaage (XSt 0f apilaJ (WACC) Tb fACe (akw into uoount both deb and equity The 0$1 of equity is denved from dlC expected return 01 investmenl by the Groups investors TJc Gos10( deb is based on l1e borrvwings the Gmup IS obllsxl to service SC~lletllmiddotspecific r5k IS incorxt4too by applying individual bera facto The betn mctors ire evauatcentd annuaHy bhseci on pubJicly aVflllabe murked earn
Fair value ()fnHstmeni proputies The fuit laHe 0 nvestmel~ propertis is deltrrnlnzd b cxterrwl indepzfldell property valuers laving appr0priate recognised professional quabfiillions and recenl xperience H1 the localjl)n and G-tegory 0 the oroperty being valued
Useful hes of PfQPcrly plmr (llld zqulpment The Groups management detennints th estiunted useful jives Df It~ property plan and equipmnl fix calnurjng depreciation Thi5 e~timJte is 6lermind after cinsidring 1b expeelcd usage (1f the a5sclt [hysical l101t and (eas tedmiltal Dr com~ercia obsolesccnce
Gotlg Qncen
ibe Groups mangerncnt UiS made aJ assessmeot cf the 011115 ability (0 COllllOUC liS a going conct11l Imd is satsl1ed hat me Group ms the resources to contmue in business for he foreseeable fu1urc he1hennort he management is no aware oC lny material Hncertainties that lray CH~t signinchnt doubt tlPDfl the Groups ability 10 continue as a going umcem Therefore titpound lotlsolidatcd finilllcij stftemeols comirme to be prepltd on li g0ing concern basis
Aamal Company QSc
NOTES TO THE CONSOLIDATED FlNANC[AL STATEMENTS For the year ended 3 1 December 20 13
32 INCOME TAX
Certa in subsidiaries of the Group which have non-GCe ownership are subject to income tax under Qatar Income Tax Law No 2 1 of2009 The iocome tax is charged on the share of profits attributable to non-GCe shareholders For the purpose of these conso lidated fi nancial statements the income tax liability oftbe foreign shareholders has been excluded given that the non-GCe shareholders have agreed under the shareholder agreements signed with the Group to bear the fh lliiability and make necessary payments
33 COMPARATIVE INFORMATION
Certain comparative figw-es of the previous year have been reclassified 0 coofonn to the current years presentation However such reclassifications are oat materia and do not have an impact on tbe previously reported net profit other comprehensive income or the total equity for the comparative year
The impact from the resta tement of comparative infonnalion as a resuh of adoption of IFRS I I - Joint arrangements is detailed in Note 32 Changes in aCCQu(lting policies
46
Aamal Company QS c
NOTES TO THE CONSOLIDATED FlNANClAL STA TEMENTS For the year ended 31 December 2013
3 BASIS OF PREPARATION AND SUMMARY OF SfGNlflCA1T ACCO UNTING POLICIES
31 BASIS OF PREPARATION
The consolidated fi nancial statements have been prepared in accordance with lntema tional Financial Reporting Standards (IFRS) and the appLicable requirements ofQalar Commercial Companies law No5 of 2002
The consolidated financial statements have been presented in Qatari Riyals (QR) which is he Companys floclional and presenUll ion currency and have been rounded to tlle nearest Qatari Riyal TIle consolidated financial statements are prepared lUlder the historical cost convention modified to include he measurement a l fair value o f investment properties and available-for-sale investments
32 CHANGES IN ACCO UNTING POLICI ES
The [lccoWiting policies adopted are consistent wilh Ihose of the previous fi nancial year except for the following standards effe ctive for the annual period beginning on or lfter 1 Jlnuary 20 13 These standards and amendments other tM n the impact of (FRS II - Joint Arrnnge menlS noted below did not have aoy malenal impact to the Group
lAS I (amendment) - Presenfalion of items ofother comprehensive income The amendments to IAS I require that an emity present separate ly the items of ltN her comprehensive income that would be reclassified to profit or loss in the future if certain conditions are met from those that would nC ver be reclass ified to profit or loss
lAS J9 - Employee benefits (201) lAS 19 (201 1) changes the definition of short-tenn and other long-tenn employee benefits to clatify the di stinction between the two
lAS 28 (201 f) - fnvesfmem in Associates and Joint ventires lAS 28 (2011 ) supersedes lAS 28 (2008) lAS 28 (2011) makes the foHowing amendments Associues held for sale JFRS 5 Non-current Assets Held for Sale and Discontinued Operat ions applies 10 an investment or a portion of an investment in an associate or a joint venture that meets the criteria to be classified as held fo r sale For any retained portion of the investment tlwt has not beell classified as beld for sale the entity applies the equity method until disposal o f the portion held for sa l ~ After disposal any re tained interes t is accounted for using the equity method if the re tained interest continues to be an associate or a joint venture and 0 0 cessation of significant influence or jo int conltOl even ifan investment in an associate becomes an investment in a joint venture or vice versa Ihe entity does not fe-measure the retaincd interest
Amendments ft) fFRS 7on ofseftingjil1ancial assels and jinancialliabilities (2011) Disclosures - O ffsetti ng Financial Assets and Financial Liabilities (amendmems to FRS 1) introduces disclosures bout Ihe impact of oetting arrangements on an entity s fin ancial position Based on the new disclosure requirements the Group has to provide inforroation about what amounts have been offset in the consolidated statement of fimmcial position and the nature and extent of rights of set o ff under master netting aITlngements or simi lar a1Tlngernents
fFRS 10 - Consolidate1 financial SIOlemenlS and lAS 17 Separate Fillancial SfalemenS (2011) [FR S 10 introduces a single control model to determine whether an investee should be consolidated FRS 0 replaces the parts of previQlSly exis ting lAS 27 Consolidated and Separate Financial Statements that dealt wi th consolidated fin ancial statements and SIC-12 Consolidation - Special Purpose Entities This new contro l model fo cuses on whether the Group has power over an investee exposure or righlS to variable rerums from its involvement with the in veSlee lnd abili ty to use its power to affect those returns The Group has amended its accounting policy on consolidation in line with requirements of TFR S 10 and has re-assessed its consolidation conclusion
[FRS 12 - Disclosures ofimerests ill other entities IFRS 12 brings together into a single Sfandatd all the disclosure requirements about an enti ty s interests in subsidiaries jo int arrangements associates and unconsolidated structured entities It requires the disclosure of infonnation about the nature risks and financial effects of these interests
II
Aamal Company QSc
NOTES TO THE CONSOLIDATED FTNANClAL STATEMENTS For the year ended 3 1 December 201 3
3 BASIS OF PREPARATION AND SUMMARY Of SIGNIFICANT ACCOUNTrNC POLICIES (continued)
32 CHANGES IN ACCOUNTING POLlc ms (coDtinued)
IFRS IJ Fair ~alue measuremetll TFRS 13 provides a single source of guidance on how fair value is measured and replaces the faif value measurement guidance tha i is currently d ispersed thIo tlghool [FRS It unifies the definiti on of fair va lue as the price that would be received 10 sell an asset or paid to transfer a liability in an orderly transaction between market participants a t the measurement dale It replaces and expands the disclosure reltjuiremenlS about fair value measurements in other IFRSs including TFRS 7
Improvements (0 IFRSs (20 ) Improvements to IFRS issued in 20 11 contained numerous amendments to IFRS that the IASB considers nonshyurgent but necessary Improvements to lFRS comprise amendments that result il) accounting changes to presentation recognition or measurement purposes as well as tennioology or editorial amendments related to a varie) of individuallFRS standards
During the period the Group has adopted the fo llowing new s tandard which became effecti ve for the annual periods beginning on I January 201 3 which had a materi81 impact to ule Group
IFRS II Joint AlTwlgements As a result of adopting IFRS II the GrOlp has changed its ltlccoUJ)ting policy for interests in jo int a rrangemeots Uuder rFRS 11 the Group classifies its interest in jo int arrJngements as e imer j oint operations or joint ventures depending on the Groups rights to the assets and obligations for the liabil ities ofthe arrangements When maldng this assessmenl the group considers the strucltire of the arrangements the legal fonn of any separate vehicles the contrac tual tenns of the arrangements and other fact s and arrangements Previously the structure of tbe a rrangement was the sole foc us of classification The Group has re-evaluated its involve men t in ils o nly joint a rrangement El Sewedy Cables Qatar WLL ltlnd has recla ssified the investment from jointly controlled entity to joint venture Also the Group has discontinued with re rrospective effect the use o f the proportionilte consol idation method and adopted the equity method to account for joint venture in accordance mth IFRS I I
Summary oquulllitative impuct The following tables summarises the materia l impac ts rcsulting from the above change in accounting polic ies on the Groups financ ial position profit o r loss and cash flo ws
Effect of chnnge in 31 Decemb er2012 accounting policy
Cunem assets (278 880441 ) Non-current assets 1295 1346 Total assds (265929095)
Current liabilities (265072694) NonmiddotcWTent liabilities (856401) Total lin bill ties (265929095)
For the year ended 31 December 2012
Profit for the year
Net chflllge in cash and cash equivalents dlUing the year (99696J)
12
Aamal Company QSc
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 3 I December 2013
3 BASIS OF PREPARATION AND SUMMARY OF SlGNlf[CANT ACCOUNTING PO LICI ES (continued)
33 lASB STANDARDS AND lNTERPRETATIONS ISSUED BUT NOT ADOPTED
The following lASB standardsamendments hJve been issued but are not yet mandatory and have 1l0( been etrly adopted by the Group
Standard
Illterpretotion COnem EffeClive dale
TfRS9 Financia l InstrumentS (new standard) I Januruy20 17
IAS 32 Financia l Instruments O ffsetting (amendment) I January 20 14 JAS 36 Financia llnslnnnents Disclosure - non-fi nancial asse ts (amendment) I January 2014
The Group is considering the implications of the above standards and the till1ing (If adoption by the Group
34 SUM MARY OF SIGNIFICAJT ACCOUNTING POLICI ES
Bu siness combinnriO llS The Group accounts for business combinations using the acquisitio n method wben connol is Imasferroo to the Group The consideration ITansrerred n the acquisition is generally measured at fa ir value as are the identifiable net assets acquired Any goodwill that arises is tested annua lly for impairmeot AllYgain on a bargain purchase is recognised in pro fit or loss immediately Transaction COStS arc expensed as incurred except if rehated to the issue of debt or equity securities
The considera tion transferred does nOt include amounts related to the settlement of pre-existing re lationships Such amounts are recognised in profit or loss
Any contingent consideration payable is roeasured at fair va lue at the acquisition date If the contingent consdicrntion is classified as equity then it is oote nmeasured and settlement is accounted for within equity Otherwise subsequent changes in the fa ir value of the contingent consderafion are recognised iu profit or loss
Cash a nd eash equivalen ts For the purpose of the consolidaled statement or cash flo ws cash and cash equivalents consist of cash and bank balaoces ruld short teJTIl bank deposi ts wi th an original marurily of three months or less net of outstanding bank overdrafts
Accounts receivable Accounts receivable are stated at originill invoice amount less an allowance for any uncollectible amounts An estimate for doubttit debts is made when collection of the flilt amount is no longer probable Bad debts are wntlen off when (here is no possibility o f recovery
Inventories Inventories are stated at the lower of cost and net realisable value Costs are those expenses incurred in bringing each product to its present location and condition
Goods ror resalework in progress - Cost of di rect materials aJld labour plus attributable overheads based on a oormallevel ofac1i vity
Raw material and spare pan s PlIlchase cost on a weighted average basis
Net realisable value is based on estimated selling price less any further costs expocted to be incurred to completion and disposal
13
Aama Company QSc
NOTES TO THE CONSOLIDATED FINANC IAL STATEMENTS For tbe year ended 31 December 20 13
3 BASIS OF PREPARATION AND SUMMA RY OF SIGNIFICANT ACCOUNTfNC POLI CIES (contin ued)
34 SUMMARY OF SIGNIFICANT ACCO UNTLNG POLICIES (continued)
Interests in equity-aecoupled inveslecs The Groups interest in equity-accounted investees comprise interest in associates and joint venture
Associates are lhose entities in which the Group has significant influence but not control or joint control over the financia l and operating policies A joint vennu-c is an arrangement in which the Group has jo int ool1lrol whereby the Group has rights to the net assets of the arrangement rather thall rights to its assets and obugations for its liabilities
InlereSIS in associates and the joint venture are accoliDted for using the equity method They are recognised initially tit cost which includes transaction costs Subsequent to ini tial recognition the consolidated financ ial stateme nts ioc lude the Groups shrre of the profit or loss and other comprehensive income of equity-accounted investees unti l the dalc on which significant in Lluence or joint control ceases
The reponing d~les of the equity-accounted investees and the Group are identical and the equi ty-accounted investees accoWlting policies confonn to those used by the Group for like tmnsactions afld events in similar circumstances
Investmefl t properties umd aod buildings are considered as investment properties only when they are being held to earn ren tals or for capital appreciation or fo r both
Investment properties are measured ini tia lly at cost including traosaction costs and borrowing costs that are directty attributable to construc tion o f the 8sseL The carrying alRount includes the cost of replacing part of an existing investment property at the time that cost is incurred jf toe recognition cri teria are mel and excludes the costs of day-to-day servic ing of an investment property Sub~quent to inilial recognition investment propert ies are slated at fa ir value which reOects market conditions at the reporting date Gains or losses arising from changes in the fa ir values of investment properties are included in the consolidated statement of income in the yeltl r in which they arise
Investment properties are derecognised when either they have been disposed off or when the investment property is pennanently withdrawn 1T0m use and no fu ture economic benefit is expected from its disposal Any gains or losses on the retirement or disposa l of aD investment property are recognised in the consolidated statement of income in the year of retiremeOl or disposal
Property under construc tion is dealt with under lAS 40 and rttorded at cost less accumulated impairment losses until either its fair value becomes relia bly detenninable or cons(TUction is completed (whichever is earl ier) At that time it is reclassified as inves tment property and a fa ir value adjustment is recognised in the consolidated statemenlof income
Transfers are made to or fro m in vestment property onl y when there is a change in use For a transfer from investmen propeIT) to ovmer occupied proreIT) the deemed cost for subsequent accounting is the fair value at the date of change in use If owner occupied property ~omes an investment property the difference between the canying value aoo the fair value at the date oflransfer is rttognised as a revaluation reserve in the equity and is released to the consol idated sta tement of income llpon disposal of such propcny
14
Aamal Company QSc
NOTES TO THE CONSOLIDATED FrNANCIAL STATEMENTS For the year eDded 31 December 20 13
3 BASIS OF PREPARATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLI CIES (continued)
304 SUMMARY Of SIGNIFICANT ACCOUNTING POLICIES (continued)
Property plant and equipment Property plant and equipment is stated at cost including borrowing costs that are eligible for capitalisation and excluding the costs of day-to-day servicing less accumu lated depreciation and any imp~innem in value
Depreciation is provided on a straight line basis on all propelT) planl and equi pment The rales of depreciatioo are based upon the following eSImnelt useful lives
Buildings 20 years Leasehold improvements 2-8 years Truck mixers and motor vehicles 4-1 5 years Plant and ITIJchioery 8-2 5 years Furniture fixtures and office equipment 3-5 years Computers and related software 3-5 years Capital work in progress Not depreciated
The carrying amounts are reviewed for impain nellt when events or changes in circumstances indicate that the carrying value may not be recoverable If any such indication exists and where the carrying values exceed tbe estimated recoverable amouot the assets are wri tten down to their recoverable amount being the higher of their fair value less costs to sen and their value in use
Expendirure iocurred lO replace a component of an item of property plaot and equipment that is accotmted for separately is capitalised and the carrying amount of the component that is replaced is written off Other subsequent expenditure is capitalised only when it increases furure economic benefits of the related item of property plant and equiproent Al l other expendirure is recognised in the consolidated statement of income as the expense is Incurred
An item o f property plaot and equipment is dereeognised upon disposal or when no future economic benefi ts are expected from its use or disposal Any gain or loss arising on derecognilloo of the asset is iocluded in the consolidated stalemeot o f income io the year the asset is derecognised
The asset s residual values useful lives and method of depreciation are reviewed and adjusted if appropriate at each rnancial year end
Borrowing costs Borrowing costs direc tly attributable to the acquisition constmction or production of an asset that necessarily takes substalltjal period of time 10 get ready for its intended use or sale are capilalised as pan of the cost o f lhe respective assets All other borrowing costs are expensed in the year they incur BOlTOwiog COSts consist of the interest and other costs that the Group incurs in coomction with the borrowing of fund s
Accounts paytlble and accruBls Liabilities are recognised for amounts to be paid in the fuMe for goods or services received whether billed by the supplier or not
Interest bearing loans Bnd borrowings Interest bearing loaos and borrowings are recognised ini tiaJy at fai r value of the amounts borrowed less direc tly attributable transaction costs Subsequent to initial recognition interest bearing loons and borrowings are measured at amortised COSt using the effecti ve interest method with any differences between the cost and tinal settlement values being recognized in the conso lidated statement of income over the peliod of borrowings Instalments due within one year aI amortised cost are shown as a ctuTentliabiliry
Gains or losses are recogTlised in the consolidated sialement of income when (he liabililies are derecognised Interest relating (0 imerest bearing loans and borrowings is expensed in the year in which it is incWTed e(cept those qualify for capitalisation
15
Aamal Company QSC
NOTES TO THE CONSOLIDATED FfNANClAL STATEMENTS For tbe year eoded 31 December 201 3
J BASIS OF PRpoundPARATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
34 SUMMARY Of)SIGNIFICAtlT ACCOUNTING POLICI ES (continued)
TClaot deposits Tenant deposit liabilities are initially recognised at fair value and subsequently measured at amortised cost where material Any di fference between the initial fair vllue and the oominal amount is [eluded as a component of rental income and rocognised on a straight-line basis over the lease term
Derecognition or fiolocial nsstls and liabilities
a) Financial assets
A fi nanCIal asset (or w~re apphcabJe a part of a fin ancial asset or part of a group of SImilar financIal assets) IS derecogmsed where J bull The n ghts to receIve [5h flo ws from the asset have expIred bull The Group has trans f rred Its rights to receive cash flows from the ass or has assumed an obhg811On to pay the
reltelved cash flows I full Wlthout mfl tenal delay to a third party under a pass-through arrangement and elther (3) the Group has Ira sferred substantially aIthe nsKs and rewards of the asset or (b) Ihe Group has neuher transferred nor relain substantially ai the n sks and rewards of the asset but has tnlnsferred control of the asset
When the Group has tTa~fened its rights 10 receive cash flo ws from an asset or has entered into a pass-waugh arrangement and has nejlher trmsferred nor reta ined substantially all of the risks and rewards of the asset nor trnnsferred control of the asset the asset is recogoised to the extent of the Groups cOlilinuing involvement in Ihe
In that case the Group at 0 recognises an associmed liability The mnsferred asset and ihe associaled liabi lity are measured 00 a basis thai flects Ihe rights lnd obligations that the Group has retained Continuing involvement that takes the form of a guara tee over the transferred asset is measured at the lower of the original canying amount of Ihe asset and fbe maxim amoun o f consideration that the Groop could be required to repay
b) Financialliabiliti
A financial liabili ty is defogniSed when the obligation under the liabil ity is discharged or cancelled or expires Where an existing fio8 1lci I liability is replaced by another from the same lender on substantia ll y d ifferent lenns or the terms of an existin liabili ty are substantia lly modified such an exchange or modification is treated as a derecognition of the orig~al liabili ty and the recog1Jitioil of a new liability and the dirference io the respective carrying amounts is reco ised in the consolidated Slatement o f income
Impalr meot ood uncollec ibility of fina ncial assets An assessment is made al each repon ing date to determine whether there is objective evidence that a speci fic financial asset may be impaired If such evidence exists allY impainneOl loss is recogoised in the consolidated statement of income ImT t is detemtined as fo llows
(a) For assets earned a t fair value impainnellt is tbe difference between cost and fair va lue (b) For asseamp carried at COSt impairment is the difference between cost and lIle present value of future
cash flo1S discounted at lhe current market rate of rdurn for a simi lar finan cial asset (0) For asseq carried al amortised COSt impainneot is the difference between canying arnOWll and lhe
present Value of future cash flO M discowlled at the original effective iDlerest rate
Provisions Provisions are rewgnised hen the Group has an obl igation (legal or COnslnlctive) aris ing fro m a past event and the costs to settle the obl igalio are both probable and able to be reliably measured
16
Aamal Company QSc
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 31 December 2013
3 BAses OF PR EPARATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICI ES (colltinued)
34 SUMMARY OF S IGNIFICANT ACCOUNTING POLICIES (continued)
Employees eod of service benefits The Group provides end of service benefits to all employees in accordance wi th employment contracts and Qatar Labour Law The entitlement to these benefits is based upon the employees final salary aocl length of service subject to the completion of a minimum service period The expected costs of these benefits are accrued over the period ofemployment
Revenue Revenue is recognised to the extent thal it is probable that the economic benefits will flow to the Group and the revenue call be reliably measured Revenue is measured al the fair value of the consideration received excluding discoWlIS rebates and duty The following spec ific recognition criteria must also be met before revenue is recognised
Sale ofgoods Sales are recognised whcn significant risks and rewards of ownership of the goods have passed to the boyer and the amount of revenue cao be me3sured rcli3bly
Rental income Rental incorne from investment properties is accoWlted for on a time proportion basis over the period of tenancy Incentives for leases to enter into lease agreements are spread evenly over the lease teon even if the payments are not made 0 0 such basis Income arising Tom expenses recharged to tenants is recogn ised in the year in which the expenses can be contrac tually recei ved Service charges aud other such receipts are includcd gross o f related cosls in revenues as the Group acts as principal io this regard Premiwns received to terminate leases arc recognised in the consolidated statement of income when they arise
Service income Service income is recognised when the service is rendered and the outCQrne of the transactions can be estimated reliably
COlimission Commission is accounted for on an accrual basis when the right 10 receive the income is established
become on tra~el agencies [ncome on travel agencies is accounted for in the year in which the airline tickets are sold
IIIeresr income Joterest income is recognised as the interest accrues using the effective interest Clle method
Foreign currencies Transactions in foreign currencies ate recorded al tbe rale ruling at the date of the transaction Monetary assets and liabi lities dcoomioated io foreign currencies ace retranslated ill the raLe of exchange ruling at the reponing date All differences are recognised in the Statement ofinconlC
Use of estimates The preparation of (he Groups consolidated financial sta temenls in CQnfonnity with Intemltional Financial Reponing Standards ([fRS) requires management 10 rnake estimates and assumptions that affect the reponed amounts of assets and liabilities and disclosure of contingent asscts and liabili ties at the rcporting date and the reported amoUlils of revenues and expenses during Ihe reponing period Although these estimates are based on managements best knowtedge of current events nnd actions acnm results may ul timately differ fro m those estimates (Significant asswnptions nccounting judgments and estimates used in preparing these coosolidated fina ncial sta temenlS are disclosed in Note 31)
The estimates and underlying assumptions are reviewed regularly Revisions to accounting estimlIes are recognised in (he period in which the estimate is revised if the revision affects only that period or in th~ period of the revision and future periods if the revision affects both current and fu ture periods
17
Aamal Company QSC
NOTES TO THE CONSOLlDA TED FINANCIAL STATEMENTS For tbe year cnded 31 December 2013
3 BASI S OF PREPARATION AND SUMMARY OF SrGNIFICANT ACCOUNTING POLICIES (continued)
34 SUMMARY or SIGNIFICANT ACCOUNTING POLI CIES (continued)
Fair va lues A number of Groups accounting policies and disclosures require tJ1 C measurement of fair values for both financial and non-financial assets and liabil ities The Group has an established control framework with respect to the measuremeot of fair values When measuring the fair value of an asset or a liabili ly the Group uses market observable data for (be valuatiOD Fair values are categorised into different levels in a fair value hierarchy baCd on the inputs used in the valuation lechniques as follows
i) Leve l I - Unadjosted quoted prices io active markets for identica l assets and liabilities ji) Level 2 - Otheqobservable inputs not included within level 1 of the fair value hierarchy ii i) Level 3 - Unobtervable inputs (including enti ty s own data which are adjusted if necessary to retlect the
assumptions market participnllts would use in the circumstances) The Group recognises tralnSfers between levels of the fair value hierarchy at the end ofthe reporting period during which the change has ocdWTed_
Treasury shares When share capitl recognized in equity is repUIchased (by the Company or any of its subsidiaries) the amount of the consideration paid which includes direa ly altributable COSIS is recognized lIS a deduction from equity Wheo treasury shares are sold or reissued subsequently the amount received is recognized as no increase in equity and the resulting surplus or deficit on the transaction is presented io share premium
18
4
Aamal Company iQSc
NOTES TO THE ONSOLlDATED FINANCIAL STATEMENTS For the year ended 31 ecember 201 3
BUSINESS CO~BlNAnON
Acquisition o f Culf ROks Company VLL On 1 January 2012 the roup acquired 51 oflhe voting shares of Gulf Rocks Company WLL (Gul f Rocks) a limited Iiabiliry campan incorporated in Qatar and registered UJKier conunercial registration number 2249) The acquisition was made thT ugh Ci-San Trading WL L a subsidiary which is 50 owned by Aamal Group
I
The fai r val ue of lbe ideltifiable assets and liabilit ies of Gulf Rocks Co mpany WLL based on purchase price allocation exercise condlcd by tbe management as at the date of acquisition WJ S as follows
Fair value recognized on
acquisition QR
Assets I Cash and bank balances 14005495 ACC QUOiS receivable and wePayments I 749383 Amouots due from related plrties I
I oveotones
48311 190 5124 270
Available for sale investm~nlS 1985245 Plant and equipment 6769 17
81852500
Liabilit ies Accounts payable aJld accll1als 4724446 Amounts due to related parties 385070 Employees end of serviccibenefits (Note 15) 349272
5458788
Total identifiable net a5sellf
Purchase consideration trasferred Non-controll ing intereSt az-ising on business combination Bargain purcha5c gain rc~u ting from the tcquisilion
Allalysis ojcash flows OIl acquisition Net cash acquire11 Nith the subsidiary 14005495 Cash paid (30600000)
(16594505)
On I September 20 12 the Company acquired the balance 49 nfthe equiry of Gulf Rocks Accordingly the Group has 74 5 effective holdin4 in Gulf Rocks as at the reporting dale The excess nfthe purchase cons ideration over Ihe fair value o f net assets of GuJf Rocks acqui red from the nnn-controlHng interest has been recorded directly in the retained earnings of tbe Gr6up as at 31 December 201 2
QR Purchase consideration 404 10000 Less fuir value of oet asset~ acquiroo from the non-controlling Interest holder (39842792) EXce5s of purchllse cons idf ration over the fair value of net assets a(q uired 567208
19
5
Aamal Company QSC
NOTES TO THE (WNSOLlDATED FfNANClAL STATEMENTS For the year eoded 3 ) December 2013
CASH AND CASH EQUIVALENTS
For the pmvose of consolidated statement of cash flows cash and cash equivalents comprise the fo llowing balances
lon 2012 QR QR
Cash and bank accounts 330333904 282272895 Short lenn bank deposits 105802852 85608396 Cash and bank balances 436136756 367881 291
Bank overdrafts (6836280) (2885090)
Cash and cash equivalents 429300 476 364996120 1
The short tenn bank deposits are made for varying periods between one day aod three months depeoding on Ibe immedifltc cash requirements of the Group and earn interest at the respective short term deposit ra tes
6 ACCOUNTS RECEfVABLE AND PREPAYMENTS
2013 2012 QR QR
Trade aCColUlts receivable 411 011 567 345260657 Advances 0 suppliers and prepayments 50787921 629389J 5 Retention receivables 36217081 56943030 Other receivables 12073270 17 139173
5tO089839 4 82 28 1775
As at 31 December 2013 trade accountS receivoble amoWlting to QR 2690 1412 (201 2 OR 24984025) were impaired Movements in the allowance for impairment of trade aCColmts receivable were as follows
2013 202 QR QR
At 1 January 24984025 1 877085 Charge for [he year (Note 21) 2294590 13613 120 Amounts wriuen off (19949) (117368) Unused amotmts reversed (357254) (388812)
At 3 t December 26901412 24984025
20
6
1
lamal CompanyQSC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMEltS For the year ended 3 J December 2013
ACCotNTS RECEIVABLpound AND PREPAYMpoundNTS (contillued)
As at -1 I Dtcemxt the ageirg of unimpaired (ltlde accounb iltcivabk was as follows
P(HI duo
nor Up to 30 31-60 61middot90 Yi-jSj gt flO Tota impoirlt-fl days days days day doys
QR QR QR QR QR QR QR
1l13 411OJl$67 25l981960 32312165 2140966 19351fi43 16f)76888 60148545 2012 345260657 1695159B6 493lt)8566 2356$954 19494369 16908414 66374363
1JJJirtpai~ed receivable are expected no th bil5tS of past experienn) 10 be fully fcCi)evbc H is not the pngtctlce ofthcent Group to oblum collaleral over recejvablcI_
AMOLNTS DUE FROyl REL-TEO PARTIES
Name
AI ~aisnl Holding Company V_LL E Seweo Cabtes Qatn WL L Cnild -ftt Cvmlllny Al hz Retll E$vt rWesnnim Company WLL~ AllaZi Real Estale BrAnch EI Sewedy Electric Egypt WLL MuincrDJ1Ce Mwagmvont Group Qat3r W LL Good fe Cheffilt - The Pcarl
BuderPhtrnacy Al Faisallnlemadonal Tnl(i and Investment Company WLL AI-rabia Land Trnr~PQltit1g Company rLL ro Sewedy CabLes - Kuwuit Gcentttco hlttrnJmJilI Frijns StHytural Steel Middle East WLl Winer Wunderand Company WLL Al FtOH1H for Investment amp llllemtiOl1a Trading COntpAny WJ_L Q)lar Bahrain lmerOlnionai Cnero3 WLL Gulf EngJisb Sltl-Qo] Al Rayyao Tourism lve$lrnent Company W LL Other relater purties
2013 2012 QR QR
15412-1064 ll941Y70 34644615 ~li96858l
[()0405 14-45012 51 59197 9538116 15514113 4014727 236824$
1867526 LSOfd22
8(1012 10435r 311650 746395
15023 204450 459829
2iYHi 244940 186750
152170 143440 33500 7768(1
6259 1459lt) 758962-1
__2~61g~~_ 1~95Ji
bull 214109950 171525363
--__ shy
7
8
9
Aamal Company QSc
NOTES TO THE CONSOLIDATED FfNANClAL STATEMENTS For the year ended 3 1 December 2013
At10(JNTS DUE FROM RELATED PA RTIES (continued)
NO les (i) Transactions witll related parties are eam ed out through open account and Directors do not consider any
receivables to be past due or impaired
(ii) Related party transactions ore disclosed ill Note 26
INVENTORIES
Goods for rew le Raw materials and spare pans Work in pTOgresS Goods in transit
Less Provision fOI obsolete and slow moving invenlories
1013 QR
165499699 38388307 19944678 9671 8553
320551237 (3851692)
31 6699545
Movements in the provision for obsolete and slow moving inventories were as follov~
At I January Charge for the year (Note 19) Reversals Amounts wri tten off
At 31 December
E QUITY-ACCOUNTED INVESTEES
TIle Group has the followiog invesllnenfs in equity-accounted investees
Interests in joint venrure Interests in associa tes
At 31 December
G roup s snare of profits fr om the equity-ncco unted iovcstees arc AS follows
Profit share from in vestment iojotnt venture Profit share from investment in associates
202 QR
232597650 36608394 30622960
10521 9695
405048699 Q 145826)
40 I902873
203 QR
3145826 1 380617 (535695)
( 1139056)
385 1692
20 12 QR
2795992 2208263 (137995)
( 1720434)
3 145826
2013 QR
2012 QR
129462184 3644723
124124803 2545188
133106907 12666999 1
17330368 22869454 1169533 534050
18499901 23403504
22
10
Aama Company QSC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 31 December 201 3
9 EQUITY-ACCOUNTED INVESTEES (continued)
Counlry of incorportllion
Relationship Proportion ofownership and lotilfg power held by the Group
203 2012
EI S~wedy Cables Qatar W LL Frij ns Structural S teel Middle East WLL Al Ftfazdaq Company WLL
Qat~
Qatar Qatar
loint venture Associate Associate
55 20
55 20 35
Note With effect from 1 January 20 13 the mlnagemeot of the Group has reclassified the investment in Al Farazdaq Company W L-L from investment in associate to investment in subsidiary This is based on the transfer of share holding by the other shareholder whereby the conlroi o f AI FOl razdaq Company W LL bas been assigned 10 tbe Company
INVESTM ENT PROPERTIES
a) Reconciliation of carry ing amounl 2013 202 QR QR
AI I January 611334701 8 555 1835348 Additions 9568047 1727191 87 Transferred from property plant and equipment (Note II ) 34519828 Net gain iTo m fa if value adjlls tment 245051107 388792483
At 31 December 6402486000 6 11334701 8
b) Measurement of fair value
The fair values of the Groups inveS hnent properties as at 31 December 201 3 and 3 1 December 2012 have been arrived al on the basis of valuations carried Ollt on the respective dates by professionally qualified independent valuers not related to the Group The independent valuers have appropriate qUlli ficatioos and (eceJ11 experience in the valuation of properties in fhe relevant locations The fa ir value WltlS determined based on market comparable approach that reflocl s recent transaction prices for simillt1r properties and discounted cash flo w and income approach techniques
Details of the Group s iovestment properties and infonnation about the fa ir vn lue hierarchy as at ) I December 20 I J are as fo llows
IIvestment propenies
Level 3 fair vallie
Al I Janu ary 6 [ 13347018 Additions and trans fers from property plant and equipment 44087875
Gain included iu prom and loss Net gain from fair value lt1djuslmem 245051 107
AI J I December
The Group recognizes transfers between levels of fair value hierarchy as o f the end of the reponing period during whicb the transfer has occurred There were no transfers between the fai r va lue hierarchy during the year
23
10
Aamal Company QSc
NOTES TO THE ONSOLlDA TED FINANCIAL STATEMENTS For the year ended 3 I ecember 201 3
LNVESTM ENT ROPERTIES (contin ued)
b) Measuremen t 0 (air value (conti nued)
Vau t ion technique an significant unobservable in puts
The valuer has applied t e income capitali zation discounted cash flow and comparab le methods to detennine the market value of the lnve tment propen ies Significant unobservable inputs used included expected market rental growth rates (an average 425) occupancy rates (approximately 90 to 95) and risk adjusted discount rates (approximately 5 to 7 0) M y significant change in these inputs can impact lhe fair valuation of investment propcnies
24
Aamal Company QS c
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For che year ended 31 December 2013
11 PROPERTY PLAi~T AND EQUIPMENT
FumilUre Truck mixers fIXtures and Complllers
Leasehold and maor Plum (fd office and relaed eapiowork Buidings improvements vehicles machinery eqllipmcni sofMore in progmiddotcss Total
QR QR QR QR QR QR QJl QR
At I January 2013 137870126 371 88 132 9595813 1 262536261 19 580954 14864 385 561 32447 6241 30436 Additions 948)65 2618 100 5367399 859061 111 5268 137147581 148055774
Relating to d isposalswrite-off (1042642) (4390496) (77157L) (589150) ( 184075) (6977934) Transfer from capilal work in progress 1505 310 164 336 3601776 ( 150000) 1182741 (6304 163) Transrer to investment properlies (Note (0) (345 19828) (345 19828)
At J I Dttember 201 J 139375436 J7 258~ ~1 85735 270733865 19700865 169783 19 152456037 _73068~448
Depreciation AI I January 2013 16133915 J6902 529 49087707 68783 065 11 980009 tl71 595 3 174603 178 Charge for the year 7059805 3237150 5390767 12249797 2849162 1768823 42555504 Relating 10 disposalsJvri te-off (664709) (4 3 1716 1) (724322) (552939) ( 18 1993) (6441 124)
At 31 December 201 3 23193 720 19474 9 70 50161 313 90303540 14276232 13302783 2 107 17558
Net carrying amounts At 31 December 2013 116181J16 _17783221 44024422 180415325 5424633 3675536 __l2456O37 JJ9970~890
Notes (i) Depreciation charge for the year amounting 10 QR 33 164382 (201 1 QR 3303091 6) is included in tbe direct costs and an amount of QR 60055 (20 12 QR 36939)
has been capiulised under capital work in progress
(ii) The capital work in progress includes capitalised borrowing costs amounting to QR 125645 (20 12 QR 15358)
(ii i) The buildings are constructed on a plot ofland taken on a loog term operating lease
25
Aamal Company QS c
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 31 December 201 3
II PROPERTY PLANT AND EQUIPM ENT (continued)
C05I~
At 1 January 2012 Additions Acquired through business combinations (Note 4) Relating to d isposalswrite-off Transfer from capital work in progress Transfers
Buildings QR
137434400 435726
Leasehold improvemellls
QR
38137377 446J 04
144 103 ( 1539452)
Truck mLCers and molO
velricles QR
83427661 11464679
1697609 (631824)
Plant and machinery
QR
249335437 97264 85
35 14 132 (99498)
59705
Furniture fir ures and
office equipmem
QR
22845309 667586
192042 (3696457)
98000 (525526)
Computers and related
software
QR
158 19519 87 14 14
141837 (266 1733)
908078 (2 l4730)
Capitol work in progress
QR
12104889 451 53265
( 1065783) (59924)
Total (JR
55910459 8 68765259
5689723 (862 8964)
(800180)
AI 31 Dttember 2012 137870) 26 371881 32 95958 13 1 262536261 19580954 14864385 56132447 624 130436
Depreciation AI Jaouary2012 Charge for the year Acquired wough business combinations (Note 4) Relating to disposalswrite-off Transfers
9144666 6989249
)4 3 16620 3410618
144103
(96 812)
42558404 548 1613
1671942 (6242 52)
44555 290 2 1398849
2890797 (6 187 1)
12392584 3 182899
169005 (3558466)
(206013 )
12235266 2077633
136959 (2627283)
(J 0662)
135202830 42540861
5012806 (7840684)
(312635)
At 3 L December 201 2 161339J5 16902529 49087701 68783065 11 980009 11715953 174603 178
Nel canying amoWlts
At 31 December 201 2 12 173 6211 2028560 3 46870424 193753 196 7600945 3148432 56132447 449527258
26
12
13
Aamal Company QSC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 31 December 20 13
ACCOUNTS PA YABLE AND ACCRUALS
Trade accouots payable Advances from customers and tenants Accmals Social and sports activities levy Other payables
AJIOUNTS DUE TO RELATED PARTIES
Name
Arab Compaey for Fiber Products EI Sewedy EIC( lric Ho lding Egypiasl Egypt Egyptlech Egypt United Industri es Company WLL Johnson Controls Air condi tioning aod Refrigeration Qatar WLL pound1 Sewedy Cables Egypt Johnson Controls Air conditioning and Refrigeration rNC Dubai United Wire Company WL L Gelteo Company W LL - Gelteo Refr igera tion and Airconditioo ing CampC Lightway nc AI Shaab Group of Companies Other related pruties
NO M Related party transactio l)s a re disclosed in Note 26
2013 QR
320017657 30486837 26924669 41 761 843 25855567
445046573
2013 QR
18517474
4902528
6531231 6404578 3215821
2825884 75 7825
3467288 263715
1313247
48199591
2011 QR
26716268 1 27410234 222575 76 28954726 33)33852
379119069
2012 QR
18380528 91458 82 54 13849 1 11 6 135 5374039 35291 2020359 1693323 1064744
670 179
11 0873 12 18650
49737757
27
14
Aamal Company QSC
NOTES TO THE CONSOLIDATED f fNANCIAL STATEMENTS For the year ended 31 December 201 3
INTEREST BEARING LOANS AND BORROWINGS
NOles Malilrify
2013 QR
2012 QR
CoMl Loan 2 Loan ) Loac4 Loan 5 Loan 6 Loan 7 CoMB Loan 9 Bills discounted
(0 (ii) (iii) (iv) (v) (vi) (vii) (viii) ( ix) (x)
lune2014 Seplember2014 January 2015 November 2016 December 20 16 November 2017 Jllne20 l J December 20 7 OClober 20 19
172070387 440000000 50544000 40261 621 81387109 19920036
6] 43890 62626967 42522794
915676804
298324180 440000000 10 J088000 57955030
100 168750 2 1300492
407728 1 782871 1
35000000
1065742444
Less Defe rred finatlcing cost (771 503) (897148)
914905301 1064845296
Presented in the consolidated statement of financial positioo as fo llows 20)3 QR
201 2 QR
Current ponion Non-current ponion
749520820 165384481
825568489 239276807
914905301 1064845296
The dete rred financing costs consSt of arrangement fees The movements m the deferred financing costs were as fo llows
203 2012 QR QR
At I January 897148 332 661 Addjtions during the year 1 062565 912506 Amortised during the year (218amp210) (34801 9)
At 3 1 December 771503 89 7148
28
Aamal Company QS C
NOTES TO THE CONSOUDATED FlNANCIAL STATEMENTS For tbe year ended 31 December 2013
14 INTEREST BEARING LOANS AND BORROWINGS (continued)
Nolec
(i) Loao I i USD 93000000 impon 10n moi lily obtoined to refimnee he Icne~ of edit The 10 IT interest at commercial fate and the interest is paid at monthly intervals The fucility is repayable within ISO days including the usage period under letter ofc redits
(ii) Loan 2 is a secured bridge loan obtained to settle an existing loan and working capital requirements of the Company The loan carries interest al coOlJllercial rates and interest is 10 be paid on quarterly basis
(iii) Loan 3 was obtained for the pWpOse of financing capital ependiture and direct payment to suppliers contractors and 5ub-controctors The 10011 CMries interest at commercial rate and the inte rest is to be paid q Uar1erly The fac ility is repayable in IS quarterly iostallmenls starting I July 20 11 and ending I January 2015
(iv) Loan 4 was obla ined for conSlruclion o r an inveslmenl property The loan is seclJed by 0 primary mortgage over the some property and corporate guarantee of the Aamal Company QSC Tbe loan carries interest at commercial marke t rate and is payable in quarterly instalments
(v) Loan 5 represents a loan fOlcility obtained in two sepnrole tranches amounting to QR 309 825 000 (USD 85 million) for the purpose of refurbi shment and construction of fociJities io one of the investment properties The loan is repayable In 16 equal quanerly instalmcnlS for individua l tranche commencing from March 20 1J The loan carries interest at conunercial rJtes
(vi) Loan 6 represents secured loans obtained ffom a commercial bank in the previous periods for the purchase of heavy equipment and machines and were merged on 15 November 20 12 as a comb ined loan This loan is payable by 59 equal instalments of QR 426000 with (I last inSlalment of OR 438 326 with effect fro m 01 October 201 3 The loan carries interest at commercial market ra tes
(vii) Loan 7 is il tmst receipt banking facility obtained for the purchase of inventories This carried interest at conunercial market rates This loan was full y settled during the year
(vii i) Loan 8 represents secured loans obuined from a commercial bank in the previous periods for the purchase of delivery trucks and machinery and were merged on 22 October 2012 as a combined loan The loan carries inte rest at commercial market Tates and is payable by 59 equal insta lments o rQR 160000 with a last inSlOlmem ofQ R 128000 with effect from 3 1 December 2012
(ix) Loan 9 is an Islamic Financi ng Arrangement obtained for construction o f a manufacturing plam and as o f yearend ba lance represents partially drawn amount out of totil1 facility of QR 655 68000 The loan is secured by joint corvorate guarantee by the shareholders The loan carries profit at Islamic Financing rates and re-payable in quarterly instalments starting from the end of the 24 months gmce period from the date of loan drawn
(x) Bi ll discounting is a loan fac ility from banks The purpose of the arrangement is to discount bills locally and carries interest at current commercia l filte
15 EM PLOYEES END OF SERVICE BENEFITS
Movements in the provision reHectelt in the consolidated SLo1tement of financia l position were as fo llows 2013 201] QR QR
At I Jan uary 18111 763 17877937 Provision made during the year 4056969 4205499 Acquirelt through business combinations (Note 4) 349272 End of service benefits paid during the year (2210756) (4320945)
At 3 1 December 19957976 18 111763
29
Aamal Company Q5C
NOTES TO THE CONSOLIDATED FINANCIAL STATEMETS For tile y~ar ended 31 Dee~mber 2013
16 SHARE CAPITAL
2013 2012 QR Qq
AtI1l1)nud 60000)000 (20 2 544500JJOfn shares ofQR iii Cilch 60i)iQOOlOO 54450lt)0000
21)13 2012 Numher of
siMtS QR shares QR Issued Mtldfully paM At lJamld) 544SfWllOfJ 5445(100001) 495000000 49500000)0 1511C ofbonus S1i1-C ___ 5550~OOO 555000000 49SGOOOO 495000000
At 31 Decenef 6(OOampQllf1(1 ---14450O000 544~OOOOOO
All ampates m~ of a110 clss and caL equal voting rights
17 LEGAL Reuro5ERVE
As required by Qatar Comnertai COfrp7lnies Lav No5 of 2002 lOfp of the profit for the ye1J as a rru1imllli silould be mmsfened to legal re~erve The reserve is lot normay [lytiabe tor distribution except ill he cixcuJUstllrtUS stipulated m the above ~lemi0ntd GIW
IS HEVE1TE
2013 l)n QR QR
Sale of goods 1726893265 i709057~(iO
Renlal income UiO362322 133117509 S-ice income 858695 33940731 CornrrusslOlL Incentives and agency fces 44695S1 422~_632
212259$)33
19 DIRECT COSTS
2013 2)i2 QR
C 051 of inven(feS recognisedlIS an exptns 1522929956 497210830 Dind sL1ries lmd wages 601 [1336 5137856-8 Operating eXpenses on nml estate p~opet1les 36)711316 3041H504 fJepreciatiort (Kate I J) 33164382 B03091pound Operators marhgerrt6nt fees 14508588 li667989 Provisicn Qr obsolete and skwlt moving mvenlories (K)tc 8) 2380617 2208263 Other operating ilxpenses _31~3982 _ 3674946
1702139171 JS9653OI tgt
Aamal Compall-yQSC________________
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For lthe year ended 31 December 20 11
2G OTHER NeOiI
2013 20J3 QR QR
Interest mcume 2824216 2)314392 Profiv( loss) 00 disposal of property plant aoe eqUlpmem 737647 (l7362G) Eargain ptmnJse gain (Kote t) 8360793 MIsceJlaneous income 5723356
2013 2012 QR QR
ManllgetnUI hrQ empl(yees ws 55170302 55lt035middot1 Rent 23596799 2594915 Allowance for impaimlcot oUrsue aCQl1ot$ rc(Xjvalle (Nole 6) 129459(i 11613120 flBumcce ane profcampiitmJI fees 2IU9263 209J902 Corununication OOtHS 1935123 1649155 Trllining tid ouSfjt$s developmccl 950476 L095764 Re]X1in and mainle-nilnce 21)11SflS 2)2 I Poslag-c prjnting acri stationery 610299 541159shyvllsltdlancous expenses _~~~664 1lt2
-~~~ 125162812
22 fIN~lCE COSTS
2013 2amp2 QR QR
Inleres epen~ 42866312 5773U4B Am(vtisJliorgt ofdefcentrred financiog coStS __ 2l)tl26~~ gt3661
44930877----=
58063009
23 BASIC A~n nHUfED EARilNGS PER SHARi~
Basic trdTJogs per hue is caculatid 0y llividing the pwfill0( Ihc year attriouiabk (0- equity roldc-5 of the parent by lhi w~iglwxi avrage number of ordinary shares 0JstandirJg dulting tht_ year During Ihe year lil~ Conpmy i-sued and CBpii3lzed bonus shares lnd awmJingl) me previously ~eportod earnings per shac have blOM restatc(i
20i3 2012
Profit feT the year auributable to Cluity holderlt of the- paren (QR)
Weighted aVCTage number ofshares outstanding during the year (i)
Basic Jd diluted earnings per share (QR) 085
59985U413 shy
~~--~~~~- ~------J 1
23
Aamal Company QSc
NOTES TO THE CONSO LIDATED FfNANC[AL STATEMENTS For tbe year ended 3 l December 2013
BASIC AND DILUTED poundARNINCS PER SHARE (continued)
NOles (i) Th wigh d m nlg urnb of hres foc h P of lruling ~migs pee share h bee kulated
as follows 2013 20J2
QU3lifying shrues allhe begi ll1ling of the year 544500000 544500000 Effect of bonus shares issued and capitalised 55500000 55500000
600000000 600000000
Less T reasury shares (149587) (i357SI)
Weighted average number of shares at the end of the year 599850413 599864249
(ii) There were no potentia lly dilutiw shares outstanding at any time during tbe year and hence the diluted earnings per share is equal to the basic earnings per share
24 COItIMITMENTS
20 1] 2012 QR QR
Estimated capital expenditure approved and contracted for at the year eod but not provided for
Investment properties 2964000 8 139063 Property plant and equipment 16386500 63759762
19350500 71 898825
Operating lease commiIOlenlS under noncancellable lease agreemenlS
Payable wilhin one year 990806 702000
990806 702000
25 CONTINGENT UABILITlES
The Group had the following contingent liabi lities from which it is anticipated thai no malerial liabilities will arise
2013 2012 QR QR
Letters of guaramee 474551239 394255203
Letters of credit 7678499 194299384
NQles
(i) leHlaquogt of gu indud penonmnlaquo tend nd bid bonds d pymenlt g gi to suppliers and contractors by the Group in the ordina ry course of bus iness which will matme within twelve months fro m the reporting da te
(i i) Letters o f credit are provided by lodging documents to the bank tor purchase of trading goods fro m foreign suppliers wruch will maMC within thJee to six months from the date or tile Iransaclion
J2
26
Aamal Company QSc
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year eoded 31 December 2013
RELATED PARTY DISCLOSURES
Related party transactions Related parties represent major shareholders directors and key management persortOei of the Group and entities controlled joimly controlled or signjficamly innueoced by such parties Pricing policies md tenns of these tnlOSaclions are approved by the Group s management
Transactions with related parties induded in the consolidated financial stalemenls were as follows
20lJ 2012 QR QR
Sale o f goods and SClVices 419034048 415225221
Rental income 1980473 2069386
Purchase of goods and services 1591 38018 300835596
Rental expense 21 780G78 23397334
Bargain purchase gain 8360793
Net assets acquired 78803585
Relat ed party bal nnces AmountS due from and due to re lated parties are disclosed in Notes 7 and 13 respectively These balances do oot carry interest and are repayable OIl mulUlUy agreed dates generally within one year
The Group did not record any impairment of receivables reJatiog to amounts due from related pat1ies in either year This assessment is undertaken each fina ncial year through examining the ftnanc ial position of the related party and the market in which the related patty operates
Parent The Groups ultimate parent is Al Faisal Ho lding Company WLL
Compensa tion or key management personn el The remuneration of key management dming the year was as fullows
2013 2012 QR QR
Short-term benefi ts 7904794 1079595 Employees end of service benefits 408934 439776
8313 728 11235727
33
AamaJ Company QSC
NOTES TO THE CONSOLIDATED FINANCIAL 5T ATEMENTS For the year ended t Decernber 2013
Dilling the year 1he Group issued a XHlUS share of 10 928 of the paid tiP share capilal hdd ilS at 31 DiX2mber 2(JJ 2 mnmuning to OR 555000000 using retamed earnings as of3 December 2012 (20l2 Doe share for every ten shues held as of 31 Dcember Oll amuunting 10 QR 495OO()OOO ling reta1ned earmrgs 28 or 31 Decencer 2D II Jshy
18 SEGMENT INFORMATION
For J)iloogement PUIpltJM rhe Group i organised into business unit bused On LlJeir nature of Acttvitics lud nas fonY reportable segments and the Head Oftklt as bllow$
Propert Tbe segntn cOlists of City C~nler Qlta~ Brunch and Aamal Rea Esmte Branch whicb ll[c invoived in lampIiiog the faJ1ities of retail outlet conpex red e5ttlte nve(mltn$ and property remal buines~s
Trading mld distrib-wion The segmeul Involves wholesalB andlor rBtail distribution of phamlaceutlcai and consunable i1ems hume Epplianccs medica equimenl t-Tes ill1d lubricmtlaquo and II1UllitnEl printing The scgn(rtt includes 6c following entities
Eotl Sina Medical Branch
Aaen Medical Braudt
Amcill Troding and DistoolltlqO Branch bull Foot Care (erier HRnd) Good llre Pbannacy Bf4Uch bull Al FllfJdaq COllpafY wJ~L
InduSNol manuacturing TIle s0groent IOvolves Ulahuactrumg whole~we aliaor rewi dimibUlioti of dccnc cables lid tools ggregJ1es_ ready-IUx connole and cement bI0C~ lI1d provi$ion of servlCcent$ in rdation to iODllltroa Itvestment repair aJ-d Gonstruction of power plwts liiiding of LED ilgluitlg products und management of industnl enterpnses The segment ircludes be folloVting centntitis
bull Aam1 Cemert Industries LL AuraJ Redy1Yl(A BrQTlch
bull Doha Cables Qawf lLL Senyaf IoolJic1es Qatar Holding W LL Advanced Pipes ard Casfs CompQTly WJ L bull GuJfRoch Coroany WLL Ci~San Trading Company WLL hmovafive Lighting Compary WLL
Managed services le segment inyolvc~ provisloH of hOllseiltecpmg mi cleaning services fucditics n-anagemerJ services C1egy s(tvices ttl centfe sltrvicf)s buildiqg lnaintemHlelt aml acting as travel gens The 5cgnltnt includes the foUowing cnti(lcents
An13 ServJce Branch
amli TnlVeJa l5tmh
f-eco Gulf Co W LL
Jolinson Controls Qattl WJL
28
Aamal Company QSc
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended ) L December 20 13
SEGMENT INFORMATION (Co ntinued)
Head Office It provides corporate services to the branches and subsidiaries of the Group
The managiog d irector of the Group monitors the operating results o f its business units separately for the purpose of making decisions about resource allocation and perfonnance assessment Segment perfonnance is evaluated based Oil operating profit or loss of these segments Transfer pricing between operating segments are on anns length basis in a manoec similar to Iraosactions with third parties
Aamal Company QSC
NOTES TO THE CONSOLIDATED FINAN CIAL STATEMENTS For the year ended 3 1 December 20 13
28 SEGMENT INFORl1ATlON (continued)
Operating segments The operat ing segment after elimination or ioter-bra nch and inter-co mpany lrnnsaclioos is presented as follows
Trading (nd Industrial Managed For fh e year elided 31 December 2013 Properly disirjblli ioll manujocljlring services
QR QR QR QR Revenues
- h lemal parties 260360172 578909983 1231522768 S l802210 - Inter segments 1253914 6843 11 8 29639873 3445052 1
Heat Office QR
Eliminoions QR
(n187426) II
Tolal
QR
2J22595133
261614086 585753 lOI 126116264 1 8625273 1 (721 87426) 2122595133
Opera ti ng results Fair vallie gains
Profit I (loss) ror the year
Depreciotion
200811944
245051 107
445863051
2066290
86492834
86492834
4345438
22636250
22636250
33049 089
5157436
5157436
1760305
(47864882)
(47864882)
1334382
267233582
245051107
512 284689
42555504
36
Aamal Company QS
NOTES TO Tl CONSOLIDATED FfNANClAL STATEMENTS For the yeM ended 31 December 20 13
28 SEGMENf INFORMAnON (c)tltioucd)
FOf the yearrnrkti J f DccemOer 2(J12 QR
Revellues - ExlcmlJ partiel 2331 17 509 bull Inter segmcI11S 1168935
-- 234236434 --~- -~--
Openning results 18S2367t Fmt value gains J8S79-4~G
pront LOllS) for the rear 570616154
gt3659
No(
lnlermiddotgment revenues are eliminated on tQHs)idntiOH_
Tadiug ftfid disl d)Ntion
QR
S2S3l7661
324 j
5335493114 ~ -~-----
51384831
54384338
4J9R71(i
Indus idi mamfmturing
QR
1255694537
129U25lS4
56727059
56727059
32752742
slnltic(s QR
55216665 2939H31
S46lOJ96
7427414
7437
[908067
ilfild ()jice QR
(64(41976
Elimination QR
(74tHi2oJ Iii
Totul QR
206936372
2069336372
235721
(64641
131 f613
6245
42541)861
Amnal Company Q$l
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Por tnt yeartndeJ 31 De~embcr 2013
28 SEGMENT JNFORMATlON (contiutlld
Assc-ts and labilities
Tng alld lndtrstfw At31 December 2(113 distnbllrior manufacturIng senices HeadOJJicc EliminatioilS lola1
QR QR QR QR QR
Cumnl 3tS 227552338 620807979 61349 j 415 S()6)86922 (301636995) 1477366090 Noolucrcnt DSeIS 6411868160 12604763 622386238 4348876 (i624548 __p2438051 780
fotal asstl$ 6639420498 1194 1243194217 65698291 513Ql1470 ==-lt03H8l~O()) 853295-870 -~----~ ~---~ -
CUIT)llliabilitics 280995335 1(3511J60 6344(12777 2l0708lJ2 496261185 (3CH636995) 1249603264 Non-current iiatJlitics 7l70L5V2 8008485 HlDi16~43_ 3181668 t433799 ____ ilj534_~57 __ --Totul liahililics 353696897 ___~4159~4~ 734419720 ~4976~~~~~ 1434945711
---~~--~ -~-~~ - _2~~~4~~ (~~~~9~
C1pild expcndimn HI) WO743OOj 1397742_~471l2~--~50 ~51 ~1~623821~~1~_ -~----~------ -~
3amp
28
Aamal Company Q SC
NOTES TO THE CONSOLIDATED FfNANClAL STATEMENTS For the year ended 31 December 20 13
SEGMFNT INFORMATION (continued)
Assets and liabilities (continued)
AI 31 December 2012 Properly QR
Trading and d iSfriblllion
QR
Indusrial manufacfuring
QR
Managed senices QR
Currenl assels
Non-current assets
146491 186
6121 864484
2964425 12 903 7264
73468 1258
549267235
51387098 471 1439
Tolal assets 6268355670 305479776 1283948493 56098537
Head Office QR
468325024
6713643
475038667
Currentliabil iies
Non-current liabiLities 273444 748 1 J10 15024
86054583 7434286
669214261 1288 14977
2 1938953
287 1199
480393637 1253084
Totil lliabiliti cs 390459772 93488869 798029238 248 10 152 48J64672 1
Capila expendirure (ltII L 72865 878 1281254 6647 J356 7169 13 149045
Notes
(i)
(Ii)
Inter-segmeot balances are e limioafed 00 consolidatio n
Capi tal expendiTU res consist of additions 10 propeny plant and equip ment and iovestmenl properties
Eliminations QR
To wl QR
(273735776) (i )
(20308351(i)
1423591302
6689563230
(27576661 1) 8 113154532
(273135777) (i) 12573 10405
257388570
(273735177) 15 14698975
24 1484446
39
29
Aamal Company QSC
NOTES TO THE CONSOLIDATED FrNANCIAL STATEMENTS For the year ended 31 Dcltmber 1013
Fr-A]~ClAL RISK MANAGpoundMamp1H
Objccthes and policies fe Groups principal )uaucill liabilities comprise imltresl bctmllg loons and IxmowHgs baRlt ovetda1s amounts due to fclaled par1ies and tracte accounts payable The main pUlJXSi of thesc financial liabilities is 4J mise firmne or 610 Grmps operations The G0JP bas various fimmcial assets such as ttadc accounts receivable lInlOlmts due from related parties bark balances tltCntion receivable and other receivables which arisgt directly fran its cperuoonamp
The maiH ri~ks an3ing Joru (be Groups UnariCJlll illslrumenls jle market risk cretiJt nsk and hmdity risk Til BoarD ofDtrcctO$ reviews end agrees policies for mzrAgbg Caltt f hespound ri~k ihkh arc summariscd beloW
VIarktt risk yenfatket risk is the risk Um changes in market prices $Uch as intfcst rates and hreig lttmeocy ect14nge rilles Vltl1 affect the Groups profit eqwty Dr value tf its hoJdiI15 of financial instrl[Thnls rile objecivpoundj of marke1 risk mUnllgcrlcnt is to manage uld 1~ontr(ll tho tr))rket risk expo-sure vithir acceptable parfI-etcJ$ while optimising rerUID
Equit) price risk ampjuity prtce risk is the risk hilt the Group ampearnings will be affected as a rcmt (If luctttltions in fm vdue of ~qui-gt
mstwnents Eqlliry price risk arises from availabtetor~sale inv2strnems However the Groups exposure to eqmty price risk IS minima as II doesn hold sitl)iftrmt ailableAor-511le inYestrmmrs
[merest rate risk The Groups fimiruial poundS5ot ampId liaojlilies (at Rl $uJject to int~~ rate mk compnse brmk depoils interst bearing loans and bOITQwjags and bank overdr-afts At the reponwg dalt tbe [merest rale pronle of Ill Goups intexst bearing fbi4rdd instruments as fliows
11113 20i3 QR QR
Fued liIeryS refc insfrvrnellts
Fmmcial assets 113035962 111913394 FrOltwial liabilities --1~203712l) 1252t43~1
9)OI~ (13350972)
Fhlllting inireSI rate ns1lmlttrs Fanctl~ Isseis 127024345 ID43848o Fllllocial liabilities _-(i~9347~ (94))48926)
(836)64116)
The Groups exposure to t~ ris of changes in marXet interest fltltes relztes primariiy to the Groups financial assets and lizbitdic$ with t1Oltttirg interest mte~
lhe loEowing able demonstrates the ampmitivity nf the eonsolidattXI statemen1 of income 1) caonaly possible chonges in in1jfgtst rmes by 25 basis points with all othe vari)ble3 hdc umstant The sensitivity of the CooiK~ljclatid statement of inc(me $ the eft(ct of tb assumed changes in lnterdt rales for one year bf1sec on the floating rate financial assets and fimmcial hablhw$ held at 31 f~r The effect of deae-ascs in interest ral~ is cXp0Ctct to be equal and opposite to the effect oHlle increases sllQvro
Changes it Eftx OIl
00513 [oms profit QR
2013 Floating mterest Hlte instruments ----2$ bp (1649776)
2012 Flv-ating irkfiSt rale instrumenls +25 bp (209[9(1))
~--------- -~~ 40-middot------ _ _ shy
29
Aamal Company QSC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 3 1 December 2013
FINANCIAL RISK MANAGEMENT (continued)
Foreign currency risk Foreign currency risk is the risk lhilt the value of lhe fi nancial instruments will fluctuate due 10 changes in fore ign exchange rates
T rade aCcOlmts payable and accrued expenses include amounts due in foreign currencies mliniy US Dollars UAB Dirhams Great Britain Pounds (GB P) and Euros of which the Group has a currency risk primruily on the baJmces payable in Euros and GBP amoWlting 10 QR 14400634 (2012 QR 17214046)
The Group does not hedge its foreign currency exposure As both Qatari Riyal and UAE Dirhams are pegged to the US Dollar balances in US Dollars and UAE Dirhams are not considered to represent significant currency ris k to the Group
The table below indicates the Group s fore ign c urrency exposure on its monetary assets a nd liabilities The analysis calculates the effect o f a reasonably poss ib le move ment of the QR curre nc y rale against the Euro and GBP with all other variables held constant on the consolidated slate menl o f income (due to the fa ir va lue of currency sensitive monetary asse ts a nd liabilities) The e ffect o f decreases in fo reign c urre ncy exchange rates is expected to he equal and opposile 10 the e ffect of the increases shown
Incramp1se ill
f oreign cUlrency rate
0
the QR
Ellecl on profil
QR
2013 +5 (720032)
20 12 +5 (860 702)
C redit Tisk Credit risk is the risk that one party to a financial instrume nt wi ll fa il to discharge an obligation and cause the other party to incur a financial loss TIle Groups exposure to credit risk is indica ted by the carrying amoWlt o f its financia l asse ts whic h consist principally oftmde accollilts receivable retention receivable amounts due from related parties othe r receivables and bank baLances
The Group sells its products and prov ides services to vario us panies It is the G ro ups policy that all customers who wish to obtain on credit lerms are subject to credit verificalion procedures to ensure c redit Ilonhiness Each new customer is analysed individually for creditworthiness before the de livery o f products Of services Custo mm tbat fai l to met t the credi tworthiness may transact with the Group only o n prepayme nt basis Property rentals are mostl y received in ad vtnce or conlrlCled wi th post dated cheques 10 additio n receivable balances are monitored on an ongoing basis a nd the purchase limils are established for each c redit custoroer which are reviewed reguJarly based on the level o f past transactions and senlement The Groups max im wn exposure with regard to trade aCCOWlts receivab le net ofa llowance re nected allhe reporting date was ilS fo llows
2013 2012
Business SJgmelll QR QR
Property 15478832 19386326 Trading and distributio n 194343 597 179748274 Industrial ma nufac turing 183119753 131578668 Managed services 18069385 14547389
411 011 567 345260657
41
29
Aamal Company QSc
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For tbe year eoded 3 J December 20 13
FlNAJICIAL RISK MANAG EMENT (c-o Dtinued)
Credit risk (continued) With respect to credit risk arising from the other financi31 assets of the Group the Groups exposure to credit risk arises from default of the counterparty with a maximum exposure equal 10 the canying amount of these instruments as follows
2013 QR
202
QR
Bank balances Amounts due from related parties Retention and other receivables
436136756 214439950 48290351
36788129 t 171525363 74082203
698867057 613488857
The group reduces the expoSltre of credit risk arising from other financial assets by maintaining bank accounts in reputed banks and providing services only to creditworthy re lated parties
The management cons iders the bank balances and a mQUIIIS due from related parties as high grade fi nancial assets and lfade accounls receivable and other receivables as sundard grade financial assets When a finltmcial asset is identified 10 be impaired the managemoot downgrades such assets to impaired category and provides adequate allowances
Liquidity risk Liquidity risk is the risk that the Group will not be able to meet its fmancial obligations as they fu ll due The Groups 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 nonnal and stressed conditiom without incurring unacceptable losses or risking damage to the Groups reputa tion and is to maintain a balance belWeen continuity of fuoding and f1eilibility through the use of bank overdrafts and bank loans and borrowings
The Group monitors its risk to a shortage o f funds using a recuning liquidity plaOfling 1001 TIllS tool considers the manuiry o f financial assets (eg accounts receivable) and projected cash flows from operations The Groups teons ofsales or services require arooUIlts to be paid within 30-90 days from the invoiced dale
42
29
Aamal Company QSc
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For tbe year ended 3 1 December 2013
FrNANClAL ruSK MANAGEMENT (contiQued)
Uqujdity risk (continued) The table below summarises the ruaruriJy profile of the Groups financial 1iabililies a t 31 December based on contractual undiscountcd paymeots
2013 Interest bearing loans and borrowings Bank overdrafts Trade accowus payable Other payables Amounl~ due (0 related panles
201l Interest bearing loans and borrowings
Baok overdrafts Trade accounts payable Other payables Amounts due to related parties
On demand
QR
6836280
6836280
011 demand QR
2885090
2885090
Less than 3 months
QR
521324473
303638792
47406830
2530~480
898675575
Less thall 3
months
QR
469839033
10754JJIO 37543236
1964504 1
634568620
3 10 J2 mOlllh$
QR
239333328
16378865 20210580
2289~11l
298816884
3 to 12 monlhs
QR
365476972
159621 37 J 24745342
30092716
579936401
1to 5 years
QR
J 60092748
160092148
1 to 5 years
QR
248472226
248472226
gt 5 years
QR
25261598
25261 598
gt 5 years
QR
7648000
7648000
TOlaf
QR
947012147 6836280
320017657
67617410 48199591
1389681085
Tota
QR
109 1436231
1885090 267162681
622 88578
49737757
14735 10337
43
30
Aamal Company QSltc NOTES TO THE CONSOLIDATED FlANCIAL STATEMETS For the year ended 31 December 20 t3
21 F~ANClAL RlSK MAiAGEMElT (continued)
Capital management The Boards policy is to maintain a strong cepit1 base so as to rnainmin investor creditor and market ronfoonee and to SUSWlJ) fumre dcltclonnent Gf the buinest The Board of Directors rronitortl the tapital whkh tbe Group defines as wlal $parcloders equity excluding nonmiddotcornroliing imerests and the level of dividends to orrunury srarellOJdcfS
The Board also reeks to ITIaimain a balance between the higher (ctums (hat might be fA-~$ihle With higher leves of borrnwings end Lle edvnrJages and security named Sy it sOMd Cilpitai posi[ion The GfCup~ k1rget is to achievfl a return on slureholders equity (exclJding aonwurrolJiug iorcf(sts) greater lll(ll1 he wcighlcd average inres exxmse on mrerest bearing Ivens and oorrowing
The (lf0t-p nl)nDg-e ils cnpital structure and makes adjustneal lOll in light ofchang2s in economic nd bttincss cordjlons and shareholders expe1ationJo chmges veremiddot maCo HI Lleuro objecttves polilCS or proCCSSC3 during the years erded 31 D~mber 2013md 31 Dtccmlxr2Ql2
The Group monitors the capit2J using a gClting fatio which IS dep divided by caplla plus debL The GtOwgts policy is to keep ttJe ge-anng rmio bclew 40 Tbe Group iLdtdes withb debt imete-51 beagting loans ard ~OITORlngs less cash and cash equtVaknts Capltal includes eqmty attributable 10 the equity tolders oft~e parcrt
2013 QR
2(i2 QR
fmerest bearing loans and borrowings lcss- Cash and cas ltYJUvalcnts
9i4lJ05301 _~ (429JfJl4761
1004845296 (649)6201)
Net debt
Toa capital
Capita and net debt
699849045
~ringrttio
FAIR VALtES OF Fl~ANOAL f~STRUMETS
Finarcial iostrumenL~ cOlnprise tina~lctal assetS carl finailcialliabilities
Fmancial assets colJist of bank balance) short 1Cm bank dcposis amounL dve dom rc)ltted partilt)$ rekntion and other receivables and ttade accolmis rceivabe Finatlclll habiilics cgtmsist of banilt ovcrdratls jnerest bearing lOil1S and bOrowings amounts due (0 nliled partiG~ ane trade x-ounls payable
The- fair values of hese financial inStrumen1S except Jo-- imCfest bearing loam lHld bOlToving aproKimate lhdr cMryinJ vlhes due to the Slort temt mzrutiiles or these instrument
Tllc faiT value of iotcnst beating Nns and borrowin2s ae estimate( based on discoumed ltash flows twin int(s rale- cune-ntly nvailagtk fur tilt debt or sinuiar tetnlS an-a rell1lmng matunties
31
Aamal Company~Q=-ScC ______________~______
~OTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For fhe year ended 31 December 20 t3
SlGNIFICANT ASUMPTIONS ACCOUJTING JUDGElE1TS AND F8TIMATFS
impairment (If accoonts receivable n etrnwe of lhe collectible anoun of trade accounlgt reccvable is made when collection of the full lHl1OUt i~ nO looger probabk FOI nCividualty significitIl amounts this estimation is p~rformed on an indh-idllai a$[$ Amomts wHcb arc not indivldl11Uy significant but wluch are past due ZTe tsscssed collectively and an aJlQwaccc applied ucc()r~Jng to the length of lime past due based oc histnncal recovery nlJes
hnpalrment of inHntnries lavenoncs are held at tho lower of col and nol realisable value InIOn inventoncent$ becone old or 0-~amplete an estilTJte is mate of their net j alisable vulue For indiviolhlUy significant amountS this cstinaunrt is performec all aD lndividwl osis Amotlnts whieh are fl0t individually significan( btll which ltIre old at obsolete wx LltSessed wllecivdy md a provisior is applied sccnrding to the invenrory type and be dep)ee of ageing 0 cDsolescc1ce based on anticipUled selling prices
Classifigt1ltion of El Sew(gtdy Cable Qatar WLI ali a j(lint vwture pound1 Sovedy Cables Qatar is a limited hability company whose kgal fum confers SCprm11ior bernten tbe jXliiies 10 ~he jomi lfranpement Snd the Company Itself FurthenrlOre then IS no oontractua] arrmgelTeot or any oibe aus aod circumstriliCe$ that iocik41to tht he putic5 [0 the joint flJTIlrgernelit bave rights to the ssetl and obligrtdons fo~ the liabilities of the joint ilrrongement Acoordingly El Sewed- C[jbl~s Qamr WLL is dassifiecl 7S a joiut enrtrr of he GWtp
impairment of goodwill G0oovj)1 embedded in th~ cot 0 aquisitior of subsidiaries and eqmtj-iccounled iflV(stees ire teswt for irl1jXlirmnt aHuaily Tbe calculations of value [n use fO( cfish gecj~r)lilg units (loring to real nte projecg are rtost sensitive to tin IDHowing assumpti015
Grosgt i1wginmiddot Gross Ilmrgins arc lmsed on avrage values tuhje0d in (he [Xrioo preeedhli (e siaM of the budge xnod T1esC at( mcreased over the budgel period for mticipatltX efficiency Hnprovemots
DisC)unr r(es Discount rotes represent th cl1tent mark as~ssmetlt of the risks specific te ech cash geocroting unit regarding lhe time value of money ilnd mdividu)l risks of he tmtieriyilg assets whICh have not been inwrport1eti it the Citik flow estimates The dj~(OUrl flte tlkulation is based on the speclfte circurnsthLCes of lile Group and its opltllatJng segn)~nts (md derived (ff)rC it weighted avaage (XSt 0f apilaJ (WACC) Tb fACe (akw into uoount both deb and equity The 0$1 of equity is denved from dlC expected return 01 investmenl by the Groups investors TJc Gos10( deb is based on l1e borrvwings the Gmup IS obllsxl to service SC~lletllmiddotspecific r5k IS incorxt4too by applying individual bera facto The betn mctors ire evauatcentd annuaHy bhseci on pubJicly aVflllabe murked earn
Fair value ()fnHstmeni proputies The fuit laHe 0 nvestmel~ propertis is deltrrnlnzd b cxterrwl indepzfldell property valuers laving appr0priate recognised professional quabfiillions and recenl xperience H1 the localjl)n and G-tegory 0 the oroperty being valued
Useful hes of PfQPcrly plmr (llld zqulpment The Groups management detennints th estiunted useful jives Df It~ property plan and equipmnl fix calnurjng depreciation Thi5 e~timJte is 6lermind after cinsidring 1b expeelcd usage (1f the a5sclt [hysical l101t and (eas tedmiltal Dr com~ercia obsolesccnce
Gotlg Qncen
ibe Groups mangerncnt UiS made aJ assessmeot cf the 011115 ability (0 COllllOUC liS a going conct11l Imd is satsl1ed hat me Group ms the resources to contmue in business for he foreseeable fu1urc he1hennort he management is no aware oC lny material Hncertainties that lray CH~t signinchnt doubt tlPDfl the Groups ability 10 continue as a going umcem Therefore titpound lotlsolidatcd finilllcij stftemeols comirme to be prepltd on li g0ing concern basis
Aamal Company QSc
NOTES TO THE CONSOLIDATED FlNANC[AL STATEMENTS For the year ended 3 1 December 20 13
32 INCOME TAX
Certa in subsidiaries of the Group which have non-GCe ownership are subject to income tax under Qatar Income Tax Law No 2 1 of2009 The iocome tax is charged on the share of profits attributable to non-GCe shareholders For the purpose of these conso lidated fi nancial statements the income tax liability oftbe foreign shareholders has been excluded given that the non-GCe shareholders have agreed under the shareholder agreements signed with the Group to bear the fh lliiability and make necessary payments
33 COMPARATIVE INFORMATION
Certain comparative figw-es of the previous year have been reclassified 0 coofonn to the current years presentation However such reclassifications are oat materia and do not have an impact on tbe previously reported net profit other comprehensive income or the total equity for the comparative year
The impact from the resta tement of comparative infonnalion as a resuh of adoption of IFRS I I - Joint arrangements is detailed in Note 32 Changes in aCCQu(lting policies
46
Aamal Company QSc
NOTES TO THE CONSOLIDATED FTNANClAL STATEMENTS For the year ended 3 1 December 201 3
3 BASIS OF PREPARATION AND SUMMARY Of SIGNIFICANT ACCOUNTrNC POLICIES (continued)
32 CHANGES IN ACCOUNTING POLlc ms (coDtinued)
IFRS IJ Fair ~alue measuremetll TFRS 13 provides a single source of guidance on how fair value is measured and replaces the faif value measurement guidance tha i is currently d ispersed thIo tlghool [FRS It unifies the definiti on of fair va lue as the price that would be received 10 sell an asset or paid to transfer a liability in an orderly transaction between market participants a t the measurement dale It replaces and expands the disclosure reltjuiremenlS about fair value measurements in other IFRSs including TFRS 7
Improvements (0 IFRSs (20 ) Improvements to IFRS issued in 20 11 contained numerous amendments to IFRS that the IASB considers nonshyurgent but necessary Improvements to lFRS comprise amendments that result il) accounting changes to presentation recognition or measurement purposes as well as tennioology or editorial amendments related to a varie) of individuallFRS standards
During the period the Group has adopted the fo llowing new s tandard which became effecti ve for the annual periods beginning on I January 201 3 which had a materi81 impact to ule Group
IFRS II Joint AlTwlgements As a result of adopting IFRS II the GrOlp has changed its ltlccoUJ)ting policy for interests in jo int a rrangemeots Uuder rFRS 11 the Group classifies its interest in jo int arrJngements as e imer j oint operations or joint ventures depending on the Groups rights to the assets and obligations for the liabil ities ofthe arrangements When maldng this assessmenl the group considers the strucltire of the arrangements the legal fonn of any separate vehicles the contrac tual tenns of the arrangements and other fact s and arrangements Previously the structure of tbe a rrangement was the sole foc us of classification The Group has re-evaluated its involve men t in ils o nly joint a rrangement El Sewedy Cables Qatar WLL ltlnd has recla ssified the investment from jointly controlled entity to joint venture Also the Group has discontinued with re rrospective effect the use o f the proportionilte consol idation method and adopted the equity method to account for joint venture in accordance mth IFRS I I
Summary oquulllitative impuct The following tables summarises the materia l impac ts rcsulting from the above change in accounting polic ies on the Groups financ ial position profit o r loss and cash flo ws
Effect of chnnge in 31 Decemb er2012 accounting policy
Cunem assets (278 880441 ) Non-current assets 1295 1346 Total assds (265929095)
Current liabilities (265072694) NonmiddotcWTent liabilities (856401) Total lin bill ties (265929095)
For the year ended 31 December 2012
Profit for the year
Net chflllge in cash and cash equivalents dlUing the year (99696J)
12
Aamal Company QSc
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 3 I December 2013
3 BASIS OF PREPARATION AND SUMMARY OF SlGNlf[CANT ACCOUNTING PO LICI ES (continued)
33 lASB STANDARDS AND lNTERPRETATIONS ISSUED BUT NOT ADOPTED
The following lASB standardsamendments hJve been issued but are not yet mandatory and have 1l0( been etrly adopted by the Group
Standard
Illterpretotion COnem EffeClive dale
TfRS9 Financia l InstrumentS (new standard) I Januruy20 17
IAS 32 Financia l Instruments O ffsetting (amendment) I January 20 14 JAS 36 Financia llnslnnnents Disclosure - non-fi nancial asse ts (amendment) I January 2014
The Group is considering the implications of the above standards and the till1ing (If adoption by the Group
34 SUM MARY OF SIGNIFICAJT ACCOUNTING POLICI ES
Bu siness combinnriO llS The Group accounts for business combinations using the acquisitio n method wben connol is Imasferroo to the Group The consideration ITansrerred n the acquisition is generally measured at fa ir value as are the identifiable net assets acquired Any goodwill that arises is tested annua lly for impairmeot AllYgain on a bargain purchase is recognised in pro fit or loss immediately Transaction COStS arc expensed as incurred except if rehated to the issue of debt or equity securities
The considera tion transferred does nOt include amounts related to the settlement of pre-existing re lationships Such amounts are recognised in profit or loss
Any contingent consideration payable is roeasured at fair va lue at the acquisition date If the contingent consdicrntion is classified as equity then it is oote nmeasured and settlement is accounted for within equity Otherwise subsequent changes in the fa ir value of the contingent consderafion are recognised iu profit or loss
Cash a nd eash equivalen ts For the purpose of the consolidaled statement or cash flo ws cash and cash equivalents consist of cash and bank balaoces ruld short teJTIl bank deposi ts wi th an original marurily of three months or less net of outstanding bank overdrafts
Accounts receivable Accounts receivable are stated at originill invoice amount less an allowance for any uncollectible amounts An estimate for doubttit debts is made when collection of the flilt amount is no longer probable Bad debts are wntlen off when (here is no possibility o f recovery
Inventories Inventories are stated at the lower of cost and net realisable value Costs are those expenses incurred in bringing each product to its present location and condition
Goods ror resalework in progress - Cost of di rect materials aJld labour plus attributable overheads based on a oormallevel ofac1i vity
Raw material and spare pan s PlIlchase cost on a weighted average basis
Net realisable value is based on estimated selling price less any further costs expocted to be incurred to completion and disposal
13
Aama Company QSc
NOTES TO THE CONSOLIDATED FINANC IAL STATEMENTS For tbe year ended 31 December 20 13
3 BASIS OF PREPARATION AND SUMMA RY OF SIGNIFICANT ACCOUNTfNC POLI CIES (contin ued)
34 SUMMARY OF SIGNIFICANT ACCO UNTLNG POLICIES (continued)
Interests in equity-aecoupled inveslecs The Groups interest in equity-accounted investees comprise interest in associates and joint venture
Associates are lhose entities in which the Group has significant influence but not control or joint control over the financia l and operating policies A joint vennu-c is an arrangement in which the Group has jo int ool1lrol whereby the Group has rights to the net assets of the arrangement rather thall rights to its assets and obugations for its liabilities
InlereSIS in associates and the joint venture are accoliDted for using the equity method They are recognised initially tit cost which includes transaction costs Subsequent to ini tial recognition the consolidated financ ial stateme nts ioc lude the Groups shrre of the profit or loss and other comprehensive income of equity-accounted investees unti l the dalc on which significant in Lluence or joint control ceases
The reponing d~les of the equity-accounted investees and the Group are identical and the equi ty-accounted investees accoWlting policies confonn to those used by the Group for like tmnsactions afld events in similar circumstances
Investmefl t properties umd aod buildings are considered as investment properties only when they are being held to earn ren tals or for capital appreciation or fo r both
Investment properties are measured ini tia lly at cost including traosaction costs and borrowing costs that are directty attributable to construc tion o f the 8sseL The carrying alRount includes the cost of replacing part of an existing investment property at the time that cost is incurred jf toe recognition cri teria are mel and excludes the costs of day-to-day servic ing of an investment property Sub~quent to inilial recognition investment propert ies are slated at fa ir value which reOects market conditions at the reporting date Gains or losses arising from changes in the fa ir values of investment properties are included in the consolidated statement of income in the yeltl r in which they arise
Investment properties are derecognised when either they have been disposed off or when the investment property is pennanently withdrawn 1T0m use and no fu ture economic benefit is expected from its disposal Any gains or losses on the retirement or disposa l of aD investment property are recognised in the consolidated statement of income in the year of retiremeOl or disposal
Property under construc tion is dealt with under lAS 40 and rttorded at cost less accumulated impairment losses until either its fair value becomes relia bly detenninable or cons(TUction is completed (whichever is earl ier) At that time it is reclassified as inves tment property and a fa ir value adjustment is recognised in the consolidated statemenlof income
Transfers are made to or fro m in vestment property onl y when there is a change in use For a transfer from investmen propeIT) to ovmer occupied proreIT) the deemed cost for subsequent accounting is the fair value at the date of change in use If owner occupied property ~omes an investment property the difference between the canying value aoo the fair value at the date oflransfer is rttognised as a revaluation reserve in the equity and is released to the consol idated sta tement of income llpon disposal of such propcny
14
Aamal Company QSc
NOTES TO THE CONSOLIDATED FrNANCIAL STATEMENTS For the year eDded 31 December 20 13
3 BASIS OF PREPARATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLI CIES (continued)
304 SUMMARY Of SIGNIFICANT ACCOUNTING POLICIES (continued)
Property plant and equipment Property plant and equipment is stated at cost including borrowing costs that are eligible for capitalisation and excluding the costs of day-to-day servicing less accumu lated depreciation and any imp~innem in value
Depreciation is provided on a straight line basis on all propelT) planl and equi pment The rales of depreciatioo are based upon the following eSImnelt useful lives
Buildings 20 years Leasehold improvements 2-8 years Truck mixers and motor vehicles 4-1 5 years Plant and ITIJchioery 8-2 5 years Furniture fixtures and office equipment 3-5 years Computers and related software 3-5 years Capital work in progress Not depreciated
The carrying amounts are reviewed for impain nellt when events or changes in circumstances indicate that the carrying value may not be recoverable If any such indication exists and where the carrying values exceed tbe estimated recoverable amouot the assets are wri tten down to their recoverable amount being the higher of their fair value less costs to sen and their value in use
Expendirure iocurred lO replace a component of an item of property plaot and equipment that is accotmted for separately is capitalised and the carrying amount of the component that is replaced is written off Other subsequent expenditure is capitalised only when it increases furure economic benefits of the related item of property plant and equiproent Al l other expendirure is recognised in the consolidated statement of income as the expense is Incurred
An item o f property plaot and equipment is dereeognised upon disposal or when no future economic benefi ts are expected from its use or disposal Any gain or loss arising on derecognilloo of the asset is iocluded in the consolidated stalemeot o f income io the year the asset is derecognised
The asset s residual values useful lives and method of depreciation are reviewed and adjusted if appropriate at each rnancial year end
Borrowing costs Borrowing costs direc tly attributable to the acquisition constmction or production of an asset that necessarily takes substalltjal period of time 10 get ready for its intended use or sale are capilalised as pan of the cost o f lhe respective assets All other borrowing costs are expensed in the year they incur BOlTOwiog COSts consist of the interest and other costs that the Group incurs in coomction with the borrowing of fund s
Accounts paytlble and accruBls Liabilities are recognised for amounts to be paid in the fuMe for goods or services received whether billed by the supplier or not
Interest bearing loans Bnd borrowings Interest bearing loaos and borrowings are recognised ini tiaJy at fai r value of the amounts borrowed less direc tly attributable transaction costs Subsequent to initial recognition interest bearing loons and borrowings are measured at amortised COSt using the effecti ve interest method with any differences between the cost and tinal settlement values being recognized in the conso lidated statement of income over the peliod of borrowings Instalments due within one year aI amortised cost are shown as a ctuTentliabiliry
Gains or losses are recogTlised in the consolidated sialement of income when (he liabililies are derecognised Interest relating (0 imerest bearing loans and borrowings is expensed in the year in which it is incWTed e(cept those qualify for capitalisation
15
Aamal Company QSC
NOTES TO THE CONSOLIDATED FfNANClAL STATEMENTS For tbe year eoded 31 December 201 3
J BASIS OF PRpoundPARATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
34 SUMMARY Of)SIGNIFICAtlT ACCOUNTING POLICI ES (continued)
TClaot deposits Tenant deposit liabilities are initially recognised at fair value and subsequently measured at amortised cost where material Any di fference between the initial fair vllue and the oominal amount is [eluded as a component of rental income and rocognised on a straight-line basis over the lease term
Derecognition or fiolocial nsstls and liabilities
a) Financial assets
A fi nanCIal asset (or w~re apphcabJe a part of a fin ancial asset or part of a group of SImilar financIal assets) IS derecogmsed where J bull The n ghts to receIve [5h flo ws from the asset have expIred bull The Group has trans f rred Its rights to receive cash flows from the ass or has assumed an obhg811On to pay the
reltelved cash flows I full Wlthout mfl tenal delay to a third party under a pass-through arrangement and elther (3) the Group has Ira sferred substantially aIthe nsKs and rewards of the asset or (b) Ihe Group has neuher transferred nor relain substantially ai the n sks and rewards of the asset but has tnlnsferred control of the asset
When the Group has tTa~fened its rights 10 receive cash flo ws from an asset or has entered into a pass-waugh arrangement and has nejlher trmsferred nor reta ined substantially all of the risks and rewards of the asset nor trnnsferred control of the asset the asset is recogoised to the extent of the Groups cOlilinuing involvement in Ihe
In that case the Group at 0 recognises an associmed liability The mnsferred asset and ihe associaled liabi lity are measured 00 a basis thai flects Ihe rights lnd obligations that the Group has retained Continuing involvement that takes the form of a guara tee over the transferred asset is measured at the lower of the original canying amount of Ihe asset and fbe maxim amoun o f consideration that the Groop could be required to repay
b) Financialliabiliti
A financial liabili ty is defogniSed when the obligation under the liabil ity is discharged or cancelled or expires Where an existing fio8 1lci I liability is replaced by another from the same lender on substantia ll y d ifferent lenns or the terms of an existin liabili ty are substantia lly modified such an exchange or modification is treated as a derecognition of the orig~al liabili ty and the recog1Jitioil of a new liability and the dirference io the respective carrying amounts is reco ised in the consolidated Slatement o f income
Impalr meot ood uncollec ibility of fina ncial assets An assessment is made al each repon ing date to determine whether there is objective evidence that a speci fic financial asset may be impaired If such evidence exists allY impainneOl loss is recogoised in the consolidated statement of income ImT t is detemtined as fo llows
(a) For assets earned a t fair value impainnellt is tbe difference between cost and fair va lue (b) For asseamp carried at COSt impairment is the difference between cost and lIle present value of future
cash flo1S discounted at lhe current market rate of rdurn for a simi lar finan cial asset (0) For asseq carried al amortised COSt impainneot is the difference between canying arnOWll and lhe
present Value of future cash flO M discowlled at the original effective iDlerest rate
Provisions Provisions are rewgnised hen the Group has an obl igation (legal or COnslnlctive) aris ing fro m a past event and the costs to settle the obl igalio are both probable and able to be reliably measured
16
Aamal Company QSc
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 31 December 2013
3 BAses OF PR EPARATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICI ES (colltinued)
34 SUMMARY OF S IGNIFICANT ACCOUNTING POLICIES (continued)
Employees eod of service benefits The Group provides end of service benefits to all employees in accordance wi th employment contracts and Qatar Labour Law The entitlement to these benefits is based upon the employees final salary aocl length of service subject to the completion of a minimum service period The expected costs of these benefits are accrued over the period ofemployment
Revenue Revenue is recognised to the extent thal it is probable that the economic benefits will flow to the Group and the revenue call be reliably measured Revenue is measured al the fair value of the consideration received excluding discoWlIS rebates and duty The following spec ific recognition criteria must also be met before revenue is recognised
Sale ofgoods Sales are recognised whcn significant risks and rewards of ownership of the goods have passed to the boyer and the amount of revenue cao be me3sured rcli3bly
Rental income Rental incorne from investment properties is accoWlted for on a time proportion basis over the period of tenancy Incentives for leases to enter into lease agreements are spread evenly over the lease teon even if the payments are not made 0 0 such basis Income arising Tom expenses recharged to tenants is recogn ised in the year in which the expenses can be contrac tually recei ved Service charges aud other such receipts are includcd gross o f related cosls in revenues as the Group acts as principal io this regard Premiwns received to terminate leases arc recognised in the consolidated statement of income when they arise
Service income Service income is recognised when the service is rendered and the outCQrne of the transactions can be estimated reliably
COlimission Commission is accounted for on an accrual basis when the right 10 receive the income is established
become on tra~el agencies [ncome on travel agencies is accounted for in the year in which the airline tickets are sold
IIIeresr income Joterest income is recognised as the interest accrues using the effective interest Clle method
Foreign currencies Transactions in foreign currencies ate recorded al tbe rale ruling at the date of the transaction Monetary assets and liabi lities dcoomioated io foreign currencies ace retranslated ill the raLe of exchange ruling at the reponing date All differences are recognised in the Statement ofinconlC
Use of estimates The preparation of (he Groups consolidated financial sta temenls in CQnfonnity with Intemltional Financial Reponing Standards ([fRS) requires management 10 rnake estimates and assumptions that affect the reponed amounts of assets and liabilities and disclosure of contingent asscts and liabili ties at the rcporting date and the reported amoUlils of revenues and expenses during Ihe reponing period Although these estimates are based on managements best knowtedge of current events nnd actions acnm results may ul timately differ fro m those estimates (Significant asswnptions nccounting judgments and estimates used in preparing these coosolidated fina ncial sta temenlS are disclosed in Note 31)
The estimates and underlying assumptions are reviewed regularly Revisions to accounting estimlIes are recognised in (he period in which the estimate is revised if the revision affects only that period or in th~ period of the revision and future periods if the revision affects both current and fu ture periods
17
Aamal Company QSC
NOTES TO THE CONSOLlDA TED FINANCIAL STATEMENTS For tbe year cnded 31 December 2013
3 BASI S OF PREPARATION AND SUMMARY OF SrGNIFICANT ACCOUNTING POLICIES (continued)
34 SUMMARY or SIGNIFICANT ACCOUNTING POLI CIES (continued)
Fair va lues A number of Groups accounting policies and disclosures require tJ1 C measurement of fair values for both financial and non-financial assets and liabil ities The Group has an established control framework with respect to the measuremeot of fair values When measuring the fair value of an asset or a liabili ly the Group uses market observable data for (be valuatiOD Fair values are categorised into different levels in a fair value hierarchy baCd on the inputs used in the valuation lechniques as follows
i) Leve l I - Unadjosted quoted prices io active markets for identica l assets and liabilities ji) Level 2 - Otheqobservable inputs not included within level 1 of the fair value hierarchy ii i) Level 3 - Unobtervable inputs (including enti ty s own data which are adjusted if necessary to retlect the
assumptions market participnllts would use in the circumstances) The Group recognises tralnSfers between levels of the fair value hierarchy at the end ofthe reporting period during which the change has ocdWTed_
Treasury shares When share capitl recognized in equity is repUIchased (by the Company or any of its subsidiaries) the amount of the consideration paid which includes direa ly altributable COSIS is recognized lIS a deduction from equity Wheo treasury shares are sold or reissued subsequently the amount received is recognized as no increase in equity and the resulting surplus or deficit on the transaction is presented io share premium
18
4
Aamal Company iQSc
NOTES TO THE ONSOLlDATED FINANCIAL STATEMENTS For the year ended 31 ecember 201 3
BUSINESS CO~BlNAnON
Acquisition o f Culf ROks Company VLL On 1 January 2012 the roup acquired 51 oflhe voting shares of Gulf Rocks Company WLL (Gul f Rocks) a limited Iiabiliry campan incorporated in Qatar and registered UJKier conunercial registration number 2249) The acquisition was made thT ugh Ci-San Trading WL L a subsidiary which is 50 owned by Aamal Group
I
The fai r val ue of lbe ideltifiable assets and liabilit ies of Gulf Rocks Co mpany WLL based on purchase price allocation exercise condlcd by tbe management as at the date of acquisition WJ S as follows
Fair value recognized on
acquisition QR
Assets I Cash and bank balances 14005495 ACC QUOiS receivable and wePayments I 749383 Amouots due from related plrties I
I oveotones
48311 190 5124 270
Available for sale investm~nlS 1985245 Plant and equipment 6769 17
81852500
Liabilit ies Accounts payable aJld accll1als 4724446 Amounts due to related parties 385070 Employees end of serviccibenefits (Note 15) 349272
5458788
Total identifiable net a5sellf
Purchase consideration trasferred Non-controll ing intereSt az-ising on business combination Bargain purcha5c gain rc~u ting from the tcquisilion
Allalysis ojcash flows OIl acquisition Net cash acquire11 Nith the subsidiary 14005495 Cash paid (30600000)
(16594505)
On I September 20 12 the Company acquired the balance 49 nfthe equiry of Gulf Rocks Accordingly the Group has 74 5 effective holdin4 in Gulf Rocks as at the reporting dale The excess nfthe purchase cons ideration over Ihe fair value o f net assets of GuJf Rocks acqui red from the nnn-controlHng interest has been recorded directly in the retained earnings of tbe Gr6up as at 31 December 201 2
QR Purchase consideration 404 10000 Less fuir value of oet asset~ acquiroo from the non-controlling Interest holder (39842792) EXce5s of purchllse cons idf ration over the fair value of net assets a(q uired 567208
19
5
Aamal Company QSC
NOTES TO THE (WNSOLlDATED FfNANClAL STATEMENTS For the year eoded 3 ) December 2013
CASH AND CASH EQUIVALENTS
For the pmvose of consolidated statement of cash flows cash and cash equivalents comprise the fo llowing balances
lon 2012 QR QR
Cash and bank accounts 330333904 282272895 Short lenn bank deposits 105802852 85608396 Cash and bank balances 436136756 367881 291
Bank overdrafts (6836280) (2885090)
Cash and cash equivalents 429300 476 364996120 1
The short tenn bank deposits are made for varying periods between one day aod three months depeoding on Ibe immedifltc cash requirements of the Group and earn interest at the respective short term deposit ra tes
6 ACCOUNTS RECEfVABLE AND PREPAYMENTS
2013 2012 QR QR
Trade aCColUlts receivable 411 011 567 345260657 Advances 0 suppliers and prepayments 50787921 629389J 5 Retention receivables 36217081 56943030 Other receivables 12073270 17 139173
5tO089839 4 82 28 1775
As at 31 December 2013 trade accountS receivoble amoWlting to QR 2690 1412 (201 2 OR 24984025) were impaired Movements in the allowance for impairment of trade aCColmts receivable were as follows
2013 202 QR QR
At 1 January 24984025 1 877085 Charge for [he year (Note 21) 2294590 13613 120 Amounts wriuen off (19949) (117368) Unused amotmts reversed (357254) (388812)
At 3 t December 26901412 24984025
20
6
1
lamal CompanyQSC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMEltS For the year ended 3 J December 2013
ACCotNTS RECEIVABLpound AND PREPAYMpoundNTS (contillued)
As at -1 I Dtcemxt the ageirg of unimpaired (ltlde accounb iltcivabk was as follows
P(HI duo
nor Up to 30 31-60 61middot90 Yi-jSj gt flO Tota impoirlt-fl days days days day doys
QR QR QR QR QR QR QR
1l13 411OJl$67 25l981960 32312165 2140966 19351fi43 16f)76888 60148545 2012 345260657 1695159B6 493lt)8566 2356$954 19494369 16908414 66374363
1JJJirtpai~ed receivable are expected no th bil5tS of past experienn) 10 be fully fcCi)evbc H is not the pngtctlce ofthcent Group to oblum collaleral over recejvablcI_
AMOLNTS DUE FROyl REL-TEO PARTIES
Name
AI ~aisnl Holding Company V_LL E Seweo Cabtes Qatn WL L Cnild -ftt Cvmlllny Al hz Retll E$vt rWesnnim Company WLL~ AllaZi Real Estale BrAnch EI Sewedy Electric Egypt WLL MuincrDJ1Ce Mwagmvont Group Qat3r W LL Good fe Cheffilt - The Pcarl
BuderPhtrnacy Al Faisallnlemadonal Tnl(i and Investment Company WLL AI-rabia Land Trnr~PQltit1g Company rLL ro Sewedy CabLes - Kuwuit Gcentttco hlttrnJmJilI Frijns StHytural Steel Middle East WLl Winer Wunderand Company WLL Al FtOH1H for Investment amp llllemtiOl1a Trading COntpAny WJ_L Q)lar Bahrain lmerOlnionai Cnero3 WLL Gulf EngJisb Sltl-Qo] Al Rayyao Tourism lve$lrnent Company W LL Other relater purties
2013 2012 QR QR
15412-1064 ll941Y70 34644615 ~li96858l
[()0405 14-45012 51 59197 9538116 15514113 4014727 236824$
1867526 LSOfd22
8(1012 10435r 311650 746395
15023 204450 459829
2iYHi 244940 186750
152170 143440 33500 7768(1
6259 1459lt) 758962-1
__2~61g~~_ 1~95Ji
bull 214109950 171525363
--__ shy
7
8
9
Aamal Company QSc
NOTES TO THE CONSOLIDATED FfNANClAL STATEMENTS For the year ended 3 1 December 2013
At10(JNTS DUE FROM RELATED PA RTIES (continued)
NO les (i) Transactions witll related parties are eam ed out through open account and Directors do not consider any
receivables to be past due or impaired
(ii) Related party transactions ore disclosed ill Note 26
INVENTORIES
Goods for rew le Raw materials and spare pans Work in pTOgresS Goods in transit
Less Provision fOI obsolete and slow moving invenlories
1013 QR
165499699 38388307 19944678 9671 8553
320551237 (3851692)
31 6699545
Movements in the provision for obsolete and slow moving inventories were as follov~
At I January Charge for the year (Note 19) Reversals Amounts wri tten off
At 31 December
E QUITY-ACCOUNTED INVESTEES
TIle Group has the followiog invesllnenfs in equity-accounted investees
Interests in joint venrure Interests in associa tes
At 31 December
G roup s snare of profits fr om the equity-ncco unted iovcstees arc AS follows
Profit share from in vestment iojotnt venture Profit share from investment in associates
202 QR
232597650 36608394 30622960
10521 9695
405048699 Q 145826)
40 I902873
203 QR
3145826 1 380617 (535695)
( 1139056)
385 1692
20 12 QR
2795992 2208263 (137995)
( 1720434)
3 145826
2013 QR
2012 QR
129462184 3644723
124124803 2545188
133106907 12666999 1
17330368 22869454 1169533 534050
18499901 23403504
22
10
Aama Company QSC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 31 December 201 3
9 EQUITY-ACCOUNTED INVESTEES (continued)
Counlry of incorportllion
Relationship Proportion ofownership and lotilfg power held by the Group
203 2012
EI S~wedy Cables Qatar W LL Frij ns Structural S teel Middle East WLL Al Ftfazdaq Company WLL
Qat~
Qatar Qatar
loint venture Associate Associate
55 20
55 20 35
Note With effect from 1 January 20 13 the mlnagemeot of the Group has reclassified the investment in Al Farazdaq Company W L-L from investment in associate to investment in subsidiary This is based on the transfer of share holding by the other shareholder whereby the conlroi o f AI FOl razdaq Company W LL bas been assigned 10 tbe Company
INVESTM ENT PROPERTIES
a) Reconciliation of carry ing amounl 2013 202 QR QR
AI I January 611334701 8 555 1835348 Additions 9568047 1727191 87 Transferred from property plant and equipment (Note II ) 34519828 Net gain iTo m fa if value adjlls tment 245051107 388792483
At 31 December 6402486000 6 11334701 8
b) Measurement of fair value
The fair values of the Groups inveS hnent properties as at 31 December 201 3 and 3 1 December 2012 have been arrived al on the basis of valuations carried Ollt on the respective dates by professionally qualified independent valuers not related to the Group The independent valuers have appropriate qUlli ficatioos and (eceJ11 experience in the valuation of properties in fhe relevant locations The fa ir value WltlS determined based on market comparable approach that reflocl s recent transaction prices for simillt1r properties and discounted cash flo w and income approach techniques
Details of the Group s iovestment properties and infonnation about the fa ir vn lue hierarchy as at ) I December 20 I J are as fo llows
IIvestment propenies
Level 3 fair vallie
Al I Janu ary 6 [ 13347018 Additions and trans fers from property plant and equipment 44087875
Gain included iu prom and loss Net gain from fair value lt1djuslmem 245051 107
AI J I December
The Group recognizes transfers between levels of fair value hierarchy as o f the end of the reponing period during whicb the transfer has occurred There were no transfers between the fai r va lue hierarchy during the year
23
10
Aamal Company QSc
NOTES TO THE ONSOLlDA TED FINANCIAL STATEMENTS For the year ended 3 I ecember 201 3
LNVESTM ENT ROPERTIES (contin ued)
b) Measuremen t 0 (air value (conti nued)
Vau t ion technique an significant unobservable in puts
The valuer has applied t e income capitali zation discounted cash flow and comparab le methods to detennine the market value of the lnve tment propen ies Significant unobservable inputs used included expected market rental growth rates (an average 425) occupancy rates (approximately 90 to 95) and risk adjusted discount rates (approximately 5 to 7 0) M y significant change in these inputs can impact lhe fair valuation of investment propcnies
24
Aamal Company QS c
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For che year ended 31 December 2013
11 PROPERTY PLAi~T AND EQUIPMENT
FumilUre Truck mixers fIXtures and Complllers
Leasehold and maor Plum (fd office and relaed eapiowork Buidings improvements vehicles machinery eqllipmcni sofMore in progmiddotcss Total
QR QR QR QR QR QR QJl QR
At I January 2013 137870126 371 88 132 9595813 1 262536261 19 580954 14864 385 561 32447 6241 30436 Additions 948)65 2618 100 5367399 859061 111 5268 137147581 148055774
Relating to d isposalswrite-off (1042642) (4390496) (77157L) (589150) ( 184075) (6977934) Transfer from capilal work in progress 1505 310 164 336 3601776 ( 150000) 1182741 (6304 163) Transrer to investment properlies (Note (0) (345 19828) (345 19828)
At J I Dttember 201 J 139375436 J7 258~ ~1 85735 270733865 19700865 169783 19 152456037 _73068~448
Depreciation AI I January 2013 16133915 J6902 529 49087707 68783 065 11 980009 tl71 595 3 174603 178 Charge for the year 7059805 3237150 5390767 12249797 2849162 1768823 42555504 Relating 10 disposalsJvri te-off (664709) (4 3 1716 1) (724322) (552939) ( 18 1993) (6441 124)
At 31 December 201 3 23193 720 19474 9 70 50161 313 90303540 14276232 13302783 2 107 17558
Net carrying amounts At 31 December 2013 116181J16 _17783221 44024422 180415325 5424633 3675536 __l2456O37 JJ9970~890
Notes (i) Depreciation charge for the year amounting 10 QR 33 164382 (201 1 QR 3303091 6) is included in tbe direct costs and an amount of QR 60055 (20 12 QR 36939)
has been capiulised under capital work in progress
(ii) The capital work in progress includes capitalised borrowing costs amounting to QR 125645 (20 12 QR 15358)
(ii i) The buildings are constructed on a plot ofland taken on a loog term operating lease
25
Aamal Company QS c
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 31 December 201 3
II PROPERTY PLANT AND EQUIPM ENT (continued)
C05I~
At 1 January 2012 Additions Acquired through business combinations (Note 4) Relating to d isposalswrite-off Transfer from capital work in progress Transfers
Buildings QR
137434400 435726
Leasehold improvemellls
QR
38137377 446J 04
144 103 ( 1539452)
Truck mLCers and molO
velricles QR
83427661 11464679
1697609 (631824)
Plant and machinery
QR
249335437 97264 85
35 14 132 (99498)
59705
Furniture fir ures and
office equipmem
QR
22845309 667586
192042 (3696457)
98000 (525526)
Computers and related
software
QR
158 19519 87 14 14
141837 (266 1733)
908078 (2 l4730)
Capitol work in progress
QR
12104889 451 53265
( 1065783) (59924)
Total (JR
55910459 8 68765259
5689723 (862 8964)
(800180)
AI 31 Dttember 2012 137870) 26 371881 32 95958 13 1 262536261 19580954 14864385 56132447 624 130436
Depreciation AI Jaouary2012 Charge for the year Acquired wough business combinations (Note 4) Relating to disposalswrite-off Transfers
9144666 6989249
)4 3 16620 3410618
144103
(96 812)
42558404 548 1613
1671942 (6242 52)
44555 290 2 1398849
2890797 (6 187 1)
12392584 3 182899
169005 (3558466)
(206013 )
12235266 2077633
136959 (2627283)
(J 0662)
135202830 42540861
5012806 (7840684)
(312635)
At 3 L December 201 2 161339J5 16902529 49087701 68783065 11 980009 11715953 174603 178
Nel canying amoWlts
At 31 December 201 2 12 173 6211 2028560 3 46870424 193753 196 7600945 3148432 56132447 449527258
26
12
13
Aamal Company QSC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 31 December 20 13
ACCOUNTS PA YABLE AND ACCRUALS
Trade accouots payable Advances from customers and tenants Accmals Social and sports activities levy Other payables
AJIOUNTS DUE TO RELATED PARTIES
Name
Arab Compaey for Fiber Products EI Sewedy EIC( lric Ho lding Egypiasl Egypt Egyptlech Egypt United Industri es Company WLL Johnson Controls Air condi tioning aod Refrigeration Qatar WLL pound1 Sewedy Cables Egypt Johnson Controls Air conditioning and Refrigeration rNC Dubai United Wire Company WL L Gelteo Company W LL - Gelteo Refr igera tion and Airconditioo ing CampC Lightway nc AI Shaab Group of Companies Other related pruties
NO M Related party transactio l)s a re disclosed in Note 26
2013 QR
320017657 30486837 26924669 41 761 843 25855567
445046573
2013 QR
18517474
4902528
6531231 6404578 3215821
2825884 75 7825
3467288 263715
1313247
48199591
2011 QR
26716268 1 27410234 222575 76 28954726 33)33852
379119069
2012 QR
18380528 91458 82 54 13849 1 11 6 135 5374039 35291 2020359 1693323 1064744
670 179
11 0873 12 18650
49737757
27
14
Aamal Company QSC
NOTES TO THE CONSOLIDATED f fNANCIAL STATEMENTS For the year ended 31 December 201 3
INTEREST BEARING LOANS AND BORROWINGS
NOles Malilrify
2013 QR
2012 QR
CoMl Loan 2 Loan ) Loac4 Loan 5 Loan 6 Loan 7 CoMB Loan 9 Bills discounted
(0 (ii) (iii) (iv) (v) (vi) (vii) (viii) ( ix) (x)
lune2014 Seplember2014 January 2015 November 2016 December 20 16 November 2017 Jllne20 l J December 20 7 OClober 20 19
172070387 440000000 50544000 40261 621 81387109 19920036
6] 43890 62626967 42522794
915676804
298324180 440000000 10 J088000 57955030
100 168750 2 1300492
407728 1 782871 1
35000000
1065742444
Less Defe rred finatlcing cost (771 503) (897148)
914905301 1064845296
Presented in the consolidated statement of financial positioo as fo llows 20)3 QR
201 2 QR
Current ponion Non-current ponion
749520820 165384481
825568489 239276807
914905301 1064845296
The dete rred financing costs consSt of arrangement fees The movements m the deferred financing costs were as fo llows
203 2012 QR QR
At I January 897148 332 661 Addjtions during the year 1 062565 912506 Amortised during the year (218amp210) (34801 9)
At 3 1 December 771503 89 7148
28
Aamal Company QS C
NOTES TO THE CONSOUDATED FlNANCIAL STATEMENTS For tbe year ended 31 December 2013
14 INTEREST BEARING LOANS AND BORROWINGS (continued)
Nolec
(i) Loao I i USD 93000000 impon 10n moi lily obtoined to refimnee he Icne~ of edit The 10 IT interest at commercial fate and the interest is paid at monthly intervals The fucility is repayable within ISO days including the usage period under letter ofc redits
(ii) Loan 2 is a secured bridge loan obtained to settle an existing loan and working capital requirements of the Company The loan carries interest al coOlJllercial rates and interest is 10 be paid on quarterly basis
(iii) Loan 3 was obtained for the pWpOse of financing capital ependiture and direct payment to suppliers contractors and 5ub-controctors The 10011 CMries interest at commercial rate and the inte rest is to be paid q Uar1erly The fac ility is repayable in IS quarterly iostallmenls starting I July 20 11 and ending I January 2015
(iv) Loan 4 was obla ined for conSlruclion o r an inveslmenl property The loan is seclJed by 0 primary mortgage over the some property and corporate guarantee of the Aamal Company QSC Tbe loan carries interest at commercial marke t rate and is payable in quarterly instalments
(v) Loan 5 represents a loan fOlcility obtained in two sepnrole tranches amounting to QR 309 825 000 (USD 85 million) for the purpose of refurbi shment and construction of fociJities io one of the investment properties The loan is repayable In 16 equal quanerly instalmcnlS for individua l tranche commencing from March 20 1J The loan carries interest at conunercial rJtes
(vi) Loan 6 represents secured loans obtained ffom a commercial bank in the previous periods for the purchase of heavy equipment and machines and were merged on 15 November 20 12 as a comb ined loan This loan is payable by 59 equal instalments of QR 426000 with (I last inSlalment of OR 438 326 with effect fro m 01 October 201 3 The loan carries interest at commercial market ra tes
(vii) Loan 7 is il tmst receipt banking facility obtained for the purchase of inventories This carried interest at conunercial market rates This loan was full y settled during the year
(vii i) Loan 8 represents secured loans obuined from a commercial bank in the previous periods for the purchase of delivery trucks and machinery and were merged on 22 October 2012 as a combined loan The loan carries inte rest at commercial market Tates and is payable by 59 equal insta lments o rQR 160000 with a last inSlOlmem ofQ R 128000 with effect from 3 1 December 2012
(ix) Loan 9 is an Islamic Financi ng Arrangement obtained for construction o f a manufacturing plam and as o f yearend ba lance represents partially drawn amount out of totil1 facility of QR 655 68000 The loan is secured by joint corvorate guarantee by the shareholders The loan carries profit at Islamic Financing rates and re-payable in quarterly instalments starting from the end of the 24 months gmce period from the date of loan drawn
(x) Bi ll discounting is a loan fac ility from banks The purpose of the arrangement is to discount bills locally and carries interest at current commercia l filte
15 EM PLOYEES END OF SERVICE BENEFITS
Movements in the provision reHectelt in the consolidated SLo1tement of financia l position were as fo llows 2013 201] QR QR
At I Jan uary 18111 763 17877937 Provision made during the year 4056969 4205499 Acquirelt through business combinations (Note 4) 349272 End of service benefits paid during the year (2210756) (4320945)
At 3 1 December 19957976 18 111763
29
Aamal Company Q5C
NOTES TO THE CONSOLIDATED FINANCIAL STATEMETS For tile y~ar ended 31 Dee~mber 2013
16 SHARE CAPITAL
2013 2012 QR Qq
AtI1l1)nud 60000)000 (20 2 544500JJOfn shares ofQR iii Cilch 60i)iQOOlOO 54450lt)0000
21)13 2012 Numher of
siMtS QR shares QR Issued Mtldfully paM At lJamld) 544SfWllOfJ 5445(100001) 495000000 49500000)0 1511C ofbonus S1i1-C ___ 5550~OOO 555000000 49SGOOOO 495000000
At 31 Decenef 6(OOampQllf1(1 ---14450O000 544~OOOOOO
All ampates m~ of a110 clss and caL equal voting rights
17 LEGAL Reuro5ERVE
As required by Qatar Comnertai COfrp7lnies Lav No5 of 2002 lOfp of the profit for the ye1J as a rru1imllli silould be mmsfened to legal re~erve The reserve is lot normay [lytiabe tor distribution except ill he cixcuJUstllrtUS stipulated m the above ~lemi0ntd GIW
IS HEVE1TE
2013 l)n QR QR
Sale of goods 1726893265 i709057~(iO
Renlal income UiO362322 133117509 S-ice income 858695 33940731 CornrrusslOlL Incentives and agency fces 44695S1 422~_632
212259$)33
19 DIRECT COSTS
2013 2)i2 QR
C 051 of inven(feS recognisedlIS an exptns 1522929956 497210830 Dind sL1ries lmd wages 601 [1336 5137856-8 Operating eXpenses on nml estate p~opet1les 36)711316 3041H504 fJepreciatiort (Kate I J) 33164382 B03091pound Operators marhgerrt6nt fees 14508588 li667989 Provisicn Qr obsolete and skwlt moving mvenlories (K)tc 8) 2380617 2208263 Other operating ilxpenses _31~3982 _ 3674946
1702139171 JS9653OI tgt
Aamal Compall-yQSC________________
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For lthe year ended 31 December 20 11
2G OTHER NeOiI
2013 20J3 QR QR
Interest mcume 2824216 2)314392 Profiv( loss) 00 disposal of property plant aoe eqUlpmem 737647 (l7362G) Eargain ptmnJse gain (Kote t) 8360793 MIsceJlaneous income 5723356
2013 2012 QR QR
ManllgetnUI hrQ empl(yees ws 55170302 55lt035middot1 Rent 23596799 2594915 Allowance for impaimlcot oUrsue aCQl1ot$ rc(Xjvalle (Nole 6) 129459(i 11613120 flBumcce ane profcampiitmJI fees 2IU9263 209J902 Corununication OOtHS 1935123 1649155 Trllining tid ouSfjt$s developmccl 950476 L095764 Re]X1in and mainle-nilnce 21)11SflS 2)2 I Poslag-c prjnting acri stationery 610299 541159shyvllsltdlancous expenses _~~~664 1lt2
-~~~ 125162812
22 fIN~lCE COSTS
2013 2amp2 QR QR
Inleres epen~ 42866312 5773U4B Am(vtisJliorgt ofdefcentrred financiog coStS __ 2l)tl26~~ gt3661
44930877----=
58063009
23 BASIC A~n nHUfED EARilNGS PER SHARi~
Basic trdTJogs per hue is caculatid 0y llividing the pwfill0( Ihc year attriouiabk (0- equity roldc-5 of the parent by lhi w~iglwxi avrage number of ordinary shares 0JstandirJg dulting tht_ year During Ihe year lil~ Conpmy i-sued and CBpii3lzed bonus shares lnd awmJingl) me previously ~eportod earnings per shac have blOM restatc(i
20i3 2012
Profit feT the year auributable to Cluity holderlt of the- paren (QR)
Weighted aVCTage number ofshares outstanding during the year (i)
Basic Jd diluted earnings per share (QR) 085
59985U413 shy
~~--~~~~- ~------J 1
23
Aamal Company QSc
NOTES TO THE CONSO LIDATED FfNANC[AL STATEMENTS For tbe year ended 3 l December 2013
BASIC AND DILUTED poundARNINCS PER SHARE (continued)
NOles (i) Th wigh d m nlg urnb of hres foc h P of lruling ~migs pee share h bee kulated
as follows 2013 20J2
QU3lifying shrues allhe begi ll1ling of the year 544500000 544500000 Effect of bonus shares issued and capitalised 55500000 55500000
600000000 600000000
Less T reasury shares (149587) (i357SI)
Weighted average number of shares at the end of the year 599850413 599864249
(ii) There were no potentia lly dilutiw shares outstanding at any time during tbe year and hence the diluted earnings per share is equal to the basic earnings per share
24 COItIMITMENTS
20 1] 2012 QR QR
Estimated capital expenditure approved and contracted for at the year eod but not provided for
Investment properties 2964000 8 139063 Property plant and equipment 16386500 63759762
19350500 71 898825
Operating lease commiIOlenlS under noncancellable lease agreemenlS
Payable wilhin one year 990806 702000
990806 702000
25 CONTINGENT UABILITlES
The Group had the following contingent liabi lities from which it is anticipated thai no malerial liabilities will arise
2013 2012 QR QR
Letters of guaramee 474551239 394255203
Letters of credit 7678499 194299384
NQles
(i) leHlaquogt of gu indud penonmnlaquo tend nd bid bonds d pymenlt g gi to suppliers and contractors by the Group in the ordina ry course of bus iness which will matme within twelve months fro m the reporting da te
(i i) Letters o f credit are provided by lodging documents to the bank tor purchase of trading goods fro m foreign suppliers wruch will maMC within thJee to six months from the date or tile Iransaclion
J2
26
Aamal Company QSc
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year eoded 31 December 2013
RELATED PARTY DISCLOSURES
Related party transactions Related parties represent major shareholders directors and key management persortOei of the Group and entities controlled joimly controlled or signjficamly innueoced by such parties Pricing policies md tenns of these tnlOSaclions are approved by the Group s management
Transactions with related parties induded in the consolidated financial stalemenls were as follows
20lJ 2012 QR QR
Sale o f goods and SClVices 419034048 415225221
Rental income 1980473 2069386
Purchase of goods and services 1591 38018 300835596
Rental expense 21 780G78 23397334
Bargain purchase gain 8360793
Net assets acquired 78803585
Relat ed party bal nnces AmountS due from and due to re lated parties are disclosed in Notes 7 and 13 respectively These balances do oot carry interest and are repayable OIl mulUlUy agreed dates generally within one year
The Group did not record any impairment of receivables reJatiog to amounts due from related pat1ies in either year This assessment is undertaken each fina ncial year through examining the ftnanc ial position of the related party and the market in which the related patty operates
Parent The Groups ultimate parent is Al Faisal Ho lding Company WLL
Compensa tion or key management personn el The remuneration of key management dming the year was as fullows
2013 2012 QR QR
Short-term benefi ts 7904794 1079595 Employees end of service benefits 408934 439776
8313 728 11235727
33
AamaJ Company QSC
NOTES TO THE CONSOLIDATED FINANCIAL 5T ATEMENTS For the year ended t Decernber 2013
Dilling the year 1he Group issued a XHlUS share of 10 928 of the paid tiP share capilal hdd ilS at 31 DiX2mber 2(JJ 2 mnmuning to OR 555000000 using retamed earnings as of3 December 2012 (20l2 Doe share for every ten shues held as of 31 Dcember Oll amuunting 10 QR 495OO()OOO ling reta1ned earmrgs 28 or 31 Decencer 2D II Jshy
18 SEGMENT INFORMATION
For J)iloogement PUIpltJM rhe Group i organised into business unit bused On LlJeir nature of Acttvitics lud nas fonY reportable segments and the Head Oftklt as bllow$
Propert Tbe segntn cOlists of City C~nler Qlta~ Brunch and Aamal Rea Esmte Branch whicb ll[c invoived in lampIiiog the faJ1ities of retail outlet conpex red e5ttlte nve(mltn$ and property remal buines~s
Trading mld distrib-wion The segmeul Involves wholesalB andlor rBtail distribution of phamlaceutlcai and consunable i1ems hume Epplianccs medica equimenl t-Tes ill1d lubricmtlaquo and II1UllitnEl printing The scgn(rtt includes 6c following entities
Eotl Sina Medical Branch
Aaen Medical Braudt
Amcill Troding and DistoolltlqO Branch bull Foot Care (erier HRnd) Good llre Pbannacy Bf4Uch bull Al FllfJdaq COllpafY wJ~L
InduSNol manuacturing TIle s0groent IOvolves Ulahuactrumg whole~we aliaor rewi dimibUlioti of dccnc cables lid tools ggregJ1es_ ready-IUx connole and cement bI0C~ lI1d provi$ion of servlCcent$ in rdation to iODllltroa Itvestment repair aJ-d Gonstruction of power plwts liiiding of LED ilgluitlg products und management of industnl enterpnses The segment ircludes be folloVting centntitis
bull Aam1 Cemert Industries LL AuraJ Redy1Yl(A BrQTlch
bull Doha Cables Qawf lLL Senyaf IoolJic1es Qatar Holding W LL Advanced Pipes ard Casfs CompQTly WJ L bull GuJfRoch Coroany WLL Ci~San Trading Company WLL hmovafive Lighting Compary WLL
Managed services le segment inyolvc~ provisloH of hOllseiltecpmg mi cleaning services fucditics n-anagemerJ services C1egy s(tvices ttl centfe sltrvicf)s buildiqg lnaintemHlelt aml acting as travel gens The 5cgnltnt includes the foUowing cnti(lcents
An13 ServJce Branch
amli TnlVeJa l5tmh
f-eco Gulf Co W LL
Jolinson Controls Qattl WJL
28
Aamal Company QSc
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended ) L December 20 13
SEGMENT INFORMATION (Co ntinued)
Head Office It provides corporate services to the branches and subsidiaries of the Group
The managiog d irector of the Group monitors the operating results o f its business units separately for the purpose of making decisions about resource allocation and perfonnance assessment Segment perfonnance is evaluated based Oil operating profit or loss of these segments Transfer pricing between operating segments are on anns length basis in a manoec similar to Iraosactions with third parties
Aamal Company QSC
NOTES TO THE CONSOLIDATED FINAN CIAL STATEMENTS For the year ended 3 1 December 20 13
28 SEGMENT INFORl1ATlON (continued)
Operating segments The operat ing segment after elimination or ioter-bra nch and inter-co mpany lrnnsaclioos is presented as follows
Trading (nd Industrial Managed For fh e year elided 31 December 2013 Properly disirjblli ioll manujocljlring services
QR QR QR QR Revenues
- h lemal parties 260360172 578909983 1231522768 S l802210 - Inter segments 1253914 6843 11 8 29639873 3445052 1
Heat Office QR
Eliminoions QR
(n187426) II
Tolal
QR
2J22595133
261614086 585753 lOI 126116264 1 8625273 1 (721 87426) 2122595133
Opera ti ng results Fair vallie gains
Profit I (loss) ror the year
Depreciotion
200811944
245051 107
445863051
2066290
86492834
86492834
4345438
22636250
22636250
33049 089
5157436
5157436
1760305
(47864882)
(47864882)
1334382
267233582
245051107
512 284689
42555504
36
Aamal Company QS
NOTES TO Tl CONSOLIDATED FfNANClAL STATEMENTS For the yeM ended 31 December 20 13
28 SEGMENf INFORMAnON (c)tltioucd)
FOf the yearrnrkti J f DccemOer 2(J12 QR
Revellues - ExlcmlJ partiel 2331 17 509 bull Inter segmcI11S 1168935
-- 234236434 --~- -~--
Openning results 18S2367t Fmt value gains J8S79-4~G
pront LOllS) for the rear 570616154
gt3659
No(
lnlermiddotgment revenues are eliminated on tQHs)idntiOH_
Tadiug ftfid disl d)Ntion
QR
S2S3l7661
324 j
5335493114 ~ -~-----
51384831
54384338
4J9R71(i
Indus idi mamfmturing
QR
1255694537
129U25lS4
56727059
56727059
32752742
slnltic(s QR
55216665 2939H31
S46lOJ96
7427414
7437
[908067
ilfild ()jice QR
(64(41976
Elimination QR
(74tHi2oJ Iii
Totul QR
206936372
2069336372
235721
(64641
131 f613
6245
42541)861
Amnal Company Q$l
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Por tnt yeartndeJ 31 De~embcr 2013
28 SEGMENT JNFORMATlON (contiutlld
Assc-ts and labilities
Tng alld lndtrstfw At31 December 2(113 distnbllrior manufacturIng senices HeadOJJicc EliminatioilS lola1
QR QR QR QR QR
Cumnl 3tS 227552338 620807979 61349 j 415 S()6)86922 (301636995) 1477366090 Noolucrcnt DSeIS 6411868160 12604763 622386238 4348876 (i624548 __p2438051 780
fotal asstl$ 6639420498 1194 1243194217 65698291 513Ql1470 ==-lt03H8l~O()) 853295-870 -~----~ ~---~ -
CUIT)llliabilitics 280995335 1(3511J60 6344(12777 2l0708lJ2 496261185 (3CH636995) 1249603264 Non-current iiatJlitics 7l70L5V2 8008485 HlDi16~43_ 3181668 t433799 ____ ilj534_~57 __ --Totul liahililics 353696897 ___~4159~4~ 734419720 ~4976~~~~~ 1434945711
---~~--~ -~-~~ - _2~~~4~~ (~~~~9~
C1pild expcndimn HI) WO743OOj 1397742_~471l2~--~50 ~51 ~1~623821~~1~_ -~----~------ -~
3amp
28
Aamal Company Q SC
NOTES TO THE CONSOLIDATED FfNANClAL STATEMENTS For the year ended 31 December 20 13
SEGMFNT INFORMATION (continued)
Assets and liabilities (continued)
AI 31 December 2012 Properly QR
Trading and d iSfriblllion
QR
Indusrial manufacfuring
QR
Managed senices QR
Currenl assels
Non-current assets
146491 186
6121 864484
2964425 12 903 7264
73468 1258
549267235
51387098 471 1439
Tolal assets 6268355670 305479776 1283948493 56098537
Head Office QR
468325024
6713643
475038667
Currentliabil iies
Non-current liabiLities 273444 748 1 J10 15024
86054583 7434286
669214261 1288 14977
2 1938953
287 1199
480393637 1253084
Totil lliabiliti cs 390459772 93488869 798029238 248 10 152 48J64672 1
Capila expendirure (ltII L 72865 878 1281254 6647 J356 7169 13 149045
Notes
(i)
(Ii)
Inter-segmeot balances are e limioafed 00 consolidatio n
Capi tal expendiTU res consist of additions 10 propeny plant and equip ment and iovestmenl properties
Eliminations QR
To wl QR
(273735776) (i )
(20308351(i)
1423591302
6689563230
(27576661 1) 8 113154532
(273135777) (i) 12573 10405
257388570
(273735177) 15 14698975
24 1484446
39
29
Aamal Company QSC
NOTES TO THE CONSOLIDATED FrNANCIAL STATEMENTS For the year ended 31 Dcltmber 1013
Fr-A]~ClAL RISK MANAGpoundMamp1H
Objccthes and policies fe Groups principal )uaucill liabilities comprise imltresl bctmllg loons and IxmowHgs baRlt ovetda1s amounts due to fclaled par1ies and tracte accounts payable The main pUlJXSi of thesc financial liabilities is 4J mise firmne or 610 Grmps operations The G0JP bas various fimmcial assets such as ttadc accounts receivable lInlOlmts due from related parties bark balances tltCntion receivable and other receivables which arisgt directly fran its cperuoonamp
The maiH ri~ks an3ing Joru (be Groups UnariCJlll illslrumenls jle market risk cretiJt nsk and hmdity risk Til BoarD ofDtrcctO$ reviews end agrees policies for mzrAgbg Caltt f hespound ri~k ihkh arc summariscd beloW
VIarktt risk yenfatket risk is the risk Um changes in market prices $Uch as intfcst rates and hreig lttmeocy ect14nge rilles Vltl1 affect the Groups profit eqwty Dr value tf its hoJdiI15 of financial instrl[Thnls rile objecivpoundj of marke1 risk mUnllgcrlcnt is to manage uld 1~ontr(ll tho tr))rket risk expo-sure vithir acceptable parfI-etcJ$ while optimising rerUID
Equit) price risk ampjuity prtce risk is the risk hilt the Group ampearnings will be affected as a rcmt (If luctttltions in fm vdue of ~qui-gt
mstwnents Eqlliry price risk arises from availabtetor~sale inv2strnems However the Groups exposure to eqmty price risk IS minima as II doesn hold sitl)iftrmt ailableAor-511le inYestrmmrs
[merest rate risk The Groups fimiruial poundS5ot ampId liaojlilies (at Rl $uJject to int~~ rate mk compnse brmk depoils interst bearing loans and bOITQwjags and bank overdr-afts At the reponwg dalt tbe [merest rale pronle of Ill Goups intexst bearing fbi4rdd instruments as fliows
11113 20i3 QR QR
Fued liIeryS refc insfrvrnellts
Fmmcial assets 113035962 111913394 FrOltwial liabilities --1~203712l) 1252t43~1
9)OI~ (13350972)
Fhlllting inireSI rate ns1lmlttrs Fanctl~ Isseis 127024345 ID43848o Fllllocial liabilities _-(i~9347~ (94))48926)
(836)64116)
The Groups exposure to t~ ris of changes in marXet interest fltltes relztes primariiy to the Groups financial assets and lizbitdic$ with t1Oltttirg interest mte~
lhe loEowing able demonstrates the ampmitivity nf the eonsolidattXI statemen1 of income 1) caonaly possible chonges in in1jfgtst rmes by 25 basis points with all othe vari)ble3 hdc umstant The sensitivity of the CooiK~ljclatid statement of inc(me $ the eft(ct of tb assumed changes in lnterdt rales for one year bf1sec on the floating rate financial assets and fimmcial hablhw$ held at 31 f~r The effect of deae-ascs in interest ral~ is cXp0Ctct to be equal and opposite to the effect oHlle increases sllQvro
Changes it Eftx OIl
00513 [oms profit QR
2013 Floating mterest Hlte instruments ----2$ bp (1649776)
2012 Flv-ating irkfiSt rale instrumenls +25 bp (209[9(1))
~--------- -~~ 40-middot------ _ _ shy
29
Aamal Company QSC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 3 1 December 2013
FINANCIAL RISK MANAGEMENT (continued)
Foreign currency risk Foreign currency risk is the risk lhilt the value of lhe fi nancial instruments will fluctuate due 10 changes in fore ign exchange rates
T rade aCcOlmts payable and accrued expenses include amounts due in foreign currencies mliniy US Dollars UAB Dirhams Great Britain Pounds (GB P) and Euros of which the Group has a currency risk primruily on the baJmces payable in Euros and GBP amoWlting 10 QR 14400634 (2012 QR 17214046)
The Group does not hedge its foreign currency exposure As both Qatari Riyal and UAE Dirhams are pegged to the US Dollar balances in US Dollars and UAE Dirhams are not considered to represent significant currency ris k to the Group
The table below indicates the Group s fore ign c urrency exposure on its monetary assets a nd liabilities The analysis calculates the effect o f a reasonably poss ib le move ment of the QR curre nc y rale against the Euro and GBP with all other variables held constant on the consolidated slate menl o f income (due to the fa ir va lue of currency sensitive monetary asse ts a nd liabilities) The e ffect o f decreases in fo reign c urre ncy exchange rates is expected to he equal and opposile 10 the e ffect of the increases shown
Incramp1se ill
f oreign cUlrency rate
0
the QR
Ellecl on profil
QR
2013 +5 (720032)
20 12 +5 (860 702)
C redit Tisk Credit risk is the risk that one party to a financial instrume nt wi ll fa il to discharge an obligation and cause the other party to incur a financial loss TIle Groups exposure to credit risk is indica ted by the carrying amoWlt o f its financia l asse ts whic h consist principally oftmde accollilts receivable retention receivable amounts due from related parties othe r receivables and bank baLances
The Group sells its products and prov ides services to vario us panies It is the G ro ups policy that all customers who wish to obtain on credit lerms are subject to credit verificalion procedures to ensure c redit Ilonhiness Each new customer is analysed individually for creditworthiness before the de livery o f products Of services Custo mm tbat fai l to met t the credi tworthiness may transact with the Group only o n prepayme nt basis Property rentals are mostl y received in ad vtnce or conlrlCled wi th post dated cheques 10 additio n receivable balances are monitored on an ongoing basis a nd the purchase limils are established for each c redit custoroer which are reviewed reguJarly based on the level o f past transactions and senlement The Groups max im wn exposure with regard to trade aCCOWlts receivab le net ofa llowance re nected allhe reporting date was ilS fo llows
2013 2012
Business SJgmelll QR QR
Property 15478832 19386326 Trading and distributio n 194343 597 179748274 Industrial ma nufac turing 183119753 131578668 Managed services 18069385 14547389
411 011 567 345260657
41
29
Aamal Company QSc
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For tbe year eoded 3 J December 20 13
FlNAJICIAL RISK MANAG EMENT (c-o Dtinued)
Credit risk (continued) With respect to credit risk arising from the other financi31 assets of the Group the Groups exposure to credit risk arises from default of the counterparty with a maximum exposure equal 10 the canying amount of these instruments as follows
2013 QR
202
QR
Bank balances Amounts due from related parties Retention and other receivables
436136756 214439950 48290351
36788129 t 171525363 74082203
698867057 613488857
The group reduces the expoSltre of credit risk arising from other financial assets by maintaining bank accounts in reputed banks and providing services only to creditworthy re lated parties
The management cons iders the bank balances and a mQUIIIS due from related parties as high grade fi nancial assets and lfade accounls receivable and other receivables as sundard grade financial assets When a finltmcial asset is identified 10 be impaired the managemoot downgrades such assets to impaired category and provides adequate allowances
Liquidity risk Liquidity risk is the risk that the Group will not be able to meet its fmancial obligations as they fu ll due The Groups 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 nonnal and stressed conditiom without incurring unacceptable losses or risking damage to the Groups reputa tion and is to maintain a balance belWeen continuity of fuoding and f1eilibility through the use of bank overdrafts and bank loans and borrowings
The Group monitors its risk to a shortage o f funds using a recuning liquidity plaOfling 1001 TIllS tool considers the manuiry o f financial assets (eg accounts receivable) and projected cash flows from operations The Groups teons ofsales or services require arooUIlts to be paid within 30-90 days from the invoiced dale
42
29
Aamal Company QSc
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For tbe year ended 3 1 December 2013
FrNANClAL ruSK MANAGEMENT (contiQued)
Uqujdity risk (continued) The table below summarises the ruaruriJy profile of the Groups financial 1iabililies a t 31 December based on contractual undiscountcd paymeots
2013 Interest bearing loans and borrowings Bank overdrafts Trade accowus payable Other payables Amounl~ due (0 related panles
201l Interest bearing loans and borrowings
Baok overdrafts Trade accounts payable Other payables Amounts due to related parties
On demand
QR
6836280
6836280
011 demand QR
2885090
2885090
Less than 3 months
QR
521324473
303638792
47406830
2530~480
898675575
Less thall 3
months
QR
469839033
10754JJIO 37543236
1964504 1
634568620
3 10 J2 mOlllh$
QR
239333328
16378865 20210580
2289~11l
298816884
3 to 12 monlhs
QR
365476972
159621 37 J 24745342
30092716
579936401
1to 5 years
QR
J 60092748
160092148
1 to 5 years
QR
248472226
248472226
gt 5 years
QR
25261598
25261 598
gt 5 years
QR
7648000
7648000
TOlaf
QR
947012147 6836280
320017657
67617410 48199591
1389681085
Tota
QR
109 1436231
1885090 267162681
622 88578
49737757
14735 10337
43
30
Aamal Company QSltc NOTES TO THE CONSOLIDATED FlANCIAL STATEMETS For the year ended 31 December 20 t3
21 F~ANClAL RlSK MAiAGEMElT (continued)
Capital management The Boards policy is to maintain a strong cepit1 base so as to rnainmin investor creditor and market ronfoonee and to SUSWlJ) fumre dcltclonnent Gf the buinest The Board of Directors rronitortl the tapital whkh tbe Group defines as wlal $parcloders equity excluding nonmiddotcornroliing imerests and the level of dividends to orrunury srarellOJdcfS
The Board also reeks to ITIaimain a balance between the higher (ctums (hat might be fA-~$ihle With higher leves of borrnwings end Lle edvnrJages and security named Sy it sOMd Cilpitai posi[ion The GfCup~ k1rget is to achievfl a return on slureholders equity (exclJding aonwurrolJiug iorcf(sts) greater lll(ll1 he wcighlcd average inres exxmse on mrerest bearing Ivens and oorrowing
The (lf0t-p nl)nDg-e ils cnpital structure and makes adjustneal lOll in light ofchang2s in economic nd bttincss cordjlons and shareholders expe1ationJo chmges veremiddot maCo HI Lleuro objecttves polilCS or proCCSSC3 during the years erded 31 D~mber 2013md 31 Dtccmlxr2Ql2
The Group monitors the capit2J using a gClting fatio which IS dep divided by caplla plus debL The GtOwgts policy is to keep ttJe ge-anng rmio bclew 40 Tbe Group iLdtdes withb debt imete-51 beagting loans ard ~OITORlngs less cash and cash equtVaknts Capltal includes eqmty attributable 10 the equity tolders oft~e parcrt
2013 QR
2(i2 QR
fmerest bearing loans and borrowings lcss- Cash and cas ltYJUvalcnts
9i4lJ05301 _~ (429JfJl4761
1004845296 (649)6201)
Net debt
Toa capital
Capita and net debt
699849045
~ringrttio
FAIR VALtES OF Fl~ANOAL f~STRUMETS
Finarcial iostrumenL~ cOlnprise tina~lctal assetS carl finailcialliabilities
Fmancial assets colJist of bank balance) short 1Cm bank dcposis amounL dve dom rc)ltted partilt)$ rekntion and other receivables and ttade accolmis rceivabe Finatlclll habiilics cgtmsist of banilt ovcrdratls jnerest bearing lOil1S and bOrowings amounts due (0 nliled partiG~ ane trade x-ounls payable
The- fair values of hese financial inStrumen1S except Jo-- imCfest bearing loam lHld bOlToving aproKimate lhdr cMryinJ vlhes due to the Slort temt mzrutiiles or these instrument
Tllc faiT value of iotcnst beating Nns and borrowin2s ae estimate( based on discoumed ltash flows twin int(s rale- cune-ntly nvailagtk fur tilt debt or sinuiar tetnlS an-a rell1lmng matunties
31
Aamal Company~Q=-ScC ______________~______
~OTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For fhe year ended 31 December 20 t3
SlGNIFICANT ASUMPTIONS ACCOUJTING JUDGElE1TS AND F8TIMATFS
impairment (If accoonts receivable n etrnwe of lhe collectible anoun of trade accounlgt reccvable is made when collection of the full lHl1OUt i~ nO looger probabk FOI nCividualty significitIl amounts this estimation is p~rformed on an indh-idllai a$[$ Amomts wHcb arc not indivldl11Uy significant but wluch are past due ZTe tsscssed collectively and an aJlQwaccc applied ucc()r~Jng to the length of lime past due based oc histnncal recovery nlJes
hnpalrment of inHntnries lavenoncs are held at tho lower of col and nol realisable value InIOn inventoncent$ becone old or 0-~amplete an estilTJte is mate of their net j alisable vulue For indiviolhlUy significant amountS this cstinaunrt is performec all aD lndividwl osis Amotlnts whieh are fl0t individually significan( btll which ltIre old at obsolete wx LltSessed wllecivdy md a provisior is applied sccnrding to the invenrory type and be dep)ee of ageing 0 cDsolescc1ce based on anticipUled selling prices
Classifigt1ltion of El Sew(gtdy Cable Qatar WLI ali a j(lint vwture pound1 Sovedy Cables Qatar is a limited hability company whose kgal fum confers SCprm11ior bernten tbe jXliiies 10 ~he jomi lfranpement Snd the Company Itself FurthenrlOre then IS no oontractua] arrmgelTeot or any oibe aus aod circumstriliCe$ that iocik41to tht he putic5 [0 the joint flJTIlrgernelit bave rights to the ssetl and obligrtdons fo~ the liabilities of the joint ilrrongement Acoordingly El Sewed- C[jbl~s Qamr WLL is dassifiecl 7S a joiut enrtrr of he GWtp
impairment of goodwill G0oovj)1 embedded in th~ cot 0 aquisitior of subsidiaries and eqmtj-iccounled iflV(stees ire teswt for irl1jXlirmnt aHuaily Tbe calculations of value [n use fO( cfish gecj~r)lilg units (loring to real nte projecg are rtost sensitive to tin IDHowing assumpti015
Grosgt i1wginmiddot Gross Ilmrgins arc lmsed on avrage values tuhje0d in (he [Xrioo preeedhli (e siaM of the budge xnod T1esC at( mcreased over the budgel period for mticipatltX efficiency Hnprovemots
DisC)unr r(es Discount rotes represent th cl1tent mark as~ssmetlt of the risks specific te ech cash geocroting unit regarding lhe time value of money ilnd mdividu)l risks of he tmtieriyilg assets whICh have not been inwrport1eti it the Citik flow estimates The dj~(OUrl flte tlkulation is based on the speclfte circurnsthLCes of lile Group and its opltllatJng segn)~nts (md derived (ff)rC it weighted avaage (XSt 0f apilaJ (WACC) Tb fACe (akw into uoount both deb and equity The 0$1 of equity is denved from dlC expected return 01 investmenl by the Groups investors TJc Gos10( deb is based on l1e borrvwings the Gmup IS obllsxl to service SC~lletllmiddotspecific r5k IS incorxt4too by applying individual bera facto The betn mctors ire evauatcentd annuaHy bhseci on pubJicly aVflllabe murked earn
Fair value ()fnHstmeni proputies The fuit laHe 0 nvestmel~ propertis is deltrrnlnzd b cxterrwl indepzfldell property valuers laving appr0priate recognised professional quabfiillions and recenl xperience H1 the localjl)n and G-tegory 0 the oroperty being valued
Useful hes of PfQPcrly plmr (llld zqulpment The Groups management detennints th estiunted useful jives Df It~ property plan and equipmnl fix calnurjng depreciation Thi5 e~timJte is 6lermind after cinsidring 1b expeelcd usage (1f the a5sclt [hysical l101t and (eas tedmiltal Dr com~ercia obsolesccnce
Gotlg Qncen
ibe Groups mangerncnt UiS made aJ assessmeot cf the 011115 ability (0 COllllOUC liS a going conct11l Imd is satsl1ed hat me Group ms the resources to contmue in business for he foreseeable fu1urc he1hennort he management is no aware oC lny material Hncertainties that lray CH~t signinchnt doubt tlPDfl the Groups ability 10 continue as a going umcem Therefore titpound lotlsolidatcd finilllcij stftemeols comirme to be prepltd on li g0ing concern basis
Aamal Company QSc
NOTES TO THE CONSOLIDATED FlNANC[AL STATEMENTS For the year ended 3 1 December 20 13
32 INCOME TAX
Certa in subsidiaries of the Group which have non-GCe ownership are subject to income tax under Qatar Income Tax Law No 2 1 of2009 The iocome tax is charged on the share of profits attributable to non-GCe shareholders For the purpose of these conso lidated fi nancial statements the income tax liability oftbe foreign shareholders has been excluded given that the non-GCe shareholders have agreed under the shareholder agreements signed with the Group to bear the fh lliiability and make necessary payments
33 COMPARATIVE INFORMATION
Certain comparative figw-es of the previous year have been reclassified 0 coofonn to the current years presentation However such reclassifications are oat materia and do not have an impact on tbe previously reported net profit other comprehensive income or the total equity for the comparative year
The impact from the resta tement of comparative infonnalion as a resuh of adoption of IFRS I I - Joint arrangements is detailed in Note 32 Changes in aCCQu(lting policies
46
Aamal Company QSc
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 3 I December 2013
3 BASIS OF PREPARATION AND SUMMARY OF SlGNlf[CANT ACCOUNTING PO LICI ES (continued)
33 lASB STANDARDS AND lNTERPRETATIONS ISSUED BUT NOT ADOPTED
The following lASB standardsamendments hJve been issued but are not yet mandatory and have 1l0( been etrly adopted by the Group
Standard
Illterpretotion COnem EffeClive dale
TfRS9 Financia l InstrumentS (new standard) I Januruy20 17
IAS 32 Financia l Instruments O ffsetting (amendment) I January 20 14 JAS 36 Financia llnslnnnents Disclosure - non-fi nancial asse ts (amendment) I January 2014
The Group is considering the implications of the above standards and the till1ing (If adoption by the Group
34 SUM MARY OF SIGNIFICAJT ACCOUNTING POLICI ES
Bu siness combinnriO llS The Group accounts for business combinations using the acquisitio n method wben connol is Imasferroo to the Group The consideration ITansrerred n the acquisition is generally measured at fa ir value as are the identifiable net assets acquired Any goodwill that arises is tested annua lly for impairmeot AllYgain on a bargain purchase is recognised in pro fit or loss immediately Transaction COStS arc expensed as incurred except if rehated to the issue of debt or equity securities
The considera tion transferred does nOt include amounts related to the settlement of pre-existing re lationships Such amounts are recognised in profit or loss
Any contingent consideration payable is roeasured at fair va lue at the acquisition date If the contingent consdicrntion is classified as equity then it is oote nmeasured and settlement is accounted for within equity Otherwise subsequent changes in the fa ir value of the contingent consderafion are recognised iu profit or loss
Cash a nd eash equivalen ts For the purpose of the consolidaled statement or cash flo ws cash and cash equivalents consist of cash and bank balaoces ruld short teJTIl bank deposi ts wi th an original marurily of three months or less net of outstanding bank overdrafts
Accounts receivable Accounts receivable are stated at originill invoice amount less an allowance for any uncollectible amounts An estimate for doubttit debts is made when collection of the flilt amount is no longer probable Bad debts are wntlen off when (here is no possibility o f recovery
Inventories Inventories are stated at the lower of cost and net realisable value Costs are those expenses incurred in bringing each product to its present location and condition
Goods ror resalework in progress - Cost of di rect materials aJld labour plus attributable overheads based on a oormallevel ofac1i vity
Raw material and spare pan s PlIlchase cost on a weighted average basis
Net realisable value is based on estimated selling price less any further costs expocted to be incurred to completion and disposal
13
Aama Company QSc
NOTES TO THE CONSOLIDATED FINANC IAL STATEMENTS For tbe year ended 31 December 20 13
3 BASIS OF PREPARATION AND SUMMA RY OF SIGNIFICANT ACCOUNTfNC POLI CIES (contin ued)
34 SUMMARY OF SIGNIFICANT ACCO UNTLNG POLICIES (continued)
Interests in equity-aecoupled inveslecs The Groups interest in equity-accounted investees comprise interest in associates and joint venture
Associates are lhose entities in which the Group has significant influence but not control or joint control over the financia l and operating policies A joint vennu-c is an arrangement in which the Group has jo int ool1lrol whereby the Group has rights to the net assets of the arrangement rather thall rights to its assets and obugations for its liabilities
InlereSIS in associates and the joint venture are accoliDted for using the equity method They are recognised initially tit cost which includes transaction costs Subsequent to ini tial recognition the consolidated financ ial stateme nts ioc lude the Groups shrre of the profit or loss and other comprehensive income of equity-accounted investees unti l the dalc on which significant in Lluence or joint control ceases
The reponing d~les of the equity-accounted investees and the Group are identical and the equi ty-accounted investees accoWlting policies confonn to those used by the Group for like tmnsactions afld events in similar circumstances
Investmefl t properties umd aod buildings are considered as investment properties only when they are being held to earn ren tals or for capital appreciation or fo r both
Investment properties are measured ini tia lly at cost including traosaction costs and borrowing costs that are directty attributable to construc tion o f the 8sseL The carrying alRount includes the cost of replacing part of an existing investment property at the time that cost is incurred jf toe recognition cri teria are mel and excludes the costs of day-to-day servic ing of an investment property Sub~quent to inilial recognition investment propert ies are slated at fa ir value which reOects market conditions at the reporting date Gains or losses arising from changes in the fa ir values of investment properties are included in the consolidated statement of income in the yeltl r in which they arise
Investment properties are derecognised when either they have been disposed off or when the investment property is pennanently withdrawn 1T0m use and no fu ture economic benefit is expected from its disposal Any gains or losses on the retirement or disposa l of aD investment property are recognised in the consolidated statement of income in the year of retiremeOl or disposal
Property under construc tion is dealt with under lAS 40 and rttorded at cost less accumulated impairment losses until either its fair value becomes relia bly detenninable or cons(TUction is completed (whichever is earl ier) At that time it is reclassified as inves tment property and a fa ir value adjustment is recognised in the consolidated statemenlof income
Transfers are made to or fro m in vestment property onl y when there is a change in use For a transfer from investmen propeIT) to ovmer occupied proreIT) the deemed cost for subsequent accounting is the fair value at the date of change in use If owner occupied property ~omes an investment property the difference between the canying value aoo the fair value at the date oflransfer is rttognised as a revaluation reserve in the equity and is released to the consol idated sta tement of income llpon disposal of such propcny
14
Aamal Company QSc
NOTES TO THE CONSOLIDATED FrNANCIAL STATEMENTS For the year eDded 31 December 20 13
3 BASIS OF PREPARATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLI CIES (continued)
304 SUMMARY Of SIGNIFICANT ACCOUNTING POLICIES (continued)
Property plant and equipment Property plant and equipment is stated at cost including borrowing costs that are eligible for capitalisation and excluding the costs of day-to-day servicing less accumu lated depreciation and any imp~innem in value
Depreciation is provided on a straight line basis on all propelT) planl and equi pment The rales of depreciatioo are based upon the following eSImnelt useful lives
Buildings 20 years Leasehold improvements 2-8 years Truck mixers and motor vehicles 4-1 5 years Plant and ITIJchioery 8-2 5 years Furniture fixtures and office equipment 3-5 years Computers and related software 3-5 years Capital work in progress Not depreciated
The carrying amounts are reviewed for impain nellt when events or changes in circumstances indicate that the carrying value may not be recoverable If any such indication exists and where the carrying values exceed tbe estimated recoverable amouot the assets are wri tten down to their recoverable amount being the higher of their fair value less costs to sen and their value in use
Expendirure iocurred lO replace a component of an item of property plaot and equipment that is accotmted for separately is capitalised and the carrying amount of the component that is replaced is written off Other subsequent expenditure is capitalised only when it increases furure economic benefits of the related item of property plant and equiproent Al l other expendirure is recognised in the consolidated statement of income as the expense is Incurred
An item o f property plaot and equipment is dereeognised upon disposal or when no future economic benefi ts are expected from its use or disposal Any gain or loss arising on derecognilloo of the asset is iocluded in the consolidated stalemeot o f income io the year the asset is derecognised
The asset s residual values useful lives and method of depreciation are reviewed and adjusted if appropriate at each rnancial year end
Borrowing costs Borrowing costs direc tly attributable to the acquisition constmction or production of an asset that necessarily takes substalltjal period of time 10 get ready for its intended use or sale are capilalised as pan of the cost o f lhe respective assets All other borrowing costs are expensed in the year they incur BOlTOwiog COSts consist of the interest and other costs that the Group incurs in coomction with the borrowing of fund s
Accounts paytlble and accruBls Liabilities are recognised for amounts to be paid in the fuMe for goods or services received whether billed by the supplier or not
Interest bearing loans Bnd borrowings Interest bearing loaos and borrowings are recognised ini tiaJy at fai r value of the amounts borrowed less direc tly attributable transaction costs Subsequent to initial recognition interest bearing loons and borrowings are measured at amortised COSt using the effecti ve interest method with any differences between the cost and tinal settlement values being recognized in the conso lidated statement of income over the peliod of borrowings Instalments due within one year aI amortised cost are shown as a ctuTentliabiliry
Gains or losses are recogTlised in the consolidated sialement of income when (he liabililies are derecognised Interest relating (0 imerest bearing loans and borrowings is expensed in the year in which it is incWTed e(cept those qualify for capitalisation
15
Aamal Company QSC
NOTES TO THE CONSOLIDATED FfNANClAL STATEMENTS For tbe year eoded 31 December 201 3
J BASIS OF PRpoundPARATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
34 SUMMARY Of)SIGNIFICAtlT ACCOUNTING POLICI ES (continued)
TClaot deposits Tenant deposit liabilities are initially recognised at fair value and subsequently measured at amortised cost where material Any di fference between the initial fair vllue and the oominal amount is [eluded as a component of rental income and rocognised on a straight-line basis over the lease term
Derecognition or fiolocial nsstls and liabilities
a) Financial assets
A fi nanCIal asset (or w~re apphcabJe a part of a fin ancial asset or part of a group of SImilar financIal assets) IS derecogmsed where J bull The n ghts to receIve [5h flo ws from the asset have expIred bull The Group has trans f rred Its rights to receive cash flows from the ass or has assumed an obhg811On to pay the
reltelved cash flows I full Wlthout mfl tenal delay to a third party under a pass-through arrangement and elther (3) the Group has Ira sferred substantially aIthe nsKs and rewards of the asset or (b) Ihe Group has neuher transferred nor relain substantially ai the n sks and rewards of the asset but has tnlnsferred control of the asset
When the Group has tTa~fened its rights 10 receive cash flo ws from an asset or has entered into a pass-waugh arrangement and has nejlher trmsferred nor reta ined substantially all of the risks and rewards of the asset nor trnnsferred control of the asset the asset is recogoised to the extent of the Groups cOlilinuing involvement in Ihe
In that case the Group at 0 recognises an associmed liability The mnsferred asset and ihe associaled liabi lity are measured 00 a basis thai flects Ihe rights lnd obligations that the Group has retained Continuing involvement that takes the form of a guara tee over the transferred asset is measured at the lower of the original canying amount of Ihe asset and fbe maxim amoun o f consideration that the Groop could be required to repay
b) Financialliabiliti
A financial liabili ty is defogniSed when the obligation under the liabil ity is discharged or cancelled or expires Where an existing fio8 1lci I liability is replaced by another from the same lender on substantia ll y d ifferent lenns or the terms of an existin liabili ty are substantia lly modified such an exchange or modification is treated as a derecognition of the orig~al liabili ty and the recog1Jitioil of a new liability and the dirference io the respective carrying amounts is reco ised in the consolidated Slatement o f income
Impalr meot ood uncollec ibility of fina ncial assets An assessment is made al each repon ing date to determine whether there is objective evidence that a speci fic financial asset may be impaired If such evidence exists allY impainneOl loss is recogoised in the consolidated statement of income ImT t is detemtined as fo llows
(a) For assets earned a t fair value impainnellt is tbe difference between cost and fair va lue (b) For asseamp carried at COSt impairment is the difference between cost and lIle present value of future
cash flo1S discounted at lhe current market rate of rdurn for a simi lar finan cial asset (0) For asseq carried al amortised COSt impainneot is the difference between canying arnOWll and lhe
present Value of future cash flO M discowlled at the original effective iDlerest rate
Provisions Provisions are rewgnised hen the Group has an obl igation (legal or COnslnlctive) aris ing fro m a past event and the costs to settle the obl igalio are both probable and able to be reliably measured
16
Aamal Company QSc
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 31 December 2013
3 BAses OF PR EPARATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICI ES (colltinued)
34 SUMMARY OF S IGNIFICANT ACCOUNTING POLICIES (continued)
Employees eod of service benefits The Group provides end of service benefits to all employees in accordance wi th employment contracts and Qatar Labour Law The entitlement to these benefits is based upon the employees final salary aocl length of service subject to the completion of a minimum service period The expected costs of these benefits are accrued over the period ofemployment
Revenue Revenue is recognised to the extent thal it is probable that the economic benefits will flow to the Group and the revenue call be reliably measured Revenue is measured al the fair value of the consideration received excluding discoWlIS rebates and duty The following spec ific recognition criteria must also be met before revenue is recognised
Sale ofgoods Sales are recognised whcn significant risks and rewards of ownership of the goods have passed to the boyer and the amount of revenue cao be me3sured rcli3bly
Rental income Rental incorne from investment properties is accoWlted for on a time proportion basis over the period of tenancy Incentives for leases to enter into lease agreements are spread evenly over the lease teon even if the payments are not made 0 0 such basis Income arising Tom expenses recharged to tenants is recogn ised in the year in which the expenses can be contrac tually recei ved Service charges aud other such receipts are includcd gross o f related cosls in revenues as the Group acts as principal io this regard Premiwns received to terminate leases arc recognised in the consolidated statement of income when they arise
Service income Service income is recognised when the service is rendered and the outCQrne of the transactions can be estimated reliably
COlimission Commission is accounted for on an accrual basis when the right 10 receive the income is established
become on tra~el agencies [ncome on travel agencies is accounted for in the year in which the airline tickets are sold
IIIeresr income Joterest income is recognised as the interest accrues using the effective interest Clle method
Foreign currencies Transactions in foreign currencies ate recorded al tbe rale ruling at the date of the transaction Monetary assets and liabi lities dcoomioated io foreign currencies ace retranslated ill the raLe of exchange ruling at the reponing date All differences are recognised in the Statement ofinconlC
Use of estimates The preparation of (he Groups consolidated financial sta temenls in CQnfonnity with Intemltional Financial Reponing Standards ([fRS) requires management 10 rnake estimates and assumptions that affect the reponed amounts of assets and liabilities and disclosure of contingent asscts and liabili ties at the rcporting date and the reported amoUlils of revenues and expenses during Ihe reponing period Although these estimates are based on managements best knowtedge of current events nnd actions acnm results may ul timately differ fro m those estimates (Significant asswnptions nccounting judgments and estimates used in preparing these coosolidated fina ncial sta temenlS are disclosed in Note 31)
The estimates and underlying assumptions are reviewed regularly Revisions to accounting estimlIes are recognised in (he period in which the estimate is revised if the revision affects only that period or in th~ period of the revision and future periods if the revision affects both current and fu ture periods
17
Aamal Company QSC
NOTES TO THE CONSOLlDA TED FINANCIAL STATEMENTS For tbe year cnded 31 December 2013
3 BASI S OF PREPARATION AND SUMMARY OF SrGNIFICANT ACCOUNTING POLICIES (continued)
34 SUMMARY or SIGNIFICANT ACCOUNTING POLI CIES (continued)
Fair va lues A number of Groups accounting policies and disclosures require tJ1 C measurement of fair values for both financial and non-financial assets and liabil ities The Group has an established control framework with respect to the measuremeot of fair values When measuring the fair value of an asset or a liabili ly the Group uses market observable data for (be valuatiOD Fair values are categorised into different levels in a fair value hierarchy baCd on the inputs used in the valuation lechniques as follows
i) Leve l I - Unadjosted quoted prices io active markets for identica l assets and liabilities ji) Level 2 - Otheqobservable inputs not included within level 1 of the fair value hierarchy ii i) Level 3 - Unobtervable inputs (including enti ty s own data which are adjusted if necessary to retlect the
assumptions market participnllts would use in the circumstances) The Group recognises tralnSfers between levels of the fair value hierarchy at the end ofthe reporting period during which the change has ocdWTed_
Treasury shares When share capitl recognized in equity is repUIchased (by the Company or any of its subsidiaries) the amount of the consideration paid which includes direa ly altributable COSIS is recognized lIS a deduction from equity Wheo treasury shares are sold or reissued subsequently the amount received is recognized as no increase in equity and the resulting surplus or deficit on the transaction is presented io share premium
18
4
Aamal Company iQSc
NOTES TO THE ONSOLlDATED FINANCIAL STATEMENTS For the year ended 31 ecember 201 3
BUSINESS CO~BlNAnON
Acquisition o f Culf ROks Company VLL On 1 January 2012 the roup acquired 51 oflhe voting shares of Gulf Rocks Company WLL (Gul f Rocks) a limited Iiabiliry campan incorporated in Qatar and registered UJKier conunercial registration number 2249) The acquisition was made thT ugh Ci-San Trading WL L a subsidiary which is 50 owned by Aamal Group
I
The fai r val ue of lbe ideltifiable assets and liabilit ies of Gulf Rocks Co mpany WLL based on purchase price allocation exercise condlcd by tbe management as at the date of acquisition WJ S as follows
Fair value recognized on
acquisition QR
Assets I Cash and bank balances 14005495 ACC QUOiS receivable and wePayments I 749383 Amouots due from related plrties I
I oveotones
48311 190 5124 270
Available for sale investm~nlS 1985245 Plant and equipment 6769 17
81852500
Liabilit ies Accounts payable aJld accll1als 4724446 Amounts due to related parties 385070 Employees end of serviccibenefits (Note 15) 349272
5458788
Total identifiable net a5sellf
Purchase consideration trasferred Non-controll ing intereSt az-ising on business combination Bargain purcha5c gain rc~u ting from the tcquisilion
Allalysis ojcash flows OIl acquisition Net cash acquire11 Nith the subsidiary 14005495 Cash paid (30600000)
(16594505)
On I September 20 12 the Company acquired the balance 49 nfthe equiry of Gulf Rocks Accordingly the Group has 74 5 effective holdin4 in Gulf Rocks as at the reporting dale The excess nfthe purchase cons ideration over Ihe fair value o f net assets of GuJf Rocks acqui red from the nnn-controlHng interest has been recorded directly in the retained earnings of tbe Gr6up as at 31 December 201 2
QR Purchase consideration 404 10000 Less fuir value of oet asset~ acquiroo from the non-controlling Interest holder (39842792) EXce5s of purchllse cons idf ration over the fair value of net assets a(q uired 567208
19
5
Aamal Company QSC
NOTES TO THE (WNSOLlDATED FfNANClAL STATEMENTS For the year eoded 3 ) December 2013
CASH AND CASH EQUIVALENTS
For the pmvose of consolidated statement of cash flows cash and cash equivalents comprise the fo llowing balances
lon 2012 QR QR
Cash and bank accounts 330333904 282272895 Short lenn bank deposits 105802852 85608396 Cash and bank balances 436136756 367881 291
Bank overdrafts (6836280) (2885090)
Cash and cash equivalents 429300 476 364996120 1
The short tenn bank deposits are made for varying periods between one day aod three months depeoding on Ibe immedifltc cash requirements of the Group and earn interest at the respective short term deposit ra tes
6 ACCOUNTS RECEfVABLE AND PREPAYMENTS
2013 2012 QR QR
Trade aCColUlts receivable 411 011 567 345260657 Advances 0 suppliers and prepayments 50787921 629389J 5 Retention receivables 36217081 56943030 Other receivables 12073270 17 139173
5tO089839 4 82 28 1775
As at 31 December 2013 trade accountS receivoble amoWlting to QR 2690 1412 (201 2 OR 24984025) were impaired Movements in the allowance for impairment of trade aCColmts receivable were as follows
2013 202 QR QR
At 1 January 24984025 1 877085 Charge for [he year (Note 21) 2294590 13613 120 Amounts wriuen off (19949) (117368) Unused amotmts reversed (357254) (388812)
At 3 t December 26901412 24984025
20
6
1
lamal CompanyQSC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMEltS For the year ended 3 J December 2013
ACCotNTS RECEIVABLpound AND PREPAYMpoundNTS (contillued)
As at -1 I Dtcemxt the ageirg of unimpaired (ltlde accounb iltcivabk was as follows
P(HI duo
nor Up to 30 31-60 61middot90 Yi-jSj gt flO Tota impoirlt-fl days days days day doys
QR QR QR QR QR QR QR
1l13 411OJl$67 25l981960 32312165 2140966 19351fi43 16f)76888 60148545 2012 345260657 1695159B6 493lt)8566 2356$954 19494369 16908414 66374363
1JJJirtpai~ed receivable are expected no th bil5tS of past experienn) 10 be fully fcCi)evbc H is not the pngtctlce ofthcent Group to oblum collaleral over recejvablcI_
AMOLNTS DUE FROyl REL-TEO PARTIES
Name
AI ~aisnl Holding Company V_LL E Seweo Cabtes Qatn WL L Cnild -ftt Cvmlllny Al hz Retll E$vt rWesnnim Company WLL~ AllaZi Real Estale BrAnch EI Sewedy Electric Egypt WLL MuincrDJ1Ce Mwagmvont Group Qat3r W LL Good fe Cheffilt - The Pcarl
BuderPhtrnacy Al Faisallnlemadonal Tnl(i and Investment Company WLL AI-rabia Land Trnr~PQltit1g Company rLL ro Sewedy CabLes - Kuwuit Gcentttco hlttrnJmJilI Frijns StHytural Steel Middle East WLl Winer Wunderand Company WLL Al FtOH1H for Investment amp llllemtiOl1a Trading COntpAny WJ_L Q)lar Bahrain lmerOlnionai Cnero3 WLL Gulf EngJisb Sltl-Qo] Al Rayyao Tourism lve$lrnent Company W LL Other relater purties
2013 2012 QR QR
15412-1064 ll941Y70 34644615 ~li96858l
[()0405 14-45012 51 59197 9538116 15514113 4014727 236824$
1867526 LSOfd22
8(1012 10435r 311650 746395
15023 204450 459829
2iYHi 244940 186750
152170 143440 33500 7768(1
6259 1459lt) 758962-1
__2~61g~~_ 1~95Ji
bull 214109950 171525363
--__ shy
7
8
9
Aamal Company QSc
NOTES TO THE CONSOLIDATED FfNANClAL STATEMENTS For the year ended 3 1 December 2013
At10(JNTS DUE FROM RELATED PA RTIES (continued)
NO les (i) Transactions witll related parties are eam ed out through open account and Directors do not consider any
receivables to be past due or impaired
(ii) Related party transactions ore disclosed ill Note 26
INVENTORIES
Goods for rew le Raw materials and spare pans Work in pTOgresS Goods in transit
Less Provision fOI obsolete and slow moving invenlories
1013 QR
165499699 38388307 19944678 9671 8553
320551237 (3851692)
31 6699545
Movements in the provision for obsolete and slow moving inventories were as follov~
At I January Charge for the year (Note 19) Reversals Amounts wri tten off
At 31 December
E QUITY-ACCOUNTED INVESTEES
TIle Group has the followiog invesllnenfs in equity-accounted investees
Interests in joint venrure Interests in associa tes
At 31 December
G roup s snare of profits fr om the equity-ncco unted iovcstees arc AS follows
Profit share from in vestment iojotnt venture Profit share from investment in associates
202 QR
232597650 36608394 30622960
10521 9695
405048699 Q 145826)
40 I902873
203 QR
3145826 1 380617 (535695)
( 1139056)
385 1692
20 12 QR
2795992 2208263 (137995)
( 1720434)
3 145826
2013 QR
2012 QR
129462184 3644723
124124803 2545188
133106907 12666999 1
17330368 22869454 1169533 534050
18499901 23403504
22
10
Aama Company QSC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 31 December 201 3
9 EQUITY-ACCOUNTED INVESTEES (continued)
Counlry of incorportllion
Relationship Proportion ofownership and lotilfg power held by the Group
203 2012
EI S~wedy Cables Qatar W LL Frij ns Structural S teel Middle East WLL Al Ftfazdaq Company WLL
Qat~
Qatar Qatar
loint venture Associate Associate
55 20
55 20 35
Note With effect from 1 January 20 13 the mlnagemeot of the Group has reclassified the investment in Al Farazdaq Company W L-L from investment in associate to investment in subsidiary This is based on the transfer of share holding by the other shareholder whereby the conlroi o f AI FOl razdaq Company W LL bas been assigned 10 tbe Company
INVESTM ENT PROPERTIES
a) Reconciliation of carry ing amounl 2013 202 QR QR
AI I January 611334701 8 555 1835348 Additions 9568047 1727191 87 Transferred from property plant and equipment (Note II ) 34519828 Net gain iTo m fa if value adjlls tment 245051107 388792483
At 31 December 6402486000 6 11334701 8
b) Measurement of fair value
The fair values of the Groups inveS hnent properties as at 31 December 201 3 and 3 1 December 2012 have been arrived al on the basis of valuations carried Ollt on the respective dates by professionally qualified independent valuers not related to the Group The independent valuers have appropriate qUlli ficatioos and (eceJ11 experience in the valuation of properties in fhe relevant locations The fa ir value WltlS determined based on market comparable approach that reflocl s recent transaction prices for simillt1r properties and discounted cash flo w and income approach techniques
Details of the Group s iovestment properties and infonnation about the fa ir vn lue hierarchy as at ) I December 20 I J are as fo llows
IIvestment propenies
Level 3 fair vallie
Al I Janu ary 6 [ 13347018 Additions and trans fers from property plant and equipment 44087875
Gain included iu prom and loss Net gain from fair value lt1djuslmem 245051 107
AI J I December
The Group recognizes transfers between levels of fair value hierarchy as o f the end of the reponing period during whicb the transfer has occurred There were no transfers between the fai r va lue hierarchy during the year
23
10
Aamal Company QSc
NOTES TO THE ONSOLlDA TED FINANCIAL STATEMENTS For the year ended 3 I ecember 201 3
LNVESTM ENT ROPERTIES (contin ued)
b) Measuremen t 0 (air value (conti nued)
Vau t ion technique an significant unobservable in puts
The valuer has applied t e income capitali zation discounted cash flow and comparab le methods to detennine the market value of the lnve tment propen ies Significant unobservable inputs used included expected market rental growth rates (an average 425) occupancy rates (approximately 90 to 95) and risk adjusted discount rates (approximately 5 to 7 0) M y significant change in these inputs can impact lhe fair valuation of investment propcnies
24
Aamal Company QS c
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For che year ended 31 December 2013
11 PROPERTY PLAi~T AND EQUIPMENT
FumilUre Truck mixers fIXtures and Complllers
Leasehold and maor Plum (fd office and relaed eapiowork Buidings improvements vehicles machinery eqllipmcni sofMore in progmiddotcss Total
QR QR QR QR QR QR QJl QR
At I January 2013 137870126 371 88 132 9595813 1 262536261 19 580954 14864 385 561 32447 6241 30436 Additions 948)65 2618 100 5367399 859061 111 5268 137147581 148055774
Relating to d isposalswrite-off (1042642) (4390496) (77157L) (589150) ( 184075) (6977934) Transfer from capilal work in progress 1505 310 164 336 3601776 ( 150000) 1182741 (6304 163) Transrer to investment properlies (Note (0) (345 19828) (345 19828)
At J I Dttember 201 J 139375436 J7 258~ ~1 85735 270733865 19700865 169783 19 152456037 _73068~448
Depreciation AI I January 2013 16133915 J6902 529 49087707 68783 065 11 980009 tl71 595 3 174603 178 Charge for the year 7059805 3237150 5390767 12249797 2849162 1768823 42555504 Relating 10 disposalsJvri te-off (664709) (4 3 1716 1) (724322) (552939) ( 18 1993) (6441 124)
At 31 December 201 3 23193 720 19474 9 70 50161 313 90303540 14276232 13302783 2 107 17558
Net carrying amounts At 31 December 2013 116181J16 _17783221 44024422 180415325 5424633 3675536 __l2456O37 JJ9970~890
Notes (i) Depreciation charge for the year amounting 10 QR 33 164382 (201 1 QR 3303091 6) is included in tbe direct costs and an amount of QR 60055 (20 12 QR 36939)
has been capiulised under capital work in progress
(ii) The capital work in progress includes capitalised borrowing costs amounting to QR 125645 (20 12 QR 15358)
(ii i) The buildings are constructed on a plot ofland taken on a loog term operating lease
25
Aamal Company QS c
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 31 December 201 3
II PROPERTY PLANT AND EQUIPM ENT (continued)
C05I~
At 1 January 2012 Additions Acquired through business combinations (Note 4) Relating to d isposalswrite-off Transfer from capital work in progress Transfers
Buildings QR
137434400 435726
Leasehold improvemellls
QR
38137377 446J 04
144 103 ( 1539452)
Truck mLCers and molO
velricles QR
83427661 11464679
1697609 (631824)
Plant and machinery
QR
249335437 97264 85
35 14 132 (99498)
59705
Furniture fir ures and
office equipmem
QR
22845309 667586
192042 (3696457)
98000 (525526)
Computers and related
software
QR
158 19519 87 14 14
141837 (266 1733)
908078 (2 l4730)
Capitol work in progress
QR
12104889 451 53265
( 1065783) (59924)
Total (JR
55910459 8 68765259
5689723 (862 8964)
(800180)
AI 31 Dttember 2012 137870) 26 371881 32 95958 13 1 262536261 19580954 14864385 56132447 624 130436
Depreciation AI Jaouary2012 Charge for the year Acquired wough business combinations (Note 4) Relating to disposalswrite-off Transfers
9144666 6989249
)4 3 16620 3410618
144103
(96 812)
42558404 548 1613
1671942 (6242 52)
44555 290 2 1398849
2890797 (6 187 1)
12392584 3 182899
169005 (3558466)
(206013 )
12235266 2077633
136959 (2627283)
(J 0662)
135202830 42540861
5012806 (7840684)
(312635)
At 3 L December 201 2 161339J5 16902529 49087701 68783065 11 980009 11715953 174603 178
Nel canying amoWlts
At 31 December 201 2 12 173 6211 2028560 3 46870424 193753 196 7600945 3148432 56132447 449527258
26
12
13
Aamal Company QSC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 31 December 20 13
ACCOUNTS PA YABLE AND ACCRUALS
Trade accouots payable Advances from customers and tenants Accmals Social and sports activities levy Other payables
AJIOUNTS DUE TO RELATED PARTIES
Name
Arab Compaey for Fiber Products EI Sewedy EIC( lric Ho lding Egypiasl Egypt Egyptlech Egypt United Industri es Company WLL Johnson Controls Air condi tioning aod Refrigeration Qatar WLL pound1 Sewedy Cables Egypt Johnson Controls Air conditioning and Refrigeration rNC Dubai United Wire Company WL L Gelteo Company W LL - Gelteo Refr igera tion and Airconditioo ing CampC Lightway nc AI Shaab Group of Companies Other related pruties
NO M Related party transactio l)s a re disclosed in Note 26
2013 QR
320017657 30486837 26924669 41 761 843 25855567
445046573
2013 QR
18517474
4902528
6531231 6404578 3215821
2825884 75 7825
3467288 263715
1313247
48199591
2011 QR
26716268 1 27410234 222575 76 28954726 33)33852
379119069
2012 QR
18380528 91458 82 54 13849 1 11 6 135 5374039 35291 2020359 1693323 1064744
670 179
11 0873 12 18650
49737757
27
14
Aamal Company QSC
NOTES TO THE CONSOLIDATED f fNANCIAL STATEMENTS For the year ended 31 December 201 3
INTEREST BEARING LOANS AND BORROWINGS
NOles Malilrify
2013 QR
2012 QR
CoMl Loan 2 Loan ) Loac4 Loan 5 Loan 6 Loan 7 CoMB Loan 9 Bills discounted
(0 (ii) (iii) (iv) (v) (vi) (vii) (viii) ( ix) (x)
lune2014 Seplember2014 January 2015 November 2016 December 20 16 November 2017 Jllne20 l J December 20 7 OClober 20 19
172070387 440000000 50544000 40261 621 81387109 19920036
6] 43890 62626967 42522794
915676804
298324180 440000000 10 J088000 57955030
100 168750 2 1300492
407728 1 782871 1
35000000
1065742444
Less Defe rred finatlcing cost (771 503) (897148)
914905301 1064845296
Presented in the consolidated statement of financial positioo as fo llows 20)3 QR
201 2 QR
Current ponion Non-current ponion
749520820 165384481
825568489 239276807
914905301 1064845296
The dete rred financing costs consSt of arrangement fees The movements m the deferred financing costs were as fo llows
203 2012 QR QR
At I January 897148 332 661 Addjtions during the year 1 062565 912506 Amortised during the year (218amp210) (34801 9)
At 3 1 December 771503 89 7148
28
Aamal Company QS C
NOTES TO THE CONSOUDATED FlNANCIAL STATEMENTS For tbe year ended 31 December 2013
14 INTEREST BEARING LOANS AND BORROWINGS (continued)
Nolec
(i) Loao I i USD 93000000 impon 10n moi lily obtoined to refimnee he Icne~ of edit The 10 IT interest at commercial fate and the interest is paid at monthly intervals The fucility is repayable within ISO days including the usage period under letter ofc redits
(ii) Loan 2 is a secured bridge loan obtained to settle an existing loan and working capital requirements of the Company The loan carries interest al coOlJllercial rates and interest is 10 be paid on quarterly basis
(iii) Loan 3 was obtained for the pWpOse of financing capital ependiture and direct payment to suppliers contractors and 5ub-controctors The 10011 CMries interest at commercial rate and the inte rest is to be paid q Uar1erly The fac ility is repayable in IS quarterly iostallmenls starting I July 20 11 and ending I January 2015
(iv) Loan 4 was obla ined for conSlruclion o r an inveslmenl property The loan is seclJed by 0 primary mortgage over the some property and corporate guarantee of the Aamal Company QSC Tbe loan carries interest at commercial marke t rate and is payable in quarterly instalments
(v) Loan 5 represents a loan fOlcility obtained in two sepnrole tranches amounting to QR 309 825 000 (USD 85 million) for the purpose of refurbi shment and construction of fociJities io one of the investment properties The loan is repayable In 16 equal quanerly instalmcnlS for individua l tranche commencing from March 20 1J The loan carries interest at conunercial rJtes
(vi) Loan 6 represents secured loans obtained ffom a commercial bank in the previous periods for the purchase of heavy equipment and machines and were merged on 15 November 20 12 as a comb ined loan This loan is payable by 59 equal instalments of QR 426000 with (I last inSlalment of OR 438 326 with effect fro m 01 October 201 3 The loan carries interest at commercial market ra tes
(vii) Loan 7 is il tmst receipt banking facility obtained for the purchase of inventories This carried interest at conunercial market rates This loan was full y settled during the year
(vii i) Loan 8 represents secured loans obuined from a commercial bank in the previous periods for the purchase of delivery trucks and machinery and were merged on 22 October 2012 as a combined loan The loan carries inte rest at commercial market Tates and is payable by 59 equal insta lments o rQR 160000 with a last inSlOlmem ofQ R 128000 with effect from 3 1 December 2012
(ix) Loan 9 is an Islamic Financi ng Arrangement obtained for construction o f a manufacturing plam and as o f yearend ba lance represents partially drawn amount out of totil1 facility of QR 655 68000 The loan is secured by joint corvorate guarantee by the shareholders The loan carries profit at Islamic Financing rates and re-payable in quarterly instalments starting from the end of the 24 months gmce period from the date of loan drawn
(x) Bi ll discounting is a loan fac ility from banks The purpose of the arrangement is to discount bills locally and carries interest at current commercia l filte
15 EM PLOYEES END OF SERVICE BENEFITS
Movements in the provision reHectelt in the consolidated SLo1tement of financia l position were as fo llows 2013 201] QR QR
At I Jan uary 18111 763 17877937 Provision made during the year 4056969 4205499 Acquirelt through business combinations (Note 4) 349272 End of service benefits paid during the year (2210756) (4320945)
At 3 1 December 19957976 18 111763
29
Aamal Company Q5C
NOTES TO THE CONSOLIDATED FINANCIAL STATEMETS For tile y~ar ended 31 Dee~mber 2013
16 SHARE CAPITAL
2013 2012 QR Qq
AtI1l1)nud 60000)000 (20 2 544500JJOfn shares ofQR iii Cilch 60i)iQOOlOO 54450lt)0000
21)13 2012 Numher of
siMtS QR shares QR Issued Mtldfully paM At lJamld) 544SfWllOfJ 5445(100001) 495000000 49500000)0 1511C ofbonus S1i1-C ___ 5550~OOO 555000000 49SGOOOO 495000000
At 31 Decenef 6(OOampQllf1(1 ---14450O000 544~OOOOOO
All ampates m~ of a110 clss and caL equal voting rights
17 LEGAL Reuro5ERVE
As required by Qatar Comnertai COfrp7lnies Lav No5 of 2002 lOfp of the profit for the ye1J as a rru1imllli silould be mmsfened to legal re~erve The reserve is lot normay [lytiabe tor distribution except ill he cixcuJUstllrtUS stipulated m the above ~lemi0ntd GIW
IS HEVE1TE
2013 l)n QR QR
Sale of goods 1726893265 i709057~(iO
Renlal income UiO362322 133117509 S-ice income 858695 33940731 CornrrusslOlL Incentives and agency fces 44695S1 422~_632
212259$)33
19 DIRECT COSTS
2013 2)i2 QR
C 051 of inven(feS recognisedlIS an exptns 1522929956 497210830 Dind sL1ries lmd wages 601 [1336 5137856-8 Operating eXpenses on nml estate p~opet1les 36)711316 3041H504 fJepreciatiort (Kate I J) 33164382 B03091pound Operators marhgerrt6nt fees 14508588 li667989 Provisicn Qr obsolete and skwlt moving mvenlories (K)tc 8) 2380617 2208263 Other operating ilxpenses _31~3982 _ 3674946
1702139171 JS9653OI tgt
Aamal Compall-yQSC________________
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For lthe year ended 31 December 20 11
2G OTHER NeOiI
2013 20J3 QR QR
Interest mcume 2824216 2)314392 Profiv( loss) 00 disposal of property plant aoe eqUlpmem 737647 (l7362G) Eargain ptmnJse gain (Kote t) 8360793 MIsceJlaneous income 5723356
2013 2012 QR QR
ManllgetnUI hrQ empl(yees ws 55170302 55lt035middot1 Rent 23596799 2594915 Allowance for impaimlcot oUrsue aCQl1ot$ rc(Xjvalle (Nole 6) 129459(i 11613120 flBumcce ane profcampiitmJI fees 2IU9263 209J902 Corununication OOtHS 1935123 1649155 Trllining tid ouSfjt$s developmccl 950476 L095764 Re]X1in and mainle-nilnce 21)11SflS 2)2 I Poslag-c prjnting acri stationery 610299 541159shyvllsltdlancous expenses _~~~664 1lt2
-~~~ 125162812
22 fIN~lCE COSTS
2013 2amp2 QR QR
Inleres epen~ 42866312 5773U4B Am(vtisJliorgt ofdefcentrred financiog coStS __ 2l)tl26~~ gt3661
44930877----=
58063009
23 BASIC A~n nHUfED EARilNGS PER SHARi~
Basic trdTJogs per hue is caculatid 0y llividing the pwfill0( Ihc year attriouiabk (0- equity roldc-5 of the parent by lhi w~iglwxi avrage number of ordinary shares 0JstandirJg dulting tht_ year During Ihe year lil~ Conpmy i-sued and CBpii3lzed bonus shares lnd awmJingl) me previously ~eportod earnings per shac have blOM restatc(i
20i3 2012
Profit feT the year auributable to Cluity holderlt of the- paren (QR)
Weighted aVCTage number ofshares outstanding during the year (i)
Basic Jd diluted earnings per share (QR) 085
59985U413 shy
~~--~~~~- ~------J 1
23
Aamal Company QSc
NOTES TO THE CONSO LIDATED FfNANC[AL STATEMENTS For tbe year ended 3 l December 2013
BASIC AND DILUTED poundARNINCS PER SHARE (continued)
NOles (i) Th wigh d m nlg urnb of hres foc h P of lruling ~migs pee share h bee kulated
as follows 2013 20J2
QU3lifying shrues allhe begi ll1ling of the year 544500000 544500000 Effect of bonus shares issued and capitalised 55500000 55500000
600000000 600000000
Less T reasury shares (149587) (i357SI)
Weighted average number of shares at the end of the year 599850413 599864249
(ii) There were no potentia lly dilutiw shares outstanding at any time during tbe year and hence the diluted earnings per share is equal to the basic earnings per share
24 COItIMITMENTS
20 1] 2012 QR QR
Estimated capital expenditure approved and contracted for at the year eod but not provided for
Investment properties 2964000 8 139063 Property plant and equipment 16386500 63759762
19350500 71 898825
Operating lease commiIOlenlS under noncancellable lease agreemenlS
Payable wilhin one year 990806 702000
990806 702000
25 CONTINGENT UABILITlES
The Group had the following contingent liabi lities from which it is anticipated thai no malerial liabilities will arise
2013 2012 QR QR
Letters of guaramee 474551239 394255203
Letters of credit 7678499 194299384
NQles
(i) leHlaquogt of gu indud penonmnlaquo tend nd bid bonds d pymenlt g gi to suppliers and contractors by the Group in the ordina ry course of bus iness which will matme within twelve months fro m the reporting da te
(i i) Letters o f credit are provided by lodging documents to the bank tor purchase of trading goods fro m foreign suppliers wruch will maMC within thJee to six months from the date or tile Iransaclion
J2
26
Aamal Company QSc
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year eoded 31 December 2013
RELATED PARTY DISCLOSURES
Related party transactions Related parties represent major shareholders directors and key management persortOei of the Group and entities controlled joimly controlled or signjficamly innueoced by such parties Pricing policies md tenns of these tnlOSaclions are approved by the Group s management
Transactions with related parties induded in the consolidated financial stalemenls were as follows
20lJ 2012 QR QR
Sale o f goods and SClVices 419034048 415225221
Rental income 1980473 2069386
Purchase of goods and services 1591 38018 300835596
Rental expense 21 780G78 23397334
Bargain purchase gain 8360793
Net assets acquired 78803585
Relat ed party bal nnces AmountS due from and due to re lated parties are disclosed in Notes 7 and 13 respectively These balances do oot carry interest and are repayable OIl mulUlUy agreed dates generally within one year
The Group did not record any impairment of receivables reJatiog to amounts due from related pat1ies in either year This assessment is undertaken each fina ncial year through examining the ftnanc ial position of the related party and the market in which the related patty operates
Parent The Groups ultimate parent is Al Faisal Ho lding Company WLL
Compensa tion or key management personn el The remuneration of key management dming the year was as fullows
2013 2012 QR QR
Short-term benefi ts 7904794 1079595 Employees end of service benefits 408934 439776
8313 728 11235727
33
AamaJ Company QSC
NOTES TO THE CONSOLIDATED FINANCIAL 5T ATEMENTS For the year ended t Decernber 2013
Dilling the year 1he Group issued a XHlUS share of 10 928 of the paid tiP share capilal hdd ilS at 31 DiX2mber 2(JJ 2 mnmuning to OR 555000000 using retamed earnings as of3 December 2012 (20l2 Doe share for every ten shues held as of 31 Dcember Oll amuunting 10 QR 495OO()OOO ling reta1ned earmrgs 28 or 31 Decencer 2D II Jshy
18 SEGMENT INFORMATION
For J)iloogement PUIpltJM rhe Group i organised into business unit bused On LlJeir nature of Acttvitics lud nas fonY reportable segments and the Head Oftklt as bllow$
Propert Tbe segntn cOlists of City C~nler Qlta~ Brunch and Aamal Rea Esmte Branch whicb ll[c invoived in lampIiiog the faJ1ities of retail outlet conpex red e5ttlte nve(mltn$ and property remal buines~s
Trading mld distrib-wion The segmeul Involves wholesalB andlor rBtail distribution of phamlaceutlcai and consunable i1ems hume Epplianccs medica equimenl t-Tes ill1d lubricmtlaquo and II1UllitnEl printing The scgn(rtt includes 6c following entities
Eotl Sina Medical Branch
Aaen Medical Braudt
Amcill Troding and DistoolltlqO Branch bull Foot Care (erier HRnd) Good llre Pbannacy Bf4Uch bull Al FllfJdaq COllpafY wJ~L
InduSNol manuacturing TIle s0groent IOvolves Ulahuactrumg whole~we aliaor rewi dimibUlioti of dccnc cables lid tools ggregJ1es_ ready-IUx connole and cement bI0C~ lI1d provi$ion of servlCcent$ in rdation to iODllltroa Itvestment repair aJ-d Gonstruction of power plwts liiiding of LED ilgluitlg products und management of industnl enterpnses The segment ircludes be folloVting centntitis
bull Aam1 Cemert Industries LL AuraJ Redy1Yl(A BrQTlch
bull Doha Cables Qawf lLL Senyaf IoolJic1es Qatar Holding W LL Advanced Pipes ard Casfs CompQTly WJ L bull GuJfRoch Coroany WLL Ci~San Trading Company WLL hmovafive Lighting Compary WLL
Managed services le segment inyolvc~ provisloH of hOllseiltecpmg mi cleaning services fucditics n-anagemerJ services C1egy s(tvices ttl centfe sltrvicf)s buildiqg lnaintemHlelt aml acting as travel gens The 5cgnltnt includes the foUowing cnti(lcents
An13 ServJce Branch
amli TnlVeJa l5tmh
f-eco Gulf Co W LL
Jolinson Controls Qattl WJL
28
Aamal Company QSc
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended ) L December 20 13
SEGMENT INFORMATION (Co ntinued)
Head Office It provides corporate services to the branches and subsidiaries of the Group
The managiog d irector of the Group monitors the operating results o f its business units separately for the purpose of making decisions about resource allocation and perfonnance assessment Segment perfonnance is evaluated based Oil operating profit or loss of these segments Transfer pricing between operating segments are on anns length basis in a manoec similar to Iraosactions with third parties
Aamal Company QSC
NOTES TO THE CONSOLIDATED FINAN CIAL STATEMENTS For the year ended 3 1 December 20 13
28 SEGMENT INFORl1ATlON (continued)
Operating segments The operat ing segment after elimination or ioter-bra nch and inter-co mpany lrnnsaclioos is presented as follows
Trading (nd Industrial Managed For fh e year elided 31 December 2013 Properly disirjblli ioll manujocljlring services
QR QR QR QR Revenues
- h lemal parties 260360172 578909983 1231522768 S l802210 - Inter segments 1253914 6843 11 8 29639873 3445052 1
Heat Office QR
Eliminoions QR
(n187426) II
Tolal
QR
2J22595133
261614086 585753 lOI 126116264 1 8625273 1 (721 87426) 2122595133
Opera ti ng results Fair vallie gains
Profit I (loss) ror the year
Depreciotion
200811944
245051 107
445863051
2066290
86492834
86492834
4345438
22636250
22636250
33049 089
5157436
5157436
1760305
(47864882)
(47864882)
1334382
267233582
245051107
512 284689
42555504
36
Aamal Company QS
NOTES TO Tl CONSOLIDATED FfNANClAL STATEMENTS For the yeM ended 31 December 20 13
28 SEGMENf INFORMAnON (c)tltioucd)
FOf the yearrnrkti J f DccemOer 2(J12 QR
Revellues - ExlcmlJ partiel 2331 17 509 bull Inter segmcI11S 1168935
-- 234236434 --~- -~--
Openning results 18S2367t Fmt value gains J8S79-4~G
pront LOllS) for the rear 570616154
gt3659
No(
lnlermiddotgment revenues are eliminated on tQHs)idntiOH_
Tadiug ftfid disl d)Ntion
QR
S2S3l7661
324 j
5335493114 ~ -~-----
51384831
54384338
4J9R71(i
Indus idi mamfmturing
QR
1255694537
129U25lS4
56727059
56727059
32752742
slnltic(s QR
55216665 2939H31
S46lOJ96
7427414
7437
[908067
ilfild ()jice QR
(64(41976
Elimination QR
(74tHi2oJ Iii
Totul QR
206936372
2069336372
235721
(64641
131 f613
6245
42541)861
Amnal Company Q$l
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Por tnt yeartndeJ 31 De~embcr 2013
28 SEGMENT JNFORMATlON (contiutlld
Assc-ts and labilities
Tng alld lndtrstfw At31 December 2(113 distnbllrior manufacturIng senices HeadOJJicc EliminatioilS lola1
QR QR QR QR QR
Cumnl 3tS 227552338 620807979 61349 j 415 S()6)86922 (301636995) 1477366090 Noolucrcnt DSeIS 6411868160 12604763 622386238 4348876 (i624548 __p2438051 780
fotal asstl$ 6639420498 1194 1243194217 65698291 513Ql1470 ==-lt03H8l~O()) 853295-870 -~----~ ~---~ -
CUIT)llliabilitics 280995335 1(3511J60 6344(12777 2l0708lJ2 496261185 (3CH636995) 1249603264 Non-current iiatJlitics 7l70L5V2 8008485 HlDi16~43_ 3181668 t433799 ____ ilj534_~57 __ --Totul liahililics 353696897 ___~4159~4~ 734419720 ~4976~~~~~ 1434945711
---~~--~ -~-~~ - _2~~~4~~ (~~~~9~
C1pild expcndimn HI) WO743OOj 1397742_~471l2~--~50 ~51 ~1~623821~~1~_ -~----~------ -~
3amp
28
Aamal Company Q SC
NOTES TO THE CONSOLIDATED FfNANClAL STATEMENTS For the year ended 31 December 20 13
SEGMFNT INFORMATION (continued)
Assets and liabilities (continued)
AI 31 December 2012 Properly QR
Trading and d iSfriblllion
QR
Indusrial manufacfuring
QR
Managed senices QR
Currenl assels
Non-current assets
146491 186
6121 864484
2964425 12 903 7264
73468 1258
549267235
51387098 471 1439
Tolal assets 6268355670 305479776 1283948493 56098537
Head Office QR
468325024
6713643
475038667
Currentliabil iies
Non-current liabiLities 273444 748 1 J10 15024
86054583 7434286
669214261 1288 14977
2 1938953
287 1199
480393637 1253084
Totil lliabiliti cs 390459772 93488869 798029238 248 10 152 48J64672 1
Capila expendirure (ltII L 72865 878 1281254 6647 J356 7169 13 149045
Notes
(i)
(Ii)
Inter-segmeot balances are e limioafed 00 consolidatio n
Capi tal expendiTU res consist of additions 10 propeny plant and equip ment and iovestmenl properties
Eliminations QR
To wl QR
(273735776) (i )
(20308351(i)
1423591302
6689563230
(27576661 1) 8 113154532
(273135777) (i) 12573 10405
257388570
(273735177) 15 14698975
24 1484446
39
29
Aamal Company QSC
NOTES TO THE CONSOLIDATED FrNANCIAL STATEMENTS For the year ended 31 Dcltmber 1013
Fr-A]~ClAL RISK MANAGpoundMamp1H
Objccthes and policies fe Groups principal )uaucill liabilities comprise imltresl bctmllg loons and IxmowHgs baRlt ovetda1s amounts due to fclaled par1ies and tracte accounts payable The main pUlJXSi of thesc financial liabilities is 4J mise firmne or 610 Grmps operations The G0JP bas various fimmcial assets such as ttadc accounts receivable lInlOlmts due from related parties bark balances tltCntion receivable and other receivables which arisgt directly fran its cperuoonamp
The maiH ri~ks an3ing Joru (be Groups UnariCJlll illslrumenls jle market risk cretiJt nsk and hmdity risk Til BoarD ofDtrcctO$ reviews end agrees policies for mzrAgbg Caltt f hespound ri~k ihkh arc summariscd beloW
VIarktt risk yenfatket risk is the risk Um changes in market prices $Uch as intfcst rates and hreig lttmeocy ect14nge rilles Vltl1 affect the Groups profit eqwty Dr value tf its hoJdiI15 of financial instrl[Thnls rile objecivpoundj of marke1 risk mUnllgcrlcnt is to manage uld 1~ontr(ll tho tr))rket risk expo-sure vithir acceptable parfI-etcJ$ while optimising rerUID
Equit) price risk ampjuity prtce risk is the risk hilt the Group ampearnings will be affected as a rcmt (If luctttltions in fm vdue of ~qui-gt
mstwnents Eqlliry price risk arises from availabtetor~sale inv2strnems However the Groups exposure to eqmty price risk IS minima as II doesn hold sitl)iftrmt ailableAor-511le inYestrmmrs
[merest rate risk The Groups fimiruial poundS5ot ampId liaojlilies (at Rl $uJject to int~~ rate mk compnse brmk depoils interst bearing loans and bOITQwjags and bank overdr-afts At the reponwg dalt tbe [merest rale pronle of Ill Goups intexst bearing fbi4rdd instruments as fliows
11113 20i3 QR QR
Fued liIeryS refc insfrvrnellts
Fmmcial assets 113035962 111913394 FrOltwial liabilities --1~203712l) 1252t43~1
9)OI~ (13350972)
Fhlllting inireSI rate ns1lmlttrs Fanctl~ Isseis 127024345 ID43848o Fllllocial liabilities _-(i~9347~ (94))48926)
(836)64116)
The Groups exposure to t~ ris of changes in marXet interest fltltes relztes primariiy to the Groups financial assets and lizbitdic$ with t1Oltttirg interest mte~
lhe loEowing able demonstrates the ampmitivity nf the eonsolidattXI statemen1 of income 1) caonaly possible chonges in in1jfgtst rmes by 25 basis points with all othe vari)ble3 hdc umstant The sensitivity of the CooiK~ljclatid statement of inc(me $ the eft(ct of tb assumed changes in lnterdt rales for one year bf1sec on the floating rate financial assets and fimmcial hablhw$ held at 31 f~r The effect of deae-ascs in interest ral~ is cXp0Ctct to be equal and opposite to the effect oHlle increases sllQvro
Changes it Eftx OIl
00513 [oms profit QR
2013 Floating mterest Hlte instruments ----2$ bp (1649776)
2012 Flv-ating irkfiSt rale instrumenls +25 bp (209[9(1))
~--------- -~~ 40-middot------ _ _ shy
29
Aamal Company QSC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 3 1 December 2013
FINANCIAL RISK MANAGEMENT (continued)
Foreign currency risk Foreign currency risk is the risk lhilt the value of lhe fi nancial instruments will fluctuate due 10 changes in fore ign exchange rates
T rade aCcOlmts payable and accrued expenses include amounts due in foreign currencies mliniy US Dollars UAB Dirhams Great Britain Pounds (GB P) and Euros of which the Group has a currency risk primruily on the baJmces payable in Euros and GBP amoWlting 10 QR 14400634 (2012 QR 17214046)
The Group does not hedge its foreign currency exposure As both Qatari Riyal and UAE Dirhams are pegged to the US Dollar balances in US Dollars and UAE Dirhams are not considered to represent significant currency ris k to the Group
The table below indicates the Group s fore ign c urrency exposure on its monetary assets a nd liabilities The analysis calculates the effect o f a reasonably poss ib le move ment of the QR curre nc y rale against the Euro and GBP with all other variables held constant on the consolidated slate menl o f income (due to the fa ir va lue of currency sensitive monetary asse ts a nd liabilities) The e ffect o f decreases in fo reign c urre ncy exchange rates is expected to he equal and opposile 10 the e ffect of the increases shown
Incramp1se ill
f oreign cUlrency rate
0
the QR
Ellecl on profil
QR
2013 +5 (720032)
20 12 +5 (860 702)
C redit Tisk Credit risk is the risk that one party to a financial instrume nt wi ll fa il to discharge an obligation and cause the other party to incur a financial loss TIle Groups exposure to credit risk is indica ted by the carrying amoWlt o f its financia l asse ts whic h consist principally oftmde accollilts receivable retention receivable amounts due from related parties othe r receivables and bank baLances
The Group sells its products and prov ides services to vario us panies It is the G ro ups policy that all customers who wish to obtain on credit lerms are subject to credit verificalion procedures to ensure c redit Ilonhiness Each new customer is analysed individually for creditworthiness before the de livery o f products Of services Custo mm tbat fai l to met t the credi tworthiness may transact with the Group only o n prepayme nt basis Property rentals are mostl y received in ad vtnce or conlrlCled wi th post dated cheques 10 additio n receivable balances are monitored on an ongoing basis a nd the purchase limils are established for each c redit custoroer which are reviewed reguJarly based on the level o f past transactions and senlement The Groups max im wn exposure with regard to trade aCCOWlts receivab le net ofa llowance re nected allhe reporting date was ilS fo llows
2013 2012
Business SJgmelll QR QR
Property 15478832 19386326 Trading and distributio n 194343 597 179748274 Industrial ma nufac turing 183119753 131578668 Managed services 18069385 14547389
411 011 567 345260657
41
29
Aamal Company QSc
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For tbe year eoded 3 J December 20 13
FlNAJICIAL RISK MANAG EMENT (c-o Dtinued)
Credit risk (continued) With respect to credit risk arising from the other financi31 assets of the Group the Groups exposure to credit risk arises from default of the counterparty with a maximum exposure equal 10 the canying amount of these instruments as follows
2013 QR
202
QR
Bank balances Amounts due from related parties Retention and other receivables
436136756 214439950 48290351
36788129 t 171525363 74082203
698867057 613488857
The group reduces the expoSltre of credit risk arising from other financial assets by maintaining bank accounts in reputed banks and providing services only to creditworthy re lated parties
The management cons iders the bank balances and a mQUIIIS due from related parties as high grade fi nancial assets and lfade accounls receivable and other receivables as sundard grade financial assets When a finltmcial asset is identified 10 be impaired the managemoot downgrades such assets to impaired category and provides adequate allowances
Liquidity risk Liquidity risk is the risk that the Group will not be able to meet its fmancial obligations as they fu ll due The Groups 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 nonnal and stressed conditiom without incurring unacceptable losses or risking damage to the Groups reputa tion and is to maintain a balance belWeen continuity of fuoding and f1eilibility through the use of bank overdrafts and bank loans and borrowings
The Group monitors its risk to a shortage o f funds using a recuning liquidity plaOfling 1001 TIllS tool considers the manuiry o f financial assets (eg accounts receivable) and projected cash flows from operations The Groups teons ofsales or services require arooUIlts to be paid within 30-90 days from the invoiced dale
42
29
Aamal Company QSc
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For tbe year ended 3 1 December 2013
FrNANClAL ruSK MANAGEMENT (contiQued)
Uqujdity risk (continued) The table below summarises the ruaruriJy profile of the Groups financial 1iabililies a t 31 December based on contractual undiscountcd paymeots
2013 Interest bearing loans and borrowings Bank overdrafts Trade accowus payable Other payables Amounl~ due (0 related panles
201l Interest bearing loans and borrowings
Baok overdrafts Trade accounts payable Other payables Amounts due to related parties
On demand
QR
6836280
6836280
011 demand QR
2885090
2885090
Less than 3 months
QR
521324473
303638792
47406830
2530~480
898675575
Less thall 3
months
QR
469839033
10754JJIO 37543236
1964504 1
634568620
3 10 J2 mOlllh$
QR
239333328
16378865 20210580
2289~11l
298816884
3 to 12 monlhs
QR
365476972
159621 37 J 24745342
30092716
579936401
1to 5 years
QR
J 60092748
160092148
1 to 5 years
QR
248472226
248472226
gt 5 years
QR
25261598
25261 598
gt 5 years
QR
7648000
7648000
TOlaf
QR
947012147 6836280
320017657
67617410 48199591
1389681085
Tota
QR
109 1436231
1885090 267162681
622 88578
49737757
14735 10337
43
30
Aamal Company QSltc NOTES TO THE CONSOLIDATED FlANCIAL STATEMETS For the year ended 31 December 20 t3
21 F~ANClAL RlSK MAiAGEMElT (continued)
Capital management The Boards policy is to maintain a strong cepit1 base so as to rnainmin investor creditor and market ronfoonee and to SUSWlJ) fumre dcltclonnent Gf the buinest The Board of Directors rronitortl the tapital whkh tbe Group defines as wlal $parcloders equity excluding nonmiddotcornroliing imerests and the level of dividends to orrunury srarellOJdcfS
The Board also reeks to ITIaimain a balance between the higher (ctums (hat might be fA-~$ihle With higher leves of borrnwings end Lle edvnrJages and security named Sy it sOMd Cilpitai posi[ion The GfCup~ k1rget is to achievfl a return on slureholders equity (exclJding aonwurrolJiug iorcf(sts) greater lll(ll1 he wcighlcd average inres exxmse on mrerest bearing Ivens and oorrowing
The (lf0t-p nl)nDg-e ils cnpital structure and makes adjustneal lOll in light ofchang2s in economic nd bttincss cordjlons and shareholders expe1ationJo chmges veremiddot maCo HI Lleuro objecttves polilCS or proCCSSC3 during the years erded 31 D~mber 2013md 31 Dtccmlxr2Ql2
The Group monitors the capit2J using a gClting fatio which IS dep divided by caplla plus debL The GtOwgts policy is to keep ttJe ge-anng rmio bclew 40 Tbe Group iLdtdes withb debt imete-51 beagting loans ard ~OITORlngs less cash and cash equtVaknts Capltal includes eqmty attributable 10 the equity tolders oft~e parcrt
2013 QR
2(i2 QR
fmerest bearing loans and borrowings lcss- Cash and cas ltYJUvalcnts
9i4lJ05301 _~ (429JfJl4761
1004845296 (649)6201)
Net debt
Toa capital
Capita and net debt
699849045
~ringrttio
FAIR VALtES OF Fl~ANOAL f~STRUMETS
Finarcial iostrumenL~ cOlnprise tina~lctal assetS carl finailcialliabilities
Fmancial assets colJist of bank balance) short 1Cm bank dcposis amounL dve dom rc)ltted partilt)$ rekntion and other receivables and ttade accolmis rceivabe Finatlclll habiilics cgtmsist of banilt ovcrdratls jnerest bearing lOil1S and bOrowings amounts due (0 nliled partiG~ ane trade x-ounls payable
The- fair values of hese financial inStrumen1S except Jo-- imCfest bearing loam lHld bOlToving aproKimate lhdr cMryinJ vlhes due to the Slort temt mzrutiiles or these instrument
Tllc faiT value of iotcnst beating Nns and borrowin2s ae estimate( based on discoumed ltash flows twin int(s rale- cune-ntly nvailagtk fur tilt debt or sinuiar tetnlS an-a rell1lmng matunties
31
Aamal Company~Q=-ScC ______________~______
~OTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For fhe year ended 31 December 20 t3
SlGNIFICANT ASUMPTIONS ACCOUJTING JUDGElE1TS AND F8TIMATFS
impairment (If accoonts receivable n etrnwe of lhe collectible anoun of trade accounlgt reccvable is made when collection of the full lHl1OUt i~ nO looger probabk FOI nCividualty significitIl amounts this estimation is p~rformed on an indh-idllai a$[$ Amomts wHcb arc not indivldl11Uy significant but wluch are past due ZTe tsscssed collectively and an aJlQwaccc applied ucc()r~Jng to the length of lime past due based oc histnncal recovery nlJes
hnpalrment of inHntnries lavenoncs are held at tho lower of col and nol realisable value InIOn inventoncent$ becone old or 0-~amplete an estilTJte is mate of their net j alisable vulue For indiviolhlUy significant amountS this cstinaunrt is performec all aD lndividwl osis Amotlnts whieh are fl0t individually significan( btll which ltIre old at obsolete wx LltSessed wllecivdy md a provisior is applied sccnrding to the invenrory type and be dep)ee of ageing 0 cDsolescc1ce based on anticipUled selling prices
Classifigt1ltion of El Sew(gtdy Cable Qatar WLI ali a j(lint vwture pound1 Sovedy Cables Qatar is a limited hability company whose kgal fum confers SCprm11ior bernten tbe jXliiies 10 ~he jomi lfranpement Snd the Company Itself FurthenrlOre then IS no oontractua] arrmgelTeot or any oibe aus aod circumstriliCe$ that iocik41to tht he putic5 [0 the joint flJTIlrgernelit bave rights to the ssetl and obligrtdons fo~ the liabilities of the joint ilrrongement Acoordingly El Sewed- C[jbl~s Qamr WLL is dassifiecl 7S a joiut enrtrr of he GWtp
impairment of goodwill G0oovj)1 embedded in th~ cot 0 aquisitior of subsidiaries and eqmtj-iccounled iflV(stees ire teswt for irl1jXlirmnt aHuaily Tbe calculations of value [n use fO( cfish gecj~r)lilg units (loring to real nte projecg are rtost sensitive to tin IDHowing assumpti015
Grosgt i1wginmiddot Gross Ilmrgins arc lmsed on avrage values tuhje0d in (he [Xrioo preeedhli (e siaM of the budge xnod T1esC at( mcreased over the budgel period for mticipatltX efficiency Hnprovemots
DisC)unr r(es Discount rotes represent th cl1tent mark as~ssmetlt of the risks specific te ech cash geocroting unit regarding lhe time value of money ilnd mdividu)l risks of he tmtieriyilg assets whICh have not been inwrport1eti it the Citik flow estimates The dj~(OUrl flte tlkulation is based on the speclfte circurnsthLCes of lile Group and its opltllatJng segn)~nts (md derived (ff)rC it weighted avaage (XSt 0f apilaJ (WACC) Tb fACe (akw into uoount both deb and equity The 0$1 of equity is denved from dlC expected return 01 investmenl by the Groups investors TJc Gos10( deb is based on l1e borrvwings the Gmup IS obllsxl to service SC~lletllmiddotspecific r5k IS incorxt4too by applying individual bera facto The betn mctors ire evauatcentd annuaHy bhseci on pubJicly aVflllabe murked earn
Fair value ()fnHstmeni proputies The fuit laHe 0 nvestmel~ propertis is deltrrnlnzd b cxterrwl indepzfldell property valuers laving appr0priate recognised professional quabfiillions and recenl xperience H1 the localjl)n and G-tegory 0 the oroperty being valued
Useful hes of PfQPcrly plmr (llld zqulpment The Groups management detennints th estiunted useful jives Df It~ property plan and equipmnl fix calnurjng depreciation Thi5 e~timJte is 6lermind after cinsidring 1b expeelcd usage (1f the a5sclt [hysical l101t and (eas tedmiltal Dr com~ercia obsolesccnce
Gotlg Qncen
ibe Groups mangerncnt UiS made aJ assessmeot cf the 011115 ability (0 COllllOUC liS a going conct11l Imd is satsl1ed hat me Group ms the resources to contmue in business for he foreseeable fu1urc he1hennort he management is no aware oC lny material Hncertainties that lray CH~t signinchnt doubt tlPDfl the Groups ability 10 continue as a going umcem Therefore titpound lotlsolidatcd finilllcij stftemeols comirme to be prepltd on li g0ing concern basis
Aamal Company QSc
NOTES TO THE CONSOLIDATED FlNANC[AL STATEMENTS For the year ended 3 1 December 20 13
32 INCOME TAX
Certa in subsidiaries of the Group which have non-GCe ownership are subject to income tax under Qatar Income Tax Law No 2 1 of2009 The iocome tax is charged on the share of profits attributable to non-GCe shareholders For the purpose of these conso lidated fi nancial statements the income tax liability oftbe foreign shareholders has been excluded given that the non-GCe shareholders have agreed under the shareholder agreements signed with the Group to bear the fh lliiability and make necessary payments
33 COMPARATIVE INFORMATION
Certain comparative figw-es of the previous year have been reclassified 0 coofonn to the current years presentation However such reclassifications are oat materia and do not have an impact on tbe previously reported net profit other comprehensive income or the total equity for the comparative year
The impact from the resta tement of comparative infonnalion as a resuh of adoption of IFRS I I - Joint arrangements is detailed in Note 32 Changes in aCCQu(lting policies
46
Aama Company QSc
NOTES TO THE CONSOLIDATED FINANC IAL STATEMENTS For tbe year ended 31 December 20 13
3 BASIS OF PREPARATION AND SUMMA RY OF SIGNIFICANT ACCOUNTfNC POLI CIES (contin ued)
34 SUMMARY OF SIGNIFICANT ACCO UNTLNG POLICIES (continued)
Interests in equity-aecoupled inveslecs The Groups interest in equity-accounted investees comprise interest in associates and joint venture
Associates are lhose entities in which the Group has significant influence but not control or joint control over the financia l and operating policies A joint vennu-c is an arrangement in which the Group has jo int ool1lrol whereby the Group has rights to the net assets of the arrangement rather thall rights to its assets and obugations for its liabilities
InlereSIS in associates and the joint venture are accoliDted for using the equity method They are recognised initially tit cost which includes transaction costs Subsequent to ini tial recognition the consolidated financ ial stateme nts ioc lude the Groups shrre of the profit or loss and other comprehensive income of equity-accounted investees unti l the dalc on which significant in Lluence or joint control ceases
The reponing d~les of the equity-accounted investees and the Group are identical and the equi ty-accounted investees accoWlting policies confonn to those used by the Group for like tmnsactions afld events in similar circumstances
Investmefl t properties umd aod buildings are considered as investment properties only when they are being held to earn ren tals or for capital appreciation or fo r both
Investment properties are measured ini tia lly at cost including traosaction costs and borrowing costs that are directty attributable to construc tion o f the 8sseL The carrying alRount includes the cost of replacing part of an existing investment property at the time that cost is incurred jf toe recognition cri teria are mel and excludes the costs of day-to-day servic ing of an investment property Sub~quent to inilial recognition investment propert ies are slated at fa ir value which reOects market conditions at the reporting date Gains or losses arising from changes in the fa ir values of investment properties are included in the consolidated statement of income in the yeltl r in which they arise
Investment properties are derecognised when either they have been disposed off or when the investment property is pennanently withdrawn 1T0m use and no fu ture economic benefit is expected from its disposal Any gains or losses on the retirement or disposa l of aD investment property are recognised in the consolidated statement of income in the year of retiremeOl or disposal
Property under construc tion is dealt with under lAS 40 and rttorded at cost less accumulated impairment losses until either its fair value becomes relia bly detenninable or cons(TUction is completed (whichever is earl ier) At that time it is reclassified as inves tment property and a fa ir value adjustment is recognised in the consolidated statemenlof income
Transfers are made to or fro m in vestment property onl y when there is a change in use For a transfer from investmen propeIT) to ovmer occupied proreIT) the deemed cost for subsequent accounting is the fair value at the date of change in use If owner occupied property ~omes an investment property the difference between the canying value aoo the fair value at the date oflransfer is rttognised as a revaluation reserve in the equity and is released to the consol idated sta tement of income llpon disposal of such propcny
14
Aamal Company QSc
NOTES TO THE CONSOLIDATED FrNANCIAL STATEMENTS For the year eDded 31 December 20 13
3 BASIS OF PREPARATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLI CIES (continued)
304 SUMMARY Of SIGNIFICANT ACCOUNTING POLICIES (continued)
Property plant and equipment Property plant and equipment is stated at cost including borrowing costs that are eligible for capitalisation and excluding the costs of day-to-day servicing less accumu lated depreciation and any imp~innem in value
Depreciation is provided on a straight line basis on all propelT) planl and equi pment The rales of depreciatioo are based upon the following eSImnelt useful lives
Buildings 20 years Leasehold improvements 2-8 years Truck mixers and motor vehicles 4-1 5 years Plant and ITIJchioery 8-2 5 years Furniture fixtures and office equipment 3-5 years Computers and related software 3-5 years Capital work in progress Not depreciated
The carrying amounts are reviewed for impain nellt when events or changes in circumstances indicate that the carrying value may not be recoverable If any such indication exists and where the carrying values exceed tbe estimated recoverable amouot the assets are wri tten down to their recoverable amount being the higher of their fair value less costs to sen and their value in use
Expendirure iocurred lO replace a component of an item of property plaot and equipment that is accotmted for separately is capitalised and the carrying amount of the component that is replaced is written off Other subsequent expenditure is capitalised only when it increases furure economic benefits of the related item of property plant and equiproent Al l other expendirure is recognised in the consolidated statement of income as the expense is Incurred
An item o f property plaot and equipment is dereeognised upon disposal or when no future economic benefi ts are expected from its use or disposal Any gain or loss arising on derecognilloo of the asset is iocluded in the consolidated stalemeot o f income io the year the asset is derecognised
The asset s residual values useful lives and method of depreciation are reviewed and adjusted if appropriate at each rnancial year end
Borrowing costs Borrowing costs direc tly attributable to the acquisition constmction or production of an asset that necessarily takes substalltjal period of time 10 get ready for its intended use or sale are capilalised as pan of the cost o f lhe respective assets All other borrowing costs are expensed in the year they incur BOlTOwiog COSts consist of the interest and other costs that the Group incurs in coomction with the borrowing of fund s
Accounts paytlble and accruBls Liabilities are recognised for amounts to be paid in the fuMe for goods or services received whether billed by the supplier or not
Interest bearing loans Bnd borrowings Interest bearing loaos and borrowings are recognised ini tiaJy at fai r value of the amounts borrowed less direc tly attributable transaction costs Subsequent to initial recognition interest bearing loons and borrowings are measured at amortised COSt using the effecti ve interest method with any differences between the cost and tinal settlement values being recognized in the conso lidated statement of income over the peliod of borrowings Instalments due within one year aI amortised cost are shown as a ctuTentliabiliry
Gains or losses are recogTlised in the consolidated sialement of income when (he liabililies are derecognised Interest relating (0 imerest bearing loans and borrowings is expensed in the year in which it is incWTed e(cept those qualify for capitalisation
15
Aamal Company QSC
NOTES TO THE CONSOLIDATED FfNANClAL STATEMENTS For tbe year eoded 31 December 201 3
J BASIS OF PRpoundPARATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
34 SUMMARY Of)SIGNIFICAtlT ACCOUNTING POLICI ES (continued)
TClaot deposits Tenant deposit liabilities are initially recognised at fair value and subsequently measured at amortised cost where material Any di fference between the initial fair vllue and the oominal amount is [eluded as a component of rental income and rocognised on a straight-line basis over the lease term
Derecognition or fiolocial nsstls and liabilities
a) Financial assets
A fi nanCIal asset (or w~re apphcabJe a part of a fin ancial asset or part of a group of SImilar financIal assets) IS derecogmsed where J bull The n ghts to receIve [5h flo ws from the asset have expIred bull The Group has trans f rred Its rights to receive cash flows from the ass or has assumed an obhg811On to pay the
reltelved cash flows I full Wlthout mfl tenal delay to a third party under a pass-through arrangement and elther (3) the Group has Ira sferred substantially aIthe nsKs and rewards of the asset or (b) Ihe Group has neuher transferred nor relain substantially ai the n sks and rewards of the asset but has tnlnsferred control of the asset
When the Group has tTa~fened its rights 10 receive cash flo ws from an asset or has entered into a pass-waugh arrangement and has nejlher trmsferred nor reta ined substantially all of the risks and rewards of the asset nor trnnsferred control of the asset the asset is recogoised to the extent of the Groups cOlilinuing involvement in Ihe
In that case the Group at 0 recognises an associmed liability The mnsferred asset and ihe associaled liabi lity are measured 00 a basis thai flects Ihe rights lnd obligations that the Group has retained Continuing involvement that takes the form of a guara tee over the transferred asset is measured at the lower of the original canying amount of Ihe asset and fbe maxim amoun o f consideration that the Groop could be required to repay
b) Financialliabiliti
A financial liabili ty is defogniSed when the obligation under the liabil ity is discharged or cancelled or expires Where an existing fio8 1lci I liability is replaced by another from the same lender on substantia ll y d ifferent lenns or the terms of an existin liabili ty are substantia lly modified such an exchange or modification is treated as a derecognition of the orig~al liabili ty and the recog1Jitioil of a new liability and the dirference io the respective carrying amounts is reco ised in the consolidated Slatement o f income
Impalr meot ood uncollec ibility of fina ncial assets An assessment is made al each repon ing date to determine whether there is objective evidence that a speci fic financial asset may be impaired If such evidence exists allY impainneOl loss is recogoised in the consolidated statement of income ImT t is detemtined as fo llows
(a) For assets earned a t fair value impainnellt is tbe difference between cost and fair va lue (b) For asseamp carried at COSt impairment is the difference between cost and lIle present value of future
cash flo1S discounted at lhe current market rate of rdurn for a simi lar finan cial asset (0) For asseq carried al amortised COSt impainneot is the difference between canying arnOWll and lhe
present Value of future cash flO M discowlled at the original effective iDlerest rate
Provisions Provisions are rewgnised hen the Group has an obl igation (legal or COnslnlctive) aris ing fro m a past event and the costs to settle the obl igalio are both probable and able to be reliably measured
16
Aamal Company QSc
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 31 December 2013
3 BAses OF PR EPARATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICI ES (colltinued)
34 SUMMARY OF S IGNIFICANT ACCOUNTING POLICIES (continued)
Employees eod of service benefits The Group provides end of service benefits to all employees in accordance wi th employment contracts and Qatar Labour Law The entitlement to these benefits is based upon the employees final salary aocl length of service subject to the completion of a minimum service period The expected costs of these benefits are accrued over the period ofemployment
Revenue Revenue is recognised to the extent thal it is probable that the economic benefits will flow to the Group and the revenue call be reliably measured Revenue is measured al the fair value of the consideration received excluding discoWlIS rebates and duty The following spec ific recognition criteria must also be met before revenue is recognised
Sale ofgoods Sales are recognised whcn significant risks and rewards of ownership of the goods have passed to the boyer and the amount of revenue cao be me3sured rcli3bly
Rental income Rental incorne from investment properties is accoWlted for on a time proportion basis over the period of tenancy Incentives for leases to enter into lease agreements are spread evenly over the lease teon even if the payments are not made 0 0 such basis Income arising Tom expenses recharged to tenants is recogn ised in the year in which the expenses can be contrac tually recei ved Service charges aud other such receipts are includcd gross o f related cosls in revenues as the Group acts as principal io this regard Premiwns received to terminate leases arc recognised in the consolidated statement of income when they arise
Service income Service income is recognised when the service is rendered and the outCQrne of the transactions can be estimated reliably
COlimission Commission is accounted for on an accrual basis when the right 10 receive the income is established
become on tra~el agencies [ncome on travel agencies is accounted for in the year in which the airline tickets are sold
IIIeresr income Joterest income is recognised as the interest accrues using the effective interest Clle method
Foreign currencies Transactions in foreign currencies ate recorded al tbe rale ruling at the date of the transaction Monetary assets and liabi lities dcoomioated io foreign currencies ace retranslated ill the raLe of exchange ruling at the reponing date All differences are recognised in the Statement ofinconlC
Use of estimates The preparation of (he Groups consolidated financial sta temenls in CQnfonnity with Intemltional Financial Reponing Standards ([fRS) requires management 10 rnake estimates and assumptions that affect the reponed amounts of assets and liabilities and disclosure of contingent asscts and liabili ties at the rcporting date and the reported amoUlils of revenues and expenses during Ihe reponing period Although these estimates are based on managements best knowtedge of current events nnd actions acnm results may ul timately differ fro m those estimates (Significant asswnptions nccounting judgments and estimates used in preparing these coosolidated fina ncial sta temenlS are disclosed in Note 31)
The estimates and underlying assumptions are reviewed regularly Revisions to accounting estimlIes are recognised in (he period in which the estimate is revised if the revision affects only that period or in th~ period of the revision and future periods if the revision affects both current and fu ture periods
17
Aamal Company QSC
NOTES TO THE CONSOLlDA TED FINANCIAL STATEMENTS For tbe year cnded 31 December 2013
3 BASI S OF PREPARATION AND SUMMARY OF SrGNIFICANT ACCOUNTING POLICIES (continued)
34 SUMMARY or SIGNIFICANT ACCOUNTING POLI CIES (continued)
Fair va lues A number of Groups accounting policies and disclosures require tJ1 C measurement of fair values for both financial and non-financial assets and liabil ities The Group has an established control framework with respect to the measuremeot of fair values When measuring the fair value of an asset or a liabili ly the Group uses market observable data for (be valuatiOD Fair values are categorised into different levels in a fair value hierarchy baCd on the inputs used in the valuation lechniques as follows
i) Leve l I - Unadjosted quoted prices io active markets for identica l assets and liabilities ji) Level 2 - Otheqobservable inputs not included within level 1 of the fair value hierarchy ii i) Level 3 - Unobtervable inputs (including enti ty s own data which are adjusted if necessary to retlect the
assumptions market participnllts would use in the circumstances) The Group recognises tralnSfers between levels of the fair value hierarchy at the end ofthe reporting period during which the change has ocdWTed_
Treasury shares When share capitl recognized in equity is repUIchased (by the Company or any of its subsidiaries) the amount of the consideration paid which includes direa ly altributable COSIS is recognized lIS a deduction from equity Wheo treasury shares are sold or reissued subsequently the amount received is recognized as no increase in equity and the resulting surplus or deficit on the transaction is presented io share premium
18
4
Aamal Company iQSc
NOTES TO THE ONSOLlDATED FINANCIAL STATEMENTS For the year ended 31 ecember 201 3
BUSINESS CO~BlNAnON
Acquisition o f Culf ROks Company VLL On 1 January 2012 the roup acquired 51 oflhe voting shares of Gulf Rocks Company WLL (Gul f Rocks) a limited Iiabiliry campan incorporated in Qatar and registered UJKier conunercial registration number 2249) The acquisition was made thT ugh Ci-San Trading WL L a subsidiary which is 50 owned by Aamal Group
I
The fai r val ue of lbe ideltifiable assets and liabilit ies of Gulf Rocks Co mpany WLL based on purchase price allocation exercise condlcd by tbe management as at the date of acquisition WJ S as follows
Fair value recognized on
acquisition QR
Assets I Cash and bank balances 14005495 ACC QUOiS receivable and wePayments I 749383 Amouots due from related plrties I
I oveotones
48311 190 5124 270
Available for sale investm~nlS 1985245 Plant and equipment 6769 17
81852500
Liabilit ies Accounts payable aJld accll1als 4724446 Amounts due to related parties 385070 Employees end of serviccibenefits (Note 15) 349272
5458788
Total identifiable net a5sellf
Purchase consideration trasferred Non-controll ing intereSt az-ising on business combination Bargain purcha5c gain rc~u ting from the tcquisilion
Allalysis ojcash flows OIl acquisition Net cash acquire11 Nith the subsidiary 14005495 Cash paid (30600000)
(16594505)
On I September 20 12 the Company acquired the balance 49 nfthe equiry of Gulf Rocks Accordingly the Group has 74 5 effective holdin4 in Gulf Rocks as at the reporting dale The excess nfthe purchase cons ideration over Ihe fair value o f net assets of GuJf Rocks acqui red from the nnn-controlHng interest has been recorded directly in the retained earnings of tbe Gr6up as at 31 December 201 2
QR Purchase consideration 404 10000 Less fuir value of oet asset~ acquiroo from the non-controlling Interest holder (39842792) EXce5s of purchllse cons idf ration over the fair value of net assets a(q uired 567208
19
5
Aamal Company QSC
NOTES TO THE (WNSOLlDATED FfNANClAL STATEMENTS For the year eoded 3 ) December 2013
CASH AND CASH EQUIVALENTS
For the pmvose of consolidated statement of cash flows cash and cash equivalents comprise the fo llowing balances
lon 2012 QR QR
Cash and bank accounts 330333904 282272895 Short lenn bank deposits 105802852 85608396 Cash and bank balances 436136756 367881 291
Bank overdrafts (6836280) (2885090)
Cash and cash equivalents 429300 476 364996120 1
The short tenn bank deposits are made for varying periods between one day aod three months depeoding on Ibe immedifltc cash requirements of the Group and earn interest at the respective short term deposit ra tes
6 ACCOUNTS RECEfVABLE AND PREPAYMENTS
2013 2012 QR QR
Trade aCColUlts receivable 411 011 567 345260657 Advances 0 suppliers and prepayments 50787921 629389J 5 Retention receivables 36217081 56943030 Other receivables 12073270 17 139173
5tO089839 4 82 28 1775
As at 31 December 2013 trade accountS receivoble amoWlting to QR 2690 1412 (201 2 OR 24984025) were impaired Movements in the allowance for impairment of trade aCColmts receivable were as follows
2013 202 QR QR
At 1 January 24984025 1 877085 Charge for [he year (Note 21) 2294590 13613 120 Amounts wriuen off (19949) (117368) Unused amotmts reversed (357254) (388812)
At 3 t December 26901412 24984025
20
6
1
lamal CompanyQSC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMEltS For the year ended 3 J December 2013
ACCotNTS RECEIVABLpound AND PREPAYMpoundNTS (contillued)
As at -1 I Dtcemxt the ageirg of unimpaired (ltlde accounb iltcivabk was as follows
P(HI duo
nor Up to 30 31-60 61middot90 Yi-jSj gt flO Tota impoirlt-fl days days days day doys
QR QR QR QR QR QR QR
1l13 411OJl$67 25l981960 32312165 2140966 19351fi43 16f)76888 60148545 2012 345260657 1695159B6 493lt)8566 2356$954 19494369 16908414 66374363
1JJJirtpai~ed receivable are expected no th bil5tS of past experienn) 10 be fully fcCi)evbc H is not the pngtctlce ofthcent Group to oblum collaleral over recejvablcI_
AMOLNTS DUE FROyl REL-TEO PARTIES
Name
AI ~aisnl Holding Company V_LL E Seweo Cabtes Qatn WL L Cnild -ftt Cvmlllny Al hz Retll E$vt rWesnnim Company WLL~ AllaZi Real Estale BrAnch EI Sewedy Electric Egypt WLL MuincrDJ1Ce Mwagmvont Group Qat3r W LL Good fe Cheffilt - The Pcarl
BuderPhtrnacy Al Faisallnlemadonal Tnl(i and Investment Company WLL AI-rabia Land Trnr~PQltit1g Company rLL ro Sewedy CabLes - Kuwuit Gcentttco hlttrnJmJilI Frijns StHytural Steel Middle East WLl Winer Wunderand Company WLL Al FtOH1H for Investment amp llllemtiOl1a Trading COntpAny WJ_L Q)lar Bahrain lmerOlnionai Cnero3 WLL Gulf EngJisb Sltl-Qo] Al Rayyao Tourism lve$lrnent Company W LL Other relater purties
2013 2012 QR QR
15412-1064 ll941Y70 34644615 ~li96858l
[()0405 14-45012 51 59197 9538116 15514113 4014727 236824$
1867526 LSOfd22
8(1012 10435r 311650 746395
15023 204450 459829
2iYHi 244940 186750
152170 143440 33500 7768(1
6259 1459lt) 758962-1
__2~61g~~_ 1~95Ji
bull 214109950 171525363
--__ shy
7
8
9
Aamal Company QSc
NOTES TO THE CONSOLIDATED FfNANClAL STATEMENTS For the year ended 3 1 December 2013
At10(JNTS DUE FROM RELATED PA RTIES (continued)
NO les (i) Transactions witll related parties are eam ed out through open account and Directors do not consider any
receivables to be past due or impaired
(ii) Related party transactions ore disclosed ill Note 26
INVENTORIES
Goods for rew le Raw materials and spare pans Work in pTOgresS Goods in transit
Less Provision fOI obsolete and slow moving invenlories
1013 QR
165499699 38388307 19944678 9671 8553
320551237 (3851692)
31 6699545
Movements in the provision for obsolete and slow moving inventories were as follov~
At I January Charge for the year (Note 19) Reversals Amounts wri tten off
At 31 December
E QUITY-ACCOUNTED INVESTEES
TIle Group has the followiog invesllnenfs in equity-accounted investees
Interests in joint venrure Interests in associa tes
At 31 December
G roup s snare of profits fr om the equity-ncco unted iovcstees arc AS follows
Profit share from in vestment iojotnt venture Profit share from investment in associates
202 QR
232597650 36608394 30622960
10521 9695
405048699 Q 145826)
40 I902873
203 QR
3145826 1 380617 (535695)
( 1139056)
385 1692
20 12 QR
2795992 2208263 (137995)
( 1720434)
3 145826
2013 QR
2012 QR
129462184 3644723
124124803 2545188
133106907 12666999 1
17330368 22869454 1169533 534050
18499901 23403504
22
10
Aama Company QSC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 31 December 201 3
9 EQUITY-ACCOUNTED INVESTEES (continued)
Counlry of incorportllion
Relationship Proportion ofownership and lotilfg power held by the Group
203 2012
EI S~wedy Cables Qatar W LL Frij ns Structural S teel Middle East WLL Al Ftfazdaq Company WLL
Qat~
Qatar Qatar
loint venture Associate Associate
55 20
55 20 35
Note With effect from 1 January 20 13 the mlnagemeot of the Group has reclassified the investment in Al Farazdaq Company W L-L from investment in associate to investment in subsidiary This is based on the transfer of share holding by the other shareholder whereby the conlroi o f AI FOl razdaq Company W LL bas been assigned 10 tbe Company
INVESTM ENT PROPERTIES
a) Reconciliation of carry ing amounl 2013 202 QR QR
AI I January 611334701 8 555 1835348 Additions 9568047 1727191 87 Transferred from property plant and equipment (Note II ) 34519828 Net gain iTo m fa if value adjlls tment 245051107 388792483
At 31 December 6402486000 6 11334701 8
b) Measurement of fair value
The fair values of the Groups inveS hnent properties as at 31 December 201 3 and 3 1 December 2012 have been arrived al on the basis of valuations carried Ollt on the respective dates by professionally qualified independent valuers not related to the Group The independent valuers have appropriate qUlli ficatioos and (eceJ11 experience in the valuation of properties in fhe relevant locations The fa ir value WltlS determined based on market comparable approach that reflocl s recent transaction prices for simillt1r properties and discounted cash flo w and income approach techniques
Details of the Group s iovestment properties and infonnation about the fa ir vn lue hierarchy as at ) I December 20 I J are as fo llows
IIvestment propenies
Level 3 fair vallie
Al I Janu ary 6 [ 13347018 Additions and trans fers from property plant and equipment 44087875
Gain included iu prom and loss Net gain from fair value lt1djuslmem 245051 107
AI J I December
The Group recognizes transfers between levels of fair value hierarchy as o f the end of the reponing period during whicb the transfer has occurred There were no transfers between the fai r va lue hierarchy during the year
23
10
Aamal Company QSc
NOTES TO THE ONSOLlDA TED FINANCIAL STATEMENTS For the year ended 3 I ecember 201 3
LNVESTM ENT ROPERTIES (contin ued)
b) Measuremen t 0 (air value (conti nued)
Vau t ion technique an significant unobservable in puts
The valuer has applied t e income capitali zation discounted cash flow and comparab le methods to detennine the market value of the lnve tment propen ies Significant unobservable inputs used included expected market rental growth rates (an average 425) occupancy rates (approximately 90 to 95) and risk adjusted discount rates (approximately 5 to 7 0) M y significant change in these inputs can impact lhe fair valuation of investment propcnies
24
Aamal Company QS c
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For che year ended 31 December 2013
11 PROPERTY PLAi~T AND EQUIPMENT
FumilUre Truck mixers fIXtures and Complllers
Leasehold and maor Plum (fd office and relaed eapiowork Buidings improvements vehicles machinery eqllipmcni sofMore in progmiddotcss Total
QR QR QR QR QR QR QJl QR
At I January 2013 137870126 371 88 132 9595813 1 262536261 19 580954 14864 385 561 32447 6241 30436 Additions 948)65 2618 100 5367399 859061 111 5268 137147581 148055774
Relating to d isposalswrite-off (1042642) (4390496) (77157L) (589150) ( 184075) (6977934) Transfer from capilal work in progress 1505 310 164 336 3601776 ( 150000) 1182741 (6304 163) Transrer to investment properlies (Note (0) (345 19828) (345 19828)
At J I Dttember 201 J 139375436 J7 258~ ~1 85735 270733865 19700865 169783 19 152456037 _73068~448
Depreciation AI I January 2013 16133915 J6902 529 49087707 68783 065 11 980009 tl71 595 3 174603 178 Charge for the year 7059805 3237150 5390767 12249797 2849162 1768823 42555504 Relating 10 disposalsJvri te-off (664709) (4 3 1716 1) (724322) (552939) ( 18 1993) (6441 124)
At 31 December 201 3 23193 720 19474 9 70 50161 313 90303540 14276232 13302783 2 107 17558
Net carrying amounts At 31 December 2013 116181J16 _17783221 44024422 180415325 5424633 3675536 __l2456O37 JJ9970~890
Notes (i) Depreciation charge for the year amounting 10 QR 33 164382 (201 1 QR 3303091 6) is included in tbe direct costs and an amount of QR 60055 (20 12 QR 36939)
has been capiulised under capital work in progress
(ii) The capital work in progress includes capitalised borrowing costs amounting to QR 125645 (20 12 QR 15358)
(ii i) The buildings are constructed on a plot ofland taken on a loog term operating lease
25
Aamal Company QS c
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 31 December 201 3
II PROPERTY PLANT AND EQUIPM ENT (continued)
C05I~
At 1 January 2012 Additions Acquired through business combinations (Note 4) Relating to d isposalswrite-off Transfer from capital work in progress Transfers
Buildings QR
137434400 435726
Leasehold improvemellls
QR
38137377 446J 04
144 103 ( 1539452)
Truck mLCers and molO
velricles QR
83427661 11464679
1697609 (631824)
Plant and machinery
QR
249335437 97264 85
35 14 132 (99498)
59705
Furniture fir ures and
office equipmem
QR
22845309 667586
192042 (3696457)
98000 (525526)
Computers and related
software
QR
158 19519 87 14 14
141837 (266 1733)
908078 (2 l4730)
Capitol work in progress
QR
12104889 451 53265
( 1065783) (59924)
Total (JR
55910459 8 68765259
5689723 (862 8964)
(800180)
AI 31 Dttember 2012 137870) 26 371881 32 95958 13 1 262536261 19580954 14864385 56132447 624 130436
Depreciation AI Jaouary2012 Charge for the year Acquired wough business combinations (Note 4) Relating to disposalswrite-off Transfers
9144666 6989249
)4 3 16620 3410618
144103
(96 812)
42558404 548 1613
1671942 (6242 52)
44555 290 2 1398849
2890797 (6 187 1)
12392584 3 182899
169005 (3558466)
(206013 )
12235266 2077633
136959 (2627283)
(J 0662)
135202830 42540861
5012806 (7840684)
(312635)
At 3 L December 201 2 161339J5 16902529 49087701 68783065 11 980009 11715953 174603 178
Nel canying amoWlts
At 31 December 201 2 12 173 6211 2028560 3 46870424 193753 196 7600945 3148432 56132447 449527258
26
12
13
Aamal Company QSC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 31 December 20 13
ACCOUNTS PA YABLE AND ACCRUALS
Trade accouots payable Advances from customers and tenants Accmals Social and sports activities levy Other payables
AJIOUNTS DUE TO RELATED PARTIES
Name
Arab Compaey for Fiber Products EI Sewedy EIC( lric Ho lding Egypiasl Egypt Egyptlech Egypt United Industri es Company WLL Johnson Controls Air condi tioning aod Refrigeration Qatar WLL pound1 Sewedy Cables Egypt Johnson Controls Air conditioning and Refrigeration rNC Dubai United Wire Company WL L Gelteo Company W LL - Gelteo Refr igera tion and Airconditioo ing CampC Lightway nc AI Shaab Group of Companies Other related pruties
NO M Related party transactio l)s a re disclosed in Note 26
2013 QR
320017657 30486837 26924669 41 761 843 25855567
445046573
2013 QR
18517474
4902528
6531231 6404578 3215821
2825884 75 7825
3467288 263715
1313247
48199591
2011 QR
26716268 1 27410234 222575 76 28954726 33)33852
379119069
2012 QR
18380528 91458 82 54 13849 1 11 6 135 5374039 35291 2020359 1693323 1064744
670 179
11 0873 12 18650
49737757
27
14
Aamal Company QSC
NOTES TO THE CONSOLIDATED f fNANCIAL STATEMENTS For the year ended 31 December 201 3
INTEREST BEARING LOANS AND BORROWINGS
NOles Malilrify
2013 QR
2012 QR
CoMl Loan 2 Loan ) Loac4 Loan 5 Loan 6 Loan 7 CoMB Loan 9 Bills discounted
(0 (ii) (iii) (iv) (v) (vi) (vii) (viii) ( ix) (x)
lune2014 Seplember2014 January 2015 November 2016 December 20 16 November 2017 Jllne20 l J December 20 7 OClober 20 19
172070387 440000000 50544000 40261 621 81387109 19920036
6] 43890 62626967 42522794
915676804
298324180 440000000 10 J088000 57955030
100 168750 2 1300492
407728 1 782871 1
35000000
1065742444
Less Defe rred finatlcing cost (771 503) (897148)
914905301 1064845296
Presented in the consolidated statement of financial positioo as fo llows 20)3 QR
201 2 QR
Current ponion Non-current ponion
749520820 165384481
825568489 239276807
914905301 1064845296
The dete rred financing costs consSt of arrangement fees The movements m the deferred financing costs were as fo llows
203 2012 QR QR
At I January 897148 332 661 Addjtions during the year 1 062565 912506 Amortised during the year (218amp210) (34801 9)
At 3 1 December 771503 89 7148
28
Aamal Company QS C
NOTES TO THE CONSOUDATED FlNANCIAL STATEMENTS For tbe year ended 31 December 2013
14 INTEREST BEARING LOANS AND BORROWINGS (continued)
Nolec
(i) Loao I i USD 93000000 impon 10n moi lily obtoined to refimnee he Icne~ of edit The 10 IT interest at commercial fate and the interest is paid at monthly intervals The fucility is repayable within ISO days including the usage period under letter ofc redits
(ii) Loan 2 is a secured bridge loan obtained to settle an existing loan and working capital requirements of the Company The loan carries interest al coOlJllercial rates and interest is 10 be paid on quarterly basis
(iii) Loan 3 was obtained for the pWpOse of financing capital ependiture and direct payment to suppliers contractors and 5ub-controctors The 10011 CMries interest at commercial rate and the inte rest is to be paid q Uar1erly The fac ility is repayable in IS quarterly iostallmenls starting I July 20 11 and ending I January 2015
(iv) Loan 4 was obla ined for conSlruclion o r an inveslmenl property The loan is seclJed by 0 primary mortgage over the some property and corporate guarantee of the Aamal Company QSC Tbe loan carries interest at commercial marke t rate and is payable in quarterly instalments
(v) Loan 5 represents a loan fOlcility obtained in two sepnrole tranches amounting to QR 309 825 000 (USD 85 million) for the purpose of refurbi shment and construction of fociJities io one of the investment properties The loan is repayable In 16 equal quanerly instalmcnlS for individua l tranche commencing from March 20 1J The loan carries interest at conunercial rJtes
(vi) Loan 6 represents secured loans obtained ffom a commercial bank in the previous periods for the purchase of heavy equipment and machines and were merged on 15 November 20 12 as a comb ined loan This loan is payable by 59 equal instalments of QR 426000 with (I last inSlalment of OR 438 326 with effect fro m 01 October 201 3 The loan carries interest at commercial market ra tes
(vii) Loan 7 is il tmst receipt banking facility obtained for the purchase of inventories This carried interest at conunercial market rates This loan was full y settled during the year
(vii i) Loan 8 represents secured loans obuined from a commercial bank in the previous periods for the purchase of delivery trucks and machinery and were merged on 22 October 2012 as a combined loan The loan carries inte rest at commercial market Tates and is payable by 59 equal insta lments o rQR 160000 with a last inSlOlmem ofQ R 128000 with effect from 3 1 December 2012
(ix) Loan 9 is an Islamic Financi ng Arrangement obtained for construction o f a manufacturing plam and as o f yearend ba lance represents partially drawn amount out of totil1 facility of QR 655 68000 The loan is secured by joint corvorate guarantee by the shareholders The loan carries profit at Islamic Financing rates and re-payable in quarterly instalments starting from the end of the 24 months gmce period from the date of loan drawn
(x) Bi ll discounting is a loan fac ility from banks The purpose of the arrangement is to discount bills locally and carries interest at current commercia l filte
15 EM PLOYEES END OF SERVICE BENEFITS
Movements in the provision reHectelt in the consolidated SLo1tement of financia l position were as fo llows 2013 201] QR QR
At I Jan uary 18111 763 17877937 Provision made during the year 4056969 4205499 Acquirelt through business combinations (Note 4) 349272 End of service benefits paid during the year (2210756) (4320945)
At 3 1 December 19957976 18 111763
29
Aamal Company Q5C
NOTES TO THE CONSOLIDATED FINANCIAL STATEMETS For tile y~ar ended 31 Dee~mber 2013
16 SHARE CAPITAL
2013 2012 QR Qq
AtI1l1)nud 60000)000 (20 2 544500JJOfn shares ofQR iii Cilch 60i)iQOOlOO 54450lt)0000
21)13 2012 Numher of
siMtS QR shares QR Issued Mtldfully paM At lJamld) 544SfWllOfJ 5445(100001) 495000000 49500000)0 1511C ofbonus S1i1-C ___ 5550~OOO 555000000 49SGOOOO 495000000
At 31 Decenef 6(OOampQllf1(1 ---14450O000 544~OOOOOO
All ampates m~ of a110 clss and caL equal voting rights
17 LEGAL Reuro5ERVE
As required by Qatar Comnertai COfrp7lnies Lav No5 of 2002 lOfp of the profit for the ye1J as a rru1imllli silould be mmsfened to legal re~erve The reserve is lot normay [lytiabe tor distribution except ill he cixcuJUstllrtUS stipulated m the above ~lemi0ntd GIW
IS HEVE1TE
2013 l)n QR QR
Sale of goods 1726893265 i709057~(iO
Renlal income UiO362322 133117509 S-ice income 858695 33940731 CornrrusslOlL Incentives and agency fces 44695S1 422~_632
212259$)33
19 DIRECT COSTS
2013 2)i2 QR
C 051 of inven(feS recognisedlIS an exptns 1522929956 497210830 Dind sL1ries lmd wages 601 [1336 5137856-8 Operating eXpenses on nml estate p~opet1les 36)711316 3041H504 fJepreciatiort (Kate I J) 33164382 B03091pound Operators marhgerrt6nt fees 14508588 li667989 Provisicn Qr obsolete and skwlt moving mvenlories (K)tc 8) 2380617 2208263 Other operating ilxpenses _31~3982 _ 3674946
1702139171 JS9653OI tgt
Aamal Compall-yQSC________________
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For lthe year ended 31 December 20 11
2G OTHER NeOiI
2013 20J3 QR QR
Interest mcume 2824216 2)314392 Profiv( loss) 00 disposal of property plant aoe eqUlpmem 737647 (l7362G) Eargain ptmnJse gain (Kote t) 8360793 MIsceJlaneous income 5723356
2013 2012 QR QR
ManllgetnUI hrQ empl(yees ws 55170302 55lt035middot1 Rent 23596799 2594915 Allowance for impaimlcot oUrsue aCQl1ot$ rc(Xjvalle (Nole 6) 129459(i 11613120 flBumcce ane profcampiitmJI fees 2IU9263 209J902 Corununication OOtHS 1935123 1649155 Trllining tid ouSfjt$s developmccl 950476 L095764 Re]X1in and mainle-nilnce 21)11SflS 2)2 I Poslag-c prjnting acri stationery 610299 541159shyvllsltdlancous expenses _~~~664 1lt2
-~~~ 125162812
22 fIN~lCE COSTS
2013 2amp2 QR QR
Inleres epen~ 42866312 5773U4B Am(vtisJliorgt ofdefcentrred financiog coStS __ 2l)tl26~~ gt3661
44930877----=
58063009
23 BASIC A~n nHUfED EARilNGS PER SHARi~
Basic trdTJogs per hue is caculatid 0y llividing the pwfill0( Ihc year attriouiabk (0- equity roldc-5 of the parent by lhi w~iglwxi avrage number of ordinary shares 0JstandirJg dulting tht_ year During Ihe year lil~ Conpmy i-sued and CBpii3lzed bonus shares lnd awmJingl) me previously ~eportod earnings per shac have blOM restatc(i
20i3 2012
Profit feT the year auributable to Cluity holderlt of the- paren (QR)
Weighted aVCTage number ofshares outstanding during the year (i)
Basic Jd diluted earnings per share (QR) 085
59985U413 shy
~~--~~~~- ~------J 1
23
Aamal Company QSc
NOTES TO THE CONSO LIDATED FfNANC[AL STATEMENTS For tbe year ended 3 l December 2013
BASIC AND DILUTED poundARNINCS PER SHARE (continued)
NOles (i) Th wigh d m nlg urnb of hres foc h P of lruling ~migs pee share h bee kulated
as follows 2013 20J2
QU3lifying shrues allhe begi ll1ling of the year 544500000 544500000 Effect of bonus shares issued and capitalised 55500000 55500000
600000000 600000000
Less T reasury shares (149587) (i357SI)
Weighted average number of shares at the end of the year 599850413 599864249
(ii) There were no potentia lly dilutiw shares outstanding at any time during tbe year and hence the diluted earnings per share is equal to the basic earnings per share
24 COItIMITMENTS
20 1] 2012 QR QR
Estimated capital expenditure approved and contracted for at the year eod but not provided for
Investment properties 2964000 8 139063 Property plant and equipment 16386500 63759762
19350500 71 898825
Operating lease commiIOlenlS under noncancellable lease agreemenlS
Payable wilhin one year 990806 702000
990806 702000
25 CONTINGENT UABILITlES
The Group had the following contingent liabi lities from which it is anticipated thai no malerial liabilities will arise
2013 2012 QR QR
Letters of guaramee 474551239 394255203
Letters of credit 7678499 194299384
NQles
(i) leHlaquogt of gu indud penonmnlaquo tend nd bid bonds d pymenlt g gi to suppliers and contractors by the Group in the ordina ry course of bus iness which will matme within twelve months fro m the reporting da te
(i i) Letters o f credit are provided by lodging documents to the bank tor purchase of trading goods fro m foreign suppliers wruch will maMC within thJee to six months from the date or tile Iransaclion
J2
26
Aamal Company QSc
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year eoded 31 December 2013
RELATED PARTY DISCLOSURES
Related party transactions Related parties represent major shareholders directors and key management persortOei of the Group and entities controlled joimly controlled or signjficamly innueoced by such parties Pricing policies md tenns of these tnlOSaclions are approved by the Group s management
Transactions with related parties induded in the consolidated financial stalemenls were as follows
20lJ 2012 QR QR
Sale o f goods and SClVices 419034048 415225221
Rental income 1980473 2069386
Purchase of goods and services 1591 38018 300835596
Rental expense 21 780G78 23397334
Bargain purchase gain 8360793
Net assets acquired 78803585
Relat ed party bal nnces AmountS due from and due to re lated parties are disclosed in Notes 7 and 13 respectively These balances do oot carry interest and are repayable OIl mulUlUy agreed dates generally within one year
The Group did not record any impairment of receivables reJatiog to amounts due from related pat1ies in either year This assessment is undertaken each fina ncial year through examining the ftnanc ial position of the related party and the market in which the related patty operates
Parent The Groups ultimate parent is Al Faisal Ho lding Company WLL
Compensa tion or key management personn el The remuneration of key management dming the year was as fullows
2013 2012 QR QR
Short-term benefi ts 7904794 1079595 Employees end of service benefits 408934 439776
8313 728 11235727
33
AamaJ Company QSC
NOTES TO THE CONSOLIDATED FINANCIAL 5T ATEMENTS For the year ended t Decernber 2013
Dilling the year 1he Group issued a XHlUS share of 10 928 of the paid tiP share capilal hdd ilS at 31 DiX2mber 2(JJ 2 mnmuning to OR 555000000 using retamed earnings as of3 December 2012 (20l2 Doe share for every ten shues held as of 31 Dcember Oll amuunting 10 QR 495OO()OOO ling reta1ned earmrgs 28 or 31 Decencer 2D II Jshy
18 SEGMENT INFORMATION
For J)iloogement PUIpltJM rhe Group i organised into business unit bused On LlJeir nature of Acttvitics lud nas fonY reportable segments and the Head Oftklt as bllow$
Propert Tbe segntn cOlists of City C~nler Qlta~ Brunch and Aamal Rea Esmte Branch whicb ll[c invoived in lampIiiog the faJ1ities of retail outlet conpex red e5ttlte nve(mltn$ and property remal buines~s
Trading mld distrib-wion The segmeul Involves wholesalB andlor rBtail distribution of phamlaceutlcai and consunable i1ems hume Epplianccs medica equimenl t-Tes ill1d lubricmtlaquo and II1UllitnEl printing The scgn(rtt includes 6c following entities
Eotl Sina Medical Branch
Aaen Medical Braudt
Amcill Troding and DistoolltlqO Branch bull Foot Care (erier HRnd) Good llre Pbannacy Bf4Uch bull Al FllfJdaq COllpafY wJ~L
InduSNol manuacturing TIle s0groent IOvolves Ulahuactrumg whole~we aliaor rewi dimibUlioti of dccnc cables lid tools ggregJ1es_ ready-IUx connole and cement bI0C~ lI1d provi$ion of servlCcent$ in rdation to iODllltroa Itvestment repair aJ-d Gonstruction of power plwts liiiding of LED ilgluitlg products und management of industnl enterpnses The segment ircludes be folloVting centntitis
bull Aam1 Cemert Industries LL AuraJ Redy1Yl(A BrQTlch
bull Doha Cables Qawf lLL Senyaf IoolJic1es Qatar Holding W LL Advanced Pipes ard Casfs CompQTly WJ L bull GuJfRoch Coroany WLL Ci~San Trading Company WLL hmovafive Lighting Compary WLL
Managed services le segment inyolvc~ provisloH of hOllseiltecpmg mi cleaning services fucditics n-anagemerJ services C1egy s(tvices ttl centfe sltrvicf)s buildiqg lnaintemHlelt aml acting as travel gens The 5cgnltnt includes the foUowing cnti(lcents
An13 ServJce Branch
amli TnlVeJa l5tmh
f-eco Gulf Co W LL
Jolinson Controls Qattl WJL
28
Aamal Company QSc
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended ) L December 20 13
SEGMENT INFORMATION (Co ntinued)
Head Office It provides corporate services to the branches and subsidiaries of the Group
The managiog d irector of the Group monitors the operating results o f its business units separately for the purpose of making decisions about resource allocation and perfonnance assessment Segment perfonnance is evaluated based Oil operating profit or loss of these segments Transfer pricing between operating segments are on anns length basis in a manoec similar to Iraosactions with third parties
Aamal Company QSC
NOTES TO THE CONSOLIDATED FINAN CIAL STATEMENTS For the year ended 3 1 December 20 13
28 SEGMENT INFORl1ATlON (continued)
Operating segments The operat ing segment after elimination or ioter-bra nch and inter-co mpany lrnnsaclioos is presented as follows
Trading (nd Industrial Managed For fh e year elided 31 December 2013 Properly disirjblli ioll manujocljlring services
QR QR QR QR Revenues
- h lemal parties 260360172 578909983 1231522768 S l802210 - Inter segments 1253914 6843 11 8 29639873 3445052 1
Heat Office QR
Eliminoions QR
(n187426) II
Tolal
QR
2J22595133
261614086 585753 lOI 126116264 1 8625273 1 (721 87426) 2122595133
Opera ti ng results Fair vallie gains
Profit I (loss) ror the year
Depreciotion
200811944
245051 107
445863051
2066290
86492834
86492834
4345438
22636250
22636250
33049 089
5157436
5157436
1760305
(47864882)
(47864882)
1334382
267233582
245051107
512 284689
42555504
36
Aamal Company QS
NOTES TO Tl CONSOLIDATED FfNANClAL STATEMENTS For the yeM ended 31 December 20 13
28 SEGMENf INFORMAnON (c)tltioucd)
FOf the yearrnrkti J f DccemOer 2(J12 QR
Revellues - ExlcmlJ partiel 2331 17 509 bull Inter segmcI11S 1168935
-- 234236434 --~- -~--
Openning results 18S2367t Fmt value gains J8S79-4~G
pront LOllS) for the rear 570616154
gt3659
No(
lnlermiddotgment revenues are eliminated on tQHs)idntiOH_
Tadiug ftfid disl d)Ntion
QR
S2S3l7661
324 j
5335493114 ~ -~-----
51384831
54384338
4J9R71(i
Indus idi mamfmturing
QR
1255694537
129U25lS4
56727059
56727059
32752742
slnltic(s QR
55216665 2939H31
S46lOJ96
7427414
7437
[908067
ilfild ()jice QR
(64(41976
Elimination QR
(74tHi2oJ Iii
Totul QR
206936372
2069336372
235721
(64641
131 f613
6245
42541)861
Amnal Company Q$l
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Por tnt yeartndeJ 31 De~embcr 2013
28 SEGMENT JNFORMATlON (contiutlld
Assc-ts and labilities
Tng alld lndtrstfw At31 December 2(113 distnbllrior manufacturIng senices HeadOJJicc EliminatioilS lola1
QR QR QR QR QR
Cumnl 3tS 227552338 620807979 61349 j 415 S()6)86922 (301636995) 1477366090 Noolucrcnt DSeIS 6411868160 12604763 622386238 4348876 (i624548 __p2438051 780
fotal asstl$ 6639420498 1194 1243194217 65698291 513Ql1470 ==-lt03H8l~O()) 853295-870 -~----~ ~---~ -
CUIT)llliabilitics 280995335 1(3511J60 6344(12777 2l0708lJ2 496261185 (3CH636995) 1249603264 Non-current iiatJlitics 7l70L5V2 8008485 HlDi16~43_ 3181668 t433799 ____ ilj534_~57 __ --Totul liahililics 353696897 ___~4159~4~ 734419720 ~4976~~~~~ 1434945711
---~~--~ -~-~~ - _2~~~4~~ (~~~~9~
C1pild expcndimn HI) WO743OOj 1397742_~471l2~--~50 ~51 ~1~623821~~1~_ -~----~------ -~
3amp
28
Aamal Company Q SC
NOTES TO THE CONSOLIDATED FfNANClAL STATEMENTS For the year ended 31 December 20 13
SEGMFNT INFORMATION (continued)
Assets and liabilities (continued)
AI 31 December 2012 Properly QR
Trading and d iSfriblllion
QR
Indusrial manufacfuring
QR
Managed senices QR
Currenl assels
Non-current assets
146491 186
6121 864484
2964425 12 903 7264
73468 1258
549267235
51387098 471 1439
Tolal assets 6268355670 305479776 1283948493 56098537
Head Office QR
468325024
6713643
475038667
Currentliabil iies
Non-current liabiLities 273444 748 1 J10 15024
86054583 7434286
669214261 1288 14977
2 1938953
287 1199
480393637 1253084
Totil lliabiliti cs 390459772 93488869 798029238 248 10 152 48J64672 1
Capila expendirure (ltII L 72865 878 1281254 6647 J356 7169 13 149045
Notes
(i)
(Ii)
Inter-segmeot balances are e limioafed 00 consolidatio n
Capi tal expendiTU res consist of additions 10 propeny plant and equip ment and iovestmenl properties
Eliminations QR
To wl QR
(273735776) (i )
(20308351(i)
1423591302
6689563230
(27576661 1) 8 113154532
(273135777) (i) 12573 10405
257388570
(273735177) 15 14698975
24 1484446
39
29
Aamal Company QSC
NOTES TO THE CONSOLIDATED FrNANCIAL STATEMENTS For the year ended 31 Dcltmber 1013
Fr-A]~ClAL RISK MANAGpoundMamp1H
Objccthes and policies fe Groups principal )uaucill liabilities comprise imltresl bctmllg loons and IxmowHgs baRlt ovetda1s amounts due to fclaled par1ies and tracte accounts payable The main pUlJXSi of thesc financial liabilities is 4J mise firmne or 610 Grmps operations The G0JP bas various fimmcial assets such as ttadc accounts receivable lInlOlmts due from related parties bark balances tltCntion receivable and other receivables which arisgt directly fran its cperuoonamp
The maiH ri~ks an3ing Joru (be Groups UnariCJlll illslrumenls jle market risk cretiJt nsk and hmdity risk Til BoarD ofDtrcctO$ reviews end agrees policies for mzrAgbg Caltt f hespound ri~k ihkh arc summariscd beloW
VIarktt risk yenfatket risk is the risk Um changes in market prices $Uch as intfcst rates and hreig lttmeocy ect14nge rilles Vltl1 affect the Groups profit eqwty Dr value tf its hoJdiI15 of financial instrl[Thnls rile objecivpoundj of marke1 risk mUnllgcrlcnt is to manage uld 1~ontr(ll tho tr))rket risk expo-sure vithir acceptable parfI-etcJ$ while optimising rerUID
Equit) price risk ampjuity prtce risk is the risk hilt the Group ampearnings will be affected as a rcmt (If luctttltions in fm vdue of ~qui-gt
mstwnents Eqlliry price risk arises from availabtetor~sale inv2strnems However the Groups exposure to eqmty price risk IS minima as II doesn hold sitl)iftrmt ailableAor-511le inYestrmmrs
[merest rate risk The Groups fimiruial poundS5ot ampId liaojlilies (at Rl $uJject to int~~ rate mk compnse brmk depoils interst bearing loans and bOITQwjags and bank overdr-afts At the reponwg dalt tbe [merest rale pronle of Ill Goups intexst bearing fbi4rdd instruments as fliows
11113 20i3 QR QR
Fued liIeryS refc insfrvrnellts
Fmmcial assets 113035962 111913394 FrOltwial liabilities --1~203712l) 1252t43~1
9)OI~ (13350972)
Fhlllting inireSI rate ns1lmlttrs Fanctl~ Isseis 127024345 ID43848o Fllllocial liabilities _-(i~9347~ (94))48926)
(836)64116)
The Groups exposure to t~ ris of changes in marXet interest fltltes relztes primariiy to the Groups financial assets and lizbitdic$ with t1Oltttirg interest mte~
lhe loEowing able demonstrates the ampmitivity nf the eonsolidattXI statemen1 of income 1) caonaly possible chonges in in1jfgtst rmes by 25 basis points with all othe vari)ble3 hdc umstant The sensitivity of the CooiK~ljclatid statement of inc(me $ the eft(ct of tb assumed changes in lnterdt rales for one year bf1sec on the floating rate financial assets and fimmcial hablhw$ held at 31 f~r The effect of deae-ascs in interest ral~ is cXp0Ctct to be equal and opposite to the effect oHlle increases sllQvro
Changes it Eftx OIl
00513 [oms profit QR
2013 Floating mterest Hlte instruments ----2$ bp (1649776)
2012 Flv-ating irkfiSt rale instrumenls +25 bp (209[9(1))
~--------- -~~ 40-middot------ _ _ shy
29
Aamal Company QSC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 3 1 December 2013
FINANCIAL RISK MANAGEMENT (continued)
Foreign currency risk Foreign currency risk is the risk lhilt the value of lhe fi nancial instruments will fluctuate due 10 changes in fore ign exchange rates
T rade aCcOlmts payable and accrued expenses include amounts due in foreign currencies mliniy US Dollars UAB Dirhams Great Britain Pounds (GB P) and Euros of which the Group has a currency risk primruily on the baJmces payable in Euros and GBP amoWlting 10 QR 14400634 (2012 QR 17214046)
The Group does not hedge its foreign currency exposure As both Qatari Riyal and UAE Dirhams are pegged to the US Dollar balances in US Dollars and UAE Dirhams are not considered to represent significant currency ris k to the Group
The table below indicates the Group s fore ign c urrency exposure on its monetary assets a nd liabilities The analysis calculates the effect o f a reasonably poss ib le move ment of the QR curre nc y rale against the Euro and GBP with all other variables held constant on the consolidated slate menl o f income (due to the fa ir va lue of currency sensitive monetary asse ts a nd liabilities) The e ffect o f decreases in fo reign c urre ncy exchange rates is expected to he equal and opposile 10 the e ffect of the increases shown
Incramp1se ill
f oreign cUlrency rate
0
the QR
Ellecl on profil
QR
2013 +5 (720032)
20 12 +5 (860 702)
C redit Tisk Credit risk is the risk that one party to a financial instrume nt wi ll fa il to discharge an obligation and cause the other party to incur a financial loss TIle Groups exposure to credit risk is indica ted by the carrying amoWlt o f its financia l asse ts whic h consist principally oftmde accollilts receivable retention receivable amounts due from related parties othe r receivables and bank baLances
The Group sells its products and prov ides services to vario us panies It is the G ro ups policy that all customers who wish to obtain on credit lerms are subject to credit verificalion procedures to ensure c redit Ilonhiness Each new customer is analysed individually for creditworthiness before the de livery o f products Of services Custo mm tbat fai l to met t the credi tworthiness may transact with the Group only o n prepayme nt basis Property rentals are mostl y received in ad vtnce or conlrlCled wi th post dated cheques 10 additio n receivable balances are monitored on an ongoing basis a nd the purchase limils are established for each c redit custoroer which are reviewed reguJarly based on the level o f past transactions and senlement The Groups max im wn exposure with regard to trade aCCOWlts receivab le net ofa llowance re nected allhe reporting date was ilS fo llows
2013 2012
Business SJgmelll QR QR
Property 15478832 19386326 Trading and distributio n 194343 597 179748274 Industrial ma nufac turing 183119753 131578668 Managed services 18069385 14547389
411 011 567 345260657
41
29
Aamal Company QSc
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For tbe year eoded 3 J December 20 13
FlNAJICIAL RISK MANAG EMENT (c-o Dtinued)
Credit risk (continued) With respect to credit risk arising from the other financi31 assets of the Group the Groups exposure to credit risk arises from default of the counterparty with a maximum exposure equal 10 the canying amount of these instruments as follows
2013 QR
202
QR
Bank balances Amounts due from related parties Retention and other receivables
436136756 214439950 48290351
36788129 t 171525363 74082203
698867057 613488857
The group reduces the expoSltre of credit risk arising from other financial assets by maintaining bank accounts in reputed banks and providing services only to creditworthy re lated parties
The management cons iders the bank balances and a mQUIIIS due from related parties as high grade fi nancial assets and lfade accounls receivable and other receivables as sundard grade financial assets When a finltmcial asset is identified 10 be impaired the managemoot downgrades such assets to impaired category and provides adequate allowances
Liquidity risk Liquidity risk is the risk that the Group will not be able to meet its fmancial obligations as they fu ll due The Groups 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 nonnal and stressed conditiom without incurring unacceptable losses or risking damage to the Groups reputa tion and is to maintain a balance belWeen continuity of fuoding and f1eilibility through the use of bank overdrafts and bank loans and borrowings
The Group monitors its risk to a shortage o f funds using a recuning liquidity plaOfling 1001 TIllS tool considers the manuiry o f financial assets (eg accounts receivable) and projected cash flows from operations The Groups teons ofsales or services require arooUIlts to be paid within 30-90 days from the invoiced dale
42
29
Aamal Company QSc
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For tbe year ended 3 1 December 2013
FrNANClAL ruSK MANAGEMENT (contiQued)
Uqujdity risk (continued) The table below summarises the ruaruriJy profile of the Groups financial 1iabililies a t 31 December based on contractual undiscountcd paymeots
2013 Interest bearing loans and borrowings Bank overdrafts Trade accowus payable Other payables Amounl~ due (0 related panles
201l Interest bearing loans and borrowings
Baok overdrafts Trade accounts payable Other payables Amounts due to related parties
On demand
QR
6836280
6836280
011 demand QR
2885090
2885090
Less than 3 months
QR
521324473
303638792
47406830
2530~480
898675575
Less thall 3
months
QR
469839033
10754JJIO 37543236
1964504 1
634568620
3 10 J2 mOlllh$
QR
239333328
16378865 20210580
2289~11l
298816884
3 to 12 monlhs
QR
365476972
159621 37 J 24745342
30092716
579936401
1to 5 years
QR
J 60092748
160092148
1 to 5 years
QR
248472226
248472226
gt 5 years
QR
25261598
25261 598
gt 5 years
QR
7648000
7648000
TOlaf
QR
947012147 6836280
320017657
67617410 48199591
1389681085
Tota
QR
109 1436231
1885090 267162681
622 88578
49737757
14735 10337
43
30
Aamal Company QSltc NOTES TO THE CONSOLIDATED FlANCIAL STATEMETS For the year ended 31 December 20 t3
21 F~ANClAL RlSK MAiAGEMElT (continued)
Capital management The Boards policy is to maintain a strong cepit1 base so as to rnainmin investor creditor and market ronfoonee and to SUSWlJ) fumre dcltclonnent Gf the buinest The Board of Directors rronitortl the tapital whkh tbe Group defines as wlal $parcloders equity excluding nonmiddotcornroliing imerests and the level of dividends to orrunury srarellOJdcfS
The Board also reeks to ITIaimain a balance between the higher (ctums (hat might be fA-~$ihle With higher leves of borrnwings end Lle edvnrJages and security named Sy it sOMd Cilpitai posi[ion The GfCup~ k1rget is to achievfl a return on slureholders equity (exclJding aonwurrolJiug iorcf(sts) greater lll(ll1 he wcighlcd average inres exxmse on mrerest bearing Ivens and oorrowing
The (lf0t-p nl)nDg-e ils cnpital structure and makes adjustneal lOll in light ofchang2s in economic nd bttincss cordjlons and shareholders expe1ationJo chmges veremiddot maCo HI Lleuro objecttves polilCS or proCCSSC3 during the years erded 31 D~mber 2013md 31 Dtccmlxr2Ql2
The Group monitors the capit2J using a gClting fatio which IS dep divided by caplla plus debL The GtOwgts policy is to keep ttJe ge-anng rmio bclew 40 Tbe Group iLdtdes withb debt imete-51 beagting loans ard ~OITORlngs less cash and cash equtVaknts Capltal includes eqmty attributable 10 the equity tolders oft~e parcrt
2013 QR
2(i2 QR
fmerest bearing loans and borrowings lcss- Cash and cas ltYJUvalcnts
9i4lJ05301 _~ (429JfJl4761
1004845296 (649)6201)
Net debt
Toa capital
Capita and net debt
699849045
~ringrttio
FAIR VALtES OF Fl~ANOAL f~STRUMETS
Finarcial iostrumenL~ cOlnprise tina~lctal assetS carl finailcialliabilities
Fmancial assets colJist of bank balance) short 1Cm bank dcposis amounL dve dom rc)ltted partilt)$ rekntion and other receivables and ttade accolmis rceivabe Finatlclll habiilics cgtmsist of banilt ovcrdratls jnerest bearing lOil1S and bOrowings amounts due (0 nliled partiG~ ane trade x-ounls payable
The- fair values of hese financial inStrumen1S except Jo-- imCfest bearing loam lHld bOlToving aproKimate lhdr cMryinJ vlhes due to the Slort temt mzrutiiles or these instrument
Tllc faiT value of iotcnst beating Nns and borrowin2s ae estimate( based on discoumed ltash flows twin int(s rale- cune-ntly nvailagtk fur tilt debt or sinuiar tetnlS an-a rell1lmng matunties
31
Aamal Company~Q=-ScC ______________~______
~OTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For fhe year ended 31 December 20 t3
SlGNIFICANT ASUMPTIONS ACCOUJTING JUDGElE1TS AND F8TIMATFS
impairment (If accoonts receivable n etrnwe of lhe collectible anoun of trade accounlgt reccvable is made when collection of the full lHl1OUt i~ nO looger probabk FOI nCividualty significitIl amounts this estimation is p~rformed on an indh-idllai a$[$ Amomts wHcb arc not indivldl11Uy significant but wluch are past due ZTe tsscssed collectively and an aJlQwaccc applied ucc()r~Jng to the length of lime past due based oc histnncal recovery nlJes
hnpalrment of inHntnries lavenoncs are held at tho lower of col and nol realisable value InIOn inventoncent$ becone old or 0-~amplete an estilTJte is mate of their net j alisable vulue For indiviolhlUy significant amountS this cstinaunrt is performec all aD lndividwl osis Amotlnts whieh are fl0t individually significan( btll which ltIre old at obsolete wx LltSessed wllecivdy md a provisior is applied sccnrding to the invenrory type and be dep)ee of ageing 0 cDsolescc1ce based on anticipUled selling prices
Classifigt1ltion of El Sew(gtdy Cable Qatar WLI ali a j(lint vwture pound1 Sovedy Cables Qatar is a limited hability company whose kgal fum confers SCprm11ior bernten tbe jXliiies 10 ~he jomi lfranpement Snd the Company Itself FurthenrlOre then IS no oontractua] arrmgelTeot or any oibe aus aod circumstriliCe$ that iocik41to tht he putic5 [0 the joint flJTIlrgernelit bave rights to the ssetl and obligrtdons fo~ the liabilities of the joint ilrrongement Acoordingly El Sewed- C[jbl~s Qamr WLL is dassifiecl 7S a joiut enrtrr of he GWtp
impairment of goodwill G0oovj)1 embedded in th~ cot 0 aquisitior of subsidiaries and eqmtj-iccounled iflV(stees ire teswt for irl1jXlirmnt aHuaily Tbe calculations of value [n use fO( cfish gecj~r)lilg units (loring to real nte projecg are rtost sensitive to tin IDHowing assumpti015
Grosgt i1wginmiddot Gross Ilmrgins arc lmsed on avrage values tuhje0d in (he [Xrioo preeedhli (e siaM of the budge xnod T1esC at( mcreased over the budgel period for mticipatltX efficiency Hnprovemots
DisC)unr r(es Discount rotes represent th cl1tent mark as~ssmetlt of the risks specific te ech cash geocroting unit regarding lhe time value of money ilnd mdividu)l risks of he tmtieriyilg assets whICh have not been inwrport1eti it the Citik flow estimates The dj~(OUrl flte tlkulation is based on the speclfte circurnsthLCes of lile Group and its opltllatJng segn)~nts (md derived (ff)rC it weighted avaage (XSt 0f apilaJ (WACC) Tb fACe (akw into uoount both deb and equity The 0$1 of equity is denved from dlC expected return 01 investmenl by the Groups investors TJc Gos10( deb is based on l1e borrvwings the Gmup IS obllsxl to service SC~lletllmiddotspecific r5k IS incorxt4too by applying individual bera facto The betn mctors ire evauatcentd annuaHy bhseci on pubJicly aVflllabe murked earn
Fair value ()fnHstmeni proputies The fuit laHe 0 nvestmel~ propertis is deltrrnlnzd b cxterrwl indepzfldell property valuers laving appr0priate recognised professional quabfiillions and recenl xperience H1 the localjl)n and G-tegory 0 the oroperty being valued
Useful hes of PfQPcrly plmr (llld zqulpment The Groups management detennints th estiunted useful jives Df It~ property plan and equipmnl fix calnurjng depreciation Thi5 e~timJte is 6lermind after cinsidring 1b expeelcd usage (1f the a5sclt [hysical l101t and (eas tedmiltal Dr com~ercia obsolesccnce
Gotlg Qncen
ibe Groups mangerncnt UiS made aJ assessmeot cf the 011115 ability (0 COllllOUC liS a going conct11l Imd is satsl1ed hat me Group ms the resources to contmue in business for he foreseeable fu1urc he1hennort he management is no aware oC lny material Hncertainties that lray CH~t signinchnt doubt tlPDfl the Groups ability 10 continue as a going umcem Therefore titpound lotlsolidatcd finilllcij stftemeols comirme to be prepltd on li g0ing concern basis
Aamal Company QSc
NOTES TO THE CONSOLIDATED FlNANC[AL STATEMENTS For the year ended 3 1 December 20 13
32 INCOME TAX
Certa in subsidiaries of the Group which have non-GCe ownership are subject to income tax under Qatar Income Tax Law No 2 1 of2009 The iocome tax is charged on the share of profits attributable to non-GCe shareholders For the purpose of these conso lidated fi nancial statements the income tax liability oftbe foreign shareholders has been excluded given that the non-GCe shareholders have agreed under the shareholder agreements signed with the Group to bear the fh lliiability and make necessary payments
33 COMPARATIVE INFORMATION
Certain comparative figw-es of the previous year have been reclassified 0 coofonn to the current years presentation However such reclassifications are oat materia and do not have an impact on tbe previously reported net profit other comprehensive income or the total equity for the comparative year
The impact from the resta tement of comparative infonnalion as a resuh of adoption of IFRS I I - Joint arrangements is detailed in Note 32 Changes in aCCQu(lting policies
46
Aamal Company QSc
NOTES TO THE CONSOLIDATED FrNANCIAL STATEMENTS For the year eDded 31 December 20 13
3 BASIS OF PREPARATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLI CIES (continued)
304 SUMMARY Of SIGNIFICANT ACCOUNTING POLICIES (continued)
Property plant and equipment Property plant and equipment is stated at cost including borrowing costs that are eligible for capitalisation and excluding the costs of day-to-day servicing less accumu lated depreciation and any imp~innem in value
Depreciation is provided on a straight line basis on all propelT) planl and equi pment The rales of depreciatioo are based upon the following eSImnelt useful lives
Buildings 20 years Leasehold improvements 2-8 years Truck mixers and motor vehicles 4-1 5 years Plant and ITIJchioery 8-2 5 years Furniture fixtures and office equipment 3-5 years Computers and related software 3-5 years Capital work in progress Not depreciated
The carrying amounts are reviewed for impain nellt when events or changes in circumstances indicate that the carrying value may not be recoverable If any such indication exists and where the carrying values exceed tbe estimated recoverable amouot the assets are wri tten down to their recoverable amount being the higher of their fair value less costs to sen and their value in use
Expendirure iocurred lO replace a component of an item of property plaot and equipment that is accotmted for separately is capitalised and the carrying amount of the component that is replaced is written off Other subsequent expenditure is capitalised only when it increases furure economic benefits of the related item of property plant and equiproent Al l other expendirure is recognised in the consolidated statement of income as the expense is Incurred
An item o f property plaot and equipment is dereeognised upon disposal or when no future economic benefi ts are expected from its use or disposal Any gain or loss arising on derecognilloo of the asset is iocluded in the consolidated stalemeot o f income io the year the asset is derecognised
The asset s residual values useful lives and method of depreciation are reviewed and adjusted if appropriate at each rnancial year end
Borrowing costs Borrowing costs direc tly attributable to the acquisition constmction or production of an asset that necessarily takes substalltjal period of time 10 get ready for its intended use or sale are capilalised as pan of the cost o f lhe respective assets All other borrowing costs are expensed in the year they incur BOlTOwiog COSts consist of the interest and other costs that the Group incurs in coomction with the borrowing of fund s
Accounts paytlble and accruBls Liabilities are recognised for amounts to be paid in the fuMe for goods or services received whether billed by the supplier or not
Interest bearing loans Bnd borrowings Interest bearing loaos and borrowings are recognised ini tiaJy at fai r value of the amounts borrowed less direc tly attributable transaction costs Subsequent to initial recognition interest bearing loons and borrowings are measured at amortised COSt using the effecti ve interest method with any differences between the cost and tinal settlement values being recognized in the conso lidated statement of income over the peliod of borrowings Instalments due within one year aI amortised cost are shown as a ctuTentliabiliry
Gains or losses are recogTlised in the consolidated sialement of income when (he liabililies are derecognised Interest relating (0 imerest bearing loans and borrowings is expensed in the year in which it is incWTed e(cept those qualify for capitalisation
15
Aamal Company QSC
NOTES TO THE CONSOLIDATED FfNANClAL STATEMENTS For tbe year eoded 31 December 201 3
J BASIS OF PRpoundPARATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
34 SUMMARY Of)SIGNIFICAtlT ACCOUNTING POLICI ES (continued)
TClaot deposits Tenant deposit liabilities are initially recognised at fair value and subsequently measured at amortised cost where material Any di fference between the initial fair vllue and the oominal amount is [eluded as a component of rental income and rocognised on a straight-line basis over the lease term
Derecognition or fiolocial nsstls and liabilities
a) Financial assets
A fi nanCIal asset (or w~re apphcabJe a part of a fin ancial asset or part of a group of SImilar financIal assets) IS derecogmsed where J bull The n ghts to receIve [5h flo ws from the asset have expIred bull The Group has trans f rred Its rights to receive cash flows from the ass or has assumed an obhg811On to pay the
reltelved cash flows I full Wlthout mfl tenal delay to a third party under a pass-through arrangement and elther (3) the Group has Ira sferred substantially aIthe nsKs and rewards of the asset or (b) Ihe Group has neuher transferred nor relain substantially ai the n sks and rewards of the asset but has tnlnsferred control of the asset
When the Group has tTa~fened its rights 10 receive cash flo ws from an asset or has entered into a pass-waugh arrangement and has nejlher trmsferred nor reta ined substantially all of the risks and rewards of the asset nor trnnsferred control of the asset the asset is recogoised to the extent of the Groups cOlilinuing involvement in Ihe
In that case the Group at 0 recognises an associmed liability The mnsferred asset and ihe associaled liabi lity are measured 00 a basis thai flects Ihe rights lnd obligations that the Group has retained Continuing involvement that takes the form of a guara tee over the transferred asset is measured at the lower of the original canying amount of Ihe asset and fbe maxim amoun o f consideration that the Groop could be required to repay
b) Financialliabiliti
A financial liabili ty is defogniSed when the obligation under the liabil ity is discharged or cancelled or expires Where an existing fio8 1lci I liability is replaced by another from the same lender on substantia ll y d ifferent lenns or the terms of an existin liabili ty are substantia lly modified such an exchange or modification is treated as a derecognition of the orig~al liabili ty and the recog1Jitioil of a new liability and the dirference io the respective carrying amounts is reco ised in the consolidated Slatement o f income
Impalr meot ood uncollec ibility of fina ncial assets An assessment is made al each repon ing date to determine whether there is objective evidence that a speci fic financial asset may be impaired If such evidence exists allY impainneOl loss is recogoised in the consolidated statement of income ImT t is detemtined as fo llows
(a) For assets earned a t fair value impainnellt is tbe difference between cost and fair va lue (b) For asseamp carried at COSt impairment is the difference between cost and lIle present value of future
cash flo1S discounted at lhe current market rate of rdurn for a simi lar finan cial asset (0) For asseq carried al amortised COSt impainneot is the difference between canying arnOWll and lhe
present Value of future cash flO M discowlled at the original effective iDlerest rate
Provisions Provisions are rewgnised hen the Group has an obl igation (legal or COnslnlctive) aris ing fro m a past event and the costs to settle the obl igalio are both probable and able to be reliably measured
16
Aamal Company QSc
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 31 December 2013
3 BAses OF PR EPARATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICI ES (colltinued)
34 SUMMARY OF S IGNIFICANT ACCOUNTING POLICIES (continued)
Employees eod of service benefits The Group provides end of service benefits to all employees in accordance wi th employment contracts and Qatar Labour Law The entitlement to these benefits is based upon the employees final salary aocl length of service subject to the completion of a minimum service period The expected costs of these benefits are accrued over the period ofemployment
Revenue Revenue is recognised to the extent thal it is probable that the economic benefits will flow to the Group and the revenue call be reliably measured Revenue is measured al the fair value of the consideration received excluding discoWlIS rebates and duty The following spec ific recognition criteria must also be met before revenue is recognised
Sale ofgoods Sales are recognised whcn significant risks and rewards of ownership of the goods have passed to the boyer and the amount of revenue cao be me3sured rcli3bly
Rental income Rental incorne from investment properties is accoWlted for on a time proportion basis over the period of tenancy Incentives for leases to enter into lease agreements are spread evenly over the lease teon even if the payments are not made 0 0 such basis Income arising Tom expenses recharged to tenants is recogn ised in the year in which the expenses can be contrac tually recei ved Service charges aud other such receipts are includcd gross o f related cosls in revenues as the Group acts as principal io this regard Premiwns received to terminate leases arc recognised in the consolidated statement of income when they arise
Service income Service income is recognised when the service is rendered and the outCQrne of the transactions can be estimated reliably
COlimission Commission is accounted for on an accrual basis when the right 10 receive the income is established
become on tra~el agencies [ncome on travel agencies is accounted for in the year in which the airline tickets are sold
IIIeresr income Joterest income is recognised as the interest accrues using the effective interest Clle method
Foreign currencies Transactions in foreign currencies ate recorded al tbe rale ruling at the date of the transaction Monetary assets and liabi lities dcoomioated io foreign currencies ace retranslated ill the raLe of exchange ruling at the reponing date All differences are recognised in the Statement ofinconlC
Use of estimates The preparation of (he Groups consolidated financial sta temenls in CQnfonnity with Intemltional Financial Reponing Standards ([fRS) requires management 10 rnake estimates and assumptions that affect the reponed amounts of assets and liabilities and disclosure of contingent asscts and liabili ties at the rcporting date and the reported amoUlils of revenues and expenses during Ihe reponing period Although these estimates are based on managements best knowtedge of current events nnd actions acnm results may ul timately differ fro m those estimates (Significant asswnptions nccounting judgments and estimates used in preparing these coosolidated fina ncial sta temenlS are disclosed in Note 31)
The estimates and underlying assumptions are reviewed regularly Revisions to accounting estimlIes are recognised in (he period in which the estimate is revised if the revision affects only that period or in th~ period of the revision and future periods if the revision affects both current and fu ture periods
17
Aamal Company QSC
NOTES TO THE CONSOLlDA TED FINANCIAL STATEMENTS For tbe year cnded 31 December 2013
3 BASI S OF PREPARATION AND SUMMARY OF SrGNIFICANT ACCOUNTING POLICIES (continued)
34 SUMMARY or SIGNIFICANT ACCOUNTING POLI CIES (continued)
Fair va lues A number of Groups accounting policies and disclosures require tJ1 C measurement of fair values for both financial and non-financial assets and liabil ities The Group has an established control framework with respect to the measuremeot of fair values When measuring the fair value of an asset or a liabili ly the Group uses market observable data for (be valuatiOD Fair values are categorised into different levels in a fair value hierarchy baCd on the inputs used in the valuation lechniques as follows
i) Leve l I - Unadjosted quoted prices io active markets for identica l assets and liabilities ji) Level 2 - Otheqobservable inputs not included within level 1 of the fair value hierarchy ii i) Level 3 - Unobtervable inputs (including enti ty s own data which are adjusted if necessary to retlect the
assumptions market participnllts would use in the circumstances) The Group recognises tralnSfers between levels of the fair value hierarchy at the end ofthe reporting period during which the change has ocdWTed_
Treasury shares When share capitl recognized in equity is repUIchased (by the Company or any of its subsidiaries) the amount of the consideration paid which includes direa ly altributable COSIS is recognized lIS a deduction from equity Wheo treasury shares are sold or reissued subsequently the amount received is recognized as no increase in equity and the resulting surplus or deficit on the transaction is presented io share premium
18
4
Aamal Company iQSc
NOTES TO THE ONSOLlDATED FINANCIAL STATEMENTS For the year ended 31 ecember 201 3
BUSINESS CO~BlNAnON
Acquisition o f Culf ROks Company VLL On 1 January 2012 the roup acquired 51 oflhe voting shares of Gulf Rocks Company WLL (Gul f Rocks) a limited Iiabiliry campan incorporated in Qatar and registered UJKier conunercial registration number 2249) The acquisition was made thT ugh Ci-San Trading WL L a subsidiary which is 50 owned by Aamal Group
I
The fai r val ue of lbe ideltifiable assets and liabilit ies of Gulf Rocks Co mpany WLL based on purchase price allocation exercise condlcd by tbe management as at the date of acquisition WJ S as follows
Fair value recognized on
acquisition QR
Assets I Cash and bank balances 14005495 ACC QUOiS receivable and wePayments I 749383 Amouots due from related plrties I
I oveotones
48311 190 5124 270
Available for sale investm~nlS 1985245 Plant and equipment 6769 17
81852500
Liabilit ies Accounts payable aJld accll1als 4724446 Amounts due to related parties 385070 Employees end of serviccibenefits (Note 15) 349272
5458788
Total identifiable net a5sellf
Purchase consideration trasferred Non-controll ing intereSt az-ising on business combination Bargain purcha5c gain rc~u ting from the tcquisilion
Allalysis ojcash flows OIl acquisition Net cash acquire11 Nith the subsidiary 14005495 Cash paid (30600000)
(16594505)
On I September 20 12 the Company acquired the balance 49 nfthe equiry of Gulf Rocks Accordingly the Group has 74 5 effective holdin4 in Gulf Rocks as at the reporting dale The excess nfthe purchase cons ideration over Ihe fair value o f net assets of GuJf Rocks acqui red from the nnn-controlHng interest has been recorded directly in the retained earnings of tbe Gr6up as at 31 December 201 2
QR Purchase consideration 404 10000 Less fuir value of oet asset~ acquiroo from the non-controlling Interest holder (39842792) EXce5s of purchllse cons idf ration over the fair value of net assets a(q uired 567208
19
5
Aamal Company QSC
NOTES TO THE (WNSOLlDATED FfNANClAL STATEMENTS For the year eoded 3 ) December 2013
CASH AND CASH EQUIVALENTS
For the pmvose of consolidated statement of cash flows cash and cash equivalents comprise the fo llowing balances
lon 2012 QR QR
Cash and bank accounts 330333904 282272895 Short lenn bank deposits 105802852 85608396 Cash and bank balances 436136756 367881 291
Bank overdrafts (6836280) (2885090)
Cash and cash equivalents 429300 476 364996120 1
The short tenn bank deposits are made for varying periods between one day aod three months depeoding on Ibe immedifltc cash requirements of the Group and earn interest at the respective short term deposit ra tes
6 ACCOUNTS RECEfVABLE AND PREPAYMENTS
2013 2012 QR QR
Trade aCColUlts receivable 411 011 567 345260657 Advances 0 suppliers and prepayments 50787921 629389J 5 Retention receivables 36217081 56943030 Other receivables 12073270 17 139173
5tO089839 4 82 28 1775
As at 31 December 2013 trade accountS receivoble amoWlting to QR 2690 1412 (201 2 OR 24984025) were impaired Movements in the allowance for impairment of trade aCColmts receivable were as follows
2013 202 QR QR
At 1 January 24984025 1 877085 Charge for [he year (Note 21) 2294590 13613 120 Amounts wriuen off (19949) (117368) Unused amotmts reversed (357254) (388812)
At 3 t December 26901412 24984025
20
6
1
lamal CompanyQSC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMEltS For the year ended 3 J December 2013
ACCotNTS RECEIVABLpound AND PREPAYMpoundNTS (contillued)
As at -1 I Dtcemxt the ageirg of unimpaired (ltlde accounb iltcivabk was as follows
P(HI duo
nor Up to 30 31-60 61middot90 Yi-jSj gt flO Tota impoirlt-fl days days days day doys
QR QR QR QR QR QR QR
1l13 411OJl$67 25l981960 32312165 2140966 19351fi43 16f)76888 60148545 2012 345260657 1695159B6 493lt)8566 2356$954 19494369 16908414 66374363
1JJJirtpai~ed receivable are expected no th bil5tS of past experienn) 10 be fully fcCi)evbc H is not the pngtctlce ofthcent Group to oblum collaleral over recejvablcI_
AMOLNTS DUE FROyl REL-TEO PARTIES
Name
AI ~aisnl Holding Company V_LL E Seweo Cabtes Qatn WL L Cnild -ftt Cvmlllny Al hz Retll E$vt rWesnnim Company WLL~ AllaZi Real Estale BrAnch EI Sewedy Electric Egypt WLL MuincrDJ1Ce Mwagmvont Group Qat3r W LL Good fe Cheffilt - The Pcarl
BuderPhtrnacy Al Faisallnlemadonal Tnl(i and Investment Company WLL AI-rabia Land Trnr~PQltit1g Company rLL ro Sewedy CabLes - Kuwuit Gcentttco hlttrnJmJilI Frijns StHytural Steel Middle East WLl Winer Wunderand Company WLL Al FtOH1H for Investment amp llllemtiOl1a Trading COntpAny WJ_L Q)lar Bahrain lmerOlnionai Cnero3 WLL Gulf EngJisb Sltl-Qo] Al Rayyao Tourism lve$lrnent Company W LL Other relater purties
2013 2012 QR QR
15412-1064 ll941Y70 34644615 ~li96858l
[()0405 14-45012 51 59197 9538116 15514113 4014727 236824$
1867526 LSOfd22
8(1012 10435r 311650 746395
15023 204450 459829
2iYHi 244940 186750
152170 143440 33500 7768(1
6259 1459lt) 758962-1
__2~61g~~_ 1~95Ji
bull 214109950 171525363
--__ shy
7
8
9
Aamal Company QSc
NOTES TO THE CONSOLIDATED FfNANClAL STATEMENTS For the year ended 3 1 December 2013
At10(JNTS DUE FROM RELATED PA RTIES (continued)
NO les (i) Transactions witll related parties are eam ed out through open account and Directors do not consider any
receivables to be past due or impaired
(ii) Related party transactions ore disclosed ill Note 26
INVENTORIES
Goods for rew le Raw materials and spare pans Work in pTOgresS Goods in transit
Less Provision fOI obsolete and slow moving invenlories
1013 QR
165499699 38388307 19944678 9671 8553
320551237 (3851692)
31 6699545
Movements in the provision for obsolete and slow moving inventories were as follov~
At I January Charge for the year (Note 19) Reversals Amounts wri tten off
At 31 December
E QUITY-ACCOUNTED INVESTEES
TIle Group has the followiog invesllnenfs in equity-accounted investees
Interests in joint venrure Interests in associa tes
At 31 December
G roup s snare of profits fr om the equity-ncco unted iovcstees arc AS follows
Profit share from in vestment iojotnt venture Profit share from investment in associates
202 QR
232597650 36608394 30622960
10521 9695
405048699 Q 145826)
40 I902873
203 QR
3145826 1 380617 (535695)
( 1139056)
385 1692
20 12 QR
2795992 2208263 (137995)
( 1720434)
3 145826
2013 QR
2012 QR
129462184 3644723
124124803 2545188
133106907 12666999 1
17330368 22869454 1169533 534050
18499901 23403504
22
10
Aama Company QSC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 31 December 201 3
9 EQUITY-ACCOUNTED INVESTEES (continued)
Counlry of incorportllion
Relationship Proportion ofownership and lotilfg power held by the Group
203 2012
EI S~wedy Cables Qatar W LL Frij ns Structural S teel Middle East WLL Al Ftfazdaq Company WLL
Qat~
Qatar Qatar
loint venture Associate Associate
55 20
55 20 35
Note With effect from 1 January 20 13 the mlnagemeot of the Group has reclassified the investment in Al Farazdaq Company W L-L from investment in associate to investment in subsidiary This is based on the transfer of share holding by the other shareholder whereby the conlroi o f AI FOl razdaq Company W LL bas been assigned 10 tbe Company
INVESTM ENT PROPERTIES
a) Reconciliation of carry ing amounl 2013 202 QR QR
AI I January 611334701 8 555 1835348 Additions 9568047 1727191 87 Transferred from property plant and equipment (Note II ) 34519828 Net gain iTo m fa if value adjlls tment 245051107 388792483
At 31 December 6402486000 6 11334701 8
b) Measurement of fair value
The fair values of the Groups inveS hnent properties as at 31 December 201 3 and 3 1 December 2012 have been arrived al on the basis of valuations carried Ollt on the respective dates by professionally qualified independent valuers not related to the Group The independent valuers have appropriate qUlli ficatioos and (eceJ11 experience in the valuation of properties in fhe relevant locations The fa ir value WltlS determined based on market comparable approach that reflocl s recent transaction prices for simillt1r properties and discounted cash flo w and income approach techniques
Details of the Group s iovestment properties and infonnation about the fa ir vn lue hierarchy as at ) I December 20 I J are as fo llows
IIvestment propenies
Level 3 fair vallie
Al I Janu ary 6 [ 13347018 Additions and trans fers from property plant and equipment 44087875
Gain included iu prom and loss Net gain from fair value lt1djuslmem 245051 107
AI J I December
The Group recognizes transfers between levels of fair value hierarchy as o f the end of the reponing period during whicb the transfer has occurred There were no transfers between the fai r va lue hierarchy during the year
23
10
Aamal Company QSc
NOTES TO THE ONSOLlDA TED FINANCIAL STATEMENTS For the year ended 3 I ecember 201 3
LNVESTM ENT ROPERTIES (contin ued)
b) Measuremen t 0 (air value (conti nued)
Vau t ion technique an significant unobservable in puts
The valuer has applied t e income capitali zation discounted cash flow and comparab le methods to detennine the market value of the lnve tment propen ies Significant unobservable inputs used included expected market rental growth rates (an average 425) occupancy rates (approximately 90 to 95) and risk adjusted discount rates (approximately 5 to 7 0) M y significant change in these inputs can impact lhe fair valuation of investment propcnies
24
Aamal Company QS c
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For che year ended 31 December 2013
11 PROPERTY PLAi~T AND EQUIPMENT
FumilUre Truck mixers fIXtures and Complllers
Leasehold and maor Plum (fd office and relaed eapiowork Buidings improvements vehicles machinery eqllipmcni sofMore in progmiddotcss Total
QR QR QR QR QR QR QJl QR
At I January 2013 137870126 371 88 132 9595813 1 262536261 19 580954 14864 385 561 32447 6241 30436 Additions 948)65 2618 100 5367399 859061 111 5268 137147581 148055774
Relating to d isposalswrite-off (1042642) (4390496) (77157L) (589150) ( 184075) (6977934) Transfer from capilal work in progress 1505 310 164 336 3601776 ( 150000) 1182741 (6304 163) Transrer to investment properlies (Note (0) (345 19828) (345 19828)
At J I Dttember 201 J 139375436 J7 258~ ~1 85735 270733865 19700865 169783 19 152456037 _73068~448
Depreciation AI I January 2013 16133915 J6902 529 49087707 68783 065 11 980009 tl71 595 3 174603 178 Charge for the year 7059805 3237150 5390767 12249797 2849162 1768823 42555504 Relating 10 disposalsJvri te-off (664709) (4 3 1716 1) (724322) (552939) ( 18 1993) (6441 124)
At 31 December 201 3 23193 720 19474 9 70 50161 313 90303540 14276232 13302783 2 107 17558
Net carrying amounts At 31 December 2013 116181J16 _17783221 44024422 180415325 5424633 3675536 __l2456O37 JJ9970~890
Notes (i) Depreciation charge for the year amounting 10 QR 33 164382 (201 1 QR 3303091 6) is included in tbe direct costs and an amount of QR 60055 (20 12 QR 36939)
has been capiulised under capital work in progress
(ii) The capital work in progress includes capitalised borrowing costs amounting to QR 125645 (20 12 QR 15358)
(ii i) The buildings are constructed on a plot ofland taken on a loog term operating lease
25
Aamal Company QS c
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 31 December 201 3
II PROPERTY PLANT AND EQUIPM ENT (continued)
C05I~
At 1 January 2012 Additions Acquired through business combinations (Note 4) Relating to d isposalswrite-off Transfer from capital work in progress Transfers
Buildings QR
137434400 435726
Leasehold improvemellls
QR
38137377 446J 04
144 103 ( 1539452)
Truck mLCers and molO
velricles QR
83427661 11464679
1697609 (631824)
Plant and machinery
QR
249335437 97264 85
35 14 132 (99498)
59705
Furniture fir ures and
office equipmem
QR
22845309 667586
192042 (3696457)
98000 (525526)
Computers and related
software
QR
158 19519 87 14 14
141837 (266 1733)
908078 (2 l4730)
Capitol work in progress
QR
12104889 451 53265
( 1065783) (59924)
Total (JR
55910459 8 68765259
5689723 (862 8964)
(800180)
AI 31 Dttember 2012 137870) 26 371881 32 95958 13 1 262536261 19580954 14864385 56132447 624 130436
Depreciation AI Jaouary2012 Charge for the year Acquired wough business combinations (Note 4) Relating to disposalswrite-off Transfers
9144666 6989249
)4 3 16620 3410618
144103
(96 812)
42558404 548 1613
1671942 (6242 52)
44555 290 2 1398849
2890797 (6 187 1)
12392584 3 182899
169005 (3558466)
(206013 )
12235266 2077633
136959 (2627283)
(J 0662)
135202830 42540861
5012806 (7840684)
(312635)
At 3 L December 201 2 161339J5 16902529 49087701 68783065 11 980009 11715953 174603 178
Nel canying amoWlts
At 31 December 201 2 12 173 6211 2028560 3 46870424 193753 196 7600945 3148432 56132447 449527258
26
12
13
Aamal Company QSC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 31 December 20 13
ACCOUNTS PA YABLE AND ACCRUALS
Trade accouots payable Advances from customers and tenants Accmals Social and sports activities levy Other payables
AJIOUNTS DUE TO RELATED PARTIES
Name
Arab Compaey for Fiber Products EI Sewedy EIC( lric Ho lding Egypiasl Egypt Egyptlech Egypt United Industri es Company WLL Johnson Controls Air condi tioning aod Refrigeration Qatar WLL pound1 Sewedy Cables Egypt Johnson Controls Air conditioning and Refrigeration rNC Dubai United Wire Company WL L Gelteo Company W LL - Gelteo Refr igera tion and Airconditioo ing CampC Lightway nc AI Shaab Group of Companies Other related pruties
NO M Related party transactio l)s a re disclosed in Note 26
2013 QR
320017657 30486837 26924669 41 761 843 25855567
445046573
2013 QR
18517474
4902528
6531231 6404578 3215821
2825884 75 7825
3467288 263715
1313247
48199591
2011 QR
26716268 1 27410234 222575 76 28954726 33)33852
379119069
2012 QR
18380528 91458 82 54 13849 1 11 6 135 5374039 35291 2020359 1693323 1064744
670 179
11 0873 12 18650
49737757
27
14
Aamal Company QSC
NOTES TO THE CONSOLIDATED f fNANCIAL STATEMENTS For the year ended 31 December 201 3
INTEREST BEARING LOANS AND BORROWINGS
NOles Malilrify
2013 QR
2012 QR
CoMl Loan 2 Loan ) Loac4 Loan 5 Loan 6 Loan 7 CoMB Loan 9 Bills discounted
(0 (ii) (iii) (iv) (v) (vi) (vii) (viii) ( ix) (x)
lune2014 Seplember2014 January 2015 November 2016 December 20 16 November 2017 Jllne20 l J December 20 7 OClober 20 19
172070387 440000000 50544000 40261 621 81387109 19920036
6] 43890 62626967 42522794
915676804
298324180 440000000 10 J088000 57955030
100 168750 2 1300492
407728 1 782871 1
35000000
1065742444
Less Defe rred finatlcing cost (771 503) (897148)
914905301 1064845296
Presented in the consolidated statement of financial positioo as fo llows 20)3 QR
201 2 QR
Current ponion Non-current ponion
749520820 165384481
825568489 239276807
914905301 1064845296
The dete rred financing costs consSt of arrangement fees The movements m the deferred financing costs were as fo llows
203 2012 QR QR
At I January 897148 332 661 Addjtions during the year 1 062565 912506 Amortised during the year (218amp210) (34801 9)
At 3 1 December 771503 89 7148
28
Aamal Company QS C
NOTES TO THE CONSOUDATED FlNANCIAL STATEMENTS For tbe year ended 31 December 2013
14 INTEREST BEARING LOANS AND BORROWINGS (continued)
Nolec
(i) Loao I i USD 93000000 impon 10n moi lily obtoined to refimnee he Icne~ of edit The 10 IT interest at commercial fate and the interest is paid at monthly intervals The fucility is repayable within ISO days including the usage period under letter ofc redits
(ii) Loan 2 is a secured bridge loan obtained to settle an existing loan and working capital requirements of the Company The loan carries interest al coOlJllercial rates and interest is 10 be paid on quarterly basis
(iii) Loan 3 was obtained for the pWpOse of financing capital ependiture and direct payment to suppliers contractors and 5ub-controctors The 10011 CMries interest at commercial rate and the inte rest is to be paid q Uar1erly The fac ility is repayable in IS quarterly iostallmenls starting I July 20 11 and ending I January 2015
(iv) Loan 4 was obla ined for conSlruclion o r an inveslmenl property The loan is seclJed by 0 primary mortgage over the some property and corporate guarantee of the Aamal Company QSC Tbe loan carries interest at commercial marke t rate and is payable in quarterly instalments
(v) Loan 5 represents a loan fOlcility obtained in two sepnrole tranches amounting to QR 309 825 000 (USD 85 million) for the purpose of refurbi shment and construction of fociJities io one of the investment properties The loan is repayable In 16 equal quanerly instalmcnlS for individua l tranche commencing from March 20 1J The loan carries interest at conunercial rJtes
(vi) Loan 6 represents secured loans obtained ffom a commercial bank in the previous periods for the purchase of heavy equipment and machines and were merged on 15 November 20 12 as a comb ined loan This loan is payable by 59 equal instalments of QR 426000 with (I last inSlalment of OR 438 326 with effect fro m 01 October 201 3 The loan carries interest at commercial market ra tes
(vii) Loan 7 is il tmst receipt banking facility obtained for the purchase of inventories This carried interest at conunercial market rates This loan was full y settled during the year
(vii i) Loan 8 represents secured loans obuined from a commercial bank in the previous periods for the purchase of delivery trucks and machinery and were merged on 22 October 2012 as a combined loan The loan carries inte rest at commercial market Tates and is payable by 59 equal insta lments o rQR 160000 with a last inSlOlmem ofQ R 128000 with effect from 3 1 December 2012
(ix) Loan 9 is an Islamic Financi ng Arrangement obtained for construction o f a manufacturing plam and as o f yearend ba lance represents partially drawn amount out of totil1 facility of QR 655 68000 The loan is secured by joint corvorate guarantee by the shareholders The loan carries profit at Islamic Financing rates and re-payable in quarterly instalments starting from the end of the 24 months gmce period from the date of loan drawn
(x) Bi ll discounting is a loan fac ility from banks The purpose of the arrangement is to discount bills locally and carries interest at current commercia l filte
15 EM PLOYEES END OF SERVICE BENEFITS
Movements in the provision reHectelt in the consolidated SLo1tement of financia l position were as fo llows 2013 201] QR QR
At I Jan uary 18111 763 17877937 Provision made during the year 4056969 4205499 Acquirelt through business combinations (Note 4) 349272 End of service benefits paid during the year (2210756) (4320945)
At 3 1 December 19957976 18 111763
29
Aamal Company Q5C
NOTES TO THE CONSOLIDATED FINANCIAL STATEMETS For tile y~ar ended 31 Dee~mber 2013
16 SHARE CAPITAL
2013 2012 QR Qq
AtI1l1)nud 60000)000 (20 2 544500JJOfn shares ofQR iii Cilch 60i)iQOOlOO 54450lt)0000
21)13 2012 Numher of
siMtS QR shares QR Issued Mtldfully paM At lJamld) 544SfWllOfJ 5445(100001) 495000000 49500000)0 1511C ofbonus S1i1-C ___ 5550~OOO 555000000 49SGOOOO 495000000
At 31 Decenef 6(OOampQllf1(1 ---14450O000 544~OOOOOO
All ampates m~ of a110 clss and caL equal voting rights
17 LEGAL Reuro5ERVE
As required by Qatar Comnertai COfrp7lnies Lav No5 of 2002 lOfp of the profit for the ye1J as a rru1imllli silould be mmsfened to legal re~erve The reserve is lot normay [lytiabe tor distribution except ill he cixcuJUstllrtUS stipulated m the above ~lemi0ntd GIW
IS HEVE1TE
2013 l)n QR QR
Sale of goods 1726893265 i709057~(iO
Renlal income UiO362322 133117509 S-ice income 858695 33940731 CornrrusslOlL Incentives and agency fces 44695S1 422~_632
212259$)33
19 DIRECT COSTS
2013 2)i2 QR
C 051 of inven(feS recognisedlIS an exptns 1522929956 497210830 Dind sL1ries lmd wages 601 [1336 5137856-8 Operating eXpenses on nml estate p~opet1les 36)711316 3041H504 fJepreciatiort (Kate I J) 33164382 B03091pound Operators marhgerrt6nt fees 14508588 li667989 Provisicn Qr obsolete and skwlt moving mvenlories (K)tc 8) 2380617 2208263 Other operating ilxpenses _31~3982 _ 3674946
1702139171 JS9653OI tgt
Aamal Compall-yQSC________________
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For lthe year ended 31 December 20 11
2G OTHER NeOiI
2013 20J3 QR QR
Interest mcume 2824216 2)314392 Profiv( loss) 00 disposal of property plant aoe eqUlpmem 737647 (l7362G) Eargain ptmnJse gain (Kote t) 8360793 MIsceJlaneous income 5723356
2013 2012 QR QR
ManllgetnUI hrQ empl(yees ws 55170302 55lt035middot1 Rent 23596799 2594915 Allowance for impaimlcot oUrsue aCQl1ot$ rc(Xjvalle (Nole 6) 129459(i 11613120 flBumcce ane profcampiitmJI fees 2IU9263 209J902 Corununication OOtHS 1935123 1649155 Trllining tid ouSfjt$s developmccl 950476 L095764 Re]X1in and mainle-nilnce 21)11SflS 2)2 I Poslag-c prjnting acri stationery 610299 541159shyvllsltdlancous expenses _~~~664 1lt2
-~~~ 125162812
22 fIN~lCE COSTS
2013 2amp2 QR QR
Inleres epen~ 42866312 5773U4B Am(vtisJliorgt ofdefcentrred financiog coStS __ 2l)tl26~~ gt3661
44930877----=
58063009
23 BASIC A~n nHUfED EARilNGS PER SHARi~
Basic trdTJogs per hue is caculatid 0y llividing the pwfill0( Ihc year attriouiabk (0- equity roldc-5 of the parent by lhi w~iglwxi avrage number of ordinary shares 0JstandirJg dulting tht_ year During Ihe year lil~ Conpmy i-sued and CBpii3lzed bonus shares lnd awmJingl) me previously ~eportod earnings per shac have blOM restatc(i
20i3 2012
Profit feT the year auributable to Cluity holderlt of the- paren (QR)
Weighted aVCTage number ofshares outstanding during the year (i)
Basic Jd diluted earnings per share (QR) 085
59985U413 shy
~~--~~~~- ~------J 1
23
Aamal Company QSc
NOTES TO THE CONSO LIDATED FfNANC[AL STATEMENTS For tbe year ended 3 l December 2013
BASIC AND DILUTED poundARNINCS PER SHARE (continued)
NOles (i) Th wigh d m nlg urnb of hres foc h P of lruling ~migs pee share h bee kulated
as follows 2013 20J2
QU3lifying shrues allhe begi ll1ling of the year 544500000 544500000 Effect of bonus shares issued and capitalised 55500000 55500000
600000000 600000000
Less T reasury shares (149587) (i357SI)
Weighted average number of shares at the end of the year 599850413 599864249
(ii) There were no potentia lly dilutiw shares outstanding at any time during tbe year and hence the diluted earnings per share is equal to the basic earnings per share
24 COItIMITMENTS
20 1] 2012 QR QR
Estimated capital expenditure approved and contracted for at the year eod but not provided for
Investment properties 2964000 8 139063 Property plant and equipment 16386500 63759762
19350500 71 898825
Operating lease commiIOlenlS under noncancellable lease agreemenlS
Payable wilhin one year 990806 702000
990806 702000
25 CONTINGENT UABILITlES
The Group had the following contingent liabi lities from which it is anticipated thai no malerial liabilities will arise
2013 2012 QR QR
Letters of guaramee 474551239 394255203
Letters of credit 7678499 194299384
NQles
(i) leHlaquogt of gu indud penonmnlaquo tend nd bid bonds d pymenlt g gi to suppliers and contractors by the Group in the ordina ry course of bus iness which will matme within twelve months fro m the reporting da te
(i i) Letters o f credit are provided by lodging documents to the bank tor purchase of trading goods fro m foreign suppliers wruch will maMC within thJee to six months from the date or tile Iransaclion
J2
26
Aamal Company QSc
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year eoded 31 December 2013
RELATED PARTY DISCLOSURES
Related party transactions Related parties represent major shareholders directors and key management persortOei of the Group and entities controlled joimly controlled or signjficamly innueoced by such parties Pricing policies md tenns of these tnlOSaclions are approved by the Group s management
Transactions with related parties induded in the consolidated financial stalemenls were as follows
20lJ 2012 QR QR
Sale o f goods and SClVices 419034048 415225221
Rental income 1980473 2069386
Purchase of goods and services 1591 38018 300835596
Rental expense 21 780G78 23397334
Bargain purchase gain 8360793
Net assets acquired 78803585
Relat ed party bal nnces AmountS due from and due to re lated parties are disclosed in Notes 7 and 13 respectively These balances do oot carry interest and are repayable OIl mulUlUy agreed dates generally within one year
The Group did not record any impairment of receivables reJatiog to amounts due from related pat1ies in either year This assessment is undertaken each fina ncial year through examining the ftnanc ial position of the related party and the market in which the related patty operates
Parent The Groups ultimate parent is Al Faisal Ho lding Company WLL
Compensa tion or key management personn el The remuneration of key management dming the year was as fullows
2013 2012 QR QR
Short-term benefi ts 7904794 1079595 Employees end of service benefits 408934 439776
8313 728 11235727
33
AamaJ Company QSC
NOTES TO THE CONSOLIDATED FINANCIAL 5T ATEMENTS For the year ended t Decernber 2013
Dilling the year 1he Group issued a XHlUS share of 10 928 of the paid tiP share capilal hdd ilS at 31 DiX2mber 2(JJ 2 mnmuning to OR 555000000 using retamed earnings as of3 December 2012 (20l2 Doe share for every ten shues held as of 31 Dcember Oll amuunting 10 QR 495OO()OOO ling reta1ned earmrgs 28 or 31 Decencer 2D II Jshy
18 SEGMENT INFORMATION
For J)iloogement PUIpltJM rhe Group i organised into business unit bused On LlJeir nature of Acttvitics lud nas fonY reportable segments and the Head Oftklt as bllow$
Propert Tbe segntn cOlists of City C~nler Qlta~ Brunch and Aamal Rea Esmte Branch whicb ll[c invoived in lampIiiog the faJ1ities of retail outlet conpex red e5ttlte nve(mltn$ and property remal buines~s
Trading mld distrib-wion The segmeul Involves wholesalB andlor rBtail distribution of phamlaceutlcai and consunable i1ems hume Epplianccs medica equimenl t-Tes ill1d lubricmtlaquo and II1UllitnEl printing The scgn(rtt includes 6c following entities
Eotl Sina Medical Branch
Aaen Medical Braudt
Amcill Troding and DistoolltlqO Branch bull Foot Care (erier HRnd) Good llre Pbannacy Bf4Uch bull Al FllfJdaq COllpafY wJ~L
InduSNol manuacturing TIle s0groent IOvolves Ulahuactrumg whole~we aliaor rewi dimibUlioti of dccnc cables lid tools ggregJ1es_ ready-IUx connole and cement bI0C~ lI1d provi$ion of servlCcent$ in rdation to iODllltroa Itvestment repair aJ-d Gonstruction of power plwts liiiding of LED ilgluitlg products und management of industnl enterpnses The segment ircludes be folloVting centntitis
bull Aam1 Cemert Industries LL AuraJ Redy1Yl(A BrQTlch
bull Doha Cables Qawf lLL Senyaf IoolJic1es Qatar Holding W LL Advanced Pipes ard Casfs CompQTly WJ L bull GuJfRoch Coroany WLL Ci~San Trading Company WLL hmovafive Lighting Compary WLL
Managed services le segment inyolvc~ provisloH of hOllseiltecpmg mi cleaning services fucditics n-anagemerJ services C1egy s(tvices ttl centfe sltrvicf)s buildiqg lnaintemHlelt aml acting as travel gens The 5cgnltnt includes the foUowing cnti(lcents
An13 ServJce Branch
amli TnlVeJa l5tmh
f-eco Gulf Co W LL
Jolinson Controls Qattl WJL
28
Aamal Company QSc
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended ) L December 20 13
SEGMENT INFORMATION (Co ntinued)
Head Office It provides corporate services to the branches and subsidiaries of the Group
The managiog d irector of the Group monitors the operating results o f its business units separately for the purpose of making decisions about resource allocation and perfonnance assessment Segment perfonnance is evaluated based Oil operating profit or loss of these segments Transfer pricing between operating segments are on anns length basis in a manoec similar to Iraosactions with third parties
Aamal Company QSC
NOTES TO THE CONSOLIDATED FINAN CIAL STATEMENTS For the year ended 3 1 December 20 13
28 SEGMENT INFORl1ATlON (continued)
Operating segments The operat ing segment after elimination or ioter-bra nch and inter-co mpany lrnnsaclioos is presented as follows
Trading (nd Industrial Managed For fh e year elided 31 December 2013 Properly disirjblli ioll manujocljlring services
QR QR QR QR Revenues
- h lemal parties 260360172 578909983 1231522768 S l802210 - Inter segments 1253914 6843 11 8 29639873 3445052 1
Heat Office QR
Eliminoions QR
(n187426) II
Tolal
QR
2J22595133
261614086 585753 lOI 126116264 1 8625273 1 (721 87426) 2122595133
Opera ti ng results Fair vallie gains
Profit I (loss) ror the year
Depreciotion
200811944
245051 107
445863051
2066290
86492834
86492834
4345438
22636250
22636250
33049 089
5157436
5157436
1760305
(47864882)
(47864882)
1334382
267233582
245051107
512 284689
42555504
36
Aamal Company QS
NOTES TO Tl CONSOLIDATED FfNANClAL STATEMENTS For the yeM ended 31 December 20 13
28 SEGMENf INFORMAnON (c)tltioucd)
FOf the yearrnrkti J f DccemOer 2(J12 QR
Revellues - ExlcmlJ partiel 2331 17 509 bull Inter segmcI11S 1168935
-- 234236434 --~- -~--
Openning results 18S2367t Fmt value gains J8S79-4~G
pront LOllS) for the rear 570616154
gt3659
No(
lnlermiddotgment revenues are eliminated on tQHs)idntiOH_
Tadiug ftfid disl d)Ntion
QR
S2S3l7661
324 j
5335493114 ~ -~-----
51384831
54384338
4J9R71(i
Indus idi mamfmturing
QR
1255694537
129U25lS4
56727059
56727059
32752742
slnltic(s QR
55216665 2939H31
S46lOJ96
7427414
7437
[908067
ilfild ()jice QR
(64(41976
Elimination QR
(74tHi2oJ Iii
Totul QR
206936372
2069336372
235721
(64641
131 f613
6245
42541)861
Amnal Company Q$l
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Por tnt yeartndeJ 31 De~embcr 2013
28 SEGMENT JNFORMATlON (contiutlld
Assc-ts and labilities
Tng alld lndtrstfw At31 December 2(113 distnbllrior manufacturIng senices HeadOJJicc EliminatioilS lola1
QR QR QR QR QR
Cumnl 3tS 227552338 620807979 61349 j 415 S()6)86922 (301636995) 1477366090 Noolucrcnt DSeIS 6411868160 12604763 622386238 4348876 (i624548 __p2438051 780
fotal asstl$ 6639420498 1194 1243194217 65698291 513Ql1470 ==-lt03H8l~O()) 853295-870 -~----~ ~---~ -
CUIT)llliabilitics 280995335 1(3511J60 6344(12777 2l0708lJ2 496261185 (3CH636995) 1249603264 Non-current iiatJlitics 7l70L5V2 8008485 HlDi16~43_ 3181668 t433799 ____ ilj534_~57 __ --Totul liahililics 353696897 ___~4159~4~ 734419720 ~4976~~~~~ 1434945711
---~~--~ -~-~~ - _2~~~4~~ (~~~~9~
C1pild expcndimn HI) WO743OOj 1397742_~471l2~--~50 ~51 ~1~623821~~1~_ -~----~------ -~
3amp
28
Aamal Company Q SC
NOTES TO THE CONSOLIDATED FfNANClAL STATEMENTS For the year ended 31 December 20 13
SEGMFNT INFORMATION (continued)
Assets and liabilities (continued)
AI 31 December 2012 Properly QR
Trading and d iSfriblllion
QR
Indusrial manufacfuring
QR
Managed senices QR
Currenl assels
Non-current assets
146491 186
6121 864484
2964425 12 903 7264
73468 1258
549267235
51387098 471 1439
Tolal assets 6268355670 305479776 1283948493 56098537
Head Office QR
468325024
6713643
475038667
Currentliabil iies
Non-current liabiLities 273444 748 1 J10 15024
86054583 7434286
669214261 1288 14977
2 1938953
287 1199
480393637 1253084
Totil lliabiliti cs 390459772 93488869 798029238 248 10 152 48J64672 1
Capila expendirure (ltII L 72865 878 1281254 6647 J356 7169 13 149045
Notes
(i)
(Ii)
Inter-segmeot balances are e limioafed 00 consolidatio n
Capi tal expendiTU res consist of additions 10 propeny plant and equip ment and iovestmenl properties
Eliminations QR
To wl QR
(273735776) (i )
(20308351(i)
1423591302
6689563230
(27576661 1) 8 113154532
(273135777) (i) 12573 10405
257388570
(273735177) 15 14698975
24 1484446
39
29
Aamal Company QSC
NOTES TO THE CONSOLIDATED FrNANCIAL STATEMENTS For the year ended 31 Dcltmber 1013
Fr-A]~ClAL RISK MANAGpoundMamp1H
Objccthes and policies fe Groups principal )uaucill liabilities comprise imltresl bctmllg loons and IxmowHgs baRlt ovetda1s amounts due to fclaled par1ies and tracte accounts payable The main pUlJXSi of thesc financial liabilities is 4J mise firmne or 610 Grmps operations The G0JP bas various fimmcial assets such as ttadc accounts receivable lInlOlmts due from related parties bark balances tltCntion receivable and other receivables which arisgt directly fran its cperuoonamp
The maiH ri~ks an3ing Joru (be Groups UnariCJlll illslrumenls jle market risk cretiJt nsk and hmdity risk Til BoarD ofDtrcctO$ reviews end agrees policies for mzrAgbg Caltt f hespound ri~k ihkh arc summariscd beloW
VIarktt risk yenfatket risk is the risk Um changes in market prices $Uch as intfcst rates and hreig lttmeocy ect14nge rilles Vltl1 affect the Groups profit eqwty Dr value tf its hoJdiI15 of financial instrl[Thnls rile objecivpoundj of marke1 risk mUnllgcrlcnt is to manage uld 1~ontr(ll tho tr))rket risk expo-sure vithir acceptable parfI-etcJ$ while optimising rerUID
Equit) price risk ampjuity prtce risk is the risk hilt the Group ampearnings will be affected as a rcmt (If luctttltions in fm vdue of ~qui-gt
mstwnents Eqlliry price risk arises from availabtetor~sale inv2strnems However the Groups exposure to eqmty price risk IS minima as II doesn hold sitl)iftrmt ailableAor-511le inYestrmmrs
[merest rate risk The Groups fimiruial poundS5ot ampId liaojlilies (at Rl $uJject to int~~ rate mk compnse brmk depoils interst bearing loans and bOITQwjags and bank overdr-afts At the reponwg dalt tbe [merest rale pronle of Ill Goups intexst bearing fbi4rdd instruments as fliows
11113 20i3 QR QR
Fued liIeryS refc insfrvrnellts
Fmmcial assets 113035962 111913394 FrOltwial liabilities --1~203712l) 1252t43~1
9)OI~ (13350972)
Fhlllting inireSI rate ns1lmlttrs Fanctl~ Isseis 127024345 ID43848o Fllllocial liabilities _-(i~9347~ (94))48926)
(836)64116)
The Groups exposure to t~ ris of changes in marXet interest fltltes relztes primariiy to the Groups financial assets and lizbitdic$ with t1Oltttirg interest mte~
lhe loEowing able demonstrates the ampmitivity nf the eonsolidattXI statemen1 of income 1) caonaly possible chonges in in1jfgtst rmes by 25 basis points with all othe vari)ble3 hdc umstant The sensitivity of the CooiK~ljclatid statement of inc(me $ the eft(ct of tb assumed changes in lnterdt rales for one year bf1sec on the floating rate financial assets and fimmcial hablhw$ held at 31 f~r The effect of deae-ascs in interest ral~ is cXp0Ctct to be equal and opposite to the effect oHlle increases sllQvro
Changes it Eftx OIl
00513 [oms profit QR
2013 Floating mterest Hlte instruments ----2$ bp (1649776)
2012 Flv-ating irkfiSt rale instrumenls +25 bp (209[9(1))
~--------- -~~ 40-middot------ _ _ shy
29
Aamal Company QSC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 3 1 December 2013
FINANCIAL RISK MANAGEMENT (continued)
Foreign currency risk Foreign currency risk is the risk lhilt the value of lhe fi nancial instruments will fluctuate due 10 changes in fore ign exchange rates
T rade aCcOlmts payable and accrued expenses include amounts due in foreign currencies mliniy US Dollars UAB Dirhams Great Britain Pounds (GB P) and Euros of which the Group has a currency risk primruily on the baJmces payable in Euros and GBP amoWlting 10 QR 14400634 (2012 QR 17214046)
The Group does not hedge its foreign currency exposure As both Qatari Riyal and UAE Dirhams are pegged to the US Dollar balances in US Dollars and UAE Dirhams are not considered to represent significant currency ris k to the Group
The table below indicates the Group s fore ign c urrency exposure on its monetary assets a nd liabilities The analysis calculates the effect o f a reasonably poss ib le move ment of the QR curre nc y rale against the Euro and GBP with all other variables held constant on the consolidated slate menl o f income (due to the fa ir va lue of currency sensitive monetary asse ts a nd liabilities) The e ffect o f decreases in fo reign c urre ncy exchange rates is expected to he equal and opposile 10 the e ffect of the increases shown
Incramp1se ill
f oreign cUlrency rate
0
the QR
Ellecl on profil
QR
2013 +5 (720032)
20 12 +5 (860 702)
C redit Tisk Credit risk is the risk that one party to a financial instrume nt wi ll fa il to discharge an obligation and cause the other party to incur a financial loss TIle Groups exposure to credit risk is indica ted by the carrying amoWlt o f its financia l asse ts whic h consist principally oftmde accollilts receivable retention receivable amounts due from related parties othe r receivables and bank baLances
The Group sells its products and prov ides services to vario us panies It is the G ro ups policy that all customers who wish to obtain on credit lerms are subject to credit verificalion procedures to ensure c redit Ilonhiness Each new customer is analysed individually for creditworthiness before the de livery o f products Of services Custo mm tbat fai l to met t the credi tworthiness may transact with the Group only o n prepayme nt basis Property rentals are mostl y received in ad vtnce or conlrlCled wi th post dated cheques 10 additio n receivable balances are monitored on an ongoing basis a nd the purchase limils are established for each c redit custoroer which are reviewed reguJarly based on the level o f past transactions and senlement The Groups max im wn exposure with regard to trade aCCOWlts receivab le net ofa llowance re nected allhe reporting date was ilS fo llows
2013 2012
Business SJgmelll QR QR
Property 15478832 19386326 Trading and distributio n 194343 597 179748274 Industrial ma nufac turing 183119753 131578668 Managed services 18069385 14547389
411 011 567 345260657
41
29
Aamal Company QSc
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For tbe year eoded 3 J December 20 13
FlNAJICIAL RISK MANAG EMENT (c-o Dtinued)
Credit risk (continued) With respect to credit risk arising from the other financi31 assets of the Group the Groups exposure to credit risk arises from default of the counterparty with a maximum exposure equal 10 the canying amount of these instruments as follows
2013 QR
202
QR
Bank balances Amounts due from related parties Retention and other receivables
436136756 214439950 48290351
36788129 t 171525363 74082203
698867057 613488857
The group reduces the expoSltre of credit risk arising from other financial assets by maintaining bank accounts in reputed banks and providing services only to creditworthy re lated parties
The management cons iders the bank balances and a mQUIIIS due from related parties as high grade fi nancial assets and lfade accounls receivable and other receivables as sundard grade financial assets When a finltmcial asset is identified 10 be impaired the managemoot downgrades such assets to impaired category and provides adequate allowances
Liquidity risk Liquidity risk is the risk that the Group will not be able to meet its fmancial obligations as they fu ll due The Groups 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 nonnal and stressed conditiom without incurring unacceptable losses or risking damage to the Groups reputa tion and is to maintain a balance belWeen continuity of fuoding and f1eilibility through the use of bank overdrafts and bank loans and borrowings
The Group monitors its risk to a shortage o f funds using a recuning liquidity plaOfling 1001 TIllS tool considers the manuiry o f financial assets (eg accounts receivable) and projected cash flows from operations The Groups teons ofsales or services require arooUIlts to be paid within 30-90 days from the invoiced dale
42
29
Aamal Company QSc
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For tbe year ended 3 1 December 2013
FrNANClAL ruSK MANAGEMENT (contiQued)
Uqujdity risk (continued) The table below summarises the ruaruriJy profile of the Groups financial 1iabililies a t 31 December based on contractual undiscountcd paymeots
2013 Interest bearing loans and borrowings Bank overdrafts Trade accowus payable Other payables Amounl~ due (0 related panles
201l Interest bearing loans and borrowings
Baok overdrafts Trade accounts payable Other payables Amounts due to related parties
On demand
QR
6836280
6836280
011 demand QR
2885090
2885090
Less than 3 months
QR
521324473
303638792
47406830
2530~480
898675575
Less thall 3
months
QR
469839033
10754JJIO 37543236
1964504 1
634568620
3 10 J2 mOlllh$
QR
239333328
16378865 20210580
2289~11l
298816884
3 to 12 monlhs
QR
365476972
159621 37 J 24745342
30092716
579936401
1to 5 years
QR
J 60092748
160092148
1 to 5 years
QR
248472226
248472226
gt 5 years
QR
25261598
25261 598
gt 5 years
QR
7648000
7648000
TOlaf
QR
947012147 6836280
320017657
67617410 48199591
1389681085
Tota
QR
109 1436231
1885090 267162681
622 88578
49737757
14735 10337
43
30
Aamal Company QSltc NOTES TO THE CONSOLIDATED FlANCIAL STATEMETS For the year ended 31 December 20 t3
21 F~ANClAL RlSK MAiAGEMElT (continued)
Capital management The Boards policy is to maintain a strong cepit1 base so as to rnainmin investor creditor and market ronfoonee and to SUSWlJ) fumre dcltclonnent Gf the buinest The Board of Directors rronitortl the tapital whkh tbe Group defines as wlal $parcloders equity excluding nonmiddotcornroliing imerests and the level of dividends to orrunury srarellOJdcfS
The Board also reeks to ITIaimain a balance between the higher (ctums (hat might be fA-~$ihle With higher leves of borrnwings end Lle edvnrJages and security named Sy it sOMd Cilpitai posi[ion The GfCup~ k1rget is to achievfl a return on slureholders equity (exclJding aonwurrolJiug iorcf(sts) greater lll(ll1 he wcighlcd average inres exxmse on mrerest bearing Ivens and oorrowing
The (lf0t-p nl)nDg-e ils cnpital structure and makes adjustneal lOll in light ofchang2s in economic nd bttincss cordjlons and shareholders expe1ationJo chmges veremiddot maCo HI Lleuro objecttves polilCS or proCCSSC3 during the years erded 31 D~mber 2013md 31 Dtccmlxr2Ql2
The Group monitors the capit2J using a gClting fatio which IS dep divided by caplla plus debL The GtOwgts policy is to keep ttJe ge-anng rmio bclew 40 Tbe Group iLdtdes withb debt imete-51 beagting loans ard ~OITORlngs less cash and cash equtVaknts Capltal includes eqmty attributable 10 the equity tolders oft~e parcrt
2013 QR
2(i2 QR
fmerest bearing loans and borrowings lcss- Cash and cas ltYJUvalcnts
9i4lJ05301 _~ (429JfJl4761
1004845296 (649)6201)
Net debt
Toa capital
Capita and net debt
699849045
~ringrttio
FAIR VALtES OF Fl~ANOAL f~STRUMETS
Finarcial iostrumenL~ cOlnprise tina~lctal assetS carl finailcialliabilities
Fmancial assets colJist of bank balance) short 1Cm bank dcposis amounL dve dom rc)ltted partilt)$ rekntion and other receivables and ttade accolmis rceivabe Finatlclll habiilics cgtmsist of banilt ovcrdratls jnerest bearing lOil1S and bOrowings amounts due (0 nliled partiG~ ane trade x-ounls payable
The- fair values of hese financial inStrumen1S except Jo-- imCfest bearing loam lHld bOlToving aproKimate lhdr cMryinJ vlhes due to the Slort temt mzrutiiles or these instrument
Tllc faiT value of iotcnst beating Nns and borrowin2s ae estimate( based on discoumed ltash flows twin int(s rale- cune-ntly nvailagtk fur tilt debt or sinuiar tetnlS an-a rell1lmng matunties
31
Aamal Company~Q=-ScC ______________~______
~OTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For fhe year ended 31 December 20 t3
SlGNIFICANT ASUMPTIONS ACCOUJTING JUDGElE1TS AND F8TIMATFS
impairment (If accoonts receivable n etrnwe of lhe collectible anoun of trade accounlgt reccvable is made when collection of the full lHl1OUt i~ nO looger probabk FOI nCividualty significitIl amounts this estimation is p~rformed on an indh-idllai a$[$ Amomts wHcb arc not indivldl11Uy significant but wluch are past due ZTe tsscssed collectively and an aJlQwaccc applied ucc()r~Jng to the length of lime past due based oc histnncal recovery nlJes
hnpalrment of inHntnries lavenoncs are held at tho lower of col and nol realisable value InIOn inventoncent$ becone old or 0-~amplete an estilTJte is mate of their net j alisable vulue For indiviolhlUy significant amountS this cstinaunrt is performec all aD lndividwl osis Amotlnts whieh are fl0t individually significan( btll which ltIre old at obsolete wx LltSessed wllecivdy md a provisior is applied sccnrding to the invenrory type and be dep)ee of ageing 0 cDsolescc1ce based on anticipUled selling prices
Classifigt1ltion of El Sew(gtdy Cable Qatar WLI ali a j(lint vwture pound1 Sovedy Cables Qatar is a limited hability company whose kgal fum confers SCprm11ior bernten tbe jXliiies 10 ~he jomi lfranpement Snd the Company Itself FurthenrlOre then IS no oontractua] arrmgelTeot or any oibe aus aod circumstriliCe$ that iocik41to tht he putic5 [0 the joint flJTIlrgernelit bave rights to the ssetl and obligrtdons fo~ the liabilities of the joint ilrrongement Acoordingly El Sewed- C[jbl~s Qamr WLL is dassifiecl 7S a joiut enrtrr of he GWtp
impairment of goodwill G0oovj)1 embedded in th~ cot 0 aquisitior of subsidiaries and eqmtj-iccounled iflV(stees ire teswt for irl1jXlirmnt aHuaily Tbe calculations of value [n use fO( cfish gecj~r)lilg units (loring to real nte projecg are rtost sensitive to tin IDHowing assumpti015
Grosgt i1wginmiddot Gross Ilmrgins arc lmsed on avrage values tuhje0d in (he [Xrioo preeedhli (e siaM of the budge xnod T1esC at( mcreased over the budgel period for mticipatltX efficiency Hnprovemots
DisC)unr r(es Discount rotes represent th cl1tent mark as~ssmetlt of the risks specific te ech cash geocroting unit regarding lhe time value of money ilnd mdividu)l risks of he tmtieriyilg assets whICh have not been inwrport1eti it the Citik flow estimates The dj~(OUrl flte tlkulation is based on the speclfte circurnsthLCes of lile Group and its opltllatJng segn)~nts (md derived (ff)rC it weighted avaage (XSt 0f apilaJ (WACC) Tb fACe (akw into uoount both deb and equity The 0$1 of equity is denved from dlC expected return 01 investmenl by the Groups investors TJc Gos10( deb is based on l1e borrvwings the Gmup IS obllsxl to service SC~lletllmiddotspecific r5k IS incorxt4too by applying individual bera facto The betn mctors ire evauatcentd annuaHy bhseci on pubJicly aVflllabe murked earn
Fair value ()fnHstmeni proputies The fuit laHe 0 nvestmel~ propertis is deltrrnlnzd b cxterrwl indepzfldell property valuers laving appr0priate recognised professional quabfiillions and recenl xperience H1 the localjl)n and G-tegory 0 the oroperty being valued
Useful hes of PfQPcrly plmr (llld zqulpment The Groups management detennints th estiunted useful jives Df It~ property plan and equipmnl fix calnurjng depreciation Thi5 e~timJte is 6lermind after cinsidring 1b expeelcd usage (1f the a5sclt [hysical l101t and (eas tedmiltal Dr com~ercia obsolesccnce
Gotlg Qncen
ibe Groups mangerncnt UiS made aJ assessmeot cf the 011115 ability (0 COllllOUC liS a going conct11l Imd is satsl1ed hat me Group ms the resources to contmue in business for he foreseeable fu1urc he1hennort he management is no aware oC lny material Hncertainties that lray CH~t signinchnt doubt tlPDfl the Groups ability 10 continue as a going umcem Therefore titpound lotlsolidatcd finilllcij stftemeols comirme to be prepltd on li g0ing concern basis
Aamal Company QSc
NOTES TO THE CONSOLIDATED FlNANC[AL STATEMENTS For the year ended 3 1 December 20 13
32 INCOME TAX
Certa in subsidiaries of the Group which have non-GCe ownership are subject to income tax under Qatar Income Tax Law No 2 1 of2009 The iocome tax is charged on the share of profits attributable to non-GCe shareholders For the purpose of these conso lidated fi nancial statements the income tax liability oftbe foreign shareholders has been excluded given that the non-GCe shareholders have agreed under the shareholder agreements signed with the Group to bear the fh lliiability and make necessary payments
33 COMPARATIVE INFORMATION
Certain comparative figw-es of the previous year have been reclassified 0 coofonn to the current years presentation However such reclassifications are oat materia and do not have an impact on tbe previously reported net profit other comprehensive income or the total equity for the comparative year
The impact from the resta tement of comparative infonnalion as a resuh of adoption of IFRS I I - Joint arrangements is detailed in Note 32 Changes in aCCQu(lting policies
46
Aamal Company QSC
NOTES TO THE CONSOLIDATED FfNANClAL STATEMENTS For tbe year eoded 31 December 201 3
J BASIS OF PRpoundPARATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
34 SUMMARY Of)SIGNIFICAtlT ACCOUNTING POLICI ES (continued)
TClaot deposits Tenant deposit liabilities are initially recognised at fair value and subsequently measured at amortised cost where material Any di fference between the initial fair vllue and the oominal amount is [eluded as a component of rental income and rocognised on a straight-line basis over the lease term
Derecognition or fiolocial nsstls and liabilities
a) Financial assets
A fi nanCIal asset (or w~re apphcabJe a part of a fin ancial asset or part of a group of SImilar financIal assets) IS derecogmsed where J bull The n ghts to receIve [5h flo ws from the asset have expIred bull The Group has trans f rred Its rights to receive cash flows from the ass or has assumed an obhg811On to pay the
reltelved cash flows I full Wlthout mfl tenal delay to a third party under a pass-through arrangement and elther (3) the Group has Ira sferred substantially aIthe nsKs and rewards of the asset or (b) Ihe Group has neuher transferred nor relain substantially ai the n sks and rewards of the asset but has tnlnsferred control of the asset
When the Group has tTa~fened its rights 10 receive cash flo ws from an asset or has entered into a pass-waugh arrangement and has nejlher trmsferred nor reta ined substantially all of the risks and rewards of the asset nor trnnsferred control of the asset the asset is recogoised to the extent of the Groups cOlilinuing involvement in Ihe
In that case the Group at 0 recognises an associmed liability The mnsferred asset and ihe associaled liabi lity are measured 00 a basis thai flects Ihe rights lnd obligations that the Group has retained Continuing involvement that takes the form of a guara tee over the transferred asset is measured at the lower of the original canying amount of Ihe asset and fbe maxim amoun o f consideration that the Groop could be required to repay
b) Financialliabiliti
A financial liabili ty is defogniSed when the obligation under the liabil ity is discharged or cancelled or expires Where an existing fio8 1lci I liability is replaced by another from the same lender on substantia ll y d ifferent lenns or the terms of an existin liabili ty are substantia lly modified such an exchange or modification is treated as a derecognition of the orig~al liabili ty and the recog1Jitioil of a new liability and the dirference io the respective carrying amounts is reco ised in the consolidated Slatement o f income
Impalr meot ood uncollec ibility of fina ncial assets An assessment is made al each repon ing date to determine whether there is objective evidence that a speci fic financial asset may be impaired If such evidence exists allY impainneOl loss is recogoised in the consolidated statement of income ImT t is detemtined as fo llows
(a) For assets earned a t fair value impainnellt is tbe difference between cost and fair va lue (b) For asseamp carried at COSt impairment is the difference between cost and lIle present value of future
cash flo1S discounted at lhe current market rate of rdurn for a simi lar finan cial asset (0) For asseq carried al amortised COSt impainneot is the difference between canying arnOWll and lhe
present Value of future cash flO M discowlled at the original effective iDlerest rate
Provisions Provisions are rewgnised hen the Group has an obl igation (legal or COnslnlctive) aris ing fro m a past event and the costs to settle the obl igalio are both probable and able to be reliably measured
16
Aamal Company QSc
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 31 December 2013
3 BAses OF PR EPARATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICI ES (colltinued)
34 SUMMARY OF S IGNIFICANT ACCOUNTING POLICIES (continued)
Employees eod of service benefits The Group provides end of service benefits to all employees in accordance wi th employment contracts and Qatar Labour Law The entitlement to these benefits is based upon the employees final salary aocl length of service subject to the completion of a minimum service period The expected costs of these benefits are accrued over the period ofemployment
Revenue Revenue is recognised to the extent thal it is probable that the economic benefits will flow to the Group and the revenue call be reliably measured Revenue is measured al the fair value of the consideration received excluding discoWlIS rebates and duty The following spec ific recognition criteria must also be met before revenue is recognised
Sale ofgoods Sales are recognised whcn significant risks and rewards of ownership of the goods have passed to the boyer and the amount of revenue cao be me3sured rcli3bly
Rental income Rental incorne from investment properties is accoWlted for on a time proportion basis over the period of tenancy Incentives for leases to enter into lease agreements are spread evenly over the lease teon even if the payments are not made 0 0 such basis Income arising Tom expenses recharged to tenants is recogn ised in the year in which the expenses can be contrac tually recei ved Service charges aud other such receipts are includcd gross o f related cosls in revenues as the Group acts as principal io this regard Premiwns received to terminate leases arc recognised in the consolidated statement of income when they arise
Service income Service income is recognised when the service is rendered and the outCQrne of the transactions can be estimated reliably
COlimission Commission is accounted for on an accrual basis when the right 10 receive the income is established
become on tra~el agencies [ncome on travel agencies is accounted for in the year in which the airline tickets are sold
IIIeresr income Joterest income is recognised as the interest accrues using the effective interest Clle method
Foreign currencies Transactions in foreign currencies ate recorded al tbe rale ruling at the date of the transaction Monetary assets and liabi lities dcoomioated io foreign currencies ace retranslated ill the raLe of exchange ruling at the reponing date All differences are recognised in the Statement ofinconlC
Use of estimates The preparation of (he Groups consolidated financial sta temenls in CQnfonnity with Intemltional Financial Reponing Standards ([fRS) requires management 10 rnake estimates and assumptions that affect the reponed amounts of assets and liabilities and disclosure of contingent asscts and liabili ties at the rcporting date and the reported amoUlils of revenues and expenses during Ihe reponing period Although these estimates are based on managements best knowtedge of current events nnd actions acnm results may ul timately differ fro m those estimates (Significant asswnptions nccounting judgments and estimates used in preparing these coosolidated fina ncial sta temenlS are disclosed in Note 31)
The estimates and underlying assumptions are reviewed regularly Revisions to accounting estimlIes are recognised in (he period in which the estimate is revised if the revision affects only that period or in th~ period of the revision and future periods if the revision affects both current and fu ture periods
17
Aamal Company QSC
NOTES TO THE CONSOLlDA TED FINANCIAL STATEMENTS For tbe year cnded 31 December 2013
3 BASI S OF PREPARATION AND SUMMARY OF SrGNIFICANT ACCOUNTING POLICIES (continued)
34 SUMMARY or SIGNIFICANT ACCOUNTING POLI CIES (continued)
Fair va lues A number of Groups accounting policies and disclosures require tJ1 C measurement of fair values for both financial and non-financial assets and liabil ities The Group has an established control framework with respect to the measuremeot of fair values When measuring the fair value of an asset or a liabili ly the Group uses market observable data for (be valuatiOD Fair values are categorised into different levels in a fair value hierarchy baCd on the inputs used in the valuation lechniques as follows
i) Leve l I - Unadjosted quoted prices io active markets for identica l assets and liabilities ji) Level 2 - Otheqobservable inputs not included within level 1 of the fair value hierarchy ii i) Level 3 - Unobtervable inputs (including enti ty s own data which are adjusted if necessary to retlect the
assumptions market participnllts would use in the circumstances) The Group recognises tralnSfers between levels of the fair value hierarchy at the end ofthe reporting period during which the change has ocdWTed_
Treasury shares When share capitl recognized in equity is repUIchased (by the Company or any of its subsidiaries) the amount of the consideration paid which includes direa ly altributable COSIS is recognized lIS a deduction from equity Wheo treasury shares are sold or reissued subsequently the amount received is recognized as no increase in equity and the resulting surplus or deficit on the transaction is presented io share premium
18
4
Aamal Company iQSc
NOTES TO THE ONSOLlDATED FINANCIAL STATEMENTS For the year ended 31 ecember 201 3
BUSINESS CO~BlNAnON
Acquisition o f Culf ROks Company VLL On 1 January 2012 the roup acquired 51 oflhe voting shares of Gulf Rocks Company WLL (Gul f Rocks) a limited Iiabiliry campan incorporated in Qatar and registered UJKier conunercial registration number 2249) The acquisition was made thT ugh Ci-San Trading WL L a subsidiary which is 50 owned by Aamal Group
I
The fai r val ue of lbe ideltifiable assets and liabilit ies of Gulf Rocks Co mpany WLL based on purchase price allocation exercise condlcd by tbe management as at the date of acquisition WJ S as follows
Fair value recognized on
acquisition QR
Assets I Cash and bank balances 14005495 ACC QUOiS receivable and wePayments I 749383 Amouots due from related plrties I
I oveotones
48311 190 5124 270
Available for sale investm~nlS 1985245 Plant and equipment 6769 17
81852500
Liabilit ies Accounts payable aJld accll1als 4724446 Amounts due to related parties 385070 Employees end of serviccibenefits (Note 15) 349272
5458788
Total identifiable net a5sellf
Purchase consideration trasferred Non-controll ing intereSt az-ising on business combination Bargain purcha5c gain rc~u ting from the tcquisilion
Allalysis ojcash flows OIl acquisition Net cash acquire11 Nith the subsidiary 14005495 Cash paid (30600000)
(16594505)
On I September 20 12 the Company acquired the balance 49 nfthe equiry of Gulf Rocks Accordingly the Group has 74 5 effective holdin4 in Gulf Rocks as at the reporting dale The excess nfthe purchase cons ideration over Ihe fair value o f net assets of GuJf Rocks acqui red from the nnn-controlHng interest has been recorded directly in the retained earnings of tbe Gr6up as at 31 December 201 2
QR Purchase consideration 404 10000 Less fuir value of oet asset~ acquiroo from the non-controlling Interest holder (39842792) EXce5s of purchllse cons idf ration over the fair value of net assets a(q uired 567208
19
5
Aamal Company QSC
NOTES TO THE (WNSOLlDATED FfNANClAL STATEMENTS For the year eoded 3 ) December 2013
CASH AND CASH EQUIVALENTS
For the pmvose of consolidated statement of cash flows cash and cash equivalents comprise the fo llowing balances
lon 2012 QR QR
Cash and bank accounts 330333904 282272895 Short lenn bank deposits 105802852 85608396 Cash and bank balances 436136756 367881 291
Bank overdrafts (6836280) (2885090)
Cash and cash equivalents 429300 476 364996120 1
The short tenn bank deposits are made for varying periods between one day aod three months depeoding on Ibe immedifltc cash requirements of the Group and earn interest at the respective short term deposit ra tes
6 ACCOUNTS RECEfVABLE AND PREPAYMENTS
2013 2012 QR QR
Trade aCColUlts receivable 411 011 567 345260657 Advances 0 suppliers and prepayments 50787921 629389J 5 Retention receivables 36217081 56943030 Other receivables 12073270 17 139173
5tO089839 4 82 28 1775
As at 31 December 2013 trade accountS receivoble amoWlting to QR 2690 1412 (201 2 OR 24984025) were impaired Movements in the allowance for impairment of trade aCColmts receivable were as follows
2013 202 QR QR
At 1 January 24984025 1 877085 Charge for [he year (Note 21) 2294590 13613 120 Amounts wriuen off (19949) (117368) Unused amotmts reversed (357254) (388812)
At 3 t December 26901412 24984025
20
6
1
lamal CompanyQSC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMEltS For the year ended 3 J December 2013
ACCotNTS RECEIVABLpound AND PREPAYMpoundNTS (contillued)
As at -1 I Dtcemxt the ageirg of unimpaired (ltlde accounb iltcivabk was as follows
P(HI duo
nor Up to 30 31-60 61middot90 Yi-jSj gt flO Tota impoirlt-fl days days days day doys
QR QR QR QR QR QR QR
1l13 411OJl$67 25l981960 32312165 2140966 19351fi43 16f)76888 60148545 2012 345260657 1695159B6 493lt)8566 2356$954 19494369 16908414 66374363
1JJJirtpai~ed receivable are expected no th bil5tS of past experienn) 10 be fully fcCi)evbc H is not the pngtctlce ofthcent Group to oblum collaleral over recejvablcI_
AMOLNTS DUE FROyl REL-TEO PARTIES
Name
AI ~aisnl Holding Company V_LL E Seweo Cabtes Qatn WL L Cnild -ftt Cvmlllny Al hz Retll E$vt rWesnnim Company WLL~ AllaZi Real Estale BrAnch EI Sewedy Electric Egypt WLL MuincrDJ1Ce Mwagmvont Group Qat3r W LL Good fe Cheffilt - The Pcarl
BuderPhtrnacy Al Faisallnlemadonal Tnl(i and Investment Company WLL AI-rabia Land Trnr~PQltit1g Company rLL ro Sewedy CabLes - Kuwuit Gcentttco hlttrnJmJilI Frijns StHytural Steel Middle East WLl Winer Wunderand Company WLL Al FtOH1H for Investment amp llllemtiOl1a Trading COntpAny WJ_L Q)lar Bahrain lmerOlnionai Cnero3 WLL Gulf EngJisb Sltl-Qo] Al Rayyao Tourism lve$lrnent Company W LL Other relater purties
2013 2012 QR QR
15412-1064 ll941Y70 34644615 ~li96858l
[()0405 14-45012 51 59197 9538116 15514113 4014727 236824$
1867526 LSOfd22
8(1012 10435r 311650 746395
15023 204450 459829
2iYHi 244940 186750
152170 143440 33500 7768(1
6259 1459lt) 758962-1
__2~61g~~_ 1~95Ji
bull 214109950 171525363
--__ shy
7
8
9
Aamal Company QSc
NOTES TO THE CONSOLIDATED FfNANClAL STATEMENTS For the year ended 3 1 December 2013
At10(JNTS DUE FROM RELATED PA RTIES (continued)
NO les (i) Transactions witll related parties are eam ed out through open account and Directors do not consider any
receivables to be past due or impaired
(ii) Related party transactions ore disclosed ill Note 26
INVENTORIES
Goods for rew le Raw materials and spare pans Work in pTOgresS Goods in transit
Less Provision fOI obsolete and slow moving invenlories
1013 QR
165499699 38388307 19944678 9671 8553
320551237 (3851692)
31 6699545
Movements in the provision for obsolete and slow moving inventories were as follov~
At I January Charge for the year (Note 19) Reversals Amounts wri tten off
At 31 December
E QUITY-ACCOUNTED INVESTEES
TIle Group has the followiog invesllnenfs in equity-accounted investees
Interests in joint venrure Interests in associa tes
At 31 December
G roup s snare of profits fr om the equity-ncco unted iovcstees arc AS follows
Profit share from in vestment iojotnt venture Profit share from investment in associates
202 QR
232597650 36608394 30622960
10521 9695
405048699 Q 145826)
40 I902873
203 QR
3145826 1 380617 (535695)
( 1139056)
385 1692
20 12 QR
2795992 2208263 (137995)
( 1720434)
3 145826
2013 QR
2012 QR
129462184 3644723
124124803 2545188
133106907 12666999 1
17330368 22869454 1169533 534050
18499901 23403504
22
10
Aama Company QSC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 31 December 201 3
9 EQUITY-ACCOUNTED INVESTEES (continued)
Counlry of incorportllion
Relationship Proportion ofownership and lotilfg power held by the Group
203 2012
EI S~wedy Cables Qatar W LL Frij ns Structural S teel Middle East WLL Al Ftfazdaq Company WLL
Qat~
Qatar Qatar
loint venture Associate Associate
55 20
55 20 35
Note With effect from 1 January 20 13 the mlnagemeot of the Group has reclassified the investment in Al Farazdaq Company W L-L from investment in associate to investment in subsidiary This is based on the transfer of share holding by the other shareholder whereby the conlroi o f AI FOl razdaq Company W LL bas been assigned 10 tbe Company
INVESTM ENT PROPERTIES
a) Reconciliation of carry ing amounl 2013 202 QR QR
AI I January 611334701 8 555 1835348 Additions 9568047 1727191 87 Transferred from property plant and equipment (Note II ) 34519828 Net gain iTo m fa if value adjlls tment 245051107 388792483
At 31 December 6402486000 6 11334701 8
b) Measurement of fair value
The fair values of the Groups inveS hnent properties as at 31 December 201 3 and 3 1 December 2012 have been arrived al on the basis of valuations carried Ollt on the respective dates by professionally qualified independent valuers not related to the Group The independent valuers have appropriate qUlli ficatioos and (eceJ11 experience in the valuation of properties in fhe relevant locations The fa ir value WltlS determined based on market comparable approach that reflocl s recent transaction prices for simillt1r properties and discounted cash flo w and income approach techniques
Details of the Group s iovestment properties and infonnation about the fa ir vn lue hierarchy as at ) I December 20 I J are as fo llows
IIvestment propenies
Level 3 fair vallie
Al I Janu ary 6 [ 13347018 Additions and trans fers from property plant and equipment 44087875
Gain included iu prom and loss Net gain from fair value lt1djuslmem 245051 107
AI J I December
The Group recognizes transfers between levels of fair value hierarchy as o f the end of the reponing period during whicb the transfer has occurred There were no transfers between the fai r va lue hierarchy during the year
23
10
Aamal Company QSc
NOTES TO THE ONSOLlDA TED FINANCIAL STATEMENTS For the year ended 3 I ecember 201 3
LNVESTM ENT ROPERTIES (contin ued)
b) Measuremen t 0 (air value (conti nued)
Vau t ion technique an significant unobservable in puts
The valuer has applied t e income capitali zation discounted cash flow and comparab le methods to detennine the market value of the lnve tment propen ies Significant unobservable inputs used included expected market rental growth rates (an average 425) occupancy rates (approximately 90 to 95) and risk adjusted discount rates (approximately 5 to 7 0) M y significant change in these inputs can impact lhe fair valuation of investment propcnies
24
Aamal Company QS c
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For che year ended 31 December 2013
11 PROPERTY PLAi~T AND EQUIPMENT
FumilUre Truck mixers fIXtures and Complllers
Leasehold and maor Plum (fd office and relaed eapiowork Buidings improvements vehicles machinery eqllipmcni sofMore in progmiddotcss Total
QR QR QR QR QR QR QJl QR
At I January 2013 137870126 371 88 132 9595813 1 262536261 19 580954 14864 385 561 32447 6241 30436 Additions 948)65 2618 100 5367399 859061 111 5268 137147581 148055774
Relating to d isposalswrite-off (1042642) (4390496) (77157L) (589150) ( 184075) (6977934) Transfer from capilal work in progress 1505 310 164 336 3601776 ( 150000) 1182741 (6304 163) Transrer to investment properlies (Note (0) (345 19828) (345 19828)
At J I Dttember 201 J 139375436 J7 258~ ~1 85735 270733865 19700865 169783 19 152456037 _73068~448
Depreciation AI I January 2013 16133915 J6902 529 49087707 68783 065 11 980009 tl71 595 3 174603 178 Charge for the year 7059805 3237150 5390767 12249797 2849162 1768823 42555504 Relating 10 disposalsJvri te-off (664709) (4 3 1716 1) (724322) (552939) ( 18 1993) (6441 124)
At 31 December 201 3 23193 720 19474 9 70 50161 313 90303540 14276232 13302783 2 107 17558
Net carrying amounts At 31 December 2013 116181J16 _17783221 44024422 180415325 5424633 3675536 __l2456O37 JJ9970~890
Notes (i) Depreciation charge for the year amounting 10 QR 33 164382 (201 1 QR 3303091 6) is included in tbe direct costs and an amount of QR 60055 (20 12 QR 36939)
has been capiulised under capital work in progress
(ii) The capital work in progress includes capitalised borrowing costs amounting to QR 125645 (20 12 QR 15358)
(ii i) The buildings are constructed on a plot ofland taken on a loog term operating lease
25
Aamal Company QS c
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 31 December 201 3
II PROPERTY PLANT AND EQUIPM ENT (continued)
C05I~
At 1 January 2012 Additions Acquired through business combinations (Note 4) Relating to d isposalswrite-off Transfer from capital work in progress Transfers
Buildings QR
137434400 435726
Leasehold improvemellls
QR
38137377 446J 04
144 103 ( 1539452)
Truck mLCers and molO
velricles QR
83427661 11464679
1697609 (631824)
Plant and machinery
QR
249335437 97264 85
35 14 132 (99498)
59705
Furniture fir ures and
office equipmem
QR
22845309 667586
192042 (3696457)
98000 (525526)
Computers and related
software
QR
158 19519 87 14 14
141837 (266 1733)
908078 (2 l4730)
Capitol work in progress
QR
12104889 451 53265
( 1065783) (59924)
Total (JR
55910459 8 68765259
5689723 (862 8964)
(800180)
AI 31 Dttember 2012 137870) 26 371881 32 95958 13 1 262536261 19580954 14864385 56132447 624 130436
Depreciation AI Jaouary2012 Charge for the year Acquired wough business combinations (Note 4) Relating to disposalswrite-off Transfers
9144666 6989249
)4 3 16620 3410618
144103
(96 812)
42558404 548 1613
1671942 (6242 52)
44555 290 2 1398849
2890797 (6 187 1)
12392584 3 182899
169005 (3558466)
(206013 )
12235266 2077633
136959 (2627283)
(J 0662)
135202830 42540861
5012806 (7840684)
(312635)
At 3 L December 201 2 161339J5 16902529 49087701 68783065 11 980009 11715953 174603 178
Nel canying amoWlts
At 31 December 201 2 12 173 6211 2028560 3 46870424 193753 196 7600945 3148432 56132447 449527258
26
12
13
Aamal Company QSC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 31 December 20 13
ACCOUNTS PA YABLE AND ACCRUALS
Trade accouots payable Advances from customers and tenants Accmals Social and sports activities levy Other payables
AJIOUNTS DUE TO RELATED PARTIES
Name
Arab Compaey for Fiber Products EI Sewedy EIC( lric Ho lding Egypiasl Egypt Egyptlech Egypt United Industri es Company WLL Johnson Controls Air condi tioning aod Refrigeration Qatar WLL pound1 Sewedy Cables Egypt Johnson Controls Air conditioning and Refrigeration rNC Dubai United Wire Company WL L Gelteo Company W LL - Gelteo Refr igera tion and Airconditioo ing CampC Lightway nc AI Shaab Group of Companies Other related pruties
NO M Related party transactio l)s a re disclosed in Note 26
2013 QR
320017657 30486837 26924669 41 761 843 25855567
445046573
2013 QR
18517474
4902528
6531231 6404578 3215821
2825884 75 7825
3467288 263715
1313247
48199591
2011 QR
26716268 1 27410234 222575 76 28954726 33)33852
379119069
2012 QR
18380528 91458 82 54 13849 1 11 6 135 5374039 35291 2020359 1693323 1064744
670 179
11 0873 12 18650
49737757
27
14
Aamal Company QSC
NOTES TO THE CONSOLIDATED f fNANCIAL STATEMENTS For the year ended 31 December 201 3
INTEREST BEARING LOANS AND BORROWINGS
NOles Malilrify
2013 QR
2012 QR
CoMl Loan 2 Loan ) Loac4 Loan 5 Loan 6 Loan 7 CoMB Loan 9 Bills discounted
(0 (ii) (iii) (iv) (v) (vi) (vii) (viii) ( ix) (x)
lune2014 Seplember2014 January 2015 November 2016 December 20 16 November 2017 Jllne20 l J December 20 7 OClober 20 19
172070387 440000000 50544000 40261 621 81387109 19920036
6] 43890 62626967 42522794
915676804
298324180 440000000 10 J088000 57955030
100 168750 2 1300492
407728 1 782871 1
35000000
1065742444
Less Defe rred finatlcing cost (771 503) (897148)
914905301 1064845296
Presented in the consolidated statement of financial positioo as fo llows 20)3 QR
201 2 QR
Current ponion Non-current ponion
749520820 165384481
825568489 239276807
914905301 1064845296
The dete rred financing costs consSt of arrangement fees The movements m the deferred financing costs were as fo llows
203 2012 QR QR
At I January 897148 332 661 Addjtions during the year 1 062565 912506 Amortised during the year (218amp210) (34801 9)
At 3 1 December 771503 89 7148
28
Aamal Company QS C
NOTES TO THE CONSOUDATED FlNANCIAL STATEMENTS For tbe year ended 31 December 2013
14 INTEREST BEARING LOANS AND BORROWINGS (continued)
Nolec
(i) Loao I i USD 93000000 impon 10n moi lily obtoined to refimnee he Icne~ of edit The 10 IT interest at commercial fate and the interest is paid at monthly intervals The fucility is repayable within ISO days including the usage period under letter ofc redits
(ii) Loan 2 is a secured bridge loan obtained to settle an existing loan and working capital requirements of the Company The loan carries interest al coOlJllercial rates and interest is 10 be paid on quarterly basis
(iii) Loan 3 was obtained for the pWpOse of financing capital ependiture and direct payment to suppliers contractors and 5ub-controctors The 10011 CMries interest at commercial rate and the inte rest is to be paid q Uar1erly The fac ility is repayable in IS quarterly iostallmenls starting I July 20 11 and ending I January 2015
(iv) Loan 4 was obla ined for conSlruclion o r an inveslmenl property The loan is seclJed by 0 primary mortgage over the some property and corporate guarantee of the Aamal Company QSC Tbe loan carries interest at commercial marke t rate and is payable in quarterly instalments
(v) Loan 5 represents a loan fOlcility obtained in two sepnrole tranches amounting to QR 309 825 000 (USD 85 million) for the purpose of refurbi shment and construction of fociJities io one of the investment properties The loan is repayable In 16 equal quanerly instalmcnlS for individua l tranche commencing from March 20 1J The loan carries interest at conunercial rJtes
(vi) Loan 6 represents secured loans obtained ffom a commercial bank in the previous periods for the purchase of heavy equipment and machines and were merged on 15 November 20 12 as a comb ined loan This loan is payable by 59 equal instalments of QR 426000 with (I last inSlalment of OR 438 326 with effect fro m 01 October 201 3 The loan carries interest at commercial market ra tes
(vii) Loan 7 is il tmst receipt banking facility obtained for the purchase of inventories This carried interest at conunercial market rates This loan was full y settled during the year
(vii i) Loan 8 represents secured loans obuined from a commercial bank in the previous periods for the purchase of delivery trucks and machinery and were merged on 22 October 2012 as a combined loan The loan carries inte rest at commercial market Tates and is payable by 59 equal insta lments o rQR 160000 with a last inSlOlmem ofQ R 128000 with effect from 3 1 December 2012
(ix) Loan 9 is an Islamic Financi ng Arrangement obtained for construction o f a manufacturing plam and as o f yearend ba lance represents partially drawn amount out of totil1 facility of QR 655 68000 The loan is secured by joint corvorate guarantee by the shareholders The loan carries profit at Islamic Financing rates and re-payable in quarterly instalments starting from the end of the 24 months gmce period from the date of loan drawn
(x) Bi ll discounting is a loan fac ility from banks The purpose of the arrangement is to discount bills locally and carries interest at current commercia l filte
15 EM PLOYEES END OF SERVICE BENEFITS
Movements in the provision reHectelt in the consolidated SLo1tement of financia l position were as fo llows 2013 201] QR QR
At I Jan uary 18111 763 17877937 Provision made during the year 4056969 4205499 Acquirelt through business combinations (Note 4) 349272 End of service benefits paid during the year (2210756) (4320945)
At 3 1 December 19957976 18 111763
29
Aamal Company Q5C
NOTES TO THE CONSOLIDATED FINANCIAL STATEMETS For tile y~ar ended 31 Dee~mber 2013
16 SHARE CAPITAL
2013 2012 QR Qq
AtI1l1)nud 60000)000 (20 2 544500JJOfn shares ofQR iii Cilch 60i)iQOOlOO 54450lt)0000
21)13 2012 Numher of
siMtS QR shares QR Issued Mtldfully paM At lJamld) 544SfWllOfJ 5445(100001) 495000000 49500000)0 1511C ofbonus S1i1-C ___ 5550~OOO 555000000 49SGOOOO 495000000
At 31 Decenef 6(OOampQllf1(1 ---14450O000 544~OOOOOO
All ampates m~ of a110 clss and caL equal voting rights
17 LEGAL Reuro5ERVE
As required by Qatar Comnertai COfrp7lnies Lav No5 of 2002 lOfp of the profit for the ye1J as a rru1imllli silould be mmsfened to legal re~erve The reserve is lot normay [lytiabe tor distribution except ill he cixcuJUstllrtUS stipulated m the above ~lemi0ntd GIW
IS HEVE1TE
2013 l)n QR QR
Sale of goods 1726893265 i709057~(iO
Renlal income UiO362322 133117509 S-ice income 858695 33940731 CornrrusslOlL Incentives and agency fces 44695S1 422~_632
212259$)33
19 DIRECT COSTS
2013 2)i2 QR
C 051 of inven(feS recognisedlIS an exptns 1522929956 497210830 Dind sL1ries lmd wages 601 [1336 5137856-8 Operating eXpenses on nml estate p~opet1les 36)711316 3041H504 fJepreciatiort (Kate I J) 33164382 B03091pound Operators marhgerrt6nt fees 14508588 li667989 Provisicn Qr obsolete and skwlt moving mvenlories (K)tc 8) 2380617 2208263 Other operating ilxpenses _31~3982 _ 3674946
1702139171 JS9653OI tgt
Aamal Compall-yQSC________________
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For lthe year ended 31 December 20 11
2G OTHER NeOiI
2013 20J3 QR QR
Interest mcume 2824216 2)314392 Profiv( loss) 00 disposal of property plant aoe eqUlpmem 737647 (l7362G) Eargain ptmnJse gain (Kote t) 8360793 MIsceJlaneous income 5723356
2013 2012 QR QR
ManllgetnUI hrQ empl(yees ws 55170302 55lt035middot1 Rent 23596799 2594915 Allowance for impaimlcot oUrsue aCQl1ot$ rc(Xjvalle (Nole 6) 129459(i 11613120 flBumcce ane profcampiitmJI fees 2IU9263 209J902 Corununication OOtHS 1935123 1649155 Trllining tid ouSfjt$s developmccl 950476 L095764 Re]X1in and mainle-nilnce 21)11SflS 2)2 I Poslag-c prjnting acri stationery 610299 541159shyvllsltdlancous expenses _~~~664 1lt2
-~~~ 125162812
22 fIN~lCE COSTS
2013 2amp2 QR QR
Inleres epen~ 42866312 5773U4B Am(vtisJliorgt ofdefcentrred financiog coStS __ 2l)tl26~~ gt3661
44930877----=
58063009
23 BASIC A~n nHUfED EARilNGS PER SHARi~
Basic trdTJogs per hue is caculatid 0y llividing the pwfill0( Ihc year attriouiabk (0- equity roldc-5 of the parent by lhi w~iglwxi avrage number of ordinary shares 0JstandirJg dulting tht_ year During Ihe year lil~ Conpmy i-sued and CBpii3lzed bonus shares lnd awmJingl) me previously ~eportod earnings per shac have blOM restatc(i
20i3 2012
Profit feT the year auributable to Cluity holderlt of the- paren (QR)
Weighted aVCTage number ofshares outstanding during the year (i)
Basic Jd diluted earnings per share (QR) 085
59985U413 shy
~~--~~~~- ~------J 1
23
Aamal Company QSc
NOTES TO THE CONSO LIDATED FfNANC[AL STATEMENTS For tbe year ended 3 l December 2013
BASIC AND DILUTED poundARNINCS PER SHARE (continued)
NOles (i) Th wigh d m nlg urnb of hres foc h P of lruling ~migs pee share h bee kulated
as follows 2013 20J2
QU3lifying shrues allhe begi ll1ling of the year 544500000 544500000 Effect of bonus shares issued and capitalised 55500000 55500000
600000000 600000000
Less T reasury shares (149587) (i357SI)
Weighted average number of shares at the end of the year 599850413 599864249
(ii) There were no potentia lly dilutiw shares outstanding at any time during tbe year and hence the diluted earnings per share is equal to the basic earnings per share
24 COItIMITMENTS
20 1] 2012 QR QR
Estimated capital expenditure approved and contracted for at the year eod but not provided for
Investment properties 2964000 8 139063 Property plant and equipment 16386500 63759762
19350500 71 898825
Operating lease commiIOlenlS under noncancellable lease agreemenlS
Payable wilhin one year 990806 702000
990806 702000
25 CONTINGENT UABILITlES
The Group had the following contingent liabi lities from which it is anticipated thai no malerial liabilities will arise
2013 2012 QR QR
Letters of guaramee 474551239 394255203
Letters of credit 7678499 194299384
NQles
(i) leHlaquogt of gu indud penonmnlaquo tend nd bid bonds d pymenlt g gi to suppliers and contractors by the Group in the ordina ry course of bus iness which will matme within twelve months fro m the reporting da te
(i i) Letters o f credit are provided by lodging documents to the bank tor purchase of trading goods fro m foreign suppliers wruch will maMC within thJee to six months from the date or tile Iransaclion
J2
26
Aamal Company QSc
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year eoded 31 December 2013
RELATED PARTY DISCLOSURES
Related party transactions Related parties represent major shareholders directors and key management persortOei of the Group and entities controlled joimly controlled or signjficamly innueoced by such parties Pricing policies md tenns of these tnlOSaclions are approved by the Group s management
Transactions with related parties induded in the consolidated financial stalemenls were as follows
20lJ 2012 QR QR
Sale o f goods and SClVices 419034048 415225221
Rental income 1980473 2069386
Purchase of goods and services 1591 38018 300835596
Rental expense 21 780G78 23397334
Bargain purchase gain 8360793
Net assets acquired 78803585
Relat ed party bal nnces AmountS due from and due to re lated parties are disclosed in Notes 7 and 13 respectively These balances do oot carry interest and are repayable OIl mulUlUy agreed dates generally within one year
The Group did not record any impairment of receivables reJatiog to amounts due from related pat1ies in either year This assessment is undertaken each fina ncial year through examining the ftnanc ial position of the related party and the market in which the related patty operates
Parent The Groups ultimate parent is Al Faisal Ho lding Company WLL
Compensa tion or key management personn el The remuneration of key management dming the year was as fullows
2013 2012 QR QR
Short-term benefi ts 7904794 1079595 Employees end of service benefits 408934 439776
8313 728 11235727
33
AamaJ Company QSC
NOTES TO THE CONSOLIDATED FINANCIAL 5T ATEMENTS For the year ended t Decernber 2013
Dilling the year 1he Group issued a XHlUS share of 10 928 of the paid tiP share capilal hdd ilS at 31 DiX2mber 2(JJ 2 mnmuning to OR 555000000 using retamed earnings as of3 December 2012 (20l2 Doe share for every ten shues held as of 31 Dcember Oll amuunting 10 QR 495OO()OOO ling reta1ned earmrgs 28 or 31 Decencer 2D II Jshy
18 SEGMENT INFORMATION
For J)iloogement PUIpltJM rhe Group i organised into business unit bused On LlJeir nature of Acttvitics lud nas fonY reportable segments and the Head Oftklt as bllow$
Propert Tbe segntn cOlists of City C~nler Qlta~ Brunch and Aamal Rea Esmte Branch whicb ll[c invoived in lampIiiog the faJ1ities of retail outlet conpex red e5ttlte nve(mltn$ and property remal buines~s
Trading mld distrib-wion The segmeul Involves wholesalB andlor rBtail distribution of phamlaceutlcai and consunable i1ems hume Epplianccs medica equimenl t-Tes ill1d lubricmtlaquo and II1UllitnEl printing The scgn(rtt includes 6c following entities
Eotl Sina Medical Branch
Aaen Medical Braudt
Amcill Troding and DistoolltlqO Branch bull Foot Care (erier HRnd) Good llre Pbannacy Bf4Uch bull Al FllfJdaq COllpafY wJ~L
InduSNol manuacturing TIle s0groent IOvolves Ulahuactrumg whole~we aliaor rewi dimibUlioti of dccnc cables lid tools ggregJ1es_ ready-IUx connole and cement bI0C~ lI1d provi$ion of servlCcent$ in rdation to iODllltroa Itvestment repair aJ-d Gonstruction of power plwts liiiding of LED ilgluitlg products und management of industnl enterpnses The segment ircludes be folloVting centntitis
bull Aam1 Cemert Industries LL AuraJ Redy1Yl(A BrQTlch
bull Doha Cables Qawf lLL Senyaf IoolJic1es Qatar Holding W LL Advanced Pipes ard Casfs CompQTly WJ L bull GuJfRoch Coroany WLL Ci~San Trading Company WLL hmovafive Lighting Compary WLL
Managed services le segment inyolvc~ provisloH of hOllseiltecpmg mi cleaning services fucditics n-anagemerJ services C1egy s(tvices ttl centfe sltrvicf)s buildiqg lnaintemHlelt aml acting as travel gens The 5cgnltnt includes the foUowing cnti(lcents
An13 ServJce Branch
amli TnlVeJa l5tmh
f-eco Gulf Co W LL
Jolinson Controls Qattl WJL
28
Aamal Company QSc
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended ) L December 20 13
SEGMENT INFORMATION (Co ntinued)
Head Office It provides corporate services to the branches and subsidiaries of the Group
The managiog d irector of the Group monitors the operating results o f its business units separately for the purpose of making decisions about resource allocation and perfonnance assessment Segment perfonnance is evaluated based Oil operating profit or loss of these segments Transfer pricing between operating segments are on anns length basis in a manoec similar to Iraosactions with third parties
Aamal Company QSC
NOTES TO THE CONSOLIDATED FINAN CIAL STATEMENTS For the year ended 3 1 December 20 13
28 SEGMENT INFORl1ATlON (continued)
Operating segments The operat ing segment after elimination or ioter-bra nch and inter-co mpany lrnnsaclioos is presented as follows
Trading (nd Industrial Managed For fh e year elided 31 December 2013 Properly disirjblli ioll manujocljlring services
QR QR QR QR Revenues
- h lemal parties 260360172 578909983 1231522768 S l802210 - Inter segments 1253914 6843 11 8 29639873 3445052 1
Heat Office QR
Eliminoions QR
(n187426) II
Tolal
QR
2J22595133
261614086 585753 lOI 126116264 1 8625273 1 (721 87426) 2122595133
Opera ti ng results Fair vallie gains
Profit I (loss) ror the year
Depreciotion
200811944
245051 107
445863051
2066290
86492834
86492834
4345438
22636250
22636250
33049 089
5157436
5157436
1760305
(47864882)
(47864882)
1334382
267233582
245051107
512 284689
42555504
36
Aamal Company QS
NOTES TO Tl CONSOLIDATED FfNANClAL STATEMENTS For the yeM ended 31 December 20 13
28 SEGMENf INFORMAnON (c)tltioucd)
FOf the yearrnrkti J f DccemOer 2(J12 QR
Revellues - ExlcmlJ partiel 2331 17 509 bull Inter segmcI11S 1168935
-- 234236434 --~- -~--
Openning results 18S2367t Fmt value gains J8S79-4~G
pront LOllS) for the rear 570616154
gt3659
No(
lnlermiddotgment revenues are eliminated on tQHs)idntiOH_
Tadiug ftfid disl d)Ntion
QR
S2S3l7661
324 j
5335493114 ~ -~-----
51384831
54384338
4J9R71(i
Indus idi mamfmturing
QR
1255694537
129U25lS4
56727059
56727059
32752742
slnltic(s QR
55216665 2939H31
S46lOJ96
7427414
7437
[908067
ilfild ()jice QR
(64(41976
Elimination QR
(74tHi2oJ Iii
Totul QR
206936372
2069336372
235721
(64641
131 f613
6245
42541)861
Amnal Company Q$l
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Por tnt yeartndeJ 31 De~embcr 2013
28 SEGMENT JNFORMATlON (contiutlld
Assc-ts and labilities
Tng alld lndtrstfw At31 December 2(113 distnbllrior manufacturIng senices HeadOJJicc EliminatioilS lola1
QR QR QR QR QR
Cumnl 3tS 227552338 620807979 61349 j 415 S()6)86922 (301636995) 1477366090 Noolucrcnt DSeIS 6411868160 12604763 622386238 4348876 (i624548 __p2438051 780
fotal asstl$ 6639420498 1194 1243194217 65698291 513Ql1470 ==-lt03H8l~O()) 853295-870 -~----~ ~---~ -
CUIT)llliabilitics 280995335 1(3511J60 6344(12777 2l0708lJ2 496261185 (3CH636995) 1249603264 Non-current iiatJlitics 7l70L5V2 8008485 HlDi16~43_ 3181668 t433799 ____ ilj534_~57 __ --Totul liahililics 353696897 ___~4159~4~ 734419720 ~4976~~~~~ 1434945711
---~~--~ -~-~~ - _2~~~4~~ (~~~~9~
C1pild expcndimn HI) WO743OOj 1397742_~471l2~--~50 ~51 ~1~623821~~1~_ -~----~------ -~
3amp
28
Aamal Company Q SC
NOTES TO THE CONSOLIDATED FfNANClAL STATEMENTS For the year ended 31 December 20 13
SEGMFNT INFORMATION (continued)
Assets and liabilities (continued)
AI 31 December 2012 Properly QR
Trading and d iSfriblllion
QR
Indusrial manufacfuring
QR
Managed senices QR
Currenl assels
Non-current assets
146491 186
6121 864484
2964425 12 903 7264
73468 1258
549267235
51387098 471 1439
Tolal assets 6268355670 305479776 1283948493 56098537
Head Office QR
468325024
6713643
475038667
Currentliabil iies
Non-current liabiLities 273444 748 1 J10 15024
86054583 7434286
669214261 1288 14977
2 1938953
287 1199
480393637 1253084
Totil lliabiliti cs 390459772 93488869 798029238 248 10 152 48J64672 1
Capila expendirure (ltII L 72865 878 1281254 6647 J356 7169 13 149045
Notes
(i)
(Ii)
Inter-segmeot balances are e limioafed 00 consolidatio n
Capi tal expendiTU res consist of additions 10 propeny plant and equip ment and iovestmenl properties
Eliminations QR
To wl QR
(273735776) (i )
(20308351(i)
1423591302
6689563230
(27576661 1) 8 113154532
(273135777) (i) 12573 10405
257388570
(273735177) 15 14698975
24 1484446
39
29
Aamal Company QSC
NOTES TO THE CONSOLIDATED FrNANCIAL STATEMENTS For the year ended 31 Dcltmber 1013
Fr-A]~ClAL RISK MANAGpoundMamp1H
Objccthes and policies fe Groups principal )uaucill liabilities comprise imltresl bctmllg loons and IxmowHgs baRlt ovetda1s amounts due to fclaled par1ies and tracte accounts payable The main pUlJXSi of thesc financial liabilities is 4J mise firmne or 610 Grmps operations The G0JP bas various fimmcial assets such as ttadc accounts receivable lInlOlmts due from related parties bark balances tltCntion receivable and other receivables which arisgt directly fran its cperuoonamp
The maiH ri~ks an3ing Joru (be Groups UnariCJlll illslrumenls jle market risk cretiJt nsk and hmdity risk Til BoarD ofDtrcctO$ reviews end agrees policies for mzrAgbg Caltt f hespound ri~k ihkh arc summariscd beloW
VIarktt risk yenfatket risk is the risk Um changes in market prices $Uch as intfcst rates and hreig lttmeocy ect14nge rilles Vltl1 affect the Groups profit eqwty Dr value tf its hoJdiI15 of financial instrl[Thnls rile objecivpoundj of marke1 risk mUnllgcrlcnt is to manage uld 1~ontr(ll tho tr))rket risk expo-sure vithir acceptable parfI-etcJ$ while optimising rerUID
Equit) price risk ampjuity prtce risk is the risk hilt the Group ampearnings will be affected as a rcmt (If luctttltions in fm vdue of ~qui-gt
mstwnents Eqlliry price risk arises from availabtetor~sale inv2strnems However the Groups exposure to eqmty price risk IS minima as II doesn hold sitl)iftrmt ailableAor-511le inYestrmmrs
[merest rate risk The Groups fimiruial poundS5ot ampId liaojlilies (at Rl $uJject to int~~ rate mk compnse brmk depoils interst bearing loans and bOITQwjags and bank overdr-afts At the reponwg dalt tbe [merest rale pronle of Ill Goups intexst bearing fbi4rdd instruments as fliows
11113 20i3 QR QR
Fued liIeryS refc insfrvrnellts
Fmmcial assets 113035962 111913394 FrOltwial liabilities --1~203712l) 1252t43~1
9)OI~ (13350972)
Fhlllting inireSI rate ns1lmlttrs Fanctl~ Isseis 127024345 ID43848o Fllllocial liabilities _-(i~9347~ (94))48926)
(836)64116)
The Groups exposure to t~ ris of changes in marXet interest fltltes relztes primariiy to the Groups financial assets and lizbitdic$ with t1Oltttirg interest mte~
lhe loEowing able demonstrates the ampmitivity nf the eonsolidattXI statemen1 of income 1) caonaly possible chonges in in1jfgtst rmes by 25 basis points with all othe vari)ble3 hdc umstant The sensitivity of the CooiK~ljclatid statement of inc(me $ the eft(ct of tb assumed changes in lnterdt rales for one year bf1sec on the floating rate financial assets and fimmcial hablhw$ held at 31 f~r The effect of deae-ascs in interest ral~ is cXp0Ctct to be equal and opposite to the effect oHlle increases sllQvro
Changes it Eftx OIl
00513 [oms profit QR
2013 Floating mterest Hlte instruments ----2$ bp (1649776)
2012 Flv-ating irkfiSt rale instrumenls +25 bp (209[9(1))
~--------- -~~ 40-middot------ _ _ shy
29
Aamal Company QSC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 3 1 December 2013
FINANCIAL RISK MANAGEMENT (continued)
Foreign currency risk Foreign currency risk is the risk lhilt the value of lhe fi nancial instruments will fluctuate due 10 changes in fore ign exchange rates
T rade aCcOlmts payable and accrued expenses include amounts due in foreign currencies mliniy US Dollars UAB Dirhams Great Britain Pounds (GB P) and Euros of which the Group has a currency risk primruily on the baJmces payable in Euros and GBP amoWlting 10 QR 14400634 (2012 QR 17214046)
The Group does not hedge its foreign currency exposure As both Qatari Riyal and UAE Dirhams are pegged to the US Dollar balances in US Dollars and UAE Dirhams are not considered to represent significant currency ris k to the Group
The table below indicates the Group s fore ign c urrency exposure on its monetary assets a nd liabilities The analysis calculates the effect o f a reasonably poss ib le move ment of the QR curre nc y rale against the Euro and GBP with all other variables held constant on the consolidated slate menl o f income (due to the fa ir va lue of currency sensitive monetary asse ts a nd liabilities) The e ffect o f decreases in fo reign c urre ncy exchange rates is expected to he equal and opposile 10 the e ffect of the increases shown
Incramp1se ill
f oreign cUlrency rate
0
the QR
Ellecl on profil
QR
2013 +5 (720032)
20 12 +5 (860 702)
C redit Tisk Credit risk is the risk that one party to a financial instrume nt wi ll fa il to discharge an obligation and cause the other party to incur a financial loss TIle Groups exposure to credit risk is indica ted by the carrying amoWlt o f its financia l asse ts whic h consist principally oftmde accollilts receivable retention receivable amounts due from related parties othe r receivables and bank baLances
The Group sells its products and prov ides services to vario us panies It is the G ro ups policy that all customers who wish to obtain on credit lerms are subject to credit verificalion procedures to ensure c redit Ilonhiness Each new customer is analysed individually for creditworthiness before the de livery o f products Of services Custo mm tbat fai l to met t the credi tworthiness may transact with the Group only o n prepayme nt basis Property rentals are mostl y received in ad vtnce or conlrlCled wi th post dated cheques 10 additio n receivable balances are monitored on an ongoing basis a nd the purchase limils are established for each c redit custoroer which are reviewed reguJarly based on the level o f past transactions and senlement The Groups max im wn exposure with regard to trade aCCOWlts receivab le net ofa llowance re nected allhe reporting date was ilS fo llows
2013 2012
Business SJgmelll QR QR
Property 15478832 19386326 Trading and distributio n 194343 597 179748274 Industrial ma nufac turing 183119753 131578668 Managed services 18069385 14547389
411 011 567 345260657
41
29
Aamal Company QSc
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For tbe year eoded 3 J December 20 13
FlNAJICIAL RISK MANAG EMENT (c-o Dtinued)
Credit risk (continued) With respect to credit risk arising from the other financi31 assets of the Group the Groups exposure to credit risk arises from default of the counterparty with a maximum exposure equal 10 the canying amount of these instruments as follows
2013 QR
202
QR
Bank balances Amounts due from related parties Retention and other receivables
436136756 214439950 48290351
36788129 t 171525363 74082203
698867057 613488857
The group reduces the expoSltre of credit risk arising from other financial assets by maintaining bank accounts in reputed banks and providing services only to creditworthy re lated parties
The management cons iders the bank balances and a mQUIIIS due from related parties as high grade fi nancial assets and lfade accounls receivable and other receivables as sundard grade financial assets When a finltmcial asset is identified 10 be impaired the managemoot downgrades such assets to impaired category and provides adequate allowances
Liquidity risk Liquidity risk is the risk that the Group will not be able to meet its fmancial obligations as they fu ll due The Groups 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 nonnal and stressed conditiom without incurring unacceptable losses or risking damage to the Groups reputa tion and is to maintain a balance belWeen continuity of fuoding and f1eilibility through the use of bank overdrafts and bank loans and borrowings
The Group monitors its risk to a shortage o f funds using a recuning liquidity plaOfling 1001 TIllS tool considers the manuiry o f financial assets (eg accounts receivable) and projected cash flows from operations The Groups teons ofsales or services require arooUIlts to be paid within 30-90 days from the invoiced dale
42
29
Aamal Company QSc
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For tbe year ended 3 1 December 2013
FrNANClAL ruSK MANAGEMENT (contiQued)
Uqujdity risk (continued) The table below summarises the ruaruriJy profile of the Groups financial 1iabililies a t 31 December based on contractual undiscountcd paymeots
2013 Interest bearing loans and borrowings Bank overdrafts Trade accowus payable Other payables Amounl~ due (0 related panles
201l Interest bearing loans and borrowings
Baok overdrafts Trade accounts payable Other payables Amounts due to related parties
On demand
QR
6836280
6836280
011 demand QR
2885090
2885090
Less than 3 months
QR
521324473
303638792
47406830
2530~480
898675575
Less thall 3
months
QR
469839033
10754JJIO 37543236
1964504 1
634568620
3 10 J2 mOlllh$
QR
239333328
16378865 20210580
2289~11l
298816884
3 to 12 monlhs
QR
365476972
159621 37 J 24745342
30092716
579936401
1to 5 years
QR
J 60092748
160092148
1 to 5 years
QR
248472226
248472226
gt 5 years
QR
25261598
25261 598
gt 5 years
QR
7648000
7648000
TOlaf
QR
947012147 6836280
320017657
67617410 48199591
1389681085
Tota
QR
109 1436231
1885090 267162681
622 88578
49737757
14735 10337
43
30
Aamal Company QSltc NOTES TO THE CONSOLIDATED FlANCIAL STATEMETS For the year ended 31 December 20 t3
21 F~ANClAL RlSK MAiAGEMElT (continued)
Capital management The Boards policy is to maintain a strong cepit1 base so as to rnainmin investor creditor and market ronfoonee and to SUSWlJ) fumre dcltclonnent Gf the buinest The Board of Directors rronitortl the tapital whkh tbe Group defines as wlal $parcloders equity excluding nonmiddotcornroliing imerests and the level of dividends to orrunury srarellOJdcfS
The Board also reeks to ITIaimain a balance between the higher (ctums (hat might be fA-~$ihle With higher leves of borrnwings end Lle edvnrJages and security named Sy it sOMd Cilpitai posi[ion The GfCup~ k1rget is to achievfl a return on slureholders equity (exclJding aonwurrolJiug iorcf(sts) greater lll(ll1 he wcighlcd average inres exxmse on mrerest bearing Ivens and oorrowing
The (lf0t-p nl)nDg-e ils cnpital structure and makes adjustneal lOll in light ofchang2s in economic nd bttincss cordjlons and shareholders expe1ationJo chmges veremiddot maCo HI Lleuro objecttves polilCS or proCCSSC3 during the years erded 31 D~mber 2013md 31 Dtccmlxr2Ql2
The Group monitors the capit2J using a gClting fatio which IS dep divided by caplla plus debL The GtOwgts policy is to keep ttJe ge-anng rmio bclew 40 Tbe Group iLdtdes withb debt imete-51 beagting loans ard ~OITORlngs less cash and cash equtVaknts Capltal includes eqmty attributable 10 the equity tolders oft~e parcrt
2013 QR
2(i2 QR
fmerest bearing loans and borrowings lcss- Cash and cas ltYJUvalcnts
9i4lJ05301 _~ (429JfJl4761
1004845296 (649)6201)
Net debt
Toa capital
Capita and net debt
699849045
~ringrttio
FAIR VALtES OF Fl~ANOAL f~STRUMETS
Finarcial iostrumenL~ cOlnprise tina~lctal assetS carl finailcialliabilities
Fmancial assets colJist of bank balance) short 1Cm bank dcposis amounL dve dom rc)ltted partilt)$ rekntion and other receivables and ttade accolmis rceivabe Finatlclll habiilics cgtmsist of banilt ovcrdratls jnerest bearing lOil1S and bOrowings amounts due (0 nliled partiG~ ane trade x-ounls payable
The- fair values of hese financial inStrumen1S except Jo-- imCfest bearing loam lHld bOlToving aproKimate lhdr cMryinJ vlhes due to the Slort temt mzrutiiles or these instrument
Tllc faiT value of iotcnst beating Nns and borrowin2s ae estimate( based on discoumed ltash flows twin int(s rale- cune-ntly nvailagtk fur tilt debt or sinuiar tetnlS an-a rell1lmng matunties
31
Aamal Company~Q=-ScC ______________~______
~OTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For fhe year ended 31 December 20 t3
SlGNIFICANT ASUMPTIONS ACCOUJTING JUDGElE1TS AND F8TIMATFS
impairment (If accoonts receivable n etrnwe of lhe collectible anoun of trade accounlgt reccvable is made when collection of the full lHl1OUt i~ nO looger probabk FOI nCividualty significitIl amounts this estimation is p~rformed on an indh-idllai a$[$ Amomts wHcb arc not indivldl11Uy significant but wluch are past due ZTe tsscssed collectively and an aJlQwaccc applied ucc()r~Jng to the length of lime past due based oc histnncal recovery nlJes
hnpalrment of inHntnries lavenoncs are held at tho lower of col and nol realisable value InIOn inventoncent$ becone old or 0-~amplete an estilTJte is mate of their net j alisable vulue For indiviolhlUy significant amountS this cstinaunrt is performec all aD lndividwl osis Amotlnts whieh are fl0t individually significan( btll which ltIre old at obsolete wx LltSessed wllecivdy md a provisior is applied sccnrding to the invenrory type and be dep)ee of ageing 0 cDsolescc1ce based on anticipUled selling prices
Classifigt1ltion of El Sew(gtdy Cable Qatar WLI ali a j(lint vwture pound1 Sovedy Cables Qatar is a limited hability company whose kgal fum confers SCprm11ior bernten tbe jXliiies 10 ~he jomi lfranpement Snd the Company Itself FurthenrlOre then IS no oontractua] arrmgelTeot or any oibe aus aod circumstriliCe$ that iocik41to tht he putic5 [0 the joint flJTIlrgernelit bave rights to the ssetl and obligrtdons fo~ the liabilities of the joint ilrrongement Acoordingly El Sewed- C[jbl~s Qamr WLL is dassifiecl 7S a joiut enrtrr of he GWtp
impairment of goodwill G0oovj)1 embedded in th~ cot 0 aquisitior of subsidiaries and eqmtj-iccounled iflV(stees ire teswt for irl1jXlirmnt aHuaily Tbe calculations of value [n use fO( cfish gecj~r)lilg units (loring to real nte projecg are rtost sensitive to tin IDHowing assumpti015
Grosgt i1wginmiddot Gross Ilmrgins arc lmsed on avrage values tuhje0d in (he [Xrioo preeedhli (e siaM of the budge xnod T1esC at( mcreased over the budgel period for mticipatltX efficiency Hnprovemots
DisC)unr r(es Discount rotes represent th cl1tent mark as~ssmetlt of the risks specific te ech cash geocroting unit regarding lhe time value of money ilnd mdividu)l risks of he tmtieriyilg assets whICh have not been inwrport1eti it the Citik flow estimates The dj~(OUrl flte tlkulation is based on the speclfte circurnsthLCes of lile Group and its opltllatJng segn)~nts (md derived (ff)rC it weighted avaage (XSt 0f apilaJ (WACC) Tb fACe (akw into uoount both deb and equity The 0$1 of equity is denved from dlC expected return 01 investmenl by the Groups investors TJc Gos10( deb is based on l1e borrvwings the Gmup IS obllsxl to service SC~lletllmiddotspecific r5k IS incorxt4too by applying individual bera facto The betn mctors ire evauatcentd annuaHy bhseci on pubJicly aVflllabe murked earn
Fair value ()fnHstmeni proputies The fuit laHe 0 nvestmel~ propertis is deltrrnlnzd b cxterrwl indepzfldell property valuers laving appr0priate recognised professional quabfiillions and recenl xperience H1 the localjl)n and G-tegory 0 the oroperty being valued
Useful hes of PfQPcrly plmr (llld zqulpment The Groups management detennints th estiunted useful jives Df It~ property plan and equipmnl fix calnurjng depreciation Thi5 e~timJte is 6lermind after cinsidring 1b expeelcd usage (1f the a5sclt [hysical l101t and (eas tedmiltal Dr com~ercia obsolesccnce
Gotlg Qncen
ibe Groups mangerncnt UiS made aJ assessmeot cf the 011115 ability (0 COllllOUC liS a going conct11l Imd is satsl1ed hat me Group ms the resources to contmue in business for he foreseeable fu1urc he1hennort he management is no aware oC lny material Hncertainties that lray CH~t signinchnt doubt tlPDfl the Groups ability 10 continue as a going umcem Therefore titpound lotlsolidatcd finilllcij stftemeols comirme to be prepltd on li g0ing concern basis
Aamal Company QSc
NOTES TO THE CONSOLIDATED FlNANC[AL STATEMENTS For the year ended 3 1 December 20 13
32 INCOME TAX
Certa in subsidiaries of the Group which have non-GCe ownership are subject to income tax under Qatar Income Tax Law No 2 1 of2009 The iocome tax is charged on the share of profits attributable to non-GCe shareholders For the purpose of these conso lidated fi nancial statements the income tax liability oftbe foreign shareholders has been excluded given that the non-GCe shareholders have agreed under the shareholder agreements signed with the Group to bear the fh lliiability and make necessary payments
33 COMPARATIVE INFORMATION
Certain comparative figw-es of the previous year have been reclassified 0 coofonn to the current years presentation However such reclassifications are oat materia and do not have an impact on tbe previously reported net profit other comprehensive income or the total equity for the comparative year
The impact from the resta tement of comparative infonnalion as a resuh of adoption of IFRS I I - Joint arrangements is detailed in Note 32 Changes in aCCQu(lting policies
46
Aamal Company QSc
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 31 December 2013
3 BAses OF PR EPARATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICI ES (colltinued)
34 SUMMARY OF S IGNIFICANT ACCOUNTING POLICIES (continued)
Employees eod of service benefits The Group provides end of service benefits to all employees in accordance wi th employment contracts and Qatar Labour Law The entitlement to these benefits is based upon the employees final salary aocl length of service subject to the completion of a minimum service period The expected costs of these benefits are accrued over the period ofemployment
Revenue Revenue is recognised to the extent thal it is probable that the economic benefits will flow to the Group and the revenue call be reliably measured Revenue is measured al the fair value of the consideration received excluding discoWlIS rebates and duty The following spec ific recognition criteria must also be met before revenue is recognised
Sale ofgoods Sales are recognised whcn significant risks and rewards of ownership of the goods have passed to the boyer and the amount of revenue cao be me3sured rcli3bly
Rental income Rental incorne from investment properties is accoWlted for on a time proportion basis over the period of tenancy Incentives for leases to enter into lease agreements are spread evenly over the lease teon even if the payments are not made 0 0 such basis Income arising Tom expenses recharged to tenants is recogn ised in the year in which the expenses can be contrac tually recei ved Service charges aud other such receipts are includcd gross o f related cosls in revenues as the Group acts as principal io this regard Premiwns received to terminate leases arc recognised in the consolidated statement of income when they arise
Service income Service income is recognised when the service is rendered and the outCQrne of the transactions can be estimated reliably
COlimission Commission is accounted for on an accrual basis when the right 10 receive the income is established
become on tra~el agencies [ncome on travel agencies is accounted for in the year in which the airline tickets are sold
IIIeresr income Joterest income is recognised as the interest accrues using the effective interest Clle method
Foreign currencies Transactions in foreign currencies ate recorded al tbe rale ruling at the date of the transaction Monetary assets and liabi lities dcoomioated io foreign currencies ace retranslated ill the raLe of exchange ruling at the reponing date All differences are recognised in the Statement ofinconlC
Use of estimates The preparation of (he Groups consolidated financial sta temenls in CQnfonnity with Intemltional Financial Reponing Standards ([fRS) requires management 10 rnake estimates and assumptions that affect the reponed amounts of assets and liabilities and disclosure of contingent asscts and liabili ties at the rcporting date and the reported amoUlils of revenues and expenses during Ihe reponing period Although these estimates are based on managements best knowtedge of current events nnd actions acnm results may ul timately differ fro m those estimates (Significant asswnptions nccounting judgments and estimates used in preparing these coosolidated fina ncial sta temenlS are disclosed in Note 31)
The estimates and underlying assumptions are reviewed regularly Revisions to accounting estimlIes are recognised in (he period in which the estimate is revised if the revision affects only that period or in th~ period of the revision and future periods if the revision affects both current and fu ture periods
17
Aamal Company QSC
NOTES TO THE CONSOLlDA TED FINANCIAL STATEMENTS For tbe year cnded 31 December 2013
3 BASI S OF PREPARATION AND SUMMARY OF SrGNIFICANT ACCOUNTING POLICIES (continued)
34 SUMMARY or SIGNIFICANT ACCOUNTING POLI CIES (continued)
Fair va lues A number of Groups accounting policies and disclosures require tJ1 C measurement of fair values for both financial and non-financial assets and liabil ities The Group has an established control framework with respect to the measuremeot of fair values When measuring the fair value of an asset or a liabili ly the Group uses market observable data for (be valuatiOD Fair values are categorised into different levels in a fair value hierarchy baCd on the inputs used in the valuation lechniques as follows
i) Leve l I - Unadjosted quoted prices io active markets for identica l assets and liabilities ji) Level 2 - Otheqobservable inputs not included within level 1 of the fair value hierarchy ii i) Level 3 - Unobtervable inputs (including enti ty s own data which are adjusted if necessary to retlect the
assumptions market participnllts would use in the circumstances) The Group recognises tralnSfers between levels of the fair value hierarchy at the end ofthe reporting period during which the change has ocdWTed_
Treasury shares When share capitl recognized in equity is repUIchased (by the Company or any of its subsidiaries) the amount of the consideration paid which includes direa ly altributable COSIS is recognized lIS a deduction from equity Wheo treasury shares are sold or reissued subsequently the amount received is recognized as no increase in equity and the resulting surplus or deficit on the transaction is presented io share premium
18
4
Aamal Company iQSc
NOTES TO THE ONSOLlDATED FINANCIAL STATEMENTS For the year ended 31 ecember 201 3
BUSINESS CO~BlNAnON
Acquisition o f Culf ROks Company VLL On 1 January 2012 the roup acquired 51 oflhe voting shares of Gulf Rocks Company WLL (Gul f Rocks) a limited Iiabiliry campan incorporated in Qatar and registered UJKier conunercial registration number 2249) The acquisition was made thT ugh Ci-San Trading WL L a subsidiary which is 50 owned by Aamal Group
I
The fai r val ue of lbe ideltifiable assets and liabilit ies of Gulf Rocks Co mpany WLL based on purchase price allocation exercise condlcd by tbe management as at the date of acquisition WJ S as follows
Fair value recognized on
acquisition QR
Assets I Cash and bank balances 14005495 ACC QUOiS receivable and wePayments I 749383 Amouots due from related plrties I
I oveotones
48311 190 5124 270
Available for sale investm~nlS 1985245 Plant and equipment 6769 17
81852500
Liabilit ies Accounts payable aJld accll1als 4724446 Amounts due to related parties 385070 Employees end of serviccibenefits (Note 15) 349272
5458788
Total identifiable net a5sellf
Purchase consideration trasferred Non-controll ing intereSt az-ising on business combination Bargain purcha5c gain rc~u ting from the tcquisilion
Allalysis ojcash flows OIl acquisition Net cash acquire11 Nith the subsidiary 14005495 Cash paid (30600000)
(16594505)
On I September 20 12 the Company acquired the balance 49 nfthe equiry of Gulf Rocks Accordingly the Group has 74 5 effective holdin4 in Gulf Rocks as at the reporting dale The excess nfthe purchase cons ideration over Ihe fair value o f net assets of GuJf Rocks acqui red from the nnn-controlHng interest has been recorded directly in the retained earnings of tbe Gr6up as at 31 December 201 2
QR Purchase consideration 404 10000 Less fuir value of oet asset~ acquiroo from the non-controlling Interest holder (39842792) EXce5s of purchllse cons idf ration over the fair value of net assets a(q uired 567208
19
5
Aamal Company QSC
NOTES TO THE (WNSOLlDATED FfNANClAL STATEMENTS For the year eoded 3 ) December 2013
CASH AND CASH EQUIVALENTS
For the pmvose of consolidated statement of cash flows cash and cash equivalents comprise the fo llowing balances
lon 2012 QR QR
Cash and bank accounts 330333904 282272895 Short lenn bank deposits 105802852 85608396 Cash and bank balances 436136756 367881 291
Bank overdrafts (6836280) (2885090)
Cash and cash equivalents 429300 476 364996120 1
The short tenn bank deposits are made for varying periods between one day aod three months depeoding on Ibe immedifltc cash requirements of the Group and earn interest at the respective short term deposit ra tes
6 ACCOUNTS RECEfVABLE AND PREPAYMENTS
2013 2012 QR QR
Trade aCColUlts receivable 411 011 567 345260657 Advances 0 suppliers and prepayments 50787921 629389J 5 Retention receivables 36217081 56943030 Other receivables 12073270 17 139173
5tO089839 4 82 28 1775
As at 31 December 2013 trade accountS receivoble amoWlting to QR 2690 1412 (201 2 OR 24984025) were impaired Movements in the allowance for impairment of trade aCColmts receivable were as follows
2013 202 QR QR
At 1 January 24984025 1 877085 Charge for [he year (Note 21) 2294590 13613 120 Amounts wriuen off (19949) (117368) Unused amotmts reversed (357254) (388812)
At 3 t December 26901412 24984025
20
6
1
lamal CompanyQSC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMEltS For the year ended 3 J December 2013
ACCotNTS RECEIVABLpound AND PREPAYMpoundNTS (contillued)
As at -1 I Dtcemxt the ageirg of unimpaired (ltlde accounb iltcivabk was as follows
P(HI duo
nor Up to 30 31-60 61middot90 Yi-jSj gt flO Tota impoirlt-fl days days days day doys
QR QR QR QR QR QR QR
1l13 411OJl$67 25l981960 32312165 2140966 19351fi43 16f)76888 60148545 2012 345260657 1695159B6 493lt)8566 2356$954 19494369 16908414 66374363
1JJJirtpai~ed receivable are expected no th bil5tS of past experienn) 10 be fully fcCi)evbc H is not the pngtctlce ofthcent Group to oblum collaleral over recejvablcI_
AMOLNTS DUE FROyl REL-TEO PARTIES
Name
AI ~aisnl Holding Company V_LL E Seweo Cabtes Qatn WL L Cnild -ftt Cvmlllny Al hz Retll E$vt rWesnnim Company WLL~ AllaZi Real Estale BrAnch EI Sewedy Electric Egypt WLL MuincrDJ1Ce Mwagmvont Group Qat3r W LL Good fe Cheffilt - The Pcarl
BuderPhtrnacy Al Faisallnlemadonal Tnl(i and Investment Company WLL AI-rabia Land Trnr~PQltit1g Company rLL ro Sewedy CabLes - Kuwuit Gcentttco hlttrnJmJilI Frijns StHytural Steel Middle East WLl Winer Wunderand Company WLL Al FtOH1H for Investment amp llllemtiOl1a Trading COntpAny WJ_L Q)lar Bahrain lmerOlnionai Cnero3 WLL Gulf EngJisb Sltl-Qo] Al Rayyao Tourism lve$lrnent Company W LL Other relater purties
2013 2012 QR QR
15412-1064 ll941Y70 34644615 ~li96858l
[()0405 14-45012 51 59197 9538116 15514113 4014727 236824$
1867526 LSOfd22
8(1012 10435r 311650 746395
15023 204450 459829
2iYHi 244940 186750
152170 143440 33500 7768(1
6259 1459lt) 758962-1
__2~61g~~_ 1~95Ji
bull 214109950 171525363
--__ shy
7
8
9
Aamal Company QSc
NOTES TO THE CONSOLIDATED FfNANClAL STATEMENTS For the year ended 3 1 December 2013
At10(JNTS DUE FROM RELATED PA RTIES (continued)
NO les (i) Transactions witll related parties are eam ed out through open account and Directors do not consider any
receivables to be past due or impaired
(ii) Related party transactions ore disclosed ill Note 26
INVENTORIES
Goods for rew le Raw materials and spare pans Work in pTOgresS Goods in transit
Less Provision fOI obsolete and slow moving invenlories
1013 QR
165499699 38388307 19944678 9671 8553
320551237 (3851692)
31 6699545
Movements in the provision for obsolete and slow moving inventories were as follov~
At I January Charge for the year (Note 19) Reversals Amounts wri tten off
At 31 December
E QUITY-ACCOUNTED INVESTEES
TIle Group has the followiog invesllnenfs in equity-accounted investees
Interests in joint venrure Interests in associa tes
At 31 December
G roup s snare of profits fr om the equity-ncco unted iovcstees arc AS follows
Profit share from in vestment iojotnt venture Profit share from investment in associates
202 QR
232597650 36608394 30622960
10521 9695
405048699 Q 145826)
40 I902873
203 QR
3145826 1 380617 (535695)
( 1139056)
385 1692
20 12 QR
2795992 2208263 (137995)
( 1720434)
3 145826
2013 QR
2012 QR
129462184 3644723
124124803 2545188
133106907 12666999 1
17330368 22869454 1169533 534050
18499901 23403504
22
10
Aama Company QSC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 31 December 201 3
9 EQUITY-ACCOUNTED INVESTEES (continued)
Counlry of incorportllion
Relationship Proportion ofownership and lotilfg power held by the Group
203 2012
EI S~wedy Cables Qatar W LL Frij ns Structural S teel Middle East WLL Al Ftfazdaq Company WLL
Qat~
Qatar Qatar
loint venture Associate Associate
55 20
55 20 35
Note With effect from 1 January 20 13 the mlnagemeot of the Group has reclassified the investment in Al Farazdaq Company W L-L from investment in associate to investment in subsidiary This is based on the transfer of share holding by the other shareholder whereby the conlroi o f AI FOl razdaq Company W LL bas been assigned 10 tbe Company
INVESTM ENT PROPERTIES
a) Reconciliation of carry ing amounl 2013 202 QR QR
AI I January 611334701 8 555 1835348 Additions 9568047 1727191 87 Transferred from property plant and equipment (Note II ) 34519828 Net gain iTo m fa if value adjlls tment 245051107 388792483
At 31 December 6402486000 6 11334701 8
b) Measurement of fair value
The fair values of the Groups inveS hnent properties as at 31 December 201 3 and 3 1 December 2012 have been arrived al on the basis of valuations carried Ollt on the respective dates by professionally qualified independent valuers not related to the Group The independent valuers have appropriate qUlli ficatioos and (eceJ11 experience in the valuation of properties in fhe relevant locations The fa ir value WltlS determined based on market comparable approach that reflocl s recent transaction prices for simillt1r properties and discounted cash flo w and income approach techniques
Details of the Group s iovestment properties and infonnation about the fa ir vn lue hierarchy as at ) I December 20 I J are as fo llows
IIvestment propenies
Level 3 fair vallie
Al I Janu ary 6 [ 13347018 Additions and trans fers from property plant and equipment 44087875
Gain included iu prom and loss Net gain from fair value lt1djuslmem 245051 107
AI J I December
The Group recognizes transfers between levels of fair value hierarchy as o f the end of the reponing period during whicb the transfer has occurred There were no transfers between the fai r va lue hierarchy during the year
23
10
Aamal Company QSc
NOTES TO THE ONSOLlDA TED FINANCIAL STATEMENTS For the year ended 3 I ecember 201 3
LNVESTM ENT ROPERTIES (contin ued)
b) Measuremen t 0 (air value (conti nued)
Vau t ion technique an significant unobservable in puts
The valuer has applied t e income capitali zation discounted cash flow and comparab le methods to detennine the market value of the lnve tment propen ies Significant unobservable inputs used included expected market rental growth rates (an average 425) occupancy rates (approximately 90 to 95) and risk adjusted discount rates (approximately 5 to 7 0) M y significant change in these inputs can impact lhe fair valuation of investment propcnies
24
Aamal Company QS c
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For che year ended 31 December 2013
11 PROPERTY PLAi~T AND EQUIPMENT
FumilUre Truck mixers fIXtures and Complllers
Leasehold and maor Plum (fd office and relaed eapiowork Buidings improvements vehicles machinery eqllipmcni sofMore in progmiddotcss Total
QR QR QR QR QR QR QJl QR
At I January 2013 137870126 371 88 132 9595813 1 262536261 19 580954 14864 385 561 32447 6241 30436 Additions 948)65 2618 100 5367399 859061 111 5268 137147581 148055774
Relating to d isposalswrite-off (1042642) (4390496) (77157L) (589150) ( 184075) (6977934) Transfer from capilal work in progress 1505 310 164 336 3601776 ( 150000) 1182741 (6304 163) Transrer to investment properlies (Note (0) (345 19828) (345 19828)
At J I Dttember 201 J 139375436 J7 258~ ~1 85735 270733865 19700865 169783 19 152456037 _73068~448
Depreciation AI I January 2013 16133915 J6902 529 49087707 68783 065 11 980009 tl71 595 3 174603 178 Charge for the year 7059805 3237150 5390767 12249797 2849162 1768823 42555504 Relating 10 disposalsJvri te-off (664709) (4 3 1716 1) (724322) (552939) ( 18 1993) (6441 124)
At 31 December 201 3 23193 720 19474 9 70 50161 313 90303540 14276232 13302783 2 107 17558
Net carrying amounts At 31 December 2013 116181J16 _17783221 44024422 180415325 5424633 3675536 __l2456O37 JJ9970~890
Notes (i) Depreciation charge for the year amounting 10 QR 33 164382 (201 1 QR 3303091 6) is included in tbe direct costs and an amount of QR 60055 (20 12 QR 36939)
has been capiulised under capital work in progress
(ii) The capital work in progress includes capitalised borrowing costs amounting to QR 125645 (20 12 QR 15358)
(ii i) The buildings are constructed on a plot ofland taken on a loog term operating lease
25
Aamal Company QS c
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 31 December 201 3
II PROPERTY PLANT AND EQUIPM ENT (continued)
C05I~
At 1 January 2012 Additions Acquired through business combinations (Note 4) Relating to d isposalswrite-off Transfer from capital work in progress Transfers
Buildings QR
137434400 435726
Leasehold improvemellls
QR
38137377 446J 04
144 103 ( 1539452)
Truck mLCers and molO
velricles QR
83427661 11464679
1697609 (631824)
Plant and machinery
QR
249335437 97264 85
35 14 132 (99498)
59705
Furniture fir ures and
office equipmem
QR
22845309 667586
192042 (3696457)
98000 (525526)
Computers and related
software
QR
158 19519 87 14 14
141837 (266 1733)
908078 (2 l4730)
Capitol work in progress
QR
12104889 451 53265
( 1065783) (59924)
Total (JR
55910459 8 68765259
5689723 (862 8964)
(800180)
AI 31 Dttember 2012 137870) 26 371881 32 95958 13 1 262536261 19580954 14864385 56132447 624 130436
Depreciation AI Jaouary2012 Charge for the year Acquired wough business combinations (Note 4) Relating to disposalswrite-off Transfers
9144666 6989249
)4 3 16620 3410618
144103
(96 812)
42558404 548 1613
1671942 (6242 52)
44555 290 2 1398849
2890797 (6 187 1)
12392584 3 182899
169005 (3558466)
(206013 )
12235266 2077633
136959 (2627283)
(J 0662)
135202830 42540861
5012806 (7840684)
(312635)
At 3 L December 201 2 161339J5 16902529 49087701 68783065 11 980009 11715953 174603 178
Nel canying amoWlts
At 31 December 201 2 12 173 6211 2028560 3 46870424 193753 196 7600945 3148432 56132447 449527258
26
12
13
Aamal Company QSC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 31 December 20 13
ACCOUNTS PA YABLE AND ACCRUALS
Trade accouots payable Advances from customers and tenants Accmals Social and sports activities levy Other payables
AJIOUNTS DUE TO RELATED PARTIES
Name
Arab Compaey for Fiber Products EI Sewedy EIC( lric Ho lding Egypiasl Egypt Egyptlech Egypt United Industri es Company WLL Johnson Controls Air condi tioning aod Refrigeration Qatar WLL pound1 Sewedy Cables Egypt Johnson Controls Air conditioning and Refrigeration rNC Dubai United Wire Company WL L Gelteo Company W LL - Gelteo Refr igera tion and Airconditioo ing CampC Lightway nc AI Shaab Group of Companies Other related pruties
NO M Related party transactio l)s a re disclosed in Note 26
2013 QR
320017657 30486837 26924669 41 761 843 25855567
445046573
2013 QR
18517474
4902528
6531231 6404578 3215821
2825884 75 7825
3467288 263715
1313247
48199591
2011 QR
26716268 1 27410234 222575 76 28954726 33)33852
379119069
2012 QR
18380528 91458 82 54 13849 1 11 6 135 5374039 35291 2020359 1693323 1064744
670 179
11 0873 12 18650
49737757
27
14
Aamal Company QSC
NOTES TO THE CONSOLIDATED f fNANCIAL STATEMENTS For the year ended 31 December 201 3
INTEREST BEARING LOANS AND BORROWINGS
NOles Malilrify
2013 QR
2012 QR
CoMl Loan 2 Loan ) Loac4 Loan 5 Loan 6 Loan 7 CoMB Loan 9 Bills discounted
(0 (ii) (iii) (iv) (v) (vi) (vii) (viii) ( ix) (x)
lune2014 Seplember2014 January 2015 November 2016 December 20 16 November 2017 Jllne20 l J December 20 7 OClober 20 19
172070387 440000000 50544000 40261 621 81387109 19920036
6] 43890 62626967 42522794
915676804
298324180 440000000 10 J088000 57955030
100 168750 2 1300492
407728 1 782871 1
35000000
1065742444
Less Defe rred finatlcing cost (771 503) (897148)
914905301 1064845296
Presented in the consolidated statement of financial positioo as fo llows 20)3 QR
201 2 QR
Current ponion Non-current ponion
749520820 165384481
825568489 239276807
914905301 1064845296
The dete rred financing costs consSt of arrangement fees The movements m the deferred financing costs were as fo llows
203 2012 QR QR
At I January 897148 332 661 Addjtions during the year 1 062565 912506 Amortised during the year (218amp210) (34801 9)
At 3 1 December 771503 89 7148
28
Aamal Company QS C
NOTES TO THE CONSOUDATED FlNANCIAL STATEMENTS For tbe year ended 31 December 2013
14 INTEREST BEARING LOANS AND BORROWINGS (continued)
Nolec
(i) Loao I i USD 93000000 impon 10n moi lily obtoined to refimnee he Icne~ of edit The 10 IT interest at commercial fate and the interest is paid at monthly intervals The fucility is repayable within ISO days including the usage period under letter ofc redits
(ii) Loan 2 is a secured bridge loan obtained to settle an existing loan and working capital requirements of the Company The loan carries interest al coOlJllercial rates and interest is 10 be paid on quarterly basis
(iii) Loan 3 was obtained for the pWpOse of financing capital ependiture and direct payment to suppliers contractors and 5ub-controctors The 10011 CMries interest at commercial rate and the inte rest is to be paid q Uar1erly The fac ility is repayable in IS quarterly iostallmenls starting I July 20 11 and ending I January 2015
(iv) Loan 4 was obla ined for conSlruclion o r an inveslmenl property The loan is seclJed by 0 primary mortgage over the some property and corporate guarantee of the Aamal Company QSC Tbe loan carries interest at commercial marke t rate and is payable in quarterly instalments
(v) Loan 5 represents a loan fOlcility obtained in two sepnrole tranches amounting to QR 309 825 000 (USD 85 million) for the purpose of refurbi shment and construction of fociJities io one of the investment properties The loan is repayable In 16 equal quanerly instalmcnlS for individua l tranche commencing from March 20 1J The loan carries interest at conunercial rJtes
(vi) Loan 6 represents secured loans obtained ffom a commercial bank in the previous periods for the purchase of heavy equipment and machines and were merged on 15 November 20 12 as a comb ined loan This loan is payable by 59 equal instalments of QR 426000 with (I last inSlalment of OR 438 326 with effect fro m 01 October 201 3 The loan carries interest at commercial market ra tes
(vii) Loan 7 is il tmst receipt banking facility obtained for the purchase of inventories This carried interest at conunercial market rates This loan was full y settled during the year
(vii i) Loan 8 represents secured loans obuined from a commercial bank in the previous periods for the purchase of delivery trucks and machinery and were merged on 22 October 2012 as a combined loan The loan carries inte rest at commercial market Tates and is payable by 59 equal insta lments o rQR 160000 with a last inSlOlmem ofQ R 128000 with effect from 3 1 December 2012
(ix) Loan 9 is an Islamic Financi ng Arrangement obtained for construction o f a manufacturing plam and as o f yearend ba lance represents partially drawn amount out of totil1 facility of QR 655 68000 The loan is secured by joint corvorate guarantee by the shareholders The loan carries profit at Islamic Financing rates and re-payable in quarterly instalments starting from the end of the 24 months gmce period from the date of loan drawn
(x) Bi ll discounting is a loan fac ility from banks The purpose of the arrangement is to discount bills locally and carries interest at current commercia l filte
15 EM PLOYEES END OF SERVICE BENEFITS
Movements in the provision reHectelt in the consolidated SLo1tement of financia l position were as fo llows 2013 201] QR QR
At I Jan uary 18111 763 17877937 Provision made during the year 4056969 4205499 Acquirelt through business combinations (Note 4) 349272 End of service benefits paid during the year (2210756) (4320945)
At 3 1 December 19957976 18 111763
29
Aamal Company Q5C
NOTES TO THE CONSOLIDATED FINANCIAL STATEMETS For tile y~ar ended 31 Dee~mber 2013
16 SHARE CAPITAL
2013 2012 QR Qq
AtI1l1)nud 60000)000 (20 2 544500JJOfn shares ofQR iii Cilch 60i)iQOOlOO 54450lt)0000
21)13 2012 Numher of
siMtS QR shares QR Issued Mtldfully paM At lJamld) 544SfWllOfJ 5445(100001) 495000000 49500000)0 1511C ofbonus S1i1-C ___ 5550~OOO 555000000 49SGOOOO 495000000
At 31 Decenef 6(OOampQllf1(1 ---14450O000 544~OOOOOO
All ampates m~ of a110 clss and caL equal voting rights
17 LEGAL Reuro5ERVE
As required by Qatar Comnertai COfrp7lnies Lav No5 of 2002 lOfp of the profit for the ye1J as a rru1imllli silould be mmsfened to legal re~erve The reserve is lot normay [lytiabe tor distribution except ill he cixcuJUstllrtUS stipulated m the above ~lemi0ntd GIW
IS HEVE1TE
2013 l)n QR QR
Sale of goods 1726893265 i709057~(iO
Renlal income UiO362322 133117509 S-ice income 858695 33940731 CornrrusslOlL Incentives and agency fces 44695S1 422~_632
212259$)33
19 DIRECT COSTS
2013 2)i2 QR
C 051 of inven(feS recognisedlIS an exptns 1522929956 497210830 Dind sL1ries lmd wages 601 [1336 5137856-8 Operating eXpenses on nml estate p~opet1les 36)711316 3041H504 fJepreciatiort (Kate I J) 33164382 B03091pound Operators marhgerrt6nt fees 14508588 li667989 Provisicn Qr obsolete and skwlt moving mvenlories (K)tc 8) 2380617 2208263 Other operating ilxpenses _31~3982 _ 3674946
1702139171 JS9653OI tgt
Aamal Compall-yQSC________________
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For lthe year ended 31 December 20 11
2G OTHER NeOiI
2013 20J3 QR QR
Interest mcume 2824216 2)314392 Profiv( loss) 00 disposal of property plant aoe eqUlpmem 737647 (l7362G) Eargain ptmnJse gain (Kote t) 8360793 MIsceJlaneous income 5723356
2013 2012 QR QR
ManllgetnUI hrQ empl(yees ws 55170302 55lt035middot1 Rent 23596799 2594915 Allowance for impaimlcot oUrsue aCQl1ot$ rc(Xjvalle (Nole 6) 129459(i 11613120 flBumcce ane profcampiitmJI fees 2IU9263 209J902 Corununication OOtHS 1935123 1649155 Trllining tid ouSfjt$s developmccl 950476 L095764 Re]X1in and mainle-nilnce 21)11SflS 2)2 I Poslag-c prjnting acri stationery 610299 541159shyvllsltdlancous expenses _~~~664 1lt2
-~~~ 125162812
22 fIN~lCE COSTS
2013 2amp2 QR QR
Inleres epen~ 42866312 5773U4B Am(vtisJliorgt ofdefcentrred financiog coStS __ 2l)tl26~~ gt3661
44930877----=
58063009
23 BASIC A~n nHUfED EARilNGS PER SHARi~
Basic trdTJogs per hue is caculatid 0y llividing the pwfill0( Ihc year attriouiabk (0- equity roldc-5 of the parent by lhi w~iglwxi avrage number of ordinary shares 0JstandirJg dulting tht_ year During Ihe year lil~ Conpmy i-sued and CBpii3lzed bonus shares lnd awmJingl) me previously ~eportod earnings per shac have blOM restatc(i
20i3 2012
Profit feT the year auributable to Cluity holderlt of the- paren (QR)
Weighted aVCTage number ofshares outstanding during the year (i)
Basic Jd diluted earnings per share (QR) 085
59985U413 shy
~~--~~~~- ~------J 1
23
Aamal Company QSc
NOTES TO THE CONSO LIDATED FfNANC[AL STATEMENTS For tbe year ended 3 l December 2013
BASIC AND DILUTED poundARNINCS PER SHARE (continued)
NOles (i) Th wigh d m nlg urnb of hres foc h P of lruling ~migs pee share h bee kulated
as follows 2013 20J2
QU3lifying shrues allhe begi ll1ling of the year 544500000 544500000 Effect of bonus shares issued and capitalised 55500000 55500000
600000000 600000000
Less T reasury shares (149587) (i357SI)
Weighted average number of shares at the end of the year 599850413 599864249
(ii) There were no potentia lly dilutiw shares outstanding at any time during tbe year and hence the diluted earnings per share is equal to the basic earnings per share
24 COItIMITMENTS
20 1] 2012 QR QR
Estimated capital expenditure approved and contracted for at the year eod but not provided for
Investment properties 2964000 8 139063 Property plant and equipment 16386500 63759762
19350500 71 898825
Operating lease commiIOlenlS under noncancellable lease agreemenlS
Payable wilhin one year 990806 702000
990806 702000
25 CONTINGENT UABILITlES
The Group had the following contingent liabi lities from which it is anticipated thai no malerial liabilities will arise
2013 2012 QR QR
Letters of guaramee 474551239 394255203
Letters of credit 7678499 194299384
NQles
(i) leHlaquogt of gu indud penonmnlaquo tend nd bid bonds d pymenlt g gi to suppliers and contractors by the Group in the ordina ry course of bus iness which will matme within twelve months fro m the reporting da te
(i i) Letters o f credit are provided by lodging documents to the bank tor purchase of trading goods fro m foreign suppliers wruch will maMC within thJee to six months from the date or tile Iransaclion
J2
26
Aamal Company QSc
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year eoded 31 December 2013
RELATED PARTY DISCLOSURES
Related party transactions Related parties represent major shareholders directors and key management persortOei of the Group and entities controlled joimly controlled or signjficamly innueoced by such parties Pricing policies md tenns of these tnlOSaclions are approved by the Group s management
Transactions with related parties induded in the consolidated financial stalemenls were as follows
20lJ 2012 QR QR
Sale o f goods and SClVices 419034048 415225221
Rental income 1980473 2069386
Purchase of goods and services 1591 38018 300835596
Rental expense 21 780G78 23397334
Bargain purchase gain 8360793
Net assets acquired 78803585
Relat ed party bal nnces AmountS due from and due to re lated parties are disclosed in Notes 7 and 13 respectively These balances do oot carry interest and are repayable OIl mulUlUy agreed dates generally within one year
The Group did not record any impairment of receivables reJatiog to amounts due from related pat1ies in either year This assessment is undertaken each fina ncial year through examining the ftnanc ial position of the related party and the market in which the related patty operates
Parent The Groups ultimate parent is Al Faisal Ho lding Company WLL
Compensa tion or key management personn el The remuneration of key management dming the year was as fullows
2013 2012 QR QR
Short-term benefi ts 7904794 1079595 Employees end of service benefits 408934 439776
8313 728 11235727
33
AamaJ Company QSC
NOTES TO THE CONSOLIDATED FINANCIAL 5T ATEMENTS For the year ended t Decernber 2013
Dilling the year 1he Group issued a XHlUS share of 10 928 of the paid tiP share capilal hdd ilS at 31 DiX2mber 2(JJ 2 mnmuning to OR 555000000 using retamed earnings as of3 December 2012 (20l2 Doe share for every ten shues held as of 31 Dcember Oll amuunting 10 QR 495OO()OOO ling reta1ned earmrgs 28 or 31 Decencer 2D II Jshy
18 SEGMENT INFORMATION
For J)iloogement PUIpltJM rhe Group i organised into business unit bused On LlJeir nature of Acttvitics lud nas fonY reportable segments and the Head Oftklt as bllow$
Propert Tbe segntn cOlists of City C~nler Qlta~ Brunch and Aamal Rea Esmte Branch whicb ll[c invoived in lampIiiog the faJ1ities of retail outlet conpex red e5ttlte nve(mltn$ and property remal buines~s
Trading mld distrib-wion The segmeul Involves wholesalB andlor rBtail distribution of phamlaceutlcai and consunable i1ems hume Epplianccs medica equimenl t-Tes ill1d lubricmtlaquo and II1UllitnEl printing The scgn(rtt includes 6c following entities
Eotl Sina Medical Branch
Aaen Medical Braudt
Amcill Troding and DistoolltlqO Branch bull Foot Care (erier HRnd) Good llre Pbannacy Bf4Uch bull Al FllfJdaq COllpafY wJ~L
InduSNol manuacturing TIle s0groent IOvolves Ulahuactrumg whole~we aliaor rewi dimibUlioti of dccnc cables lid tools ggregJ1es_ ready-IUx connole and cement bI0C~ lI1d provi$ion of servlCcent$ in rdation to iODllltroa Itvestment repair aJ-d Gonstruction of power plwts liiiding of LED ilgluitlg products und management of industnl enterpnses The segment ircludes be folloVting centntitis
bull Aam1 Cemert Industries LL AuraJ Redy1Yl(A BrQTlch
bull Doha Cables Qawf lLL Senyaf IoolJic1es Qatar Holding W LL Advanced Pipes ard Casfs CompQTly WJ L bull GuJfRoch Coroany WLL Ci~San Trading Company WLL hmovafive Lighting Compary WLL
Managed services le segment inyolvc~ provisloH of hOllseiltecpmg mi cleaning services fucditics n-anagemerJ services C1egy s(tvices ttl centfe sltrvicf)s buildiqg lnaintemHlelt aml acting as travel gens The 5cgnltnt includes the foUowing cnti(lcents
An13 ServJce Branch
amli TnlVeJa l5tmh
f-eco Gulf Co W LL
Jolinson Controls Qattl WJL
28
Aamal Company QSc
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended ) L December 20 13
SEGMENT INFORMATION (Co ntinued)
Head Office It provides corporate services to the branches and subsidiaries of the Group
The managiog d irector of the Group monitors the operating results o f its business units separately for the purpose of making decisions about resource allocation and perfonnance assessment Segment perfonnance is evaluated based Oil operating profit or loss of these segments Transfer pricing between operating segments are on anns length basis in a manoec similar to Iraosactions with third parties
Aamal Company QSC
NOTES TO THE CONSOLIDATED FINAN CIAL STATEMENTS For the year ended 3 1 December 20 13
28 SEGMENT INFORl1ATlON (continued)
Operating segments The operat ing segment after elimination or ioter-bra nch and inter-co mpany lrnnsaclioos is presented as follows
Trading (nd Industrial Managed For fh e year elided 31 December 2013 Properly disirjblli ioll manujocljlring services
QR QR QR QR Revenues
- h lemal parties 260360172 578909983 1231522768 S l802210 - Inter segments 1253914 6843 11 8 29639873 3445052 1
Heat Office QR
Eliminoions QR
(n187426) II
Tolal
QR
2J22595133
261614086 585753 lOI 126116264 1 8625273 1 (721 87426) 2122595133
Opera ti ng results Fair vallie gains
Profit I (loss) ror the year
Depreciotion
200811944
245051 107
445863051
2066290
86492834
86492834
4345438
22636250
22636250
33049 089
5157436
5157436
1760305
(47864882)
(47864882)
1334382
267233582
245051107
512 284689
42555504
36
Aamal Company QS
NOTES TO Tl CONSOLIDATED FfNANClAL STATEMENTS For the yeM ended 31 December 20 13
28 SEGMENf INFORMAnON (c)tltioucd)
FOf the yearrnrkti J f DccemOer 2(J12 QR
Revellues - ExlcmlJ partiel 2331 17 509 bull Inter segmcI11S 1168935
-- 234236434 --~- -~--
Openning results 18S2367t Fmt value gains J8S79-4~G
pront LOllS) for the rear 570616154
gt3659
No(
lnlermiddotgment revenues are eliminated on tQHs)idntiOH_
Tadiug ftfid disl d)Ntion
QR
S2S3l7661
324 j
5335493114 ~ -~-----
51384831
54384338
4J9R71(i
Indus idi mamfmturing
QR
1255694537
129U25lS4
56727059
56727059
32752742
slnltic(s QR
55216665 2939H31
S46lOJ96
7427414
7437
[908067
ilfild ()jice QR
(64(41976
Elimination QR
(74tHi2oJ Iii
Totul QR
206936372
2069336372
235721
(64641
131 f613
6245
42541)861
Amnal Company Q$l
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Por tnt yeartndeJ 31 De~embcr 2013
28 SEGMENT JNFORMATlON (contiutlld
Assc-ts and labilities
Tng alld lndtrstfw At31 December 2(113 distnbllrior manufacturIng senices HeadOJJicc EliminatioilS lola1
QR QR QR QR QR
Cumnl 3tS 227552338 620807979 61349 j 415 S()6)86922 (301636995) 1477366090 Noolucrcnt DSeIS 6411868160 12604763 622386238 4348876 (i624548 __p2438051 780
fotal asstl$ 6639420498 1194 1243194217 65698291 513Ql1470 ==-lt03H8l~O()) 853295-870 -~----~ ~---~ -
CUIT)llliabilitics 280995335 1(3511J60 6344(12777 2l0708lJ2 496261185 (3CH636995) 1249603264 Non-current iiatJlitics 7l70L5V2 8008485 HlDi16~43_ 3181668 t433799 ____ ilj534_~57 __ --Totul liahililics 353696897 ___~4159~4~ 734419720 ~4976~~~~~ 1434945711
---~~--~ -~-~~ - _2~~~4~~ (~~~~9~
C1pild expcndimn HI) WO743OOj 1397742_~471l2~--~50 ~51 ~1~623821~~1~_ -~----~------ -~
3amp
28
Aamal Company Q SC
NOTES TO THE CONSOLIDATED FfNANClAL STATEMENTS For the year ended 31 December 20 13
SEGMFNT INFORMATION (continued)
Assets and liabilities (continued)
AI 31 December 2012 Properly QR
Trading and d iSfriblllion
QR
Indusrial manufacfuring
QR
Managed senices QR
Currenl assels
Non-current assets
146491 186
6121 864484
2964425 12 903 7264
73468 1258
549267235
51387098 471 1439
Tolal assets 6268355670 305479776 1283948493 56098537
Head Office QR
468325024
6713643
475038667
Currentliabil iies
Non-current liabiLities 273444 748 1 J10 15024
86054583 7434286
669214261 1288 14977
2 1938953
287 1199
480393637 1253084
Totil lliabiliti cs 390459772 93488869 798029238 248 10 152 48J64672 1
Capila expendirure (ltII L 72865 878 1281254 6647 J356 7169 13 149045
Notes
(i)
(Ii)
Inter-segmeot balances are e limioafed 00 consolidatio n
Capi tal expendiTU res consist of additions 10 propeny plant and equip ment and iovestmenl properties
Eliminations QR
To wl QR
(273735776) (i )
(20308351(i)
1423591302
6689563230
(27576661 1) 8 113154532
(273135777) (i) 12573 10405
257388570
(273735177) 15 14698975
24 1484446
39
29
Aamal Company QSC
NOTES TO THE CONSOLIDATED FrNANCIAL STATEMENTS For the year ended 31 Dcltmber 1013
Fr-A]~ClAL RISK MANAGpoundMamp1H
Objccthes and policies fe Groups principal )uaucill liabilities comprise imltresl bctmllg loons and IxmowHgs baRlt ovetda1s amounts due to fclaled par1ies and tracte accounts payable The main pUlJXSi of thesc financial liabilities is 4J mise firmne or 610 Grmps operations The G0JP bas various fimmcial assets such as ttadc accounts receivable lInlOlmts due from related parties bark balances tltCntion receivable and other receivables which arisgt directly fran its cperuoonamp
The maiH ri~ks an3ing Joru (be Groups UnariCJlll illslrumenls jle market risk cretiJt nsk and hmdity risk Til BoarD ofDtrcctO$ reviews end agrees policies for mzrAgbg Caltt f hespound ri~k ihkh arc summariscd beloW
VIarktt risk yenfatket risk is the risk Um changes in market prices $Uch as intfcst rates and hreig lttmeocy ect14nge rilles Vltl1 affect the Groups profit eqwty Dr value tf its hoJdiI15 of financial instrl[Thnls rile objecivpoundj of marke1 risk mUnllgcrlcnt is to manage uld 1~ontr(ll tho tr))rket risk expo-sure vithir acceptable parfI-etcJ$ while optimising rerUID
Equit) price risk ampjuity prtce risk is the risk hilt the Group ampearnings will be affected as a rcmt (If luctttltions in fm vdue of ~qui-gt
mstwnents Eqlliry price risk arises from availabtetor~sale inv2strnems However the Groups exposure to eqmty price risk IS minima as II doesn hold sitl)iftrmt ailableAor-511le inYestrmmrs
[merest rate risk The Groups fimiruial poundS5ot ampId liaojlilies (at Rl $uJject to int~~ rate mk compnse brmk depoils interst bearing loans and bOITQwjags and bank overdr-afts At the reponwg dalt tbe [merest rale pronle of Ill Goups intexst bearing fbi4rdd instruments as fliows
11113 20i3 QR QR
Fued liIeryS refc insfrvrnellts
Fmmcial assets 113035962 111913394 FrOltwial liabilities --1~203712l) 1252t43~1
9)OI~ (13350972)
Fhlllting inireSI rate ns1lmlttrs Fanctl~ Isseis 127024345 ID43848o Fllllocial liabilities _-(i~9347~ (94))48926)
(836)64116)
The Groups exposure to t~ ris of changes in marXet interest fltltes relztes primariiy to the Groups financial assets and lizbitdic$ with t1Oltttirg interest mte~
lhe loEowing able demonstrates the ampmitivity nf the eonsolidattXI statemen1 of income 1) caonaly possible chonges in in1jfgtst rmes by 25 basis points with all othe vari)ble3 hdc umstant The sensitivity of the CooiK~ljclatid statement of inc(me $ the eft(ct of tb assumed changes in lnterdt rales for one year bf1sec on the floating rate financial assets and fimmcial hablhw$ held at 31 f~r The effect of deae-ascs in interest ral~ is cXp0Ctct to be equal and opposite to the effect oHlle increases sllQvro
Changes it Eftx OIl
00513 [oms profit QR
2013 Floating mterest Hlte instruments ----2$ bp (1649776)
2012 Flv-ating irkfiSt rale instrumenls +25 bp (209[9(1))
~--------- -~~ 40-middot------ _ _ shy
29
Aamal Company QSC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 3 1 December 2013
FINANCIAL RISK MANAGEMENT (continued)
Foreign currency risk Foreign currency risk is the risk lhilt the value of lhe fi nancial instruments will fluctuate due 10 changes in fore ign exchange rates
T rade aCcOlmts payable and accrued expenses include amounts due in foreign currencies mliniy US Dollars UAB Dirhams Great Britain Pounds (GB P) and Euros of which the Group has a currency risk primruily on the baJmces payable in Euros and GBP amoWlting 10 QR 14400634 (2012 QR 17214046)
The Group does not hedge its foreign currency exposure As both Qatari Riyal and UAE Dirhams are pegged to the US Dollar balances in US Dollars and UAE Dirhams are not considered to represent significant currency ris k to the Group
The table below indicates the Group s fore ign c urrency exposure on its monetary assets a nd liabilities The analysis calculates the effect o f a reasonably poss ib le move ment of the QR curre nc y rale against the Euro and GBP with all other variables held constant on the consolidated slate menl o f income (due to the fa ir va lue of currency sensitive monetary asse ts a nd liabilities) The e ffect o f decreases in fo reign c urre ncy exchange rates is expected to he equal and opposile 10 the e ffect of the increases shown
Incramp1se ill
f oreign cUlrency rate
0
the QR
Ellecl on profil
QR
2013 +5 (720032)
20 12 +5 (860 702)
C redit Tisk Credit risk is the risk that one party to a financial instrume nt wi ll fa il to discharge an obligation and cause the other party to incur a financial loss TIle Groups exposure to credit risk is indica ted by the carrying amoWlt o f its financia l asse ts whic h consist principally oftmde accollilts receivable retention receivable amounts due from related parties othe r receivables and bank baLances
The Group sells its products and prov ides services to vario us panies It is the G ro ups policy that all customers who wish to obtain on credit lerms are subject to credit verificalion procedures to ensure c redit Ilonhiness Each new customer is analysed individually for creditworthiness before the de livery o f products Of services Custo mm tbat fai l to met t the credi tworthiness may transact with the Group only o n prepayme nt basis Property rentals are mostl y received in ad vtnce or conlrlCled wi th post dated cheques 10 additio n receivable balances are monitored on an ongoing basis a nd the purchase limils are established for each c redit custoroer which are reviewed reguJarly based on the level o f past transactions and senlement The Groups max im wn exposure with regard to trade aCCOWlts receivab le net ofa llowance re nected allhe reporting date was ilS fo llows
2013 2012
Business SJgmelll QR QR
Property 15478832 19386326 Trading and distributio n 194343 597 179748274 Industrial ma nufac turing 183119753 131578668 Managed services 18069385 14547389
411 011 567 345260657
41
29
Aamal Company QSc
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For tbe year eoded 3 J December 20 13
FlNAJICIAL RISK MANAG EMENT (c-o Dtinued)
Credit risk (continued) With respect to credit risk arising from the other financi31 assets of the Group the Groups exposure to credit risk arises from default of the counterparty with a maximum exposure equal 10 the canying amount of these instruments as follows
2013 QR
202
QR
Bank balances Amounts due from related parties Retention and other receivables
436136756 214439950 48290351
36788129 t 171525363 74082203
698867057 613488857
The group reduces the expoSltre of credit risk arising from other financial assets by maintaining bank accounts in reputed banks and providing services only to creditworthy re lated parties
The management cons iders the bank balances and a mQUIIIS due from related parties as high grade fi nancial assets and lfade accounls receivable and other receivables as sundard grade financial assets When a finltmcial asset is identified 10 be impaired the managemoot downgrades such assets to impaired category and provides adequate allowances
Liquidity risk Liquidity risk is the risk that the Group will not be able to meet its fmancial obligations as they fu ll due The Groups 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 nonnal and stressed conditiom without incurring unacceptable losses or risking damage to the Groups reputa tion and is to maintain a balance belWeen continuity of fuoding and f1eilibility through the use of bank overdrafts and bank loans and borrowings
The Group monitors its risk to a shortage o f funds using a recuning liquidity plaOfling 1001 TIllS tool considers the manuiry o f financial assets (eg accounts receivable) and projected cash flows from operations The Groups teons ofsales or services require arooUIlts to be paid within 30-90 days from the invoiced dale
42
29
Aamal Company QSc
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For tbe year ended 3 1 December 2013
FrNANClAL ruSK MANAGEMENT (contiQued)
Uqujdity risk (continued) The table below summarises the ruaruriJy profile of the Groups financial 1iabililies a t 31 December based on contractual undiscountcd paymeots
2013 Interest bearing loans and borrowings Bank overdrafts Trade accowus payable Other payables Amounl~ due (0 related panles
201l Interest bearing loans and borrowings
Baok overdrafts Trade accounts payable Other payables Amounts due to related parties
On demand
QR
6836280
6836280
011 demand QR
2885090
2885090
Less than 3 months
QR
521324473
303638792
47406830
2530~480
898675575
Less thall 3
months
QR
469839033
10754JJIO 37543236
1964504 1
634568620
3 10 J2 mOlllh$
QR
239333328
16378865 20210580
2289~11l
298816884
3 to 12 monlhs
QR
365476972
159621 37 J 24745342
30092716
579936401
1to 5 years
QR
J 60092748
160092148
1 to 5 years
QR
248472226
248472226
gt 5 years
QR
25261598
25261 598
gt 5 years
QR
7648000
7648000
TOlaf
QR
947012147 6836280
320017657
67617410 48199591
1389681085
Tota
QR
109 1436231
1885090 267162681
622 88578
49737757
14735 10337
43
30
Aamal Company QSltc NOTES TO THE CONSOLIDATED FlANCIAL STATEMETS For the year ended 31 December 20 t3
21 F~ANClAL RlSK MAiAGEMElT (continued)
Capital management The Boards policy is to maintain a strong cepit1 base so as to rnainmin investor creditor and market ronfoonee and to SUSWlJ) fumre dcltclonnent Gf the buinest The Board of Directors rronitortl the tapital whkh tbe Group defines as wlal $parcloders equity excluding nonmiddotcornroliing imerests and the level of dividends to orrunury srarellOJdcfS
The Board also reeks to ITIaimain a balance between the higher (ctums (hat might be fA-~$ihle With higher leves of borrnwings end Lle edvnrJages and security named Sy it sOMd Cilpitai posi[ion The GfCup~ k1rget is to achievfl a return on slureholders equity (exclJding aonwurrolJiug iorcf(sts) greater lll(ll1 he wcighlcd average inres exxmse on mrerest bearing Ivens and oorrowing
The (lf0t-p nl)nDg-e ils cnpital structure and makes adjustneal lOll in light ofchang2s in economic nd bttincss cordjlons and shareholders expe1ationJo chmges veremiddot maCo HI Lleuro objecttves polilCS or proCCSSC3 during the years erded 31 D~mber 2013md 31 Dtccmlxr2Ql2
The Group monitors the capit2J using a gClting fatio which IS dep divided by caplla plus debL The GtOwgts policy is to keep ttJe ge-anng rmio bclew 40 Tbe Group iLdtdes withb debt imete-51 beagting loans ard ~OITORlngs less cash and cash equtVaknts Capltal includes eqmty attributable 10 the equity tolders oft~e parcrt
2013 QR
2(i2 QR
fmerest bearing loans and borrowings lcss- Cash and cas ltYJUvalcnts
9i4lJ05301 _~ (429JfJl4761
1004845296 (649)6201)
Net debt
Toa capital
Capita and net debt
699849045
~ringrttio
FAIR VALtES OF Fl~ANOAL f~STRUMETS
Finarcial iostrumenL~ cOlnprise tina~lctal assetS carl finailcialliabilities
Fmancial assets colJist of bank balance) short 1Cm bank dcposis amounL dve dom rc)ltted partilt)$ rekntion and other receivables and ttade accolmis rceivabe Finatlclll habiilics cgtmsist of banilt ovcrdratls jnerest bearing lOil1S and bOrowings amounts due (0 nliled partiG~ ane trade x-ounls payable
The- fair values of hese financial inStrumen1S except Jo-- imCfest bearing loam lHld bOlToving aproKimate lhdr cMryinJ vlhes due to the Slort temt mzrutiiles or these instrument
Tllc faiT value of iotcnst beating Nns and borrowin2s ae estimate( based on discoumed ltash flows twin int(s rale- cune-ntly nvailagtk fur tilt debt or sinuiar tetnlS an-a rell1lmng matunties
31
Aamal Company~Q=-ScC ______________~______
~OTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For fhe year ended 31 December 20 t3
SlGNIFICANT ASUMPTIONS ACCOUJTING JUDGElE1TS AND F8TIMATFS
impairment (If accoonts receivable n etrnwe of lhe collectible anoun of trade accounlgt reccvable is made when collection of the full lHl1OUt i~ nO looger probabk FOI nCividualty significitIl amounts this estimation is p~rformed on an indh-idllai a$[$ Amomts wHcb arc not indivldl11Uy significant but wluch are past due ZTe tsscssed collectively and an aJlQwaccc applied ucc()r~Jng to the length of lime past due based oc histnncal recovery nlJes
hnpalrment of inHntnries lavenoncs are held at tho lower of col and nol realisable value InIOn inventoncent$ becone old or 0-~amplete an estilTJte is mate of their net j alisable vulue For indiviolhlUy significant amountS this cstinaunrt is performec all aD lndividwl osis Amotlnts whieh are fl0t individually significan( btll which ltIre old at obsolete wx LltSessed wllecivdy md a provisior is applied sccnrding to the invenrory type and be dep)ee of ageing 0 cDsolescc1ce based on anticipUled selling prices
Classifigt1ltion of El Sew(gtdy Cable Qatar WLI ali a j(lint vwture pound1 Sovedy Cables Qatar is a limited hability company whose kgal fum confers SCprm11ior bernten tbe jXliiies 10 ~he jomi lfranpement Snd the Company Itself FurthenrlOre then IS no oontractua] arrmgelTeot or any oibe aus aod circumstriliCe$ that iocik41to tht he putic5 [0 the joint flJTIlrgernelit bave rights to the ssetl and obligrtdons fo~ the liabilities of the joint ilrrongement Acoordingly El Sewed- C[jbl~s Qamr WLL is dassifiecl 7S a joiut enrtrr of he GWtp
impairment of goodwill G0oovj)1 embedded in th~ cot 0 aquisitior of subsidiaries and eqmtj-iccounled iflV(stees ire teswt for irl1jXlirmnt aHuaily Tbe calculations of value [n use fO( cfish gecj~r)lilg units (loring to real nte projecg are rtost sensitive to tin IDHowing assumpti015
Grosgt i1wginmiddot Gross Ilmrgins arc lmsed on avrage values tuhje0d in (he [Xrioo preeedhli (e siaM of the budge xnod T1esC at( mcreased over the budgel period for mticipatltX efficiency Hnprovemots
DisC)unr r(es Discount rotes represent th cl1tent mark as~ssmetlt of the risks specific te ech cash geocroting unit regarding lhe time value of money ilnd mdividu)l risks of he tmtieriyilg assets whICh have not been inwrport1eti it the Citik flow estimates The dj~(OUrl flte tlkulation is based on the speclfte circurnsthLCes of lile Group and its opltllatJng segn)~nts (md derived (ff)rC it weighted avaage (XSt 0f apilaJ (WACC) Tb fACe (akw into uoount both deb and equity The 0$1 of equity is denved from dlC expected return 01 investmenl by the Groups investors TJc Gos10( deb is based on l1e borrvwings the Gmup IS obllsxl to service SC~lletllmiddotspecific r5k IS incorxt4too by applying individual bera facto The betn mctors ire evauatcentd annuaHy bhseci on pubJicly aVflllabe murked earn
Fair value ()fnHstmeni proputies The fuit laHe 0 nvestmel~ propertis is deltrrnlnzd b cxterrwl indepzfldell property valuers laving appr0priate recognised professional quabfiillions and recenl xperience H1 the localjl)n and G-tegory 0 the oroperty being valued
Useful hes of PfQPcrly plmr (llld zqulpment The Groups management detennints th estiunted useful jives Df It~ property plan and equipmnl fix calnurjng depreciation Thi5 e~timJte is 6lermind after cinsidring 1b expeelcd usage (1f the a5sclt [hysical l101t and (eas tedmiltal Dr com~ercia obsolesccnce
Gotlg Qncen
ibe Groups mangerncnt UiS made aJ assessmeot cf the 011115 ability (0 COllllOUC liS a going conct11l Imd is satsl1ed hat me Group ms the resources to contmue in business for he foreseeable fu1urc he1hennort he management is no aware oC lny material Hncertainties that lray CH~t signinchnt doubt tlPDfl the Groups ability 10 continue as a going umcem Therefore titpound lotlsolidatcd finilllcij stftemeols comirme to be prepltd on li g0ing concern basis
Aamal Company QSc
NOTES TO THE CONSOLIDATED FlNANC[AL STATEMENTS For the year ended 3 1 December 20 13
32 INCOME TAX
Certa in subsidiaries of the Group which have non-GCe ownership are subject to income tax under Qatar Income Tax Law No 2 1 of2009 The iocome tax is charged on the share of profits attributable to non-GCe shareholders For the purpose of these conso lidated fi nancial statements the income tax liability oftbe foreign shareholders has been excluded given that the non-GCe shareholders have agreed under the shareholder agreements signed with the Group to bear the fh lliiability and make necessary payments
33 COMPARATIVE INFORMATION
Certain comparative figw-es of the previous year have been reclassified 0 coofonn to the current years presentation However such reclassifications are oat materia and do not have an impact on tbe previously reported net profit other comprehensive income or the total equity for the comparative year
The impact from the resta tement of comparative infonnalion as a resuh of adoption of IFRS I I - Joint arrangements is detailed in Note 32 Changes in aCCQu(lting policies
46
Aamal Company QSC
NOTES TO THE CONSOLlDA TED FINANCIAL STATEMENTS For tbe year cnded 31 December 2013
3 BASI S OF PREPARATION AND SUMMARY OF SrGNIFICANT ACCOUNTING POLICIES (continued)
34 SUMMARY or SIGNIFICANT ACCOUNTING POLI CIES (continued)
Fair va lues A number of Groups accounting policies and disclosures require tJ1 C measurement of fair values for both financial and non-financial assets and liabil ities The Group has an established control framework with respect to the measuremeot of fair values When measuring the fair value of an asset or a liabili ly the Group uses market observable data for (be valuatiOD Fair values are categorised into different levels in a fair value hierarchy baCd on the inputs used in the valuation lechniques as follows
i) Leve l I - Unadjosted quoted prices io active markets for identica l assets and liabilities ji) Level 2 - Otheqobservable inputs not included within level 1 of the fair value hierarchy ii i) Level 3 - Unobtervable inputs (including enti ty s own data which are adjusted if necessary to retlect the
assumptions market participnllts would use in the circumstances) The Group recognises tralnSfers between levels of the fair value hierarchy at the end ofthe reporting period during which the change has ocdWTed_
Treasury shares When share capitl recognized in equity is repUIchased (by the Company or any of its subsidiaries) the amount of the consideration paid which includes direa ly altributable COSIS is recognized lIS a deduction from equity Wheo treasury shares are sold or reissued subsequently the amount received is recognized as no increase in equity and the resulting surplus or deficit on the transaction is presented io share premium
18
4
Aamal Company iQSc
NOTES TO THE ONSOLlDATED FINANCIAL STATEMENTS For the year ended 31 ecember 201 3
BUSINESS CO~BlNAnON
Acquisition o f Culf ROks Company VLL On 1 January 2012 the roup acquired 51 oflhe voting shares of Gulf Rocks Company WLL (Gul f Rocks) a limited Iiabiliry campan incorporated in Qatar and registered UJKier conunercial registration number 2249) The acquisition was made thT ugh Ci-San Trading WL L a subsidiary which is 50 owned by Aamal Group
I
The fai r val ue of lbe ideltifiable assets and liabilit ies of Gulf Rocks Co mpany WLL based on purchase price allocation exercise condlcd by tbe management as at the date of acquisition WJ S as follows
Fair value recognized on
acquisition QR
Assets I Cash and bank balances 14005495 ACC QUOiS receivable and wePayments I 749383 Amouots due from related plrties I
I oveotones
48311 190 5124 270
Available for sale investm~nlS 1985245 Plant and equipment 6769 17
81852500
Liabilit ies Accounts payable aJld accll1als 4724446 Amounts due to related parties 385070 Employees end of serviccibenefits (Note 15) 349272
5458788
Total identifiable net a5sellf
Purchase consideration trasferred Non-controll ing intereSt az-ising on business combination Bargain purcha5c gain rc~u ting from the tcquisilion
Allalysis ojcash flows OIl acquisition Net cash acquire11 Nith the subsidiary 14005495 Cash paid (30600000)
(16594505)
On I September 20 12 the Company acquired the balance 49 nfthe equiry of Gulf Rocks Accordingly the Group has 74 5 effective holdin4 in Gulf Rocks as at the reporting dale The excess nfthe purchase cons ideration over Ihe fair value o f net assets of GuJf Rocks acqui red from the nnn-controlHng interest has been recorded directly in the retained earnings of tbe Gr6up as at 31 December 201 2
QR Purchase consideration 404 10000 Less fuir value of oet asset~ acquiroo from the non-controlling Interest holder (39842792) EXce5s of purchllse cons idf ration over the fair value of net assets a(q uired 567208
19
5
Aamal Company QSC
NOTES TO THE (WNSOLlDATED FfNANClAL STATEMENTS For the year eoded 3 ) December 2013
CASH AND CASH EQUIVALENTS
For the pmvose of consolidated statement of cash flows cash and cash equivalents comprise the fo llowing balances
lon 2012 QR QR
Cash and bank accounts 330333904 282272895 Short lenn bank deposits 105802852 85608396 Cash and bank balances 436136756 367881 291
Bank overdrafts (6836280) (2885090)
Cash and cash equivalents 429300 476 364996120 1
The short tenn bank deposits are made for varying periods between one day aod three months depeoding on Ibe immedifltc cash requirements of the Group and earn interest at the respective short term deposit ra tes
6 ACCOUNTS RECEfVABLE AND PREPAYMENTS
2013 2012 QR QR
Trade aCColUlts receivable 411 011 567 345260657 Advances 0 suppliers and prepayments 50787921 629389J 5 Retention receivables 36217081 56943030 Other receivables 12073270 17 139173
5tO089839 4 82 28 1775
As at 31 December 2013 trade accountS receivoble amoWlting to QR 2690 1412 (201 2 OR 24984025) were impaired Movements in the allowance for impairment of trade aCColmts receivable were as follows
2013 202 QR QR
At 1 January 24984025 1 877085 Charge for [he year (Note 21) 2294590 13613 120 Amounts wriuen off (19949) (117368) Unused amotmts reversed (357254) (388812)
At 3 t December 26901412 24984025
20
6
1
lamal CompanyQSC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMEltS For the year ended 3 J December 2013
ACCotNTS RECEIVABLpound AND PREPAYMpoundNTS (contillued)
As at -1 I Dtcemxt the ageirg of unimpaired (ltlde accounb iltcivabk was as follows
P(HI duo
nor Up to 30 31-60 61middot90 Yi-jSj gt flO Tota impoirlt-fl days days days day doys
QR QR QR QR QR QR QR
1l13 411OJl$67 25l981960 32312165 2140966 19351fi43 16f)76888 60148545 2012 345260657 1695159B6 493lt)8566 2356$954 19494369 16908414 66374363
1JJJirtpai~ed receivable are expected no th bil5tS of past experienn) 10 be fully fcCi)evbc H is not the pngtctlce ofthcent Group to oblum collaleral over recejvablcI_
AMOLNTS DUE FROyl REL-TEO PARTIES
Name
AI ~aisnl Holding Company V_LL E Seweo Cabtes Qatn WL L Cnild -ftt Cvmlllny Al hz Retll E$vt rWesnnim Company WLL~ AllaZi Real Estale BrAnch EI Sewedy Electric Egypt WLL MuincrDJ1Ce Mwagmvont Group Qat3r W LL Good fe Cheffilt - The Pcarl
BuderPhtrnacy Al Faisallnlemadonal Tnl(i and Investment Company WLL AI-rabia Land Trnr~PQltit1g Company rLL ro Sewedy CabLes - Kuwuit Gcentttco hlttrnJmJilI Frijns StHytural Steel Middle East WLl Winer Wunderand Company WLL Al FtOH1H for Investment amp llllemtiOl1a Trading COntpAny WJ_L Q)lar Bahrain lmerOlnionai Cnero3 WLL Gulf EngJisb Sltl-Qo] Al Rayyao Tourism lve$lrnent Company W LL Other relater purties
2013 2012 QR QR
15412-1064 ll941Y70 34644615 ~li96858l
[()0405 14-45012 51 59197 9538116 15514113 4014727 236824$
1867526 LSOfd22
8(1012 10435r 311650 746395
15023 204450 459829
2iYHi 244940 186750
152170 143440 33500 7768(1
6259 1459lt) 758962-1
__2~61g~~_ 1~95Ji
bull 214109950 171525363
--__ shy
7
8
9
Aamal Company QSc
NOTES TO THE CONSOLIDATED FfNANClAL STATEMENTS For the year ended 3 1 December 2013
At10(JNTS DUE FROM RELATED PA RTIES (continued)
NO les (i) Transactions witll related parties are eam ed out through open account and Directors do not consider any
receivables to be past due or impaired
(ii) Related party transactions ore disclosed ill Note 26
INVENTORIES
Goods for rew le Raw materials and spare pans Work in pTOgresS Goods in transit
Less Provision fOI obsolete and slow moving invenlories
1013 QR
165499699 38388307 19944678 9671 8553
320551237 (3851692)
31 6699545
Movements in the provision for obsolete and slow moving inventories were as follov~
At I January Charge for the year (Note 19) Reversals Amounts wri tten off
At 31 December
E QUITY-ACCOUNTED INVESTEES
TIle Group has the followiog invesllnenfs in equity-accounted investees
Interests in joint venrure Interests in associa tes
At 31 December
G roup s snare of profits fr om the equity-ncco unted iovcstees arc AS follows
Profit share from in vestment iojotnt venture Profit share from investment in associates
202 QR
232597650 36608394 30622960
10521 9695
405048699 Q 145826)
40 I902873
203 QR
3145826 1 380617 (535695)
( 1139056)
385 1692
20 12 QR
2795992 2208263 (137995)
( 1720434)
3 145826
2013 QR
2012 QR
129462184 3644723
124124803 2545188
133106907 12666999 1
17330368 22869454 1169533 534050
18499901 23403504
22
10
Aama Company QSC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 31 December 201 3
9 EQUITY-ACCOUNTED INVESTEES (continued)
Counlry of incorportllion
Relationship Proportion ofownership and lotilfg power held by the Group
203 2012
EI S~wedy Cables Qatar W LL Frij ns Structural S teel Middle East WLL Al Ftfazdaq Company WLL
Qat~
Qatar Qatar
loint venture Associate Associate
55 20
55 20 35
Note With effect from 1 January 20 13 the mlnagemeot of the Group has reclassified the investment in Al Farazdaq Company W L-L from investment in associate to investment in subsidiary This is based on the transfer of share holding by the other shareholder whereby the conlroi o f AI FOl razdaq Company W LL bas been assigned 10 tbe Company
INVESTM ENT PROPERTIES
a) Reconciliation of carry ing amounl 2013 202 QR QR
AI I January 611334701 8 555 1835348 Additions 9568047 1727191 87 Transferred from property plant and equipment (Note II ) 34519828 Net gain iTo m fa if value adjlls tment 245051107 388792483
At 31 December 6402486000 6 11334701 8
b) Measurement of fair value
The fair values of the Groups inveS hnent properties as at 31 December 201 3 and 3 1 December 2012 have been arrived al on the basis of valuations carried Ollt on the respective dates by professionally qualified independent valuers not related to the Group The independent valuers have appropriate qUlli ficatioos and (eceJ11 experience in the valuation of properties in fhe relevant locations The fa ir value WltlS determined based on market comparable approach that reflocl s recent transaction prices for simillt1r properties and discounted cash flo w and income approach techniques
Details of the Group s iovestment properties and infonnation about the fa ir vn lue hierarchy as at ) I December 20 I J are as fo llows
IIvestment propenies
Level 3 fair vallie
Al I Janu ary 6 [ 13347018 Additions and trans fers from property plant and equipment 44087875
Gain included iu prom and loss Net gain from fair value lt1djuslmem 245051 107
AI J I December
The Group recognizes transfers between levels of fair value hierarchy as o f the end of the reponing period during whicb the transfer has occurred There were no transfers between the fai r va lue hierarchy during the year
23
10
Aamal Company QSc
NOTES TO THE ONSOLlDA TED FINANCIAL STATEMENTS For the year ended 3 I ecember 201 3
LNVESTM ENT ROPERTIES (contin ued)
b) Measuremen t 0 (air value (conti nued)
Vau t ion technique an significant unobservable in puts
The valuer has applied t e income capitali zation discounted cash flow and comparab le methods to detennine the market value of the lnve tment propen ies Significant unobservable inputs used included expected market rental growth rates (an average 425) occupancy rates (approximately 90 to 95) and risk adjusted discount rates (approximately 5 to 7 0) M y significant change in these inputs can impact lhe fair valuation of investment propcnies
24
Aamal Company QS c
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For che year ended 31 December 2013
11 PROPERTY PLAi~T AND EQUIPMENT
FumilUre Truck mixers fIXtures and Complllers
Leasehold and maor Plum (fd office and relaed eapiowork Buidings improvements vehicles machinery eqllipmcni sofMore in progmiddotcss Total
QR QR QR QR QR QR QJl QR
At I January 2013 137870126 371 88 132 9595813 1 262536261 19 580954 14864 385 561 32447 6241 30436 Additions 948)65 2618 100 5367399 859061 111 5268 137147581 148055774
Relating to d isposalswrite-off (1042642) (4390496) (77157L) (589150) ( 184075) (6977934) Transfer from capilal work in progress 1505 310 164 336 3601776 ( 150000) 1182741 (6304 163) Transrer to investment properlies (Note (0) (345 19828) (345 19828)
At J I Dttember 201 J 139375436 J7 258~ ~1 85735 270733865 19700865 169783 19 152456037 _73068~448
Depreciation AI I January 2013 16133915 J6902 529 49087707 68783 065 11 980009 tl71 595 3 174603 178 Charge for the year 7059805 3237150 5390767 12249797 2849162 1768823 42555504 Relating 10 disposalsJvri te-off (664709) (4 3 1716 1) (724322) (552939) ( 18 1993) (6441 124)
At 31 December 201 3 23193 720 19474 9 70 50161 313 90303540 14276232 13302783 2 107 17558
Net carrying amounts At 31 December 2013 116181J16 _17783221 44024422 180415325 5424633 3675536 __l2456O37 JJ9970~890
Notes (i) Depreciation charge for the year amounting 10 QR 33 164382 (201 1 QR 3303091 6) is included in tbe direct costs and an amount of QR 60055 (20 12 QR 36939)
has been capiulised under capital work in progress
(ii) The capital work in progress includes capitalised borrowing costs amounting to QR 125645 (20 12 QR 15358)
(ii i) The buildings are constructed on a plot ofland taken on a loog term operating lease
25
Aamal Company QS c
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 31 December 201 3
II PROPERTY PLANT AND EQUIPM ENT (continued)
C05I~
At 1 January 2012 Additions Acquired through business combinations (Note 4) Relating to d isposalswrite-off Transfer from capital work in progress Transfers
Buildings QR
137434400 435726
Leasehold improvemellls
QR
38137377 446J 04
144 103 ( 1539452)
Truck mLCers and molO
velricles QR
83427661 11464679
1697609 (631824)
Plant and machinery
QR
249335437 97264 85
35 14 132 (99498)
59705
Furniture fir ures and
office equipmem
QR
22845309 667586
192042 (3696457)
98000 (525526)
Computers and related
software
QR
158 19519 87 14 14
141837 (266 1733)
908078 (2 l4730)
Capitol work in progress
QR
12104889 451 53265
( 1065783) (59924)
Total (JR
55910459 8 68765259
5689723 (862 8964)
(800180)
AI 31 Dttember 2012 137870) 26 371881 32 95958 13 1 262536261 19580954 14864385 56132447 624 130436
Depreciation AI Jaouary2012 Charge for the year Acquired wough business combinations (Note 4) Relating to disposalswrite-off Transfers
9144666 6989249
)4 3 16620 3410618
144103
(96 812)
42558404 548 1613
1671942 (6242 52)
44555 290 2 1398849
2890797 (6 187 1)
12392584 3 182899
169005 (3558466)
(206013 )
12235266 2077633
136959 (2627283)
(J 0662)
135202830 42540861
5012806 (7840684)
(312635)
At 3 L December 201 2 161339J5 16902529 49087701 68783065 11 980009 11715953 174603 178
Nel canying amoWlts
At 31 December 201 2 12 173 6211 2028560 3 46870424 193753 196 7600945 3148432 56132447 449527258
26
12
13
Aamal Company QSC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 31 December 20 13
ACCOUNTS PA YABLE AND ACCRUALS
Trade accouots payable Advances from customers and tenants Accmals Social and sports activities levy Other payables
AJIOUNTS DUE TO RELATED PARTIES
Name
Arab Compaey for Fiber Products EI Sewedy EIC( lric Ho lding Egypiasl Egypt Egyptlech Egypt United Industri es Company WLL Johnson Controls Air condi tioning aod Refrigeration Qatar WLL pound1 Sewedy Cables Egypt Johnson Controls Air conditioning and Refrigeration rNC Dubai United Wire Company WL L Gelteo Company W LL - Gelteo Refr igera tion and Airconditioo ing CampC Lightway nc AI Shaab Group of Companies Other related pruties
NO M Related party transactio l)s a re disclosed in Note 26
2013 QR
320017657 30486837 26924669 41 761 843 25855567
445046573
2013 QR
18517474
4902528
6531231 6404578 3215821
2825884 75 7825
3467288 263715
1313247
48199591
2011 QR
26716268 1 27410234 222575 76 28954726 33)33852
379119069
2012 QR
18380528 91458 82 54 13849 1 11 6 135 5374039 35291 2020359 1693323 1064744
670 179
11 0873 12 18650
49737757
27
14
Aamal Company QSC
NOTES TO THE CONSOLIDATED f fNANCIAL STATEMENTS For the year ended 31 December 201 3
INTEREST BEARING LOANS AND BORROWINGS
NOles Malilrify
2013 QR
2012 QR
CoMl Loan 2 Loan ) Loac4 Loan 5 Loan 6 Loan 7 CoMB Loan 9 Bills discounted
(0 (ii) (iii) (iv) (v) (vi) (vii) (viii) ( ix) (x)
lune2014 Seplember2014 January 2015 November 2016 December 20 16 November 2017 Jllne20 l J December 20 7 OClober 20 19
172070387 440000000 50544000 40261 621 81387109 19920036
6] 43890 62626967 42522794
915676804
298324180 440000000 10 J088000 57955030
100 168750 2 1300492
407728 1 782871 1
35000000
1065742444
Less Defe rred finatlcing cost (771 503) (897148)
914905301 1064845296
Presented in the consolidated statement of financial positioo as fo llows 20)3 QR
201 2 QR
Current ponion Non-current ponion
749520820 165384481
825568489 239276807
914905301 1064845296
The dete rred financing costs consSt of arrangement fees The movements m the deferred financing costs were as fo llows
203 2012 QR QR
At I January 897148 332 661 Addjtions during the year 1 062565 912506 Amortised during the year (218amp210) (34801 9)
At 3 1 December 771503 89 7148
28
Aamal Company QS C
NOTES TO THE CONSOUDATED FlNANCIAL STATEMENTS For tbe year ended 31 December 2013
14 INTEREST BEARING LOANS AND BORROWINGS (continued)
Nolec
(i) Loao I i USD 93000000 impon 10n moi lily obtoined to refimnee he Icne~ of edit The 10 IT interest at commercial fate and the interest is paid at monthly intervals The fucility is repayable within ISO days including the usage period under letter ofc redits
(ii) Loan 2 is a secured bridge loan obtained to settle an existing loan and working capital requirements of the Company The loan carries interest al coOlJllercial rates and interest is 10 be paid on quarterly basis
(iii) Loan 3 was obtained for the pWpOse of financing capital ependiture and direct payment to suppliers contractors and 5ub-controctors The 10011 CMries interest at commercial rate and the inte rest is to be paid q Uar1erly The fac ility is repayable in IS quarterly iostallmenls starting I July 20 11 and ending I January 2015
(iv) Loan 4 was obla ined for conSlruclion o r an inveslmenl property The loan is seclJed by 0 primary mortgage over the some property and corporate guarantee of the Aamal Company QSC Tbe loan carries interest at commercial marke t rate and is payable in quarterly instalments
(v) Loan 5 represents a loan fOlcility obtained in two sepnrole tranches amounting to QR 309 825 000 (USD 85 million) for the purpose of refurbi shment and construction of fociJities io one of the investment properties The loan is repayable In 16 equal quanerly instalmcnlS for individua l tranche commencing from March 20 1J The loan carries interest at conunercial rJtes
(vi) Loan 6 represents secured loans obtained ffom a commercial bank in the previous periods for the purchase of heavy equipment and machines and were merged on 15 November 20 12 as a comb ined loan This loan is payable by 59 equal instalments of QR 426000 with (I last inSlalment of OR 438 326 with effect fro m 01 October 201 3 The loan carries interest at commercial market ra tes
(vii) Loan 7 is il tmst receipt banking facility obtained for the purchase of inventories This carried interest at conunercial market rates This loan was full y settled during the year
(vii i) Loan 8 represents secured loans obuined from a commercial bank in the previous periods for the purchase of delivery trucks and machinery and were merged on 22 October 2012 as a combined loan The loan carries inte rest at commercial market Tates and is payable by 59 equal insta lments o rQR 160000 with a last inSlOlmem ofQ R 128000 with effect from 3 1 December 2012
(ix) Loan 9 is an Islamic Financi ng Arrangement obtained for construction o f a manufacturing plam and as o f yearend ba lance represents partially drawn amount out of totil1 facility of QR 655 68000 The loan is secured by joint corvorate guarantee by the shareholders The loan carries profit at Islamic Financing rates and re-payable in quarterly instalments starting from the end of the 24 months gmce period from the date of loan drawn
(x) Bi ll discounting is a loan fac ility from banks The purpose of the arrangement is to discount bills locally and carries interest at current commercia l filte
15 EM PLOYEES END OF SERVICE BENEFITS
Movements in the provision reHectelt in the consolidated SLo1tement of financia l position were as fo llows 2013 201] QR QR
At I Jan uary 18111 763 17877937 Provision made during the year 4056969 4205499 Acquirelt through business combinations (Note 4) 349272 End of service benefits paid during the year (2210756) (4320945)
At 3 1 December 19957976 18 111763
29
Aamal Company Q5C
NOTES TO THE CONSOLIDATED FINANCIAL STATEMETS For tile y~ar ended 31 Dee~mber 2013
16 SHARE CAPITAL
2013 2012 QR Qq
AtI1l1)nud 60000)000 (20 2 544500JJOfn shares ofQR iii Cilch 60i)iQOOlOO 54450lt)0000
21)13 2012 Numher of
siMtS QR shares QR Issued Mtldfully paM At lJamld) 544SfWllOfJ 5445(100001) 495000000 49500000)0 1511C ofbonus S1i1-C ___ 5550~OOO 555000000 49SGOOOO 495000000
At 31 Decenef 6(OOampQllf1(1 ---14450O000 544~OOOOOO
All ampates m~ of a110 clss and caL equal voting rights
17 LEGAL Reuro5ERVE
As required by Qatar Comnertai COfrp7lnies Lav No5 of 2002 lOfp of the profit for the ye1J as a rru1imllli silould be mmsfened to legal re~erve The reserve is lot normay [lytiabe tor distribution except ill he cixcuJUstllrtUS stipulated m the above ~lemi0ntd GIW
IS HEVE1TE
2013 l)n QR QR
Sale of goods 1726893265 i709057~(iO
Renlal income UiO362322 133117509 S-ice income 858695 33940731 CornrrusslOlL Incentives and agency fces 44695S1 422~_632
212259$)33
19 DIRECT COSTS
2013 2)i2 QR
C 051 of inven(feS recognisedlIS an exptns 1522929956 497210830 Dind sL1ries lmd wages 601 [1336 5137856-8 Operating eXpenses on nml estate p~opet1les 36)711316 3041H504 fJepreciatiort (Kate I J) 33164382 B03091pound Operators marhgerrt6nt fees 14508588 li667989 Provisicn Qr obsolete and skwlt moving mvenlories (K)tc 8) 2380617 2208263 Other operating ilxpenses _31~3982 _ 3674946
1702139171 JS9653OI tgt
Aamal Compall-yQSC________________
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For lthe year ended 31 December 20 11
2G OTHER NeOiI
2013 20J3 QR QR
Interest mcume 2824216 2)314392 Profiv( loss) 00 disposal of property plant aoe eqUlpmem 737647 (l7362G) Eargain ptmnJse gain (Kote t) 8360793 MIsceJlaneous income 5723356
2013 2012 QR QR
ManllgetnUI hrQ empl(yees ws 55170302 55lt035middot1 Rent 23596799 2594915 Allowance for impaimlcot oUrsue aCQl1ot$ rc(Xjvalle (Nole 6) 129459(i 11613120 flBumcce ane profcampiitmJI fees 2IU9263 209J902 Corununication OOtHS 1935123 1649155 Trllining tid ouSfjt$s developmccl 950476 L095764 Re]X1in and mainle-nilnce 21)11SflS 2)2 I Poslag-c prjnting acri stationery 610299 541159shyvllsltdlancous expenses _~~~664 1lt2
-~~~ 125162812
22 fIN~lCE COSTS
2013 2amp2 QR QR
Inleres epen~ 42866312 5773U4B Am(vtisJliorgt ofdefcentrred financiog coStS __ 2l)tl26~~ gt3661
44930877----=
58063009
23 BASIC A~n nHUfED EARilNGS PER SHARi~
Basic trdTJogs per hue is caculatid 0y llividing the pwfill0( Ihc year attriouiabk (0- equity roldc-5 of the parent by lhi w~iglwxi avrage number of ordinary shares 0JstandirJg dulting tht_ year During Ihe year lil~ Conpmy i-sued and CBpii3lzed bonus shares lnd awmJingl) me previously ~eportod earnings per shac have blOM restatc(i
20i3 2012
Profit feT the year auributable to Cluity holderlt of the- paren (QR)
Weighted aVCTage number ofshares outstanding during the year (i)
Basic Jd diluted earnings per share (QR) 085
59985U413 shy
~~--~~~~- ~------J 1
23
Aamal Company QSc
NOTES TO THE CONSO LIDATED FfNANC[AL STATEMENTS For tbe year ended 3 l December 2013
BASIC AND DILUTED poundARNINCS PER SHARE (continued)
NOles (i) Th wigh d m nlg urnb of hres foc h P of lruling ~migs pee share h bee kulated
as follows 2013 20J2
QU3lifying shrues allhe begi ll1ling of the year 544500000 544500000 Effect of bonus shares issued and capitalised 55500000 55500000
600000000 600000000
Less T reasury shares (149587) (i357SI)
Weighted average number of shares at the end of the year 599850413 599864249
(ii) There were no potentia lly dilutiw shares outstanding at any time during tbe year and hence the diluted earnings per share is equal to the basic earnings per share
24 COItIMITMENTS
20 1] 2012 QR QR
Estimated capital expenditure approved and contracted for at the year eod but not provided for
Investment properties 2964000 8 139063 Property plant and equipment 16386500 63759762
19350500 71 898825
Operating lease commiIOlenlS under noncancellable lease agreemenlS
Payable wilhin one year 990806 702000
990806 702000
25 CONTINGENT UABILITlES
The Group had the following contingent liabi lities from which it is anticipated thai no malerial liabilities will arise
2013 2012 QR QR
Letters of guaramee 474551239 394255203
Letters of credit 7678499 194299384
NQles
(i) leHlaquogt of gu indud penonmnlaquo tend nd bid bonds d pymenlt g gi to suppliers and contractors by the Group in the ordina ry course of bus iness which will matme within twelve months fro m the reporting da te
(i i) Letters o f credit are provided by lodging documents to the bank tor purchase of trading goods fro m foreign suppliers wruch will maMC within thJee to six months from the date or tile Iransaclion
J2
26
Aamal Company QSc
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year eoded 31 December 2013
RELATED PARTY DISCLOSURES
Related party transactions Related parties represent major shareholders directors and key management persortOei of the Group and entities controlled joimly controlled or signjficamly innueoced by such parties Pricing policies md tenns of these tnlOSaclions are approved by the Group s management
Transactions with related parties induded in the consolidated financial stalemenls were as follows
20lJ 2012 QR QR
Sale o f goods and SClVices 419034048 415225221
Rental income 1980473 2069386
Purchase of goods and services 1591 38018 300835596
Rental expense 21 780G78 23397334
Bargain purchase gain 8360793
Net assets acquired 78803585
Relat ed party bal nnces AmountS due from and due to re lated parties are disclosed in Notes 7 and 13 respectively These balances do oot carry interest and are repayable OIl mulUlUy agreed dates generally within one year
The Group did not record any impairment of receivables reJatiog to amounts due from related pat1ies in either year This assessment is undertaken each fina ncial year through examining the ftnanc ial position of the related party and the market in which the related patty operates
Parent The Groups ultimate parent is Al Faisal Ho lding Company WLL
Compensa tion or key management personn el The remuneration of key management dming the year was as fullows
2013 2012 QR QR
Short-term benefi ts 7904794 1079595 Employees end of service benefits 408934 439776
8313 728 11235727
33
AamaJ Company QSC
NOTES TO THE CONSOLIDATED FINANCIAL 5T ATEMENTS For the year ended t Decernber 2013
Dilling the year 1he Group issued a XHlUS share of 10 928 of the paid tiP share capilal hdd ilS at 31 DiX2mber 2(JJ 2 mnmuning to OR 555000000 using retamed earnings as of3 December 2012 (20l2 Doe share for every ten shues held as of 31 Dcember Oll amuunting 10 QR 495OO()OOO ling reta1ned earmrgs 28 or 31 Decencer 2D II Jshy
18 SEGMENT INFORMATION
For J)iloogement PUIpltJM rhe Group i organised into business unit bused On LlJeir nature of Acttvitics lud nas fonY reportable segments and the Head Oftklt as bllow$
Propert Tbe segntn cOlists of City C~nler Qlta~ Brunch and Aamal Rea Esmte Branch whicb ll[c invoived in lampIiiog the faJ1ities of retail outlet conpex red e5ttlte nve(mltn$ and property remal buines~s
Trading mld distrib-wion The segmeul Involves wholesalB andlor rBtail distribution of phamlaceutlcai and consunable i1ems hume Epplianccs medica equimenl t-Tes ill1d lubricmtlaquo and II1UllitnEl printing The scgn(rtt includes 6c following entities
Eotl Sina Medical Branch
Aaen Medical Braudt
Amcill Troding and DistoolltlqO Branch bull Foot Care (erier HRnd) Good llre Pbannacy Bf4Uch bull Al FllfJdaq COllpafY wJ~L
InduSNol manuacturing TIle s0groent IOvolves Ulahuactrumg whole~we aliaor rewi dimibUlioti of dccnc cables lid tools ggregJ1es_ ready-IUx connole and cement bI0C~ lI1d provi$ion of servlCcent$ in rdation to iODllltroa Itvestment repair aJ-d Gonstruction of power plwts liiiding of LED ilgluitlg products und management of industnl enterpnses The segment ircludes be folloVting centntitis
bull Aam1 Cemert Industries LL AuraJ Redy1Yl(A BrQTlch
bull Doha Cables Qawf lLL Senyaf IoolJic1es Qatar Holding W LL Advanced Pipes ard Casfs CompQTly WJ L bull GuJfRoch Coroany WLL Ci~San Trading Company WLL hmovafive Lighting Compary WLL
Managed services le segment inyolvc~ provisloH of hOllseiltecpmg mi cleaning services fucditics n-anagemerJ services C1egy s(tvices ttl centfe sltrvicf)s buildiqg lnaintemHlelt aml acting as travel gens The 5cgnltnt includes the foUowing cnti(lcents
An13 ServJce Branch
amli TnlVeJa l5tmh
f-eco Gulf Co W LL
Jolinson Controls Qattl WJL
28
Aamal Company QSc
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended ) L December 20 13
SEGMENT INFORMATION (Co ntinued)
Head Office It provides corporate services to the branches and subsidiaries of the Group
The managiog d irector of the Group monitors the operating results o f its business units separately for the purpose of making decisions about resource allocation and perfonnance assessment Segment perfonnance is evaluated based Oil operating profit or loss of these segments Transfer pricing between operating segments are on anns length basis in a manoec similar to Iraosactions with third parties
Aamal Company QSC
NOTES TO THE CONSOLIDATED FINAN CIAL STATEMENTS For the year ended 3 1 December 20 13
28 SEGMENT INFORl1ATlON (continued)
Operating segments The operat ing segment after elimination or ioter-bra nch and inter-co mpany lrnnsaclioos is presented as follows
Trading (nd Industrial Managed For fh e year elided 31 December 2013 Properly disirjblli ioll manujocljlring services
QR QR QR QR Revenues
- h lemal parties 260360172 578909983 1231522768 S l802210 - Inter segments 1253914 6843 11 8 29639873 3445052 1
Heat Office QR
Eliminoions QR
(n187426) II
Tolal
QR
2J22595133
261614086 585753 lOI 126116264 1 8625273 1 (721 87426) 2122595133
Opera ti ng results Fair vallie gains
Profit I (loss) ror the year
Depreciotion
200811944
245051 107
445863051
2066290
86492834
86492834
4345438
22636250
22636250
33049 089
5157436
5157436
1760305
(47864882)
(47864882)
1334382
267233582
245051107
512 284689
42555504
36
Aamal Company QS
NOTES TO Tl CONSOLIDATED FfNANClAL STATEMENTS For the yeM ended 31 December 20 13
28 SEGMENf INFORMAnON (c)tltioucd)
FOf the yearrnrkti J f DccemOer 2(J12 QR
Revellues - ExlcmlJ partiel 2331 17 509 bull Inter segmcI11S 1168935
-- 234236434 --~- -~--
Openning results 18S2367t Fmt value gains J8S79-4~G
pront LOllS) for the rear 570616154
gt3659
No(
lnlermiddotgment revenues are eliminated on tQHs)idntiOH_
Tadiug ftfid disl d)Ntion
QR
S2S3l7661
324 j
5335493114 ~ -~-----
51384831
54384338
4J9R71(i
Indus idi mamfmturing
QR
1255694537
129U25lS4
56727059
56727059
32752742
slnltic(s QR
55216665 2939H31
S46lOJ96
7427414
7437
[908067
ilfild ()jice QR
(64(41976
Elimination QR
(74tHi2oJ Iii
Totul QR
206936372
2069336372
235721
(64641
131 f613
6245
42541)861
Amnal Company Q$l
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Por tnt yeartndeJ 31 De~embcr 2013
28 SEGMENT JNFORMATlON (contiutlld
Assc-ts and labilities
Tng alld lndtrstfw At31 December 2(113 distnbllrior manufacturIng senices HeadOJJicc EliminatioilS lola1
QR QR QR QR QR
Cumnl 3tS 227552338 620807979 61349 j 415 S()6)86922 (301636995) 1477366090 Noolucrcnt DSeIS 6411868160 12604763 622386238 4348876 (i624548 __p2438051 780
fotal asstl$ 6639420498 1194 1243194217 65698291 513Ql1470 ==-lt03H8l~O()) 853295-870 -~----~ ~---~ -
CUIT)llliabilitics 280995335 1(3511J60 6344(12777 2l0708lJ2 496261185 (3CH636995) 1249603264 Non-current iiatJlitics 7l70L5V2 8008485 HlDi16~43_ 3181668 t433799 ____ ilj534_~57 __ --Totul liahililics 353696897 ___~4159~4~ 734419720 ~4976~~~~~ 1434945711
---~~--~ -~-~~ - _2~~~4~~ (~~~~9~
C1pild expcndimn HI) WO743OOj 1397742_~471l2~--~50 ~51 ~1~623821~~1~_ -~----~------ -~
3amp
28
Aamal Company Q SC
NOTES TO THE CONSOLIDATED FfNANClAL STATEMENTS For the year ended 31 December 20 13
SEGMFNT INFORMATION (continued)
Assets and liabilities (continued)
AI 31 December 2012 Properly QR
Trading and d iSfriblllion
QR
Indusrial manufacfuring
QR
Managed senices QR
Currenl assels
Non-current assets
146491 186
6121 864484
2964425 12 903 7264
73468 1258
549267235
51387098 471 1439
Tolal assets 6268355670 305479776 1283948493 56098537
Head Office QR
468325024
6713643
475038667
Currentliabil iies
Non-current liabiLities 273444 748 1 J10 15024
86054583 7434286
669214261 1288 14977
2 1938953
287 1199
480393637 1253084
Totil lliabiliti cs 390459772 93488869 798029238 248 10 152 48J64672 1
Capila expendirure (ltII L 72865 878 1281254 6647 J356 7169 13 149045
Notes
(i)
(Ii)
Inter-segmeot balances are e limioafed 00 consolidatio n
Capi tal expendiTU res consist of additions 10 propeny plant and equip ment and iovestmenl properties
Eliminations QR
To wl QR
(273735776) (i )
(20308351(i)
1423591302
6689563230
(27576661 1) 8 113154532
(273135777) (i) 12573 10405
257388570
(273735177) 15 14698975
24 1484446
39
29
Aamal Company QSC
NOTES TO THE CONSOLIDATED FrNANCIAL STATEMENTS For the year ended 31 Dcltmber 1013
Fr-A]~ClAL RISK MANAGpoundMamp1H
Objccthes and policies fe Groups principal )uaucill liabilities comprise imltresl bctmllg loons and IxmowHgs baRlt ovetda1s amounts due to fclaled par1ies and tracte accounts payable The main pUlJXSi of thesc financial liabilities is 4J mise firmne or 610 Grmps operations The G0JP bas various fimmcial assets such as ttadc accounts receivable lInlOlmts due from related parties bark balances tltCntion receivable and other receivables which arisgt directly fran its cperuoonamp
The maiH ri~ks an3ing Joru (be Groups UnariCJlll illslrumenls jle market risk cretiJt nsk and hmdity risk Til BoarD ofDtrcctO$ reviews end agrees policies for mzrAgbg Caltt f hespound ri~k ihkh arc summariscd beloW
VIarktt risk yenfatket risk is the risk Um changes in market prices $Uch as intfcst rates and hreig lttmeocy ect14nge rilles Vltl1 affect the Groups profit eqwty Dr value tf its hoJdiI15 of financial instrl[Thnls rile objecivpoundj of marke1 risk mUnllgcrlcnt is to manage uld 1~ontr(ll tho tr))rket risk expo-sure vithir acceptable parfI-etcJ$ while optimising rerUID
Equit) price risk ampjuity prtce risk is the risk hilt the Group ampearnings will be affected as a rcmt (If luctttltions in fm vdue of ~qui-gt
mstwnents Eqlliry price risk arises from availabtetor~sale inv2strnems However the Groups exposure to eqmty price risk IS minima as II doesn hold sitl)iftrmt ailableAor-511le inYestrmmrs
[merest rate risk The Groups fimiruial poundS5ot ampId liaojlilies (at Rl $uJject to int~~ rate mk compnse brmk depoils interst bearing loans and bOITQwjags and bank overdr-afts At the reponwg dalt tbe [merest rale pronle of Ill Goups intexst bearing fbi4rdd instruments as fliows
11113 20i3 QR QR
Fued liIeryS refc insfrvrnellts
Fmmcial assets 113035962 111913394 FrOltwial liabilities --1~203712l) 1252t43~1
9)OI~ (13350972)
Fhlllting inireSI rate ns1lmlttrs Fanctl~ Isseis 127024345 ID43848o Fllllocial liabilities _-(i~9347~ (94))48926)
(836)64116)
The Groups exposure to t~ ris of changes in marXet interest fltltes relztes primariiy to the Groups financial assets and lizbitdic$ with t1Oltttirg interest mte~
lhe loEowing able demonstrates the ampmitivity nf the eonsolidattXI statemen1 of income 1) caonaly possible chonges in in1jfgtst rmes by 25 basis points with all othe vari)ble3 hdc umstant The sensitivity of the CooiK~ljclatid statement of inc(me $ the eft(ct of tb assumed changes in lnterdt rales for one year bf1sec on the floating rate financial assets and fimmcial hablhw$ held at 31 f~r The effect of deae-ascs in interest ral~ is cXp0Ctct to be equal and opposite to the effect oHlle increases sllQvro
Changes it Eftx OIl
00513 [oms profit QR
2013 Floating mterest Hlte instruments ----2$ bp (1649776)
2012 Flv-ating irkfiSt rale instrumenls +25 bp (209[9(1))
~--------- -~~ 40-middot------ _ _ shy
29
Aamal Company QSC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 3 1 December 2013
FINANCIAL RISK MANAGEMENT (continued)
Foreign currency risk Foreign currency risk is the risk lhilt the value of lhe fi nancial instruments will fluctuate due 10 changes in fore ign exchange rates
T rade aCcOlmts payable and accrued expenses include amounts due in foreign currencies mliniy US Dollars UAB Dirhams Great Britain Pounds (GB P) and Euros of which the Group has a currency risk primruily on the baJmces payable in Euros and GBP amoWlting 10 QR 14400634 (2012 QR 17214046)
The Group does not hedge its foreign currency exposure As both Qatari Riyal and UAE Dirhams are pegged to the US Dollar balances in US Dollars and UAE Dirhams are not considered to represent significant currency ris k to the Group
The table below indicates the Group s fore ign c urrency exposure on its monetary assets a nd liabilities The analysis calculates the effect o f a reasonably poss ib le move ment of the QR curre nc y rale against the Euro and GBP with all other variables held constant on the consolidated slate menl o f income (due to the fa ir va lue of currency sensitive monetary asse ts a nd liabilities) The e ffect o f decreases in fo reign c urre ncy exchange rates is expected to he equal and opposile 10 the e ffect of the increases shown
Incramp1se ill
f oreign cUlrency rate
0
the QR
Ellecl on profil
QR
2013 +5 (720032)
20 12 +5 (860 702)
C redit Tisk Credit risk is the risk that one party to a financial instrume nt wi ll fa il to discharge an obligation and cause the other party to incur a financial loss TIle Groups exposure to credit risk is indica ted by the carrying amoWlt o f its financia l asse ts whic h consist principally oftmde accollilts receivable retention receivable amounts due from related parties othe r receivables and bank baLances
The Group sells its products and prov ides services to vario us panies It is the G ro ups policy that all customers who wish to obtain on credit lerms are subject to credit verificalion procedures to ensure c redit Ilonhiness Each new customer is analysed individually for creditworthiness before the de livery o f products Of services Custo mm tbat fai l to met t the credi tworthiness may transact with the Group only o n prepayme nt basis Property rentals are mostl y received in ad vtnce or conlrlCled wi th post dated cheques 10 additio n receivable balances are monitored on an ongoing basis a nd the purchase limils are established for each c redit custoroer which are reviewed reguJarly based on the level o f past transactions and senlement The Groups max im wn exposure with regard to trade aCCOWlts receivab le net ofa llowance re nected allhe reporting date was ilS fo llows
2013 2012
Business SJgmelll QR QR
Property 15478832 19386326 Trading and distributio n 194343 597 179748274 Industrial ma nufac turing 183119753 131578668 Managed services 18069385 14547389
411 011 567 345260657
41
29
Aamal Company QSc
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For tbe year eoded 3 J December 20 13
FlNAJICIAL RISK MANAG EMENT (c-o Dtinued)
Credit risk (continued) With respect to credit risk arising from the other financi31 assets of the Group the Groups exposure to credit risk arises from default of the counterparty with a maximum exposure equal 10 the canying amount of these instruments as follows
2013 QR
202
QR
Bank balances Amounts due from related parties Retention and other receivables
436136756 214439950 48290351
36788129 t 171525363 74082203
698867057 613488857
The group reduces the expoSltre of credit risk arising from other financial assets by maintaining bank accounts in reputed banks and providing services only to creditworthy re lated parties
The management cons iders the bank balances and a mQUIIIS due from related parties as high grade fi nancial assets and lfade accounls receivable and other receivables as sundard grade financial assets When a finltmcial asset is identified 10 be impaired the managemoot downgrades such assets to impaired category and provides adequate allowances
Liquidity risk Liquidity risk is the risk that the Group will not be able to meet its fmancial obligations as they fu ll due The Groups 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 nonnal and stressed conditiom without incurring unacceptable losses or risking damage to the Groups reputa tion and is to maintain a balance belWeen continuity of fuoding and f1eilibility through the use of bank overdrafts and bank loans and borrowings
The Group monitors its risk to a shortage o f funds using a recuning liquidity plaOfling 1001 TIllS tool considers the manuiry o f financial assets (eg accounts receivable) and projected cash flows from operations The Groups teons ofsales or services require arooUIlts to be paid within 30-90 days from the invoiced dale
42
29
Aamal Company QSc
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For tbe year ended 3 1 December 2013
FrNANClAL ruSK MANAGEMENT (contiQued)
Uqujdity risk (continued) The table below summarises the ruaruriJy profile of the Groups financial 1iabililies a t 31 December based on contractual undiscountcd paymeots
2013 Interest bearing loans and borrowings Bank overdrafts Trade accowus payable Other payables Amounl~ due (0 related panles
201l Interest bearing loans and borrowings
Baok overdrafts Trade accounts payable Other payables Amounts due to related parties
On demand
QR
6836280
6836280
011 demand QR
2885090
2885090
Less than 3 months
QR
521324473
303638792
47406830
2530~480
898675575
Less thall 3
months
QR
469839033
10754JJIO 37543236
1964504 1
634568620
3 10 J2 mOlllh$
QR
239333328
16378865 20210580
2289~11l
298816884
3 to 12 monlhs
QR
365476972
159621 37 J 24745342
30092716
579936401
1to 5 years
QR
J 60092748
160092148
1 to 5 years
QR
248472226
248472226
gt 5 years
QR
25261598
25261 598
gt 5 years
QR
7648000
7648000
TOlaf
QR
947012147 6836280
320017657
67617410 48199591
1389681085
Tota
QR
109 1436231
1885090 267162681
622 88578
49737757
14735 10337
43
30
Aamal Company QSltc NOTES TO THE CONSOLIDATED FlANCIAL STATEMETS For the year ended 31 December 20 t3
21 F~ANClAL RlSK MAiAGEMElT (continued)
Capital management The Boards policy is to maintain a strong cepit1 base so as to rnainmin investor creditor and market ronfoonee and to SUSWlJ) fumre dcltclonnent Gf the buinest The Board of Directors rronitortl the tapital whkh tbe Group defines as wlal $parcloders equity excluding nonmiddotcornroliing imerests and the level of dividends to orrunury srarellOJdcfS
The Board also reeks to ITIaimain a balance between the higher (ctums (hat might be fA-~$ihle With higher leves of borrnwings end Lle edvnrJages and security named Sy it sOMd Cilpitai posi[ion The GfCup~ k1rget is to achievfl a return on slureholders equity (exclJding aonwurrolJiug iorcf(sts) greater lll(ll1 he wcighlcd average inres exxmse on mrerest bearing Ivens and oorrowing
The (lf0t-p nl)nDg-e ils cnpital structure and makes adjustneal lOll in light ofchang2s in economic nd bttincss cordjlons and shareholders expe1ationJo chmges veremiddot maCo HI Lleuro objecttves polilCS or proCCSSC3 during the years erded 31 D~mber 2013md 31 Dtccmlxr2Ql2
The Group monitors the capit2J using a gClting fatio which IS dep divided by caplla plus debL The GtOwgts policy is to keep ttJe ge-anng rmio bclew 40 Tbe Group iLdtdes withb debt imete-51 beagting loans ard ~OITORlngs less cash and cash equtVaknts Capltal includes eqmty attributable 10 the equity tolders oft~e parcrt
2013 QR
2(i2 QR
fmerest bearing loans and borrowings lcss- Cash and cas ltYJUvalcnts
9i4lJ05301 _~ (429JfJl4761
1004845296 (649)6201)
Net debt
Toa capital
Capita and net debt
699849045
~ringrttio
FAIR VALtES OF Fl~ANOAL f~STRUMETS
Finarcial iostrumenL~ cOlnprise tina~lctal assetS carl finailcialliabilities
Fmancial assets colJist of bank balance) short 1Cm bank dcposis amounL dve dom rc)ltted partilt)$ rekntion and other receivables and ttade accolmis rceivabe Finatlclll habiilics cgtmsist of banilt ovcrdratls jnerest bearing lOil1S and bOrowings amounts due (0 nliled partiG~ ane trade x-ounls payable
The- fair values of hese financial inStrumen1S except Jo-- imCfest bearing loam lHld bOlToving aproKimate lhdr cMryinJ vlhes due to the Slort temt mzrutiiles or these instrument
Tllc faiT value of iotcnst beating Nns and borrowin2s ae estimate( based on discoumed ltash flows twin int(s rale- cune-ntly nvailagtk fur tilt debt or sinuiar tetnlS an-a rell1lmng matunties
31
Aamal Company~Q=-ScC ______________~______
~OTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For fhe year ended 31 December 20 t3
SlGNIFICANT ASUMPTIONS ACCOUJTING JUDGElE1TS AND F8TIMATFS
impairment (If accoonts receivable n etrnwe of lhe collectible anoun of trade accounlgt reccvable is made when collection of the full lHl1OUt i~ nO looger probabk FOI nCividualty significitIl amounts this estimation is p~rformed on an indh-idllai a$[$ Amomts wHcb arc not indivldl11Uy significant but wluch are past due ZTe tsscssed collectively and an aJlQwaccc applied ucc()r~Jng to the length of lime past due based oc histnncal recovery nlJes
hnpalrment of inHntnries lavenoncs are held at tho lower of col and nol realisable value InIOn inventoncent$ becone old or 0-~amplete an estilTJte is mate of their net j alisable vulue For indiviolhlUy significant amountS this cstinaunrt is performec all aD lndividwl osis Amotlnts whieh are fl0t individually significan( btll which ltIre old at obsolete wx LltSessed wllecivdy md a provisior is applied sccnrding to the invenrory type and be dep)ee of ageing 0 cDsolescc1ce based on anticipUled selling prices
Classifigt1ltion of El Sew(gtdy Cable Qatar WLI ali a j(lint vwture pound1 Sovedy Cables Qatar is a limited hability company whose kgal fum confers SCprm11ior bernten tbe jXliiies 10 ~he jomi lfranpement Snd the Company Itself FurthenrlOre then IS no oontractua] arrmgelTeot or any oibe aus aod circumstriliCe$ that iocik41to tht he putic5 [0 the joint flJTIlrgernelit bave rights to the ssetl and obligrtdons fo~ the liabilities of the joint ilrrongement Acoordingly El Sewed- C[jbl~s Qamr WLL is dassifiecl 7S a joiut enrtrr of he GWtp
impairment of goodwill G0oovj)1 embedded in th~ cot 0 aquisitior of subsidiaries and eqmtj-iccounled iflV(stees ire teswt for irl1jXlirmnt aHuaily Tbe calculations of value [n use fO( cfish gecj~r)lilg units (loring to real nte projecg are rtost sensitive to tin IDHowing assumpti015
Grosgt i1wginmiddot Gross Ilmrgins arc lmsed on avrage values tuhje0d in (he [Xrioo preeedhli (e siaM of the budge xnod T1esC at( mcreased over the budgel period for mticipatltX efficiency Hnprovemots
DisC)unr r(es Discount rotes represent th cl1tent mark as~ssmetlt of the risks specific te ech cash geocroting unit regarding lhe time value of money ilnd mdividu)l risks of he tmtieriyilg assets whICh have not been inwrport1eti it the Citik flow estimates The dj~(OUrl flte tlkulation is based on the speclfte circurnsthLCes of lile Group and its opltllatJng segn)~nts (md derived (ff)rC it weighted avaage (XSt 0f apilaJ (WACC) Tb fACe (akw into uoount both deb and equity The 0$1 of equity is denved from dlC expected return 01 investmenl by the Groups investors TJc Gos10( deb is based on l1e borrvwings the Gmup IS obllsxl to service SC~lletllmiddotspecific r5k IS incorxt4too by applying individual bera facto The betn mctors ire evauatcentd annuaHy bhseci on pubJicly aVflllabe murked earn
Fair value ()fnHstmeni proputies The fuit laHe 0 nvestmel~ propertis is deltrrnlnzd b cxterrwl indepzfldell property valuers laving appr0priate recognised professional quabfiillions and recenl xperience H1 the localjl)n and G-tegory 0 the oroperty being valued
Useful hes of PfQPcrly plmr (llld zqulpment The Groups management detennints th estiunted useful jives Df It~ property plan and equipmnl fix calnurjng depreciation Thi5 e~timJte is 6lermind after cinsidring 1b expeelcd usage (1f the a5sclt [hysical l101t and (eas tedmiltal Dr com~ercia obsolesccnce
Gotlg Qncen
ibe Groups mangerncnt UiS made aJ assessmeot cf the 011115 ability (0 COllllOUC liS a going conct11l Imd is satsl1ed hat me Group ms the resources to contmue in business for he foreseeable fu1urc he1hennort he management is no aware oC lny material Hncertainties that lray CH~t signinchnt doubt tlPDfl the Groups ability 10 continue as a going umcem Therefore titpound lotlsolidatcd finilllcij stftemeols comirme to be prepltd on li g0ing concern basis
Aamal Company QSc
NOTES TO THE CONSOLIDATED FlNANC[AL STATEMENTS For the year ended 3 1 December 20 13
32 INCOME TAX
Certa in subsidiaries of the Group which have non-GCe ownership are subject to income tax under Qatar Income Tax Law No 2 1 of2009 The iocome tax is charged on the share of profits attributable to non-GCe shareholders For the purpose of these conso lidated fi nancial statements the income tax liability oftbe foreign shareholders has been excluded given that the non-GCe shareholders have agreed under the shareholder agreements signed with the Group to bear the fh lliiability and make necessary payments
33 COMPARATIVE INFORMATION
Certain comparative figw-es of the previous year have been reclassified 0 coofonn to the current years presentation However such reclassifications are oat materia and do not have an impact on tbe previously reported net profit other comprehensive income or the total equity for the comparative year
The impact from the resta tement of comparative infonnalion as a resuh of adoption of IFRS I I - Joint arrangements is detailed in Note 32 Changes in aCCQu(lting policies
46
4
Aamal Company iQSc
NOTES TO THE ONSOLlDATED FINANCIAL STATEMENTS For the year ended 31 ecember 201 3
BUSINESS CO~BlNAnON
Acquisition o f Culf ROks Company VLL On 1 January 2012 the roup acquired 51 oflhe voting shares of Gulf Rocks Company WLL (Gul f Rocks) a limited Iiabiliry campan incorporated in Qatar and registered UJKier conunercial registration number 2249) The acquisition was made thT ugh Ci-San Trading WL L a subsidiary which is 50 owned by Aamal Group
I
The fai r val ue of lbe ideltifiable assets and liabilit ies of Gulf Rocks Co mpany WLL based on purchase price allocation exercise condlcd by tbe management as at the date of acquisition WJ S as follows
Fair value recognized on
acquisition QR
Assets I Cash and bank balances 14005495 ACC QUOiS receivable and wePayments I 749383 Amouots due from related plrties I
I oveotones
48311 190 5124 270
Available for sale investm~nlS 1985245 Plant and equipment 6769 17
81852500
Liabilit ies Accounts payable aJld accll1als 4724446 Amounts due to related parties 385070 Employees end of serviccibenefits (Note 15) 349272
5458788
Total identifiable net a5sellf
Purchase consideration trasferred Non-controll ing intereSt az-ising on business combination Bargain purcha5c gain rc~u ting from the tcquisilion
Allalysis ojcash flows OIl acquisition Net cash acquire11 Nith the subsidiary 14005495 Cash paid (30600000)
(16594505)
On I September 20 12 the Company acquired the balance 49 nfthe equiry of Gulf Rocks Accordingly the Group has 74 5 effective holdin4 in Gulf Rocks as at the reporting dale The excess nfthe purchase cons ideration over Ihe fair value o f net assets of GuJf Rocks acqui red from the nnn-controlHng interest has been recorded directly in the retained earnings of tbe Gr6up as at 31 December 201 2
QR Purchase consideration 404 10000 Less fuir value of oet asset~ acquiroo from the non-controlling Interest holder (39842792) EXce5s of purchllse cons idf ration over the fair value of net assets a(q uired 567208
19
5
Aamal Company QSC
NOTES TO THE (WNSOLlDATED FfNANClAL STATEMENTS For the year eoded 3 ) December 2013
CASH AND CASH EQUIVALENTS
For the pmvose of consolidated statement of cash flows cash and cash equivalents comprise the fo llowing balances
lon 2012 QR QR
Cash and bank accounts 330333904 282272895 Short lenn bank deposits 105802852 85608396 Cash and bank balances 436136756 367881 291
Bank overdrafts (6836280) (2885090)
Cash and cash equivalents 429300 476 364996120 1
The short tenn bank deposits are made for varying periods between one day aod three months depeoding on Ibe immedifltc cash requirements of the Group and earn interest at the respective short term deposit ra tes
6 ACCOUNTS RECEfVABLE AND PREPAYMENTS
2013 2012 QR QR
Trade aCColUlts receivable 411 011 567 345260657 Advances 0 suppliers and prepayments 50787921 629389J 5 Retention receivables 36217081 56943030 Other receivables 12073270 17 139173
5tO089839 4 82 28 1775
As at 31 December 2013 trade accountS receivoble amoWlting to QR 2690 1412 (201 2 OR 24984025) were impaired Movements in the allowance for impairment of trade aCColmts receivable were as follows
2013 202 QR QR
At 1 January 24984025 1 877085 Charge for [he year (Note 21) 2294590 13613 120 Amounts wriuen off (19949) (117368) Unused amotmts reversed (357254) (388812)
At 3 t December 26901412 24984025
20
6
1
lamal CompanyQSC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMEltS For the year ended 3 J December 2013
ACCotNTS RECEIVABLpound AND PREPAYMpoundNTS (contillued)
As at -1 I Dtcemxt the ageirg of unimpaired (ltlde accounb iltcivabk was as follows
P(HI duo
nor Up to 30 31-60 61middot90 Yi-jSj gt flO Tota impoirlt-fl days days days day doys
QR QR QR QR QR QR QR
1l13 411OJl$67 25l981960 32312165 2140966 19351fi43 16f)76888 60148545 2012 345260657 1695159B6 493lt)8566 2356$954 19494369 16908414 66374363
1JJJirtpai~ed receivable are expected no th bil5tS of past experienn) 10 be fully fcCi)evbc H is not the pngtctlce ofthcent Group to oblum collaleral over recejvablcI_
AMOLNTS DUE FROyl REL-TEO PARTIES
Name
AI ~aisnl Holding Company V_LL E Seweo Cabtes Qatn WL L Cnild -ftt Cvmlllny Al hz Retll E$vt rWesnnim Company WLL~ AllaZi Real Estale BrAnch EI Sewedy Electric Egypt WLL MuincrDJ1Ce Mwagmvont Group Qat3r W LL Good fe Cheffilt - The Pcarl
BuderPhtrnacy Al Faisallnlemadonal Tnl(i and Investment Company WLL AI-rabia Land Trnr~PQltit1g Company rLL ro Sewedy CabLes - Kuwuit Gcentttco hlttrnJmJilI Frijns StHytural Steel Middle East WLl Winer Wunderand Company WLL Al FtOH1H for Investment amp llllemtiOl1a Trading COntpAny WJ_L Q)lar Bahrain lmerOlnionai Cnero3 WLL Gulf EngJisb Sltl-Qo] Al Rayyao Tourism lve$lrnent Company W LL Other relater purties
2013 2012 QR QR
15412-1064 ll941Y70 34644615 ~li96858l
[()0405 14-45012 51 59197 9538116 15514113 4014727 236824$
1867526 LSOfd22
8(1012 10435r 311650 746395
15023 204450 459829
2iYHi 244940 186750
152170 143440 33500 7768(1
6259 1459lt) 758962-1
__2~61g~~_ 1~95Ji
bull 214109950 171525363
--__ shy
7
8
9
Aamal Company QSc
NOTES TO THE CONSOLIDATED FfNANClAL STATEMENTS For the year ended 3 1 December 2013
At10(JNTS DUE FROM RELATED PA RTIES (continued)
NO les (i) Transactions witll related parties are eam ed out through open account and Directors do not consider any
receivables to be past due or impaired
(ii) Related party transactions ore disclosed ill Note 26
INVENTORIES
Goods for rew le Raw materials and spare pans Work in pTOgresS Goods in transit
Less Provision fOI obsolete and slow moving invenlories
1013 QR
165499699 38388307 19944678 9671 8553
320551237 (3851692)
31 6699545
Movements in the provision for obsolete and slow moving inventories were as follov~
At I January Charge for the year (Note 19) Reversals Amounts wri tten off
At 31 December
E QUITY-ACCOUNTED INVESTEES
TIle Group has the followiog invesllnenfs in equity-accounted investees
Interests in joint venrure Interests in associa tes
At 31 December
G roup s snare of profits fr om the equity-ncco unted iovcstees arc AS follows
Profit share from in vestment iojotnt venture Profit share from investment in associates
202 QR
232597650 36608394 30622960
10521 9695
405048699 Q 145826)
40 I902873
203 QR
3145826 1 380617 (535695)
( 1139056)
385 1692
20 12 QR
2795992 2208263 (137995)
( 1720434)
3 145826
2013 QR
2012 QR
129462184 3644723
124124803 2545188
133106907 12666999 1
17330368 22869454 1169533 534050
18499901 23403504
22
10
Aama Company QSC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 31 December 201 3
9 EQUITY-ACCOUNTED INVESTEES (continued)
Counlry of incorportllion
Relationship Proportion ofownership and lotilfg power held by the Group
203 2012
EI S~wedy Cables Qatar W LL Frij ns Structural S teel Middle East WLL Al Ftfazdaq Company WLL
Qat~
Qatar Qatar
loint venture Associate Associate
55 20
55 20 35
Note With effect from 1 January 20 13 the mlnagemeot of the Group has reclassified the investment in Al Farazdaq Company W L-L from investment in associate to investment in subsidiary This is based on the transfer of share holding by the other shareholder whereby the conlroi o f AI FOl razdaq Company W LL bas been assigned 10 tbe Company
INVESTM ENT PROPERTIES
a) Reconciliation of carry ing amounl 2013 202 QR QR
AI I January 611334701 8 555 1835348 Additions 9568047 1727191 87 Transferred from property plant and equipment (Note II ) 34519828 Net gain iTo m fa if value adjlls tment 245051107 388792483
At 31 December 6402486000 6 11334701 8
b) Measurement of fair value
The fair values of the Groups inveS hnent properties as at 31 December 201 3 and 3 1 December 2012 have been arrived al on the basis of valuations carried Ollt on the respective dates by professionally qualified independent valuers not related to the Group The independent valuers have appropriate qUlli ficatioos and (eceJ11 experience in the valuation of properties in fhe relevant locations The fa ir value WltlS determined based on market comparable approach that reflocl s recent transaction prices for simillt1r properties and discounted cash flo w and income approach techniques
Details of the Group s iovestment properties and infonnation about the fa ir vn lue hierarchy as at ) I December 20 I J are as fo llows
IIvestment propenies
Level 3 fair vallie
Al I Janu ary 6 [ 13347018 Additions and trans fers from property plant and equipment 44087875
Gain included iu prom and loss Net gain from fair value lt1djuslmem 245051 107
AI J I December
The Group recognizes transfers between levels of fair value hierarchy as o f the end of the reponing period during whicb the transfer has occurred There were no transfers between the fai r va lue hierarchy during the year
23
10
Aamal Company QSc
NOTES TO THE ONSOLlDA TED FINANCIAL STATEMENTS For the year ended 3 I ecember 201 3
LNVESTM ENT ROPERTIES (contin ued)
b) Measuremen t 0 (air value (conti nued)
Vau t ion technique an significant unobservable in puts
The valuer has applied t e income capitali zation discounted cash flow and comparab le methods to detennine the market value of the lnve tment propen ies Significant unobservable inputs used included expected market rental growth rates (an average 425) occupancy rates (approximately 90 to 95) and risk adjusted discount rates (approximately 5 to 7 0) M y significant change in these inputs can impact lhe fair valuation of investment propcnies
24
Aamal Company QS c
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For che year ended 31 December 2013
11 PROPERTY PLAi~T AND EQUIPMENT
FumilUre Truck mixers fIXtures and Complllers
Leasehold and maor Plum (fd office and relaed eapiowork Buidings improvements vehicles machinery eqllipmcni sofMore in progmiddotcss Total
QR QR QR QR QR QR QJl QR
At I January 2013 137870126 371 88 132 9595813 1 262536261 19 580954 14864 385 561 32447 6241 30436 Additions 948)65 2618 100 5367399 859061 111 5268 137147581 148055774
Relating to d isposalswrite-off (1042642) (4390496) (77157L) (589150) ( 184075) (6977934) Transfer from capilal work in progress 1505 310 164 336 3601776 ( 150000) 1182741 (6304 163) Transrer to investment properlies (Note (0) (345 19828) (345 19828)
At J I Dttember 201 J 139375436 J7 258~ ~1 85735 270733865 19700865 169783 19 152456037 _73068~448
Depreciation AI I January 2013 16133915 J6902 529 49087707 68783 065 11 980009 tl71 595 3 174603 178 Charge for the year 7059805 3237150 5390767 12249797 2849162 1768823 42555504 Relating 10 disposalsJvri te-off (664709) (4 3 1716 1) (724322) (552939) ( 18 1993) (6441 124)
At 31 December 201 3 23193 720 19474 9 70 50161 313 90303540 14276232 13302783 2 107 17558
Net carrying amounts At 31 December 2013 116181J16 _17783221 44024422 180415325 5424633 3675536 __l2456O37 JJ9970~890
Notes (i) Depreciation charge for the year amounting 10 QR 33 164382 (201 1 QR 3303091 6) is included in tbe direct costs and an amount of QR 60055 (20 12 QR 36939)
has been capiulised under capital work in progress
(ii) The capital work in progress includes capitalised borrowing costs amounting to QR 125645 (20 12 QR 15358)
(ii i) The buildings are constructed on a plot ofland taken on a loog term operating lease
25
Aamal Company QS c
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 31 December 201 3
II PROPERTY PLANT AND EQUIPM ENT (continued)
C05I~
At 1 January 2012 Additions Acquired through business combinations (Note 4) Relating to d isposalswrite-off Transfer from capital work in progress Transfers
Buildings QR
137434400 435726
Leasehold improvemellls
QR
38137377 446J 04
144 103 ( 1539452)
Truck mLCers and molO
velricles QR
83427661 11464679
1697609 (631824)
Plant and machinery
QR
249335437 97264 85
35 14 132 (99498)
59705
Furniture fir ures and
office equipmem
QR
22845309 667586
192042 (3696457)
98000 (525526)
Computers and related
software
QR
158 19519 87 14 14
141837 (266 1733)
908078 (2 l4730)
Capitol work in progress
QR
12104889 451 53265
( 1065783) (59924)
Total (JR
55910459 8 68765259
5689723 (862 8964)
(800180)
AI 31 Dttember 2012 137870) 26 371881 32 95958 13 1 262536261 19580954 14864385 56132447 624 130436
Depreciation AI Jaouary2012 Charge for the year Acquired wough business combinations (Note 4) Relating to disposalswrite-off Transfers
9144666 6989249
)4 3 16620 3410618
144103
(96 812)
42558404 548 1613
1671942 (6242 52)
44555 290 2 1398849
2890797 (6 187 1)
12392584 3 182899
169005 (3558466)
(206013 )
12235266 2077633
136959 (2627283)
(J 0662)
135202830 42540861
5012806 (7840684)
(312635)
At 3 L December 201 2 161339J5 16902529 49087701 68783065 11 980009 11715953 174603 178
Nel canying amoWlts
At 31 December 201 2 12 173 6211 2028560 3 46870424 193753 196 7600945 3148432 56132447 449527258
26
12
13
Aamal Company QSC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 31 December 20 13
ACCOUNTS PA YABLE AND ACCRUALS
Trade accouots payable Advances from customers and tenants Accmals Social and sports activities levy Other payables
AJIOUNTS DUE TO RELATED PARTIES
Name
Arab Compaey for Fiber Products EI Sewedy EIC( lric Ho lding Egypiasl Egypt Egyptlech Egypt United Industri es Company WLL Johnson Controls Air condi tioning aod Refrigeration Qatar WLL pound1 Sewedy Cables Egypt Johnson Controls Air conditioning and Refrigeration rNC Dubai United Wire Company WL L Gelteo Company W LL - Gelteo Refr igera tion and Airconditioo ing CampC Lightway nc AI Shaab Group of Companies Other related pruties
NO M Related party transactio l)s a re disclosed in Note 26
2013 QR
320017657 30486837 26924669 41 761 843 25855567
445046573
2013 QR
18517474
4902528
6531231 6404578 3215821
2825884 75 7825
3467288 263715
1313247
48199591
2011 QR
26716268 1 27410234 222575 76 28954726 33)33852
379119069
2012 QR
18380528 91458 82 54 13849 1 11 6 135 5374039 35291 2020359 1693323 1064744
670 179
11 0873 12 18650
49737757
27
14
Aamal Company QSC
NOTES TO THE CONSOLIDATED f fNANCIAL STATEMENTS For the year ended 31 December 201 3
INTEREST BEARING LOANS AND BORROWINGS
NOles Malilrify
2013 QR
2012 QR
CoMl Loan 2 Loan ) Loac4 Loan 5 Loan 6 Loan 7 CoMB Loan 9 Bills discounted
(0 (ii) (iii) (iv) (v) (vi) (vii) (viii) ( ix) (x)
lune2014 Seplember2014 January 2015 November 2016 December 20 16 November 2017 Jllne20 l J December 20 7 OClober 20 19
172070387 440000000 50544000 40261 621 81387109 19920036
6] 43890 62626967 42522794
915676804
298324180 440000000 10 J088000 57955030
100 168750 2 1300492
407728 1 782871 1
35000000
1065742444
Less Defe rred finatlcing cost (771 503) (897148)
914905301 1064845296
Presented in the consolidated statement of financial positioo as fo llows 20)3 QR
201 2 QR
Current ponion Non-current ponion
749520820 165384481
825568489 239276807
914905301 1064845296
The dete rred financing costs consSt of arrangement fees The movements m the deferred financing costs were as fo llows
203 2012 QR QR
At I January 897148 332 661 Addjtions during the year 1 062565 912506 Amortised during the year (218amp210) (34801 9)
At 3 1 December 771503 89 7148
28
Aamal Company QS C
NOTES TO THE CONSOUDATED FlNANCIAL STATEMENTS For tbe year ended 31 December 2013
14 INTEREST BEARING LOANS AND BORROWINGS (continued)
Nolec
(i) Loao I i USD 93000000 impon 10n moi lily obtoined to refimnee he Icne~ of edit The 10 IT interest at commercial fate and the interest is paid at monthly intervals The fucility is repayable within ISO days including the usage period under letter ofc redits
(ii) Loan 2 is a secured bridge loan obtained to settle an existing loan and working capital requirements of the Company The loan carries interest al coOlJllercial rates and interest is 10 be paid on quarterly basis
(iii) Loan 3 was obtained for the pWpOse of financing capital ependiture and direct payment to suppliers contractors and 5ub-controctors The 10011 CMries interest at commercial rate and the inte rest is to be paid q Uar1erly The fac ility is repayable in IS quarterly iostallmenls starting I July 20 11 and ending I January 2015
(iv) Loan 4 was obla ined for conSlruclion o r an inveslmenl property The loan is seclJed by 0 primary mortgage over the some property and corporate guarantee of the Aamal Company QSC Tbe loan carries interest at commercial marke t rate and is payable in quarterly instalments
(v) Loan 5 represents a loan fOlcility obtained in two sepnrole tranches amounting to QR 309 825 000 (USD 85 million) for the purpose of refurbi shment and construction of fociJities io one of the investment properties The loan is repayable In 16 equal quanerly instalmcnlS for individua l tranche commencing from March 20 1J The loan carries interest at conunercial rJtes
(vi) Loan 6 represents secured loans obtained ffom a commercial bank in the previous periods for the purchase of heavy equipment and machines and were merged on 15 November 20 12 as a comb ined loan This loan is payable by 59 equal instalments of QR 426000 with (I last inSlalment of OR 438 326 with effect fro m 01 October 201 3 The loan carries interest at commercial market ra tes
(vii) Loan 7 is il tmst receipt banking facility obtained for the purchase of inventories This carried interest at conunercial market rates This loan was full y settled during the year
(vii i) Loan 8 represents secured loans obuined from a commercial bank in the previous periods for the purchase of delivery trucks and machinery and were merged on 22 October 2012 as a combined loan The loan carries inte rest at commercial market Tates and is payable by 59 equal insta lments o rQR 160000 with a last inSlOlmem ofQ R 128000 with effect from 3 1 December 2012
(ix) Loan 9 is an Islamic Financi ng Arrangement obtained for construction o f a manufacturing plam and as o f yearend ba lance represents partially drawn amount out of totil1 facility of QR 655 68000 The loan is secured by joint corvorate guarantee by the shareholders The loan carries profit at Islamic Financing rates and re-payable in quarterly instalments starting from the end of the 24 months gmce period from the date of loan drawn
(x) Bi ll discounting is a loan fac ility from banks The purpose of the arrangement is to discount bills locally and carries interest at current commercia l filte
15 EM PLOYEES END OF SERVICE BENEFITS
Movements in the provision reHectelt in the consolidated SLo1tement of financia l position were as fo llows 2013 201] QR QR
At I Jan uary 18111 763 17877937 Provision made during the year 4056969 4205499 Acquirelt through business combinations (Note 4) 349272 End of service benefits paid during the year (2210756) (4320945)
At 3 1 December 19957976 18 111763
29
Aamal Company Q5C
NOTES TO THE CONSOLIDATED FINANCIAL STATEMETS For tile y~ar ended 31 Dee~mber 2013
16 SHARE CAPITAL
2013 2012 QR Qq
AtI1l1)nud 60000)000 (20 2 544500JJOfn shares ofQR iii Cilch 60i)iQOOlOO 54450lt)0000
21)13 2012 Numher of
siMtS QR shares QR Issued Mtldfully paM At lJamld) 544SfWllOfJ 5445(100001) 495000000 49500000)0 1511C ofbonus S1i1-C ___ 5550~OOO 555000000 49SGOOOO 495000000
At 31 Decenef 6(OOampQllf1(1 ---14450O000 544~OOOOOO
All ampates m~ of a110 clss and caL equal voting rights
17 LEGAL Reuro5ERVE
As required by Qatar Comnertai COfrp7lnies Lav No5 of 2002 lOfp of the profit for the ye1J as a rru1imllli silould be mmsfened to legal re~erve The reserve is lot normay [lytiabe tor distribution except ill he cixcuJUstllrtUS stipulated m the above ~lemi0ntd GIW
IS HEVE1TE
2013 l)n QR QR
Sale of goods 1726893265 i709057~(iO
Renlal income UiO362322 133117509 S-ice income 858695 33940731 CornrrusslOlL Incentives and agency fces 44695S1 422~_632
212259$)33
19 DIRECT COSTS
2013 2)i2 QR
C 051 of inven(feS recognisedlIS an exptns 1522929956 497210830 Dind sL1ries lmd wages 601 [1336 5137856-8 Operating eXpenses on nml estate p~opet1les 36)711316 3041H504 fJepreciatiort (Kate I J) 33164382 B03091pound Operators marhgerrt6nt fees 14508588 li667989 Provisicn Qr obsolete and skwlt moving mvenlories (K)tc 8) 2380617 2208263 Other operating ilxpenses _31~3982 _ 3674946
1702139171 JS9653OI tgt
Aamal Compall-yQSC________________
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For lthe year ended 31 December 20 11
2G OTHER NeOiI
2013 20J3 QR QR
Interest mcume 2824216 2)314392 Profiv( loss) 00 disposal of property plant aoe eqUlpmem 737647 (l7362G) Eargain ptmnJse gain (Kote t) 8360793 MIsceJlaneous income 5723356
2013 2012 QR QR
ManllgetnUI hrQ empl(yees ws 55170302 55lt035middot1 Rent 23596799 2594915 Allowance for impaimlcot oUrsue aCQl1ot$ rc(Xjvalle (Nole 6) 129459(i 11613120 flBumcce ane profcampiitmJI fees 2IU9263 209J902 Corununication OOtHS 1935123 1649155 Trllining tid ouSfjt$s developmccl 950476 L095764 Re]X1in and mainle-nilnce 21)11SflS 2)2 I Poslag-c prjnting acri stationery 610299 541159shyvllsltdlancous expenses _~~~664 1lt2
-~~~ 125162812
22 fIN~lCE COSTS
2013 2amp2 QR QR
Inleres epen~ 42866312 5773U4B Am(vtisJliorgt ofdefcentrred financiog coStS __ 2l)tl26~~ gt3661
44930877----=
58063009
23 BASIC A~n nHUfED EARilNGS PER SHARi~
Basic trdTJogs per hue is caculatid 0y llividing the pwfill0( Ihc year attriouiabk (0- equity roldc-5 of the parent by lhi w~iglwxi avrage number of ordinary shares 0JstandirJg dulting tht_ year During Ihe year lil~ Conpmy i-sued and CBpii3lzed bonus shares lnd awmJingl) me previously ~eportod earnings per shac have blOM restatc(i
20i3 2012
Profit feT the year auributable to Cluity holderlt of the- paren (QR)
Weighted aVCTage number ofshares outstanding during the year (i)
Basic Jd diluted earnings per share (QR) 085
59985U413 shy
~~--~~~~- ~------J 1
23
Aamal Company QSc
NOTES TO THE CONSO LIDATED FfNANC[AL STATEMENTS For tbe year ended 3 l December 2013
BASIC AND DILUTED poundARNINCS PER SHARE (continued)
NOles (i) Th wigh d m nlg urnb of hres foc h P of lruling ~migs pee share h bee kulated
as follows 2013 20J2
QU3lifying shrues allhe begi ll1ling of the year 544500000 544500000 Effect of bonus shares issued and capitalised 55500000 55500000
600000000 600000000
Less T reasury shares (149587) (i357SI)
Weighted average number of shares at the end of the year 599850413 599864249
(ii) There were no potentia lly dilutiw shares outstanding at any time during tbe year and hence the diluted earnings per share is equal to the basic earnings per share
24 COItIMITMENTS
20 1] 2012 QR QR
Estimated capital expenditure approved and contracted for at the year eod but not provided for
Investment properties 2964000 8 139063 Property plant and equipment 16386500 63759762
19350500 71 898825
Operating lease commiIOlenlS under noncancellable lease agreemenlS
Payable wilhin one year 990806 702000
990806 702000
25 CONTINGENT UABILITlES
The Group had the following contingent liabi lities from which it is anticipated thai no malerial liabilities will arise
2013 2012 QR QR
Letters of guaramee 474551239 394255203
Letters of credit 7678499 194299384
NQles
(i) leHlaquogt of gu indud penonmnlaquo tend nd bid bonds d pymenlt g gi to suppliers and contractors by the Group in the ordina ry course of bus iness which will matme within twelve months fro m the reporting da te
(i i) Letters o f credit are provided by lodging documents to the bank tor purchase of trading goods fro m foreign suppliers wruch will maMC within thJee to six months from the date or tile Iransaclion
J2
26
Aamal Company QSc
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year eoded 31 December 2013
RELATED PARTY DISCLOSURES
Related party transactions Related parties represent major shareholders directors and key management persortOei of the Group and entities controlled joimly controlled or signjficamly innueoced by such parties Pricing policies md tenns of these tnlOSaclions are approved by the Group s management
Transactions with related parties induded in the consolidated financial stalemenls were as follows
20lJ 2012 QR QR
Sale o f goods and SClVices 419034048 415225221
Rental income 1980473 2069386
Purchase of goods and services 1591 38018 300835596
Rental expense 21 780G78 23397334
Bargain purchase gain 8360793
Net assets acquired 78803585
Relat ed party bal nnces AmountS due from and due to re lated parties are disclosed in Notes 7 and 13 respectively These balances do oot carry interest and are repayable OIl mulUlUy agreed dates generally within one year
The Group did not record any impairment of receivables reJatiog to amounts due from related pat1ies in either year This assessment is undertaken each fina ncial year through examining the ftnanc ial position of the related party and the market in which the related patty operates
Parent The Groups ultimate parent is Al Faisal Ho lding Company WLL
Compensa tion or key management personn el The remuneration of key management dming the year was as fullows
2013 2012 QR QR
Short-term benefi ts 7904794 1079595 Employees end of service benefits 408934 439776
8313 728 11235727
33
AamaJ Company QSC
NOTES TO THE CONSOLIDATED FINANCIAL 5T ATEMENTS For the year ended t Decernber 2013
Dilling the year 1he Group issued a XHlUS share of 10 928 of the paid tiP share capilal hdd ilS at 31 DiX2mber 2(JJ 2 mnmuning to OR 555000000 using retamed earnings as of3 December 2012 (20l2 Doe share for every ten shues held as of 31 Dcember Oll amuunting 10 QR 495OO()OOO ling reta1ned earmrgs 28 or 31 Decencer 2D II Jshy
18 SEGMENT INFORMATION
For J)iloogement PUIpltJM rhe Group i organised into business unit bused On LlJeir nature of Acttvitics lud nas fonY reportable segments and the Head Oftklt as bllow$
Propert Tbe segntn cOlists of City C~nler Qlta~ Brunch and Aamal Rea Esmte Branch whicb ll[c invoived in lampIiiog the faJ1ities of retail outlet conpex red e5ttlte nve(mltn$ and property remal buines~s
Trading mld distrib-wion The segmeul Involves wholesalB andlor rBtail distribution of phamlaceutlcai and consunable i1ems hume Epplianccs medica equimenl t-Tes ill1d lubricmtlaquo and II1UllitnEl printing The scgn(rtt includes 6c following entities
Eotl Sina Medical Branch
Aaen Medical Braudt
Amcill Troding and DistoolltlqO Branch bull Foot Care (erier HRnd) Good llre Pbannacy Bf4Uch bull Al FllfJdaq COllpafY wJ~L
InduSNol manuacturing TIle s0groent IOvolves Ulahuactrumg whole~we aliaor rewi dimibUlioti of dccnc cables lid tools ggregJ1es_ ready-IUx connole and cement bI0C~ lI1d provi$ion of servlCcent$ in rdation to iODllltroa Itvestment repair aJ-d Gonstruction of power plwts liiiding of LED ilgluitlg products und management of industnl enterpnses The segment ircludes be folloVting centntitis
bull Aam1 Cemert Industries LL AuraJ Redy1Yl(A BrQTlch
bull Doha Cables Qawf lLL Senyaf IoolJic1es Qatar Holding W LL Advanced Pipes ard Casfs CompQTly WJ L bull GuJfRoch Coroany WLL Ci~San Trading Company WLL hmovafive Lighting Compary WLL
Managed services le segment inyolvc~ provisloH of hOllseiltecpmg mi cleaning services fucditics n-anagemerJ services C1egy s(tvices ttl centfe sltrvicf)s buildiqg lnaintemHlelt aml acting as travel gens The 5cgnltnt includes the foUowing cnti(lcents
An13 ServJce Branch
amli TnlVeJa l5tmh
f-eco Gulf Co W LL
Jolinson Controls Qattl WJL
28
Aamal Company QSc
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended ) L December 20 13
SEGMENT INFORMATION (Co ntinued)
Head Office It provides corporate services to the branches and subsidiaries of the Group
The managiog d irector of the Group monitors the operating results o f its business units separately for the purpose of making decisions about resource allocation and perfonnance assessment Segment perfonnance is evaluated based Oil operating profit or loss of these segments Transfer pricing between operating segments are on anns length basis in a manoec similar to Iraosactions with third parties
Aamal Company QSC
NOTES TO THE CONSOLIDATED FINAN CIAL STATEMENTS For the year ended 3 1 December 20 13
28 SEGMENT INFORl1ATlON (continued)
Operating segments The operat ing segment after elimination or ioter-bra nch and inter-co mpany lrnnsaclioos is presented as follows
Trading (nd Industrial Managed For fh e year elided 31 December 2013 Properly disirjblli ioll manujocljlring services
QR QR QR QR Revenues
- h lemal parties 260360172 578909983 1231522768 S l802210 - Inter segments 1253914 6843 11 8 29639873 3445052 1
Heat Office QR
Eliminoions QR
(n187426) II
Tolal
QR
2J22595133
261614086 585753 lOI 126116264 1 8625273 1 (721 87426) 2122595133
Opera ti ng results Fair vallie gains
Profit I (loss) ror the year
Depreciotion
200811944
245051 107
445863051
2066290
86492834
86492834
4345438
22636250
22636250
33049 089
5157436
5157436
1760305
(47864882)
(47864882)
1334382
267233582
245051107
512 284689
42555504
36
Aamal Company QS
NOTES TO Tl CONSOLIDATED FfNANClAL STATEMENTS For the yeM ended 31 December 20 13
28 SEGMENf INFORMAnON (c)tltioucd)
FOf the yearrnrkti J f DccemOer 2(J12 QR
Revellues - ExlcmlJ partiel 2331 17 509 bull Inter segmcI11S 1168935
-- 234236434 --~- -~--
Openning results 18S2367t Fmt value gains J8S79-4~G
pront LOllS) for the rear 570616154
gt3659
No(
lnlermiddotgment revenues are eliminated on tQHs)idntiOH_
Tadiug ftfid disl d)Ntion
QR
S2S3l7661
324 j
5335493114 ~ -~-----
51384831
54384338
4J9R71(i
Indus idi mamfmturing
QR
1255694537
129U25lS4
56727059
56727059
32752742
slnltic(s QR
55216665 2939H31
S46lOJ96
7427414
7437
[908067
ilfild ()jice QR
(64(41976
Elimination QR
(74tHi2oJ Iii
Totul QR
206936372
2069336372
235721
(64641
131 f613
6245
42541)861
Amnal Company Q$l
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Por tnt yeartndeJ 31 De~embcr 2013
28 SEGMENT JNFORMATlON (contiutlld
Assc-ts and labilities
Tng alld lndtrstfw At31 December 2(113 distnbllrior manufacturIng senices HeadOJJicc EliminatioilS lola1
QR QR QR QR QR
Cumnl 3tS 227552338 620807979 61349 j 415 S()6)86922 (301636995) 1477366090 Noolucrcnt DSeIS 6411868160 12604763 622386238 4348876 (i624548 __p2438051 780
fotal asstl$ 6639420498 1194 1243194217 65698291 513Ql1470 ==-lt03H8l~O()) 853295-870 -~----~ ~---~ -
CUIT)llliabilitics 280995335 1(3511J60 6344(12777 2l0708lJ2 496261185 (3CH636995) 1249603264 Non-current iiatJlitics 7l70L5V2 8008485 HlDi16~43_ 3181668 t433799 ____ ilj534_~57 __ --Totul liahililics 353696897 ___~4159~4~ 734419720 ~4976~~~~~ 1434945711
---~~--~ -~-~~ - _2~~~4~~ (~~~~9~
C1pild expcndimn HI) WO743OOj 1397742_~471l2~--~50 ~51 ~1~623821~~1~_ -~----~------ -~
3amp
28
Aamal Company Q SC
NOTES TO THE CONSOLIDATED FfNANClAL STATEMENTS For the year ended 31 December 20 13
SEGMFNT INFORMATION (continued)
Assets and liabilities (continued)
AI 31 December 2012 Properly QR
Trading and d iSfriblllion
QR
Indusrial manufacfuring
QR
Managed senices QR
Currenl assels
Non-current assets
146491 186
6121 864484
2964425 12 903 7264
73468 1258
549267235
51387098 471 1439
Tolal assets 6268355670 305479776 1283948493 56098537
Head Office QR
468325024
6713643
475038667
Currentliabil iies
Non-current liabiLities 273444 748 1 J10 15024
86054583 7434286
669214261 1288 14977
2 1938953
287 1199
480393637 1253084
Totil lliabiliti cs 390459772 93488869 798029238 248 10 152 48J64672 1
Capila expendirure (ltII L 72865 878 1281254 6647 J356 7169 13 149045
Notes
(i)
(Ii)
Inter-segmeot balances are e limioafed 00 consolidatio n
Capi tal expendiTU res consist of additions 10 propeny plant and equip ment and iovestmenl properties
Eliminations QR
To wl QR
(273735776) (i )
(20308351(i)
1423591302
6689563230
(27576661 1) 8 113154532
(273135777) (i) 12573 10405
257388570
(273735177) 15 14698975
24 1484446
39
29
Aamal Company QSC
NOTES TO THE CONSOLIDATED FrNANCIAL STATEMENTS For the year ended 31 Dcltmber 1013
Fr-A]~ClAL RISK MANAGpoundMamp1H
Objccthes and policies fe Groups principal )uaucill liabilities comprise imltresl bctmllg loons and IxmowHgs baRlt ovetda1s amounts due to fclaled par1ies and tracte accounts payable The main pUlJXSi of thesc financial liabilities is 4J mise firmne or 610 Grmps operations The G0JP bas various fimmcial assets such as ttadc accounts receivable lInlOlmts due from related parties bark balances tltCntion receivable and other receivables which arisgt directly fran its cperuoonamp
The maiH ri~ks an3ing Joru (be Groups UnariCJlll illslrumenls jle market risk cretiJt nsk and hmdity risk Til BoarD ofDtrcctO$ reviews end agrees policies for mzrAgbg Caltt f hespound ri~k ihkh arc summariscd beloW
VIarktt risk yenfatket risk is the risk Um changes in market prices $Uch as intfcst rates and hreig lttmeocy ect14nge rilles Vltl1 affect the Groups profit eqwty Dr value tf its hoJdiI15 of financial instrl[Thnls rile objecivpoundj of marke1 risk mUnllgcrlcnt is to manage uld 1~ontr(ll tho tr))rket risk expo-sure vithir acceptable parfI-etcJ$ while optimising rerUID
Equit) price risk ampjuity prtce risk is the risk hilt the Group ampearnings will be affected as a rcmt (If luctttltions in fm vdue of ~qui-gt
mstwnents Eqlliry price risk arises from availabtetor~sale inv2strnems However the Groups exposure to eqmty price risk IS minima as II doesn hold sitl)iftrmt ailableAor-511le inYestrmmrs
[merest rate risk The Groups fimiruial poundS5ot ampId liaojlilies (at Rl $uJject to int~~ rate mk compnse brmk depoils interst bearing loans and bOITQwjags and bank overdr-afts At the reponwg dalt tbe [merest rale pronle of Ill Goups intexst bearing fbi4rdd instruments as fliows
11113 20i3 QR QR
Fued liIeryS refc insfrvrnellts
Fmmcial assets 113035962 111913394 FrOltwial liabilities --1~203712l) 1252t43~1
9)OI~ (13350972)
Fhlllting inireSI rate ns1lmlttrs Fanctl~ Isseis 127024345 ID43848o Fllllocial liabilities _-(i~9347~ (94))48926)
(836)64116)
The Groups exposure to t~ ris of changes in marXet interest fltltes relztes primariiy to the Groups financial assets and lizbitdic$ with t1Oltttirg interest mte~
lhe loEowing able demonstrates the ampmitivity nf the eonsolidattXI statemen1 of income 1) caonaly possible chonges in in1jfgtst rmes by 25 basis points with all othe vari)ble3 hdc umstant The sensitivity of the CooiK~ljclatid statement of inc(me $ the eft(ct of tb assumed changes in lnterdt rales for one year bf1sec on the floating rate financial assets and fimmcial hablhw$ held at 31 f~r The effect of deae-ascs in interest ral~ is cXp0Ctct to be equal and opposite to the effect oHlle increases sllQvro
Changes it Eftx OIl
00513 [oms profit QR
2013 Floating mterest Hlte instruments ----2$ bp (1649776)
2012 Flv-ating irkfiSt rale instrumenls +25 bp (209[9(1))
~--------- -~~ 40-middot------ _ _ shy
29
Aamal Company QSC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 3 1 December 2013
FINANCIAL RISK MANAGEMENT (continued)
Foreign currency risk Foreign currency risk is the risk lhilt the value of lhe fi nancial instruments will fluctuate due 10 changes in fore ign exchange rates
T rade aCcOlmts payable and accrued expenses include amounts due in foreign currencies mliniy US Dollars UAB Dirhams Great Britain Pounds (GB P) and Euros of which the Group has a currency risk primruily on the baJmces payable in Euros and GBP amoWlting 10 QR 14400634 (2012 QR 17214046)
The Group does not hedge its foreign currency exposure As both Qatari Riyal and UAE Dirhams are pegged to the US Dollar balances in US Dollars and UAE Dirhams are not considered to represent significant currency ris k to the Group
The table below indicates the Group s fore ign c urrency exposure on its monetary assets a nd liabilities The analysis calculates the effect o f a reasonably poss ib le move ment of the QR curre nc y rale against the Euro and GBP with all other variables held constant on the consolidated slate menl o f income (due to the fa ir va lue of currency sensitive monetary asse ts a nd liabilities) The e ffect o f decreases in fo reign c urre ncy exchange rates is expected to he equal and opposile 10 the e ffect of the increases shown
Incramp1se ill
f oreign cUlrency rate
0
the QR
Ellecl on profil
QR
2013 +5 (720032)
20 12 +5 (860 702)
C redit Tisk Credit risk is the risk that one party to a financial instrume nt wi ll fa il to discharge an obligation and cause the other party to incur a financial loss TIle Groups exposure to credit risk is indica ted by the carrying amoWlt o f its financia l asse ts whic h consist principally oftmde accollilts receivable retention receivable amounts due from related parties othe r receivables and bank baLances
The Group sells its products and prov ides services to vario us panies It is the G ro ups policy that all customers who wish to obtain on credit lerms are subject to credit verificalion procedures to ensure c redit Ilonhiness Each new customer is analysed individually for creditworthiness before the de livery o f products Of services Custo mm tbat fai l to met t the credi tworthiness may transact with the Group only o n prepayme nt basis Property rentals are mostl y received in ad vtnce or conlrlCled wi th post dated cheques 10 additio n receivable balances are monitored on an ongoing basis a nd the purchase limils are established for each c redit custoroer which are reviewed reguJarly based on the level o f past transactions and senlement The Groups max im wn exposure with regard to trade aCCOWlts receivab le net ofa llowance re nected allhe reporting date was ilS fo llows
2013 2012
Business SJgmelll QR QR
Property 15478832 19386326 Trading and distributio n 194343 597 179748274 Industrial ma nufac turing 183119753 131578668 Managed services 18069385 14547389
411 011 567 345260657
41
29
Aamal Company QSc
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For tbe year eoded 3 J December 20 13
FlNAJICIAL RISK MANAG EMENT (c-o Dtinued)
Credit risk (continued) With respect to credit risk arising from the other financi31 assets of the Group the Groups exposure to credit risk arises from default of the counterparty with a maximum exposure equal 10 the canying amount of these instruments as follows
2013 QR
202
QR
Bank balances Amounts due from related parties Retention and other receivables
436136756 214439950 48290351
36788129 t 171525363 74082203
698867057 613488857
The group reduces the expoSltre of credit risk arising from other financial assets by maintaining bank accounts in reputed banks and providing services only to creditworthy re lated parties
The management cons iders the bank balances and a mQUIIIS due from related parties as high grade fi nancial assets and lfade accounls receivable and other receivables as sundard grade financial assets When a finltmcial asset is identified 10 be impaired the managemoot downgrades such assets to impaired category and provides adequate allowances
Liquidity risk Liquidity risk is the risk that the Group will not be able to meet its fmancial obligations as they fu ll due The Groups 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 nonnal and stressed conditiom without incurring unacceptable losses or risking damage to the Groups reputa tion and is to maintain a balance belWeen continuity of fuoding and f1eilibility through the use of bank overdrafts and bank loans and borrowings
The Group monitors its risk to a shortage o f funds using a recuning liquidity plaOfling 1001 TIllS tool considers the manuiry o f financial assets (eg accounts receivable) and projected cash flows from operations The Groups teons ofsales or services require arooUIlts to be paid within 30-90 days from the invoiced dale
42
29
Aamal Company QSc
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For tbe year ended 3 1 December 2013
FrNANClAL ruSK MANAGEMENT (contiQued)
Uqujdity risk (continued) The table below summarises the ruaruriJy profile of the Groups financial 1iabililies a t 31 December based on contractual undiscountcd paymeots
2013 Interest bearing loans and borrowings Bank overdrafts Trade accowus payable Other payables Amounl~ due (0 related panles
201l Interest bearing loans and borrowings
Baok overdrafts Trade accounts payable Other payables Amounts due to related parties
On demand
QR
6836280
6836280
011 demand QR
2885090
2885090
Less than 3 months
QR
521324473
303638792
47406830
2530~480
898675575
Less thall 3
months
QR
469839033
10754JJIO 37543236
1964504 1
634568620
3 10 J2 mOlllh$
QR
239333328
16378865 20210580
2289~11l
298816884
3 to 12 monlhs
QR
365476972
159621 37 J 24745342
30092716
579936401
1to 5 years
QR
J 60092748
160092148
1 to 5 years
QR
248472226
248472226
gt 5 years
QR
25261598
25261 598
gt 5 years
QR
7648000
7648000
TOlaf
QR
947012147 6836280
320017657
67617410 48199591
1389681085
Tota
QR
109 1436231
1885090 267162681
622 88578
49737757
14735 10337
43
30
Aamal Company QSltc NOTES TO THE CONSOLIDATED FlANCIAL STATEMETS For the year ended 31 December 20 t3
21 F~ANClAL RlSK MAiAGEMElT (continued)
Capital management The Boards policy is to maintain a strong cepit1 base so as to rnainmin investor creditor and market ronfoonee and to SUSWlJ) fumre dcltclonnent Gf the buinest The Board of Directors rronitortl the tapital whkh tbe Group defines as wlal $parcloders equity excluding nonmiddotcornroliing imerests and the level of dividends to orrunury srarellOJdcfS
The Board also reeks to ITIaimain a balance between the higher (ctums (hat might be fA-~$ihle With higher leves of borrnwings end Lle edvnrJages and security named Sy it sOMd Cilpitai posi[ion The GfCup~ k1rget is to achievfl a return on slureholders equity (exclJding aonwurrolJiug iorcf(sts) greater lll(ll1 he wcighlcd average inres exxmse on mrerest bearing Ivens and oorrowing
The (lf0t-p nl)nDg-e ils cnpital structure and makes adjustneal lOll in light ofchang2s in economic nd bttincss cordjlons and shareholders expe1ationJo chmges veremiddot maCo HI Lleuro objecttves polilCS or proCCSSC3 during the years erded 31 D~mber 2013md 31 Dtccmlxr2Ql2
The Group monitors the capit2J using a gClting fatio which IS dep divided by caplla plus debL The GtOwgts policy is to keep ttJe ge-anng rmio bclew 40 Tbe Group iLdtdes withb debt imete-51 beagting loans ard ~OITORlngs less cash and cash equtVaknts Capltal includes eqmty attributable 10 the equity tolders oft~e parcrt
2013 QR
2(i2 QR
fmerest bearing loans and borrowings lcss- Cash and cas ltYJUvalcnts
9i4lJ05301 _~ (429JfJl4761
1004845296 (649)6201)
Net debt
Toa capital
Capita and net debt
699849045
~ringrttio
FAIR VALtES OF Fl~ANOAL f~STRUMETS
Finarcial iostrumenL~ cOlnprise tina~lctal assetS carl finailcialliabilities
Fmancial assets colJist of bank balance) short 1Cm bank dcposis amounL dve dom rc)ltted partilt)$ rekntion and other receivables and ttade accolmis rceivabe Finatlclll habiilics cgtmsist of banilt ovcrdratls jnerest bearing lOil1S and bOrowings amounts due (0 nliled partiG~ ane trade x-ounls payable
The- fair values of hese financial inStrumen1S except Jo-- imCfest bearing loam lHld bOlToving aproKimate lhdr cMryinJ vlhes due to the Slort temt mzrutiiles or these instrument
Tllc faiT value of iotcnst beating Nns and borrowin2s ae estimate( based on discoumed ltash flows twin int(s rale- cune-ntly nvailagtk fur tilt debt or sinuiar tetnlS an-a rell1lmng matunties
31
Aamal Company~Q=-ScC ______________~______
~OTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For fhe year ended 31 December 20 t3
SlGNIFICANT ASUMPTIONS ACCOUJTING JUDGElE1TS AND F8TIMATFS
impairment (If accoonts receivable n etrnwe of lhe collectible anoun of trade accounlgt reccvable is made when collection of the full lHl1OUt i~ nO looger probabk FOI nCividualty significitIl amounts this estimation is p~rformed on an indh-idllai a$[$ Amomts wHcb arc not indivldl11Uy significant but wluch are past due ZTe tsscssed collectively and an aJlQwaccc applied ucc()r~Jng to the length of lime past due based oc histnncal recovery nlJes
hnpalrment of inHntnries lavenoncs are held at tho lower of col and nol realisable value InIOn inventoncent$ becone old or 0-~amplete an estilTJte is mate of their net j alisable vulue For indiviolhlUy significant amountS this cstinaunrt is performec all aD lndividwl osis Amotlnts whieh are fl0t individually significan( btll which ltIre old at obsolete wx LltSessed wllecivdy md a provisior is applied sccnrding to the invenrory type and be dep)ee of ageing 0 cDsolescc1ce based on anticipUled selling prices
Classifigt1ltion of El Sew(gtdy Cable Qatar WLI ali a j(lint vwture pound1 Sovedy Cables Qatar is a limited hability company whose kgal fum confers SCprm11ior bernten tbe jXliiies 10 ~he jomi lfranpement Snd the Company Itself FurthenrlOre then IS no oontractua] arrmgelTeot or any oibe aus aod circumstriliCe$ that iocik41to tht he putic5 [0 the joint flJTIlrgernelit bave rights to the ssetl and obligrtdons fo~ the liabilities of the joint ilrrongement Acoordingly El Sewed- C[jbl~s Qamr WLL is dassifiecl 7S a joiut enrtrr of he GWtp
impairment of goodwill G0oovj)1 embedded in th~ cot 0 aquisitior of subsidiaries and eqmtj-iccounled iflV(stees ire teswt for irl1jXlirmnt aHuaily Tbe calculations of value [n use fO( cfish gecj~r)lilg units (loring to real nte projecg are rtost sensitive to tin IDHowing assumpti015
Grosgt i1wginmiddot Gross Ilmrgins arc lmsed on avrage values tuhje0d in (he [Xrioo preeedhli (e siaM of the budge xnod T1esC at( mcreased over the budgel period for mticipatltX efficiency Hnprovemots
DisC)unr r(es Discount rotes represent th cl1tent mark as~ssmetlt of the risks specific te ech cash geocroting unit regarding lhe time value of money ilnd mdividu)l risks of he tmtieriyilg assets whICh have not been inwrport1eti it the Citik flow estimates The dj~(OUrl flte tlkulation is based on the speclfte circurnsthLCes of lile Group and its opltllatJng segn)~nts (md derived (ff)rC it weighted avaage (XSt 0f apilaJ (WACC) Tb fACe (akw into uoount both deb and equity The 0$1 of equity is denved from dlC expected return 01 investmenl by the Groups investors TJc Gos10( deb is based on l1e borrvwings the Gmup IS obllsxl to service SC~lletllmiddotspecific r5k IS incorxt4too by applying individual bera facto The betn mctors ire evauatcentd annuaHy bhseci on pubJicly aVflllabe murked earn
Fair value ()fnHstmeni proputies The fuit laHe 0 nvestmel~ propertis is deltrrnlnzd b cxterrwl indepzfldell property valuers laving appr0priate recognised professional quabfiillions and recenl xperience H1 the localjl)n and G-tegory 0 the oroperty being valued
Useful hes of PfQPcrly plmr (llld zqulpment The Groups management detennints th estiunted useful jives Df It~ property plan and equipmnl fix calnurjng depreciation Thi5 e~timJte is 6lermind after cinsidring 1b expeelcd usage (1f the a5sclt [hysical l101t and (eas tedmiltal Dr com~ercia obsolesccnce
Gotlg Qncen
ibe Groups mangerncnt UiS made aJ assessmeot cf the 011115 ability (0 COllllOUC liS a going conct11l Imd is satsl1ed hat me Group ms the resources to contmue in business for he foreseeable fu1urc he1hennort he management is no aware oC lny material Hncertainties that lray CH~t signinchnt doubt tlPDfl the Groups ability 10 continue as a going umcem Therefore titpound lotlsolidatcd finilllcij stftemeols comirme to be prepltd on li g0ing concern basis
Aamal Company QSc
NOTES TO THE CONSOLIDATED FlNANC[AL STATEMENTS For the year ended 3 1 December 20 13
32 INCOME TAX
Certa in subsidiaries of the Group which have non-GCe ownership are subject to income tax under Qatar Income Tax Law No 2 1 of2009 The iocome tax is charged on the share of profits attributable to non-GCe shareholders For the purpose of these conso lidated fi nancial statements the income tax liability oftbe foreign shareholders has been excluded given that the non-GCe shareholders have agreed under the shareholder agreements signed with the Group to bear the fh lliiability and make necessary payments
33 COMPARATIVE INFORMATION
Certain comparative figw-es of the previous year have been reclassified 0 coofonn to the current years presentation However such reclassifications are oat materia and do not have an impact on tbe previously reported net profit other comprehensive income or the total equity for the comparative year
The impact from the resta tement of comparative infonnalion as a resuh of adoption of IFRS I I - Joint arrangements is detailed in Note 32 Changes in aCCQu(lting policies
46
5
Aamal Company QSC
NOTES TO THE (WNSOLlDATED FfNANClAL STATEMENTS For the year eoded 3 ) December 2013
CASH AND CASH EQUIVALENTS
For the pmvose of consolidated statement of cash flows cash and cash equivalents comprise the fo llowing balances
lon 2012 QR QR
Cash and bank accounts 330333904 282272895 Short lenn bank deposits 105802852 85608396 Cash and bank balances 436136756 367881 291
Bank overdrafts (6836280) (2885090)
Cash and cash equivalents 429300 476 364996120 1
The short tenn bank deposits are made for varying periods between one day aod three months depeoding on Ibe immedifltc cash requirements of the Group and earn interest at the respective short term deposit ra tes
6 ACCOUNTS RECEfVABLE AND PREPAYMENTS
2013 2012 QR QR
Trade aCColUlts receivable 411 011 567 345260657 Advances 0 suppliers and prepayments 50787921 629389J 5 Retention receivables 36217081 56943030 Other receivables 12073270 17 139173
5tO089839 4 82 28 1775
As at 31 December 2013 trade accountS receivoble amoWlting to QR 2690 1412 (201 2 OR 24984025) were impaired Movements in the allowance for impairment of trade aCColmts receivable were as follows
2013 202 QR QR
At 1 January 24984025 1 877085 Charge for [he year (Note 21) 2294590 13613 120 Amounts wriuen off (19949) (117368) Unused amotmts reversed (357254) (388812)
At 3 t December 26901412 24984025
20
6
1
lamal CompanyQSC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMEltS For the year ended 3 J December 2013
ACCotNTS RECEIVABLpound AND PREPAYMpoundNTS (contillued)
As at -1 I Dtcemxt the ageirg of unimpaired (ltlde accounb iltcivabk was as follows
P(HI duo
nor Up to 30 31-60 61middot90 Yi-jSj gt flO Tota impoirlt-fl days days days day doys
QR QR QR QR QR QR QR
1l13 411OJl$67 25l981960 32312165 2140966 19351fi43 16f)76888 60148545 2012 345260657 1695159B6 493lt)8566 2356$954 19494369 16908414 66374363
1JJJirtpai~ed receivable are expected no th bil5tS of past experienn) 10 be fully fcCi)evbc H is not the pngtctlce ofthcent Group to oblum collaleral over recejvablcI_
AMOLNTS DUE FROyl REL-TEO PARTIES
Name
AI ~aisnl Holding Company V_LL E Seweo Cabtes Qatn WL L Cnild -ftt Cvmlllny Al hz Retll E$vt rWesnnim Company WLL~ AllaZi Real Estale BrAnch EI Sewedy Electric Egypt WLL MuincrDJ1Ce Mwagmvont Group Qat3r W LL Good fe Cheffilt - The Pcarl
BuderPhtrnacy Al Faisallnlemadonal Tnl(i and Investment Company WLL AI-rabia Land Trnr~PQltit1g Company rLL ro Sewedy CabLes - Kuwuit Gcentttco hlttrnJmJilI Frijns StHytural Steel Middle East WLl Winer Wunderand Company WLL Al FtOH1H for Investment amp llllemtiOl1a Trading COntpAny WJ_L Q)lar Bahrain lmerOlnionai Cnero3 WLL Gulf EngJisb Sltl-Qo] Al Rayyao Tourism lve$lrnent Company W LL Other relater purties
2013 2012 QR QR
15412-1064 ll941Y70 34644615 ~li96858l
[()0405 14-45012 51 59197 9538116 15514113 4014727 236824$
1867526 LSOfd22
8(1012 10435r 311650 746395
15023 204450 459829
2iYHi 244940 186750
152170 143440 33500 7768(1
6259 1459lt) 758962-1
__2~61g~~_ 1~95Ji
bull 214109950 171525363
--__ shy
7
8
9
Aamal Company QSc
NOTES TO THE CONSOLIDATED FfNANClAL STATEMENTS For the year ended 3 1 December 2013
At10(JNTS DUE FROM RELATED PA RTIES (continued)
NO les (i) Transactions witll related parties are eam ed out through open account and Directors do not consider any
receivables to be past due or impaired
(ii) Related party transactions ore disclosed ill Note 26
INVENTORIES
Goods for rew le Raw materials and spare pans Work in pTOgresS Goods in transit
Less Provision fOI obsolete and slow moving invenlories
1013 QR
165499699 38388307 19944678 9671 8553
320551237 (3851692)
31 6699545
Movements in the provision for obsolete and slow moving inventories were as follov~
At I January Charge for the year (Note 19) Reversals Amounts wri tten off
At 31 December
E QUITY-ACCOUNTED INVESTEES
TIle Group has the followiog invesllnenfs in equity-accounted investees
Interests in joint venrure Interests in associa tes
At 31 December
G roup s snare of profits fr om the equity-ncco unted iovcstees arc AS follows
Profit share from in vestment iojotnt venture Profit share from investment in associates
202 QR
232597650 36608394 30622960
10521 9695
405048699 Q 145826)
40 I902873
203 QR
3145826 1 380617 (535695)
( 1139056)
385 1692
20 12 QR
2795992 2208263 (137995)
( 1720434)
3 145826
2013 QR
2012 QR
129462184 3644723
124124803 2545188
133106907 12666999 1
17330368 22869454 1169533 534050
18499901 23403504
22
10
Aama Company QSC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 31 December 201 3
9 EQUITY-ACCOUNTED INVESTEES (continued)
Counlry of incorportllion
Relationship Proportion ofownership and lotilfg power held by the Group
203 2012
EI S~wedy Cables Qatar W LL Frij ns Structural S teel Middle East WLL Al Ftfazdaq Company WLL
Qat~
Qatar Qatar
loint venture Associate Associate
55 20
55 20 35
Note With effect from 1 January 20 13 the mlnagemeot of the Group has reclassified the investment in Al Farazdaq Company W L-L from investment in associate to investment in subsidiary This is based on the transfer of share holding by the other shareholder whereby the conlroi o f AI FOl razdaq Company W LL bas been assigned 10 tbe Company
INVESTM ENT PROPERTIES
a) Reconciliation of carry ing amounl 2013 202 QR QR
AI I January 611334701 8 555 1835348 Additions 9568047 1727191 87 Transferred from property plant and equipment (Note II ) 34519828 Net gain iTo m fa if value adjlls tment 245051107 388792483
At 31 December 6402486000 6 11334701 8
b) Measurement of fair value
The fair values of the Groups inveS hnent properties as at 31 December 201 3 and 3 1 December 2012 have been arrived al on the basis of valuations carried Ollt on the respective dates by professionally qualified independent valuers not related to the Group The independent valuers have appropriate qUlli ficatioos and (eceJ11 experience in the valuation of properties in fhe relevant locations The fa ir value WltlS determined based on market comparable approach that reflocl s recent transaction prices for simillt1r properties and discounted cash flo w and income approach techniques
Details of the Group s iovestment properties and infonnation about the fa ir vn lue hierarchy as at ) I December 20 I J are as fo llows
IIvestment propenies
Level 3 fair vallie
Al I Janu ary 6 [ 13347018 Additions and trans fers from property plant and equipment 44087875
Gain included iu prom and loss Net gain from fair value lt1djuslmem 245051 107
AI J I December
The Group recognizes transfers between levels of fair value hierarchy as o f the end of the reponing period during whicb the transfer has occurred There were no transfers between the fai r va lue hierarchy during the year
23
10
Aamal Company QSc
NOTES TO THE ONSOLlDA TED FINANCIAL STATEMENTS For the year ended 3 I ecember 201 3
LNVESTM ENT ROPERTIES (contin ued)
b) Measuremen t 0 (air value (conti nued)
Vau t ion technique an significant unobservable in puts
The valuer has applied t e income capitali zation discounted cash flow and comparab le methods to detennine the market value of the lnve tment propen ies Significant unobservable inputs used included expected market rental growth rates (an average 425) occupancy rates (approximately 90 to 95) and risk adjusted discount rates (approximately 5 to 7 0) M y significant change in these inputs can impact lhe fair valuation of investment propcnies
24
Aamal Company QS c
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For che year ended 31 December 2013
11 PROPERTY PLAi~T AND EQUIPMENT
FumilUre Truck mixers fIXtures and Complllers
Leasehold and maor Plum (fd office and relaed eapiowork Buidings improvements vehicles machinery eqllipmcni sofMore in progmiddotcss Total
QR QR QR QR QR QR QJl QR
At I January 2013 137870126 371 88 132 9595813 1 262536261 19 580954 14864 385 561 32447 6241 30436 Additions 948)65 2618 100 5367399 859061 111 5268 137147581 148055774
Relating to d isposalswrite-off (1042642) (4390496) (77157L) (589150) ( 184075) (6977934) Transfer from capilal work in progress 1505 310 164 336 3601776 ( 150000) 1182741 (6304 163) Transrer to investment properlies (Note (0) (345 19828) (345 19828)
At J I Dttember 201 J 139375436 J7 258~ ~1 85735 270733865 19700865 169783 19 152456037 _73068~448
Depreciation AI I January 2013 16133915 J6902 529 49087707 68783 065 11 980009 tl71 595 3 174603 178 Charge for the year 7059805 3237150 5390767 12249797 2849162 1768823 42555504 Relating 10 disposalsJvri te-off (664709) (4 3 1716 1) (724322) (552939) ( 18 1993) (6441 124)
At 31 December 201 3 23193 720 19474 9 70 50161 313 90303540 14276232 13302783 2 107 17558
Net carrying amounts At 31 December 2013 116181J16 _17783221 44024422 180415325 5424633 3675536 __l2456O37 JJ9970~890
Notes (i) Depreciation charge for the year amounting 10 QR 33 164382 (201 1 QR 3303091 6) is included in tbe direct costs and an amount of QR 60055 (20 12 QR 36939)
has been capiulised under capital work in progress
(ii) The capital work in progress includes capitalised borrowing costs amounting to QR 125645 (20 12 QR 15358)
(ii i) The buildings are constructed on a plot ofland taken on a loog term operating lease
25
Aamal Company QS c
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 31 December 201 3
II PROPERTY PLANT AND EQUIPM ENT (continued)
C05I~
At 1 January 2012 Additions Acquired through business combinations (Note 4) Relating to d isposalswrite-off Transfer from capital work in progress Transfers
Buildings QR
137434400 435726
Leasehold improvemellls
QR
38137377 446J 04
144 103 ( 1539452)
Truck mLCers and molO
velricles QR
83427661 11464679
1697609 (631824)
Plant and machinery
QR
249335437 97264 85
35 14 132 (99498)
59705
Furniture fir ures and
office equipmem
QR
22845309 667586
192042 (3696457)
98000 (525526)
Computers and related
software
QR
158 19519 87 14 14
141837 (266 1733)
908078 (2 l4730)
Capitol work in progress
QR
12104889 451 53265
( 1065783) (59924)
Total (JR
55910459 8 68765259
5689723 (862 8964)
(800180)
AI 31 Dttember 2012 137870) 26 371881 32 95958 13 1 262536261 19580954 14864385 56132447 624 130436
Depreciation AI Jaouary2012 Charge for the year Acquired wough business combinations (Note 4) Relating to disposalswrite-off Transfers
9144666 6989249
)4 3 16620 3410618
144103
(96 812)
42558404 548 1613
1671942 (6242 52)
44555 290 2 1398849
2890797 (6 187 1)
12392584 3 182899
169005 (3558466)
(206013 )
12235266 2077633
136959 (2627283)
(J 0662)
135202830 42540861
5012806 (7840684)
(312635)
At 3 L December 201 2 161339J5 16902529 49087701 68783065 11 980009 11715953 174603 178
Nel canying amoWlts
At 31 December 201 2 12 173 6211 2028560 3 46870424 193753 196 7600945 3148432 56132447 449527258
26
12
13
Aamal Company QSC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 31 December 20 13
ACCOUNTS PA YABLE AND ACCRUALS
Trade accouots payable Advances from customers and tenants Accmals Social and sports activities levy Other payables
AJIOUNTS DUE TO RELATED PARTIES
Name
Arab Compaey for Fiber Products EI Sewedy EIC( lric Ho lding Egypiasl Egypt Egyptlech Egypt United Industri es Company WLL Johnson Controls Air condi tioning aod Refrigeration Qatar WLL pound1 Sewedy Cables Egypt Johnson Controls Air conditioning and Refrigeration rNC Dubai United Wire Company WL L Gelteo Company W LL - Gelteo Refr igera tion and Airconditioo ing CampC Lightway nc AI Shaab Group of Companies Other related pruties
NO M Related party transactio l)s a re disclosed in Note 26
2013 QR
320017657 30486837 26924669 41 761 843 25855567
445046573
2013 QR
18517474
4902528
6531231 6404578 3215821
2825884 75 7825
3467288 263715
1313247
48199591
2011 QR
26716268 1 27410234 222575 76 28954726 33)33852
379119069
2012 QR
18380528 91458 82 54 13849 1 11 6 135 5374039 35291 2020359 1693323 1064744
670 179
11 0873 12 18650
49737757
27
14
Aamal Company QSC
NOTES TO THE CONSOLIDATED f fNANCIAL STATEMENTS For the year ended 31 December 201 3
INTEREST BEARING LOANS AND BORROWINGS
NOles Malilrify
2013 QR
2012 QR
CoMl Loan 2 Loan ) Loac4 Loan 5 Loan 6 Loan 7 CoMB Loan 9 Bills discounted
(0 (ii) (iii) (iv) (v) (vi) (vii) (viii) ( ix) (x)
lune2014 Seplember2014 January 2015 November 2016 December 20 16 November 2017 Jllne20 l J December 20 7 OClober 20 19
172070387 440000000 50544000 40261 621 81387109 19920036
6] 43890 62626967 42522794
915676804
298324180 440000000 10 J088000 57955030
100 168750 2 1300492
407728 1 782871 1
35000000
1065742444
Less Defe rred finatlcing cost (771 503) (897148)
914905301 1064845296
Presented in the consolidated statement of financial positioo as fo llows 20)3 QR
201 2 QR
Current ponion Non-current ponion
749520820 165384481
825568489 239276807
914905301 1064845296
The dete rred financing costs consSt of arrangement fees The movements m the deferred financing costs were as fo llows
203 2012 QR QR
At I January 897148 332 661 Addjtions during the year 1 062565 912506 Amortised during the year (218amp210) (34801 9)
At 3 1 December 771503 89 7148
28
Aamal Company QS C
NOTES TO THE CONSOUDATED FlNANCIAL STATEMENTS For tbe year ended 31 December 2013
14 INTEREST BEARING LOANS AND BORROWINGS (continued)
Nolec
(i) Loao I i USD 93000000 impon 10n moi lily obtoined to refimnee he Icne~ of edit The 10 IT interest at commercial fate and the interest is paid at monthly intervals The fucility is repayable within ISO days including the usage period under letter ofc redits
(ii) Loan 2 is a secured bridge loan obtained to settle an existing loan and working capital requirements of the Company The loan carries interest al coOlJllercial rates and interest is 10 be paid on quarterly basis
(iii) Loan 3 was obtained for the pWpOse of financing capital ependiture and direct payment to suppliers contractors and 5ub-controctors The 10011 CMries interest at commercial rate and the inte rest is to be paid q Uar1erly The fac ility is repayable in IS quarterly iostallmenls starting I July 20 11 and ending I January 2015
(iv) Loan 4 was obla ined for conSlruclion o r an inveslmenl property The loan is seclJed by 0 primary mortgage over the some property and corporate guarantee of the Aamal Company QSC Tbe loan carries interest at commercial marke t rate and is payable in quarterly instalments
(v) Loan 5 represents a loan fOlcility obtained in two sepnrole tranches amounting to QR 309 825 000 (USD 85 million) for the purpose of refurbi shment and construction of fociJities io one of the investment properties The loan is repayable In 16 equal quanerly instalmcnlS for individua l tranche commencing from March 20 1J The loan carries interest at conunercial rJtes
(vi) Loan 6 represents secured loans obtained ffom a commercial bank in the previous periods for the purchase of heavy equipment and machines and were merged on 15 November 20 12 as a comb ined loan This loan is payable by 59 equal instalments of QR 426000 with (I last inSlalment of OR 438 326 with effect fro m 01 October 201 3 The loan carries interest at commercial market ra tes
(vii) Loan 7 is il tmst receipt banking facility obtained for the purchase of inventories This carried interest at conunercial market rates This loan was full y settled during the year
(vii i) Loan 8 represents secured loans obuined from a commercial bank in the previous periods for the purchase of delivery trucks and machinery and were merged on 22 October 2012 as a combined loan The loan carries inte rest at commercial market Tates and is payable by 59 equal insta lments o rQR 160000 with a last inSlOlmem ofQ R 128000 with effect from 3 1 December 2012
(ix) Loan 9 is an Islamic Financi ng Arrangement obtained for construction o f a manufacturing plam and as o f yearend ba lance represents partially drawn amount out of totil1 facility of QR 655 68000 The loan is secured by joint corvorate guarantee by the shareholders The loan carries profit at Islamic Financing rates and re-payable in quarterly instalments starting from the end of the 24 months gmce period from the date of loan drawn
(x) Bi ll discounting is a loan fac ility from banks The purpose of the arrangement is to discount bills locally and carries interest at current commercia l filte
15 EM PLOYEES END OF SERVICE BENEFITS
Movements in the provision reHectelt in the consolidated SLo1tement of financia l position were as fo llows 2013 201] QR QR
At I Jan uary 18111 763 17877937 Provision made during the year 4056969 4205499 Acquirelt through business combinations (Note 4) 349272 End of service benefits paid during the year (2210756) (4320945)
At 3 1 December 19957976 18 111763
29
Aamal Company Q5C
NOTES TO THE CONSOLIDATED FINANCIAL STATEMETS For tile y~ar ended 31 Dee~mber 2013
16 SHARE CAPITAL
2013 2012 QR Qq
AtI1l1)nud 60000)000 (20 2 544500JJOfn shares ofQR iii Cilch 60i)iQOOlOO 54450lt)0000
21)13 2012 Numher of
siMtS QR shares QR Issued Mtldfully paM At lJamld) 544SfWllOfJ 5445(100001) 495000000 49500000)0 1511C ofbonus S1i1-C ___ 5550~OOO 555000000 49SGOOOO 495000000
At 31 Decenef 6(OOampQllf1(1 ---14450O000 544~OOOOOO
All ampates m~ of a110 clss and caL equal voting rights
17 LEGAL Reuro5ERVE
As required by Qatar Comnertai COfrp7lnies Lav No5 of 2002 lOfp of the profit for the ye1J as a rru1imllli silould be mmsfened to legal re~erve The reserve is lot normay [lytiabe tor distribution except ill he cixcuJUstllrtUS stipulated m the above ~lemi0ntd GIW
IS HEVE1TE
2013 l)n QR QR
Sale of goods 1726893265 i709057~(iO
Renlal income UiO362322 133117509 S-ice income 858695 33940731 CornrrusslOlL Incentives and agency fces 44695S1 422~_632
212259$)33
19 DIRECT COSTS
2013 2)i2 QR
C 051 of inven(feS recognisedlIS an exptns 1522929956 497210830 Dind sL1ries lmd wages 601 [1336 5137856-8 Operating eXpenses on nml estate p~opet1les 36)711316 3041H504 fJepreciatiort (Kate I J) 33164382 B03091pound Operators marhgerrt6nt fees 14508588 li667989 Provisicn Qr obsolete and skwlt moving mvenlories (K)tc 8) 2380617 2208263 Other operating ilxpenses _31~3982 _ 3674946
1702139171 JS9653OI tgt
Aamal Compall-yQSC________________
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For lthe year ended 31 December 20 11
2G OTHER NeOiI
2013 20J3 QR QR
Interest mcume 2824216 2)314392 Profiv( loss) 00 disposal of property plant aoe eqUlpmem 737647 (l7362G) Eargain ptmnJse gain (Kote t) 8360793 MIsceJlaneous income 5723356
2013 2012 QR QR
ManllgetnUI hrQ empl(yees ws 55170302 55lt035middot1 Rent 23596799 2594915 Allowance for impaimlcot oUrsue aCQl1ot$ rc(Xjvalle (Nole 6) 129459(i 11613120 flBumcce ane profcampiitmJI fees 2IU9263 209J902 Corununication OOtHS 1935123 1649155 Trllining tid ouSfjt$s developmccl 950476 L095764 Re]X1in and mainle-nilnce 21)11SflS 2)2 I Poslag-c prjnting acri stationery 610299 541159shyvllsltdlancous expenses _~~~664 1lt2
-~~~ 125162812
22 fIN~lCE COSTS
2013 2amp2 QR QR
Inleres epen~ 42866312 5773U4B Am(vtisJliorgt ofdefcentrred financiog coStS __ 2l)tl26~~ gt3661
44930877----=
58063009
23 BASIC A~n nHUfED EARilNGS PER SHARi~
Basic trdTJogs per hue is caculatid 0y llividing the pwfill0( Ihc year attriouiabk (0- equity roldc-5 of the parent by lhi w~iglwxi avrage number of ordinary shares 0JstandirJg dulting tht_ year During Ihe year lil~ Conpmy i-sued and CBpii3lzed bonus shares lnd awmJingl) me previously ~eportod earnings per shac have blOM restatc(i
20i3 2012
Profit feT the year auributable to Cluity holderlt of the- paren (QR)
Weighted aVCTage number ofshares outstanding during the year (i)
Basic Jd diluted earnings per share (QR) 085
59985U413 shy
~~--~~~~- ~------J 1
23
Aamal Company QSc
NOTES TO THE CONSO LIDATED FfNANC[AL STATEMENTS For tbe year ended 3 l December 2013
BASIC AND DILUTED poundARNINCS PER SHARE (continued)
NOles (i) Th wigh d m nlg urnb of hres foc h P of lruling ~migs pee share h bee kulated
as follows 2013 20J2
QU3lifying shrues allhe begi ll1ling of the year 544500000 544500000 Effect of bonus shares issued and capitalised 55500000 55500000
600000000 600000000
Less T reasury shares (149587) (i357SI)
Weighted average number of shares at the end of the year 599850413 599864249
(ii) There were no potentia lly dilutiw shares outstanding at any time during tbe year and hence the diluted earnings per share is equal to the basic earnings per share
24 COItIMITMENTS
20 1] 2012 QR QR
Estimated capital expenditure approved and contracted for at the year eod but not provided for
Investment properties 2964000 8 139063 Property plant and equipment 16386500 63759762
19350500 71 898825
Operating lease commiIOlenlS under noncancellable lease agreemenlS
Payable wilhin one year 990806 702000
990806 702000
25 CONTINGENT UABILITlES
The Group had the following contingent liabi lities from which it is anticipated thai no malerial liabilities will arise
2013 2012 QR QR
Letters of guaramee 474551239 394255203
Letters of credit 7678499 194299384
NQles
(i) leHlaquogt of gu indud penonmnlaquo tend nd bid bonds d pymenlt g gi to suppliers and contractors by the Group in the ordina ry course of bus iness which will matme within twelve months fro m the reporting da te
(i i) Letters o f credit are provided by lodging documents to the bank tor purchase of trading goods fro m foreign suppliers wruch will maMC within thJee to six months from the date or tile Iransaclion
J2
26
Aamal Company QSc
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year eoded 31 December 2013
RELATED PARTY DISCLOSURES
Related party transactions Related parties represent major shareholders directors and key management persortOei of the Group and entities controlled joimly controlled or signjficamly innueoced by such parties Pricing policies md tenns of these tnlOSaclions are approved by the Group s management
Transactions with related parties induded in the consolidated financial stalemenls were as follows
20lJ 2012 QR QR
Sale o f goods and SClVices 419034048 415225221
Rental income 1980473 2069386
Purchase of goods and services 1591 38018 300835596
Rental expense 21 780G78 23397334
Bargain purchase gain 8360793
Net assets acquired 78803585
Relat ed party bal nnces AmountS due from and due to re lated parties are disclosed in Notes 7 and 13 respectively These balances do oot carry interest and are repayable OIl mulUlUy agreed dates generally within one year
The Group did not record any impairment of receivables reJatiog to amounts due from related pat1ies in either year This assessment is undertaken each fina ncial year through examining the ftnanc ial position of the related party and the market in which the related patty operates
Parent The Groups ultimate parent is Al Faisal Ho lding Company WLL
Compensa tion or key management personn el The remuneration of key management dming the year was as fullows
2013 2012 QR QR
Short-term benefi ts 7904794 1079595 Employees end of service benefits 408934 439776
8313 728 11235727
33
AamaJ Company QSC
NOTES TO THE CONSOLIDATED FINANCIAL 5T ATEMENTS For the year ended t Decernber 2013
Dilling the year 1he Group issued a XHlUS share of 10 928 of the paid tiP share capilal hdd ilS at 31 DiX2mber 2(JJ 2 mnmuning to OR 555000000 using retamed earnings as of3 December 2012 (20l2 Doe share for every ten shues held as of 31 Dcember Oll amuunting 10 QR 495OO()OOO ling reta1ned earmrgs 28 or 31 Decencer 2D II Jshy
18 SEGMENT INFORMATION
For J)iloogement PUIpltJM rhe Group i organised into business unit bused On LlJeir nature of Acttvitics lud nas fonY reportable segments and the Head Oftklt as bllow$
Propert Tbe segntn cOlists of City C~nler Qlta~ Brunch and Aamal Rea Esmte Branch whicb ll[c invoived in lampIiiog the faJ1ities of retail outlet conpex red e5ttlte nve(mltn$ and property remal buines~s
Trading mld distrib-wion The segmeul Involves wholesalB andlor rBtail distribution of phamlaceutlcai and consunable i1ems hume Epplianccs medica equimenl t-Tes ill1d lubricmtlaquo and II1UllitnEl printing The scgn(rtt includes 6c following entities
Eotl Sina Medical Branch
Aaen Medical Braudt
Amcill Troding and DistoolltlqO Branch bull Foot Care (erier HRnd) Good llre Pbannacy Bf4Uch bull Al FllfJdaq COllpafY wJ~L
InduSNol manuacturing TIle s0groent IOvolves Ulahuactrumg whole~we aliaor rewi dimibUlioti of dccnc cables lid tools ggregJ1es_ ready-IUx connole and cement bI0C~ lI1d provi$ion of servlCcent$ in rdation to iODllltroa Itvestment repair aJ-d Gonstruction of power plwts liiiding of LED ilgluitlg products und management of industnl enterpnses The segment ircludes be folloVting centntitis
bull Aam1 Cemert Industries LL AuraJ Redy1Yl(A BrQTlch
bull Doha Cables Qawf lLL Senyaf IoolJic1es Qatar Holding W LL Advanced Pipes ard Casfs CompQTly WJ L bull GuJfRoch Coroany WLL Ci~San Trading Company WLL hmovafive Lighting Compary WLL
Managed services le segment inyolvc~ provisloH of hOllseiltecpmg mi cleaning services fucditics n-anagemerJ services C1egy s(tvices ttl centfe sltrvicf)s buildiqg lnaintemHlelt aml acting as travel gens The 5cgnltnt includes the foUowing cnti(lcents
An13 ServJce Branch
amli TnlVeJa l5tmh
f-eco Gulf Co W LL
Jolinson Controls Qattl WJL
28
Aamal Company QSc
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended ) L December 20 13
SEGMENT INFORMATION (Co ntinued)
Head Office It provides corporate services to the branches and subsidiaries of the Group
The managiog d irector of the Group monitors the operating results o f its business units separately for the purpose of making decisions about resource allocation and perfonnance assessment Segment perfonnance is evaluated based Oil operating profit or loss of these segments Transfer pricing between operating segments are on anns length basis in a manoec similar to Iraosactions with third parties
Aamal Company QSC
NOTES TO THE CONSOLIDATED FINAN CIAL STATEMENTS For the year ended 3 1 December 20 13
28 SEGMENT INFORl1ATlON (continued)
Operating segments The operat ing segment after elimination or ioter-bra nch and inter-co mpany lrnnsaclioos is presented as follows
Trading (nd Industrial Managed For fh e year elided 31 December 2013 Properly disirjblli ioll manujocljlring services
QR QR QR QR Revenues
- h lemal parties 260360172 578909983 1231522768 S l802210 - Inter segments 1253914 6843 11 8 29639873 3445052 1
Heat Office QR
Eliminoions QR
(n187426) II
Tolal
QR
2J22595133
261614086 585753 lOI 126116264 1 8625273 1 (721 87426) 2122595133
Opera ti ng results Fair vallie gains
Profit I (loss) ror the year
Depreciotion
200811944
245051 107
445863051
2066290
86492834
86492834
4345438
22636250
22636250
33049 089
5157436
5157436
1760305
(47864882)
(47864882)
1334382
267233582
245051107
512 284689
42555504
36
Aamal Company QS
NOTES TO Tl CONSOLIDATED FfNANClAL STATEMENTS For the yeM ended 31 December 20 13
28 SEGMENf INFORMAnON (c)tltioucd)
FOf the yearrnrkti J f DccemOer 2(J12 QR
Revellues - ExlcmlJ partiel 2331 17 509 bull Inter segmcI11S 1168935
-- 234236434 --~- -~--
Openning results 18S2367t Fmt value gains J8S79-4~G
pront LOllS) for the rear 570616154
gt3659
No(
lnlermiddotgment revenues are eliminated on tQHs)idntiOH_
Tadiug ftfid disl d)Ntion
QR
S2S3l7661
324 j
5335493114 ~ -~-----
51384831
54384338
4J9R71(i
Indus idi mamfmturing
QR
1255694537
129U25lS4
56727059
56727059
32752742
slnltic(s QR
55216665 2939H31
S46lOJ96
7427414
7437
[908067
ilfild ()jice QR
(64(41976
Elimination QR
(74tHi2oJ Iii
Totul QR
206936372
2069336372
235721
(64641
131 f613
6245
42541)861
Amnal Company Q$l
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Por tnt yeartndeJ 31 De~embcr 2013
28 SEGMENT JNFORMATlON (contiutlld
Assc-ts and labilities
Tng alld lndtrstfw At31 December 2(113 distnbllrior manufacturIng senices HeadOJJicc EliminatioilS lola1
QR QR QR QR QR
Cumnl 3tS 227552338 620807979 61349 j 415 S()6)86922 (301636995) 1477366090 Noolucrcnt DSeIS 6411868160 12604763 622386238 4348876 (i624548 __p2438051 780
fotal asstl$ 6639420498 1194 1243194217 65698291 513Ql1470 ==-lt03H8l~O()) 853295-870 -~----~ ~---~ -
CUIT)llliabilitics 280995335 1(3511J60 6344(12777 2l0708lJ2 496261185 (3CH636995) 1249603264 Non-current iiatJlitics 7l70L5V2 8008485 HlDi16~43_ 3181668 t433799 ____ ilj534_~57 __ --Totul liahililics 353696897 ___~4159~4~ 734419720 ~4976~~~~~ 1434945711
---~~--~ -~-~~ - _2~~~4~~ (~~~~9~
C1pild expcndimn HI) WO743OOj 1397742_~471l2~--~50 ~51 ~1~623821~~1~_ -~----~------ -~
3amp
28
Aamal Company Q SC
NOTES TO THE CONSOLIDATED FfNANClAL STATEMENTS For the year ended 31 December 20 13
SEGMFNT INFORMATION (continued)
Assets and liabilities (continued)
AI 31 December 2012 Properly QR
Trading and d iSfriblllion
QR
Indusrial manufacfuring
QR
Managed senices QR
Currenl assels
Non-current assets
146491 186
6121 864484
2964425 12 903 7264
73468 1258
549267235
51387098 471 1439
Tolal assets 6268355670 305479776 1283948493 56098537
Head Office QR
468325024
6713643
475038667
Currentliabil iies
Non-current liabiLities 273444 748 1 J10 15024
86054583 7434286
669214261 1288 14977
2 1938953
287 1199
480393637 1253084
Totil lliabiliti cs 390459772 93488869 798029238 248 10 152 48J64672 1
Capila expendirure (ltII L 72865 878 1281254 6647 J356 7169 13 149045
Notes
(i)
(Ii)
Inter-segmeot balances are e limioafed 00 consolidatio n
Capi tal expendiTU res consist of additions 10 propeny plant and equip ment and iovestmenl properties
Eliminations QR
To wl QR
(273735776) (i )
(20308351(i)
1423591302
6689563230
(27576661 1) 8 113154532
(273135777) (i) 12573 10405
257388570
(273735177) 15 14698975
24 1484446
39
29
Aamal Company QSC
NOTES TO THE CONSOLIDATED FrNANCIAL STATEMENTS For the year ended 31 Dcltmber 1013
Fr-A]~ClAL RISK MANAGpoundMamp1H
Objccthes and policies fe Groups principal )uaucill liabilities comprise imltresl bctmllg loons and IxmowHgs baRlt ovetda1s amounts due to fclaled par1ies and tracte accounts payable The main pUlJXSi of thesc financial liabilities is 4J mise firmne or 610 Grmps operations The G0JP bas various fimmcial assets such as ttadc accounts receivable lInlOlmts due from related parties bark balances tltCntion receivable and other receivables which arisgt directly fran its cperuoonamp
The maiH ri~ks an3ing Joru (be Groups UnariCJlll illslrumenls jle market risk cretiJt nsk and hmdity risk Til BoarD ofDtrcctO$ reviews end agrees policies for mzrAgbg Caltt f hespound ri~k ihkh arc summariscd beloW
VIarktt risk yenfatket risk is the risk Um changes in market prices $Uch as intfcst rates and hreig lttmeocy ect14nge rilles Vltl1 affect the Groups profit eqwty Dr value tf its hoJdiI15 of financial instrl[Thnls rile objecivpoundj of marke1 risk mUnllgcrlcnt is to manage uld 1~ontr(ll tho tr))rket risk expo-sure vithir acceptable parfI-etcJ$ while optimising rerUID
Equit) price risk ampjuity prtce risk is the risk hilt the Group ampearnings will be affected as a rcmt (If luctttltions in fm vdue of ~qui-gt
mstwnents Eqlliry price risk arises from availabtetor~sale inv2strnems However the Groups exposure to eqmty price risk IS minima as II doesn hold sitl)iftrmt ailableAor-511le inYestrmmrs
[merest rate risk The Groups fimiruial poundS5ot ampId liaojlilies (at Rl $uJject to int~~ rate mk compnse brmk depoils interst bearing loans and bOITQwjags and bank overdr-afts At the reponwg dalt tbe [merest rale pronle of Ill Goups intexst bearing fbi4rdd instruments as fliows
11113 20i3 QR QR
Fued liIeryS refc insfrvrnellts
Fmmcial assets 113035962 111913394 FrOltwial liabilities --1~203712l) 1252t43~1
9)OI~ (13350972)
Fhlllting inireSI rate ns1lmlttrs Fanctl~ Isseis 127024345 ID43848o Fllllocial liabilities _-(i~9347~ (94))48926)
(836)64116)
The Groups exposure to t~ ris of changes in marXet interest fltltes relztes primariiy to the Groups financial assets and lizbitdic$ with t1Oltttirg interest mte~
lhe loEowing able demonstrates the ampmitivity nf the eonsolidattXI statemen1 of income 1) caonaly possible chonges in in1jfgtst rmes by 25 basis points with all othe vari)ble3 hdc umstant The sensitivity of the CooiK~ljclatid statement of inc(me $ the eft(ct of tb assumed changes in lnterdt rales for one year bf1sec on the floating rate financial assets and fimmcial hablhw$ held at 31 f~r The effect of deae-ascs in interest ral~ is cXp0Ctct to be equal and opposite to the effect oHlle increases sllQvro
Changes it Eftx OIl
00513 [oms profit QR
2013 Floating mterest Hlte instruments ----2$ bp (1649776)
2012 Flv-ating irkfiSt rale instrumenls +25 bp (209[9(1))
~--------- -~~ 40-middot------ _ _ shy
29
Aamal Company QSC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 3 1 December 2013
FINANCIAL RISK MANAGEMENT (continued)
Foreign currency risk Foreign currency risk is the risk lhilt the value of lhe fi nancial instruments will fluctuate due 10 changes in fore ign exchange rates
T rade aCcOlmts payable and accrued expenses include amounts due in foreign currencies mliniy US Dollars UAB Dirhams Great Britain Pounds (GB P) and Euros of which the Group has a currency risk primruily on the baJmces payable in Euros and GBP amoWlting 10 QR 14400634 (2012 QR 17214046)
The Group does not hedge its foreign currency exposure As both Qatari Riyal and UAE Dirhams are pegged to the US Dollar balances in US Dollars and UAE Dirhams are not considered to represent significant currency ris k to the Group
The table below indicates the Group s fore ign c urrency exposure on its monetary assets a nd liabilities The analysis calculates the effect o f a reasonably poss ib le move ment of the QR curre nc y rale against the Euro and GBP with all other variables held constant on the consolidated slate menl o f income (due to the fa ir va lue of currency sensitive monetary asse ts a nd liabilities) The e ffect o f decreases in fo reign c urre ncy exchange rates is expected to he equal and opposile 10 the e ffect of the increases shown
Incramp1se ill
f oreign cUlrency rate
0
the QR
Ellecl on profil
QR
2013 +5 (720032)
20 12 +5 (860 702)
C redit Tisk Credit risk is the risk that one party to a financial instrume nt wi ll fa il to discharge an obligation and cause the other party to incur a financial loss TIle Groups exposure to credit risk is indica ted by the carrying amoWlt o f its financia l asse ts whic h consist principally oftmde accollilts receivable retention receivable amounts due from related parties othe r receivables and bank baLances
The Group sells its products and prov ides services to vario us panies It is the G ro ups policy that all customers who wish to obtain on credit lerms are subject to credit verificalion procedures to ensure c redit Ilonhiness Each new customer is analysed individually for creditworthiness before the de livery o f products Of services Custo mm tbat fai l to met t the credi tworthiness may transact with the Group only o n prepayme nt basis Property rentals are mostl y received in ad vtnce or conlrlCled wi th post dated cheques 10 additio n receivable balances are monitored on an ongoing basis a nd the purchase limils are established for each c redit custoroer which are reviewed reguJarly based on the level o f past transactions and senlement The Groups max im wn exposure with regard to trade aCCOWlts receivab le net ofa llowance re nected allhe reporting date was ilS fo llows
2013 2012
Business SJgmelll QR QR
Property 15478832 19386326 Trading and distributio n 194343 597 179748274 Industrial ma nufac turing 183119753 131578668 Managed services 18069385 14547389
411 011 567 345260657
41
29
Aamal Company QSc
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For tbe year eoded 3 J December 20 13
FlNAJICIAL RISK MANAG EMENT (c-o Dtinued)
Credit risk (continued) With respect to credit risk arising from the other financi31 assets of the Group the Groups exposure to credit risk arises from default of the counterparty with a maximum exposure equal 10 the canying amount of these instruments as follows
2013 QR
202
QR
Bank balances Amounts due from related parties Retention and other receivables
436136756 214439950 48290351
36788129 t 171525363 74082203
698867057 613488857
The group reduces the expoSltre of credit risk arising from other financial assets by maintaining bank accounts in reputed banks and providing services only to creditworthy re lated parties
The management cons iders the bank balances and a mQUIIIS due from related parties as high grade fi nancial assets and lfade accounls receivable and other receivables as sundard grade financial assets When a finltmcial asset is identified 10 be impaired the managemoot downgrades such assets to impaired category and provides adequate allowances
Liquidity risk Liquidity risk is the risk that the Group will not be able to meet its fmancial obligations as they fu ll due The Groups 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 nonnal and stressed conditiom without incurring unacceptable losses or risking damage to the Groups reputa tion and is to maintain a balance belWeen continuity of fuoding and f1eilibility through the use of bank overdrafts and bank loans and borrowings
The Group monitors its risk to a shortage o f funds using a recuning liquidity plaOfling 1001 TIllS tool considers the manuiry o f financial assets (eg accounts receivable) and projected cash flows from operations The Groups teons ofsales or services require arooUIlts to be paid within 30-90 days from the invoiced dale
42
29
Aamal Company QSc
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For tbe year ended 3 1 December 2013
FrNANClAL ruSK MANAGEMENT (contiQued)
Uqujdity risk (continued) The table below summarises the ruaruriJy profile of the Groups financial 1iabililies a t 31 December based on contractual undiscountcd paymeots
2013 Interest bearing loans and borrowings Bank overdrafts Trade accowus payable Other payables Amounl~ due (0 related panles
201l Interest bearing loans and borrowings
Baok overdrafts Trade accounts payable Other payables Amounts due to related parties
On demand
QR
6836280
6836280
011 demand QR
2885090
2885090
Less than 3 months
QR
521324473
303638792
47406830
2530~480
898675575
Less thall 3
months
QR
469839033
10754JJIO 37543236
1964504 1
634568620
3 10 J2 mOlllh$
QR
239333328
16378865 20210580
2289~11l
298816884
3 to 12 monlhs
QR
365476972
159621 37 J 24745342
30092716
579936401
1to 5 years
QR
J 60092748
160092148
1 to 5 years
QR
248472226
248472226
gt 5 years
QR
25261598
25261 598
gt 5 years
QR
7648000
7648000
TOlaf
QR
947012147 6836280
320017657
67617410 48199591
1389681085
Tota
QR
109 1436231
1885090 267162681
622 88578
49737757
14735 10337
43
30
Aamal Company QSltc NOTES TO THE CONSOLIDATED FlANCIAL STATEMETS For the year ended 31 December 20 t3
21 F~ANClAL RlSK MAiAGEMElT (continued)
Capital management The Boards policy is to maintain a strong cepit1 base so as to rnainmin investor creditor and market ronfoonee and to SUSWlJ) fumre dcltclonnent Gf the buinest The Board of Directors rronitortl the tapital whkh tbe Group defines as wlal $parcloders equity excluding nonmiddotcornroliing imerests and the level of dividends to orrunury srarellOJdcfS
The Board also reeks to ITIaimain a balance between the higher (ctums (hat might be fA-~$ihle With higher leves of borrnwings end Lle edvnrJages and security named Sy it sOMd Cilpitai posi[ion The GfCup~ k1rget is to achievfl a return on slureholders equity (exclJding aonwurrolJiug iorcf(sts) greater lll(ll1 he wcighlcd average inres exxmse on mrerest bearing Ivens and oorrowing
The (lf0t-p nl)nDg-e ils cnpital structure and makes adjustneal lOll in light ofchang2s in economic nd bttincss cordjlons and shareholders expe1ationJo chmges veremiddot maCo HI Lleuro objecttves polilCS or proCCSSC3 during the years erded 31 D~mber 2013md 31 Dtccmlxr2Ql2
The Group monitors the capit2J using a gClting fatio which IS dep divided by caplla plus debL The GtOwgts policy is to keep ttJe ge-anng rmio bclew 40 Tbe Group iLdtdes withb debt imete-51 beagting loans ard ~OITORlngs less cash and cash equtVaknts Capltal includes eqmty attributable 10 the equity tolders oft~e parcrt
2013 QR
2(i2 QR
fmerest bearing loans and borrowings lcss- Cash and cas ltYJUvalcnts
9i4lJ05301 _~ (429JfJl4761
1004845296 (649)6201)
Net debt
Toa capital
Capita and net debt
699849045
~ringrttio
FAIR VALtES OF Fl~ANOAL f~STRUMETS
Finarcial iostrumenL~ cOlnprise tina~lctal assetS carl finailcialliabilities
Fmancial assets colJist of bank balance) short 1Cm bank dcposis amounL dve dom rc)ltted partilt)$ rekntion and other receivables and ttade accolmis rceivabe Finatlclll habiilics cgtmsist of banilt ovcrdratls jnerest bearing lOil1S and bOrowings amounts due (0 nliled partiG~ ane trade x-ounls payable
The- fair values of hese financial inStrumen1S except Jo-- imCfest bearing loam lHld bOlToving aproKimate lhdr cMryinJ vlhes due to the Slort temt mzrutiiles or these instrument
Tllc faiT value of iotcnst beating Nns and borrowin2s ae estimate( based on discoumed ltash flows twin int(s rale- cune-ntly nvailagtk fur tilt debt or sinuiar tetnlS an-a rell1lmng matunties
31
Aamal Company~Q=-ScC ______________~______
~OTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For fhe year ended 31 December 20 t3
SlGNIFICANT ASUMPTIONS ACCOUJTING JUDGElE1TS AND F8TIMATFS
impairment (If accoonts receivable n etrnwe of lhe collectible anoun of trade accounlgt reccvable is made when collection of the full lHl1OUt i~ nO looger probabk FOI nCividualty significitIl amounts this estimation is p~rformed on an indh-idllai a$[$ Amomts wHcb arc not indivldl11Uy significant but wluch are past due ZTe tsscssed collectively and an aJlQwaccc applied ucc()r~Jng to the length of lime past due based oc histnncal recovery nlJes
hnpalrment of inHntnries lavenoncs are held at tho lower of col and nol realisable value InIOn inventoncent$ becone old or 0-~amplete an estilTJte is mate of their net j alisable vulue For indiviolhlUy significant amountS this cstinaunrt is performec all aD lndividwl osis Amotlnts whieh are fl0t individually significan( btll which ltIre old at obsolete wx LltSessed wllecivdy md a provisior is applied sccnrding to the invenrory type and be dep)ee of ageing 0 cDsolescc1ce based on anticipUled selling prices
Classifigt1ltion of El Sew(gtdy Cable Qatar WLI ali a j(lint vwture pound1 Sovedy Cables Qatar is a limited hability company whose kgal fum confers SCprm11ior bernten tbe jXliiies 10 ~he jomi lfranpement Snd the Company Itself FurthenrlOre then IS no oontractua] arrmgelTeot or any oibe aus aod circumstriliCe$ that iocik41to tht he putic5 [0 the joint flJTIlrgernelit bave rights to the ssetl and obligrtdons fo~ the liabilities of the joint ilrrongement Acoordingly El Sewed- C[jbl~s Qamr WLL is dassifiecl 7S a joiut enrtrr of he GWtp
impairment of goodwill G0oovj)1 embedded in th~ cot 0 aquisitior of subsidiaries and eqmtj-iccounled iflV(stees ire teswt for irl1jXlirmnt aHuaily Tbe calculations of value [n use fO( cfish gecj~r)lilg units (loring to real nte projecg are rtost sensitive to tin IDHowing assumpti015
Grosgt i1wginmiddot Gross Ilmrgins arc lmsed on avrage values tuhje0d in (he [Xrioo preeedhli (e siaM of the budge xnod T1esC at( mcreased over the budgel period for mticipatltX efficiency Hnprovemots
DisC)unr r(es Discount rotes represent th cl1tent mark as~ssmetlt of the risks specific te ech cash geocroting unit regarding lhe time value of money ilnd mdividu)l risks of he tmtieriyilg assets whICh have not been inwrport1eti it the Citik flow estimates The dj~(OUrl flte tlkulation is based on the speclfte circurnsthLCes of lile Group and its opltllatJng segn)~nts (md derived (ff)rC it weighted avaage (XSt 0f apilaJ (WACC) Tb fACe (akw into uoount both deb and equity The 0$1 of equity is denved from dlC expected return 01 investmenl by the Groups investors TJc Gos10( deb is based on l1e borrvwings the Gmup IS obllsxl to service SC~lletllmiddotspecific r5k IS incorxt4too by applying individual bera facto The betn mctors ire evauatcentd annuaHy bhseci on pubJicly aVflllabe murked earn
Fair value ()fnHstmeni proputies The fuit laHe 0 nvestmel~ propertis is deltrrnlnzd b cxterrwl indepzfldell property valuers laving appr0priate recognised professional quabfiillions and recenl xperience H1 the localjl)n and G-tegory 0 the oroperty being valued
Useful hes of PfQPcrly plmr (llld zqulpment The Groups management detennints th estiunted useful jives Df It~ property plan and equipmnl fix calnurjng depreciation Thi5 e~timJte is 6lermind after cinsidring 1b expeelcd usage (1f the a5sclt [hysical l101t and (eas tedmiltal Dr com~ercia obsolesccnce
Gotlg Qncen
ibe Groups mangerncnt UiS made aJ assessmeot cf the 011115 ability (0 COllllOUC liS a going conct11l Imd is satsl1ed hat me Group ms the resources to contmue in business for he foreseeable fu1urc he1hennort he management is no aware oC lny material Hncertainties that lray CH~t signinchnt doubt tlPDfl the Groups ability 10 continue as a going umcem Therefore titpound lotlsolidatcd finilllcij stftemeols comirme to be prepltd on li g0ing concern basis
Aamal Company QSc
NOTES TO THE CONSOLIDATED FlNANC[AL STATEMENTS For the year ended 3 1 December 20 13
32 INCOME TAX
Certa in subsidiaries of the Group which have non-GCe ownership are subject to income tax under Qatar Income Tax Law No 2 1 of2009 The iocome tax is charged on the share of profits attributable to non-GCe shareholders For the purpose of these conso lidated fi nancial statements the income tax liability oftbe foreign shareholders has been excluded given that the non-GCe shareholders have agreed under the shareholder agreements signed with the Group to bear the fh lliiability and make necessary payments
33 COMPARATIVE INFORMATION
Certain comparative figw-es of the previous year have been reclassified 0 coofonn to the current years presentation However such reclassifications are oat materia and do not have an impact on tbe previously reported net profit other comprehensive income or the total equity for the comparative year
The impact from the resta tement of comparative infonnalion as a resuh of adoption of IFRS I I - Joint arrangements is detailed in Note 32 Changes in aCCQu(lting policies
46
6
1
lamal CompanyQSC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMEltS For the year ended 3 J December 2013
ACCotNTS RECEIVABLpound AND PREPAYMpoundNTS (contillued)
As at -1 I Dtcemxt the ageirg of unimpaired (ltlde accounb iltcivabk was as follows
P(HI duo
nor Up to 30 31-60 61middot90 Yi-jSj gt flO Tota impoirlt-fl days days days day doys
QR QR QR QR QR QR QR
1l13 411OJl$67 25l981960 32312165 2140966 19351fi43 16f)76888 60148545 2012 345260657 1695159B6 493lt)8566 2356$954 19494369 16908414 66374363
1JJJirtpai~ed receivable are expected no th bil5tS of past experienn) 10 be fully fcCi)evbc H is not the pngtctlce ofthcent Group to oblum collaleral over recejvablcI_
AMOLNTS DUE FROyl REL-TEO PARTIES
Name
AI ~aisnl Holding Company V_LL E Seweo Cabtes Qatn WL L Cnild -ftt Cvmlllny Al hz Retll E$vt rWesnnim Company WLL~ AllaZi Real Estale BrAnch EI Sewedy Electric Egypt WLL MuincrDJ1Ce Mwagmvont Group Qat3r W LL Good fe Cheffilt - The Pcarl
BuderPhtrnacy Al Faisallnlemadonal Tnl(i and Investment Company WLL AI-rabia Land Trnr~PQltit1g Company rLL ro Sewedy CabLes - Kuwuit Gcentttco hlttrnJmJilI Frijns StHytural Steel Middle East WLl Winer Wunderand Company WLL Al FtOH1H for Investment amp llllemtiOl1a Trading COntpAny WJ_L Q)lar Bahrain lmerOlnionai Cnero3 WLL Gulf EngJisb Sltl-Qo] Al Rayyao Tourism lve$lrnent Company W LL Other relater purties
2013 2012 QR QR
15412-1064 ll941Y70 34644615 ~li96858l
[()0405 14-45012 51 59197 9538116 15514113 4014727 236824$
1867526 LSOfd22
8(1012 10435r 311650 746395
15023 204450 459829
2iYHi 244940 186750
152170 143440 33500 7768(1
6259 1459lt) 758962-1
__2~61g~~_ 1~95Ji
bull 214109950 171525363
--__ shy
7
8
9
Aamal Company QSc
NOTES TO THE CONSOLIDATED FfNANClAL STATEMENTS For the year ended 3 1 December 2013
At10(JNTS DUE FROM RELATED PA RTIES (continued)
NO les (i) Transactions witll related parties are eam ed out through open account and Directors do not consider any
receivables to be past due or impaired
(ii) Related party transactions ore disclosed ill Note 26
INVENTORIES
Goods for rew le Raw materials and spare pans Work in pTOgresS Goods in transit
Less Provision fOI obsolete and slow moving invenlories
1013 QR
165499699 38388307 19944678 9671 8553
320551237 (3851692)
31 6699545
Movements in the provision for obsolete and slow moving inventories were as follov~
At I January Charge for the year (Note 19) Reversals Amounts wri tten off
At 31 December
E QUITY-ACCOUNTED INVESTEES
TIle Group has the followiog invesllnenfs in equity-accounted investees
Interests in joint venrure Interests in associa tes
At 31 December
G roup s snare of profits fr om the equity-ncco unted iovcstees arc AS follows
Profit share from in vestment iojotnt venture Profit share from investment in associates
202 QR
232597650 36608394 30622960
10521 9695
405048699 Q 145826)
40 I902873
203 QR
3145826 1 380617 (535695)
( 1139056)
385 1692
20 12 QR
2795992 2208263 (137995)
( 1720434)
3 145826
2013 QR
2012 QR
129462184 3644723
124124803 2545188
133106907 12666999 1
17330368 22869454 1169533 534050
18499901 23403504
22
10
Aama Company QSC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 31 December 201 3
9 EQUITY-ACCOUNTED INVESTEES (continued)
Counlry of incorportllion
Relationship Proportion ofownership and lotilfg power held by the Group
203 2012
EI S~wedy Cables Qatar W LL Frij ns Structural S teel Middle East WLL Al Ftfazdaq Company WLL
Qat~
Qatar Qatar
loint venture Associate Associate
55 20
55 20 35
Note With effect from 1 January 20 13 the mlnagemeot of the Group has reclassified the investment in Al Farazdaq Company W L-L from investment in associate to investment in subsidiary This is based on the transfer of share holding by the other shareholder whereby the conlroi o f AI FOl razdaq Company W LL bas been assigned 10 tbe Company
INVESTM ENT PROPERTIES
a) Reconciliation of carry ing amounl 2013 202 QR QR
AI I January 611334701 8 555 1835348 Additions 9568047 1727191 87 Transferred from property plant and equipment (Note II ) 34519828 Net gain iTo m fa if value adjlls tment 245051107 388792483
At 31 December 6402486000 6 11334701 8
b) Measurement of fair value
The fair values of the Groups inveS hnent properties as at 31 December 201 3 and 3 1 December 2012 have been arrived al on the basis of valuations carried Ollt on the respective dates by professionally qualified independent valuers not related to the Group The independent valuers have appropriate qUlli ficatioos and (eceJ11 experience in the valuation of properties in fhe relevant locations The fa ir value WltlS determined based on market comparable approach that reflocl s recent transaction prices for simillt1r properties and discounted cash flo w and income approach techniques
Details of the Group s iovestment properties and infonnation about the fa ir vn lue hierarchy as at ) I December 20 I J are as fo llows
IIvestment propenies
Level 3 fair vallie
Al I Janu ary 6 [ 13347018 Additions and trans fers from property plant and equipment 44087875
Gain included iu prom and loss Net gain from fair value lt1djuslmem 245051 107
AI J I December
The Group recognizes transfers between levels of fair value hierarchy as o f the end of the reponing period during whicb the transfer has occurred There were no transfers between the fai r va lue hierarchy during the year
23
10
Aamal Company QSc
NOTES TO THE ONSOLlDA TED FINANCIAL STATEMENTS For the year ended 3 I ecember 201 3
LNVESTM ENT ROPERTIES (contin ued)
b) Measuremen t 0 (air value (conti nued)
Vau t ion technique an significant unobservable in puts
The valuer has applied t e income capitali zation discounted cash flow and comparab le methods to detennine the market value of the lnve tment propen ies Significant unobservable inputs used included expected market rental growth rates (an average 425) occupancy rates (approximately 90 to 95) and risk adjusted discount rates (approximately 5 to 7 0) M y significant change in these inputs can impact lhe fair valuation of investment propcnies
24
Aamal Company QS c
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For che year ended 31 December 2013
11 PROPERTY PLAi~T AND EQUIPMENT
FumilUre Truck mixers fIXtures and Complllers
Leasehold and maor Plum (fd office and relaed eapiowork Buidings improvements vehicles machinery eqllipmcni sofMore in progmiddotcss Total
QR QR QR QR QR QR QJl QR
At I January 2013 137870126 371 88 132 9595813 1 262536261 19 580954 14864 385 561 32447 6241 30436 Additions 948)65 2618 100 5367399 859061 111 5268 137147581 148055774
Relating to d isposalswrite-off (1042642) (4390496) (77157L) (589150) ( 184075) (6977934) Transfer from capilal work in progress 1505 310 164 336 3601776 ( 150000) 1182741 (6304 163) Transrer to investment properlies (Note (0) (345 19828) (345 19828)
At J I Dttember 201 J 139375436 J7 258~ ~1 85735 270733865 19700865 169783 19 152456037 _73068~448
Depreciation AI I January 2013 16133915 J6902 529 49087707 68783 065 11 980009 tl71 595 3 174603 178 Charge for the year 7059805 3237150 5390767 12249797 2849162 1768823 42555504 Relating 10 disposalsJvri te-off (664709) (4 3 1716 1) (724322) (552939) ( 18 1993) (6441 124)
At 31 December 201 3 23193 720 19474 9 70 50161 313 90303540 14276232 13302783 2 107 17558
Net carrying amounts At 31 December 2013 116181J16 _17783221 44024422 180415325 5424633 3675536 __l2456O37 JJ9970~890
Notes (i) Depreciation charge for the year amounting 10 QR 33 164382 (201 1 QR 3303091 6) is included in tbe direct costs and an amount of QR 60055 (20 12 QR 36939)
has been capiulised under capital work in progress
(ii) The capital work in progress includes capitalised borrowing costs amounting to QR 125645 (20 12 QR 15358)
(ii i) The buildings are constructed on a plot ofland taken on a loog term operating lease
25
Aamal Company QS c
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 31 December 201 3
II PROPERTY PLANT AND EQUIPM ENT (continued)
C05I~
At 1 January 2012 Additions Acquired through business combinations (Note 4) Relating to d isposalswrite-off Transfer from capital work in progress Transfers
Buildings QR
137434400 435726
Leasehold improvemellls
QR
38137377 446J 04
144 103 ( 1539452)
Truck mLCers and molO
velricles QR
83427661 11464679
1697609 (631824)
Plant and machinery
QR
249335437 97264 85
35 14 132 (99498)
59705
Furniture fir ures and
office equipmem
QR
22845309 667586
192042 (3696457)
98000 (525526)
Computers and related
software
QR
158 19519 87 14 14
141837 (266 1733)
908078 (2 l4730)
Capitol work in progress
QR
12104889 451 53265
( 1065783) (59924)
Total (JR
55910459 8 68765259
5689723 (862 8964)
(800180)
AI 31 Dttember 2012 137870) 26 371881 32 95958 13 1 262536261 19580954 14864385 56132447 624 130436
Depreciation AI Jaouary2012 Charge for the year Acquired wough business combinations (Note 4) Relating to disposalswrite-off Transfers
9144666 6989249
)4 3 16620 3410618
144103
(96 812)
42558404 548 1613
1671942 (6242 52)
44555 290 2 1398849
2890797 (6 187 1)
12392584 3 182899
169005 (3558466)
(206013 )
12235266 2077633
136959 (2627283)
(J 0662)
135202830 42540861
5012806 (7840684)
(312635)
At 3 L December 201 2 161339J5 16902529 49087701 68783065 11 980009 11715953 174603 178
Nel canying amoWlts
At 31 December 201 2 12 173 6211 2028560 3 46870424 193753 196 7600945 3148432 56132447 449527258
26
12
13
Aamal Company QSC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 31 December 20 13
ACCOUNTS PA YABLE AND ACCRUALS
Trade accouots payable Advances from customers and tenants Accmals Social and sports activities levy Other payables
AJIOUNTS DUE TO RELATED PARTIES
Name
Arab Compaey for Fiber Products EI Sewedy EIC( lric Ho lding Egypiasl Egypt Egyptlech Egypt United Industri es Company WLL Johnson Controls Air condi tioning aod Refrigeration Qatar WLL pound1 Sewedy Cables Egypt Johnson Controls Air conditioning and Refrigeration rNC Dubai United Wire Company WL L Gelteo Company W LL - Gelteo Refr igera tion and Airconditioo ing CampC Lightway nc AI Shaab Group of Companies Other related pruties
NO M Related party transactio l)s a re disclosed in Note 26
2013 QR
320017657 30486837 26924669 41 761 843 25855567
445046573
2013 QR
18517474
4902528
6531231 6404578 3215821
2825884 75 7825
3467288 263715
1313247
48199591
2011 QR
26716268 1 27410234 222575 76 28954726 33)33852
379119069
2012 QR
18380528 91458 82 54 13849 1 11 6 135 5374039 35291 2020359 1693323 1064744
670 179
11 0873 12 18650
49737757
27
14
Aamal Company QSC
NOTES TO THE CONSOLIDATED f fNANCIAL STATEMENTS For the year ended 31 December 201 3
INTEREST BEARING LOANS AND BORROWINGS
NOles Malilrify
2013 QR
2012 QR
CoMl Loan 2 Loan ) Loac4 Loan 5 Loan 6 Loan 7 CoMB Loan 9 Bills discounted
(0 (ii) (iii) (iv) (v) (vi) (vii) (viii) ( ix) (x)
lune2014 Seplember2014 January 2015 November 2016 December 20 16 November 2017 Jllne20 l J December 20 7 OClober 20 19
172070387 440000000 50544000 40261 621 81387109 19920036
6] 43890 62626967 42522794
915676804
298324180 440000000 10 J088000 57955030
100 168750 2 1300492
407728 1 782871 1
35000000
1065742444
Less Defe rred finatlcing cost (771 503) (897148)
914905301 1064845296
Presented in the consolidated statement of financial positioo as fo llows 20)3 QR
201 2 QR
Current ponion Non-current ponion
749520820 165384481
825568489 239276807
914905301 1064845296
The dete rred financing costs consSt of arrangement fees The movements m the deferred financing costs were as fo llows
203 2012 QR QR
At I January 897148 332 661 Addjtions during the year 1 062565 912506 Amortised during the year (218amp210) (34801 9)
At 3 1 December 771503 89 7148
28
Aamal Company QS C
NOTES TO THE CONSOUDATED FlNANCIAL STATEMENTS For tbe year ended 31 December 2013
14 INTEREST BEARING LOANS AND BORROWINGS (continued)
Nolec
(i) Loao I i USD 93000000 impon 10n moi lily obtoined to refimnee he Icne~ of edit The 10 IT interest at commercial fate and the interest is paid at monthly intervals The fucility is repayable within ISO days including the usage period under letter ofc redits
(ii) Loan 2 is a secured bridge loan obtained to settle an existing loan and working capital requirements of the Company The loan carries interest al coOlJllercial rates and interest is 10 be paid on quarterly basis
(iii) Loan 3 was obtained for the pWpOse of financing capital ependiture and direct payment to suppliers contractors and 5ub-controctors The 10011 CMries interest at commercial rate and the inte rest is to be paid q Uar1erly The fac ility is repayable in IS quarterly iostallmenls starting I July 20 11 and ending I January 2015
(iv) Loan 4 was obla ined for conSlruclion o r an inveslmenl property The loan is seclJed by 0 primary mortgage over the some property and corporate guarantee of the Aamal Company QSC Tbe loan carries interest at commercial marke t rate and is payable in quarterly instalments
(v) Loan 5 represents a loan fOlcility obtained in two sepnrole tranches amounting to QR 309 825 000 (USD 85 million) for the purpose of refurbi shment and construction of fociJities io one of the investment properties The loan is repayable In 16 equal quanerly instalmcnlS for individua l tranche commencing from March 20 1J The loan carries interest at conunercial rJtes
(vi) Loan 6 represents secured loans obtained ffom a commercial bank in the previous periods for the purchase of heavy equipment and machines and were merged on 15 November 20 12 as a comb ined loan This loan is payable by 59 equal instalments of QR 426000 with (I last inSlalment of OR 438 326 with effect fro m 01 October 201 3 The loan carries interest at commercial market ra tes
(vii) Loan 7 is il tmst receipt banking facility obtained for the purchase of inventories This carried interest at conunercial market rates This loan was full y settled during the year
(vii i) Loan 8 represents secured loans obuined from a commercial bank in the previous periods for the purchase of delivery trucks and machinery and were merged on 22 October 2012 as a combined loan The loan carries inte rest at commercial market Tates and is payable by 59 equal insta lments o rQR 160000 with a last inSlOlmem ofQ R 128000 with effect from 3 1 December 2012
(ix) Loan 9 is an Islamic Financi ng Arrangement obtained for construction o f a manufacturing plam and as o f yearend ba lance represents partially drawn amount out of totil1 facility of QR 655 68000 The loan is secured by joint corvorate guarantee by the shareholders The loan carries profit at Islamic Financing rates and re-payable in quarterly instalments starting from the end of the 24 months gmce period from the date of loan drawn
(x) Bi ll discounting is a loan fac ility from banks The purpose of the arrangement is to discount bills locally and carries interest at current commercia l filte
15 EM PLOYEES END OF SERVICE BENEFITS
Movements in the provision reHectelt in the consolidated SLo1tement of financia l position were as fo llows 2013 201] QR QR
At I Jan uary 18111 763 17877937 Provision made during the year 4056969 4205499 Acquirelt through business combinations (Note 4) 349272 End of service benefits paid during the year (2210756) (4320945)
At 3 1 December 19957976 18 111763
29
Aamal Company Q5C
NOTES TO THE CONSOLIDATED FINANCIAL STATEMETS For tile y~ar ended 31 Dee~mber 2013
16 SHARE CAPITAL
2013 2012 QR Qq
AtI1l1)nud 60000)000 (20 2 544500JJOfn shares ofQR iii Cilch 60i)iQOOlOO 54450lt)0000
21)13 2012 Numher of
siMtS QR shares QR Issued Mtldfully paM At lJamld) 544SfWllOfJ 5445(100001) 495000000 49500000)0 1511C ofbonus S1i1-C ___ 5550~OOO 555000000 49SGOOOO 495000000
At 31 Decenef 6(OOampQllf1(1 ---14450O000 544~OOOOOO
All ampates m~ of a110 clss and caL equal voting rights
17 LEGAL Reuro5ERVE
As required by Qatar Comnertai COfrp7lnies Lav No5 of 2002 lOfp of the profit for the ye1J as a rru1imllli silould be mmsfened to legal re~erve The reserve is lot normay [lytiabe tor distribution except ill he cixcuJUstllrtUS stipulated m the above ~lemi0ntd GIW
IS HEVE1TE
2013 l)n QR QR
Sale of goods 1726893265 i709057~(iO
Renlal income UiO362322 133117509 S-ice income 858695 33940731 CornrrusslOlL Incentives and agency fces 44695S1 422~_632
212259$)33
19 DIRECT COSTS
2013 2)i2 QR
C 051 of inven(feS recognisedlIS an exptns 1522929956 497210830 Dind sL1ries lmd wages 601 [1336 5137856-8 Operating eXpenses on nml estate p~opet1les 36)711316 3041H504 fJepreciatiort (Kate I J) 33164382 B03091pound Operators marhgerrt6nt fees 14508588 li667989 Provisicn Qr obsolete and skwlt moving mvenlories (K)tc 8) 2380617 2208263 Other operating ilxpenses _31~3982 _ 3674946
1702139171 JS9653OI tgt
Aamal Compall-yQSC________________
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For lthe year ended 31 December 20 11
2G OTHER NeOiI
2013 20J3 QR QR
Interest mcume 2824216 2)314392 Profiv( loss) 00 disposal of property plant aoe eqUlpmem 737647 (l7362G) Eargain ptmnJse gain (Kote t) 8360793 MIsceJlaneous income 5723356
2013 2012 QR QR
ManllgetnUI hrQ empl(yees ws 55170302 55lt035middot1 Rent 23596799 2594915 Allowance for impaimlcot oUrsue aCQl1ot$ rc(Xjvalle (Nole 6) 129459(i 11613120 flBumcce ane profcampiitmJI fees 2IU9263 209J902 Corununication OOtHS 1935123 1649155 Trllining tid ouSfjt$s developmccl 950476 L095764 Re]X1in and mainle-nilnce 21)11SflS 2)2 I Poslag-c prjnting acri stationery 610299 541159shyvllsltdlancous expenses _~~~664 1lt2
-~~~ 125162812
22 fIN~lCE COSTS
2013 2amp2 QR QR
Inleres epen~ 42866312 5773U4B Am(vtisJliorgt ofdefcentrred financiog coStS __ 2l)tl26~~ gt3661
44930877----=
58063009
23 BASIC A~n nHUfED EARilNGS PER SHARi~
Basic trdTJogs per hue is caculatid 0y llividing the pwfill0( Ihc year attriouiabk (0- equity roldc-5 of the parent by lhi w~iglwxi avrage number of ordinary shares 0JstandirJg dulting tht_ year During Ihe year lil~ Conpmy i-sued and CBpii3lzed bonus shares lnd awmJingl) me previously ~eportod earnings per shac have blOM restatc(i
20i3 2012
Profit feT the year auributable to Cluity holderlt of the- paren (QR)
Weighted aVCTage number ofshares outstanding during the year (i)
Basic Jd diluted earnings per share (QR) 085
59985U413 shy
~~--~~~~- ~------J 1
23
Aamal Company QSc
NOTES TO THE CONSO LIDATED FfNANC[AL STATEMENTS For tbe year ended 3 l December 2013
BASIC AND DILUTED poundARNINCS PER SHARE (continued)
NOles (i) Th wigh d m nlg urnb of hres foc h P of lruling ~migs pee share h bee kulated
as follows 2013 20J2
QU3lifying shrues allhe begi ll1ling of the year 544500000 544500000 Effect of bonus shares issued and capitalised 55500000 55500000
600000000 600000000
Less T reasury shares (149587) (i357SI)
Weighted average number of shares at the end of the year 599850413 599864249
(ii) There were no potentia lly dilutiw shares outstanding at any time during tbe year and hence the diluted earnings per share is equal to the basic earnings per share
24 COItIMITMENTS
20 1] 2012 QR QR
Estimated capital expenditure approved and contracted for at the year eod but not provided for
Investment properties 2964000 8 139063 Property plant and equipment 16386500 63759762
19350500 71 898825
Operating lease commiIOlenlS under noncancellable lease agreemenlS
Payable wilhin one year 990806 702000
990806 702000
25 CONTINGENT UABILITlES
The Group had the following contingent liabi lities from which it is anticipated thai no malerial liabilities will arise
2013 2012 QR QR
Letters of guaramee 474551239 394255203
Letters of credit 7678499 194299384
NQles
(i) leHlaquogt of gu indud penonmnlaquo tend nd bid bonds d pymenlt g gi to suppliers and contractors by the Group in the ordina ry course of bus iness which will matme within twelve months fro m the reporting da te
(i i) Letters o f credit are provided by lodging documents to the bank tor purchase of trading goods fro m foreign suppliers wruch will maMC within thJee to six months from the date or tile Iransaclion
J2
26
Aamal Company QSc
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year eoded 31 December 2013
RELATED PARTY DISCLOSURES
Related party transactions Related parties represent major shareholders directors and key management persortOei of the Group and entities controlled joimly controlled or signjficamly innueoced by such parties Pricing policies md tenns of these tnlOSaclions are approved by the Group s management
Transactions with related parties induded in the consolidated financial stalemenls were as follows
20lJ 2012 QR QR
Sale o f goods and SClVices 419034048 415225221
Rental income 1980473 2069386
Purchase of goods and services 1591 38018 300835596
Rental expense 21 780G78 23397334
Bargain purchase gain 8360793
Net assets acquired 78803585
Relat ed party bal nnces AmountS due from and due to re lated parties are disclosed in Notes 7 and 13 respectively These balances do oot carry interest and are repayable OIl mulUlUy agreed dates generally within one year
The Group did not record any impairment of receivables reJatiog to amounts due from related pat1ies in either year This assessment is undertaken each fina ncial year through examining the ftnanc ial position of the related party and the market in which the related patty operates
Parent The Groups ultimate parent is Al Faisal Ho lding Company WLL
Compensa tion or key management personn el The remuneration of key management dming the year was as fullows
2013 2012 QR QR
Short-term benefi ts 7904794 1079595 Employees end of service benefits 408934 439776
8313 728 11235727
33
AamaJ Company QSC
NOTES TO THE CONSOLIDATED FINANCIAL 5T ATEMENTS For the year ended t Decernber 2013
Dilling the year 1he Group issued a XHlUS share of 10 928 of the paid tiP share capilal hdd ilS at 31 DiX2mber 2(JJ 2 mnmuning to OR 555000000 using retamed earnings as of3 December 2012 (20l2 Doe share for every ten shues held as of 31 Dcember Oll amuunting 10 QR 495OO()OOO ling reta1ned earmrgs 28 or 31 Decencer 2D II Jshy
18 SEGMENT INFORMATION
For J)iloogement PUIpltJM rhe Group i organised into business unit bused On LlJeir nature of Acttvitics lud nas fonY reportable segments and the Head Oftklt as bllow$
Propert Tbe segntn cOlists of City C~nler Qlta~ Brunch and Aamal Rea Esmte Branch whicb ll[c invoived in lampIiiog the faJ1ities of retail outlet conpex red e5ttlte nve(mltn$ and property remal buines~s
Trading mld distrib-wion The segmeul Involves wholesalB andlor rBtail distribution of phamlaceutlcai and consunable i1ems hume Epplianccs medica equimenl t-Tes ill1d lubricmtlaquo and II1UllitnEl printing The scgn(rtt includes 6c following entities
Eotl Sina Medical Branch
Aaen Medical Braudt
Amcill Troding and DistoolltlqO Branch bull Foot Care (erier HRnd) Good llre Pbannacy Bf4Uch bull Al FllfJdaq COllpafY wJ~L
InduSNol manuacturing TIle s0groent IOvolves Ulahuactrumg whole~we aliaor rewi dimibUlioti of dccnc cables lid tools ggregJ1es_ ready-IUx connole and cement bI0C~ lI1d provi$ion of servlCcent$ in rdation to iODllltroa Itvestment repair aJ-d Gonstruction of power plwts liiiding of LED ilgluitlg products und management of industnl enterpnses The segment ircludes be folloVting centntitis
bull Aam1 Cemert Industries LL AuraJ Redy1Yl(A BrQTlch
bull Doha Cables Qawf lLL Senyaf IoolJic1es Qatar Holding W LL Advanced Pipes ard Casfs CompQTly WJ L bull GuJfRoch Coroany WLL Ci~San Trading Company WLL hmovafive Lighting Compary WLL
Managed services le segment inyolvc~ provisloH of hOllseiltecpmg mi cleaning services fucditics n-anagemerJ services C1egy s(tvices ttl centfe sltrvicf)s buildiqg lnaintemHlelt aml acting as travel gens The 5cgnltnt includes the foUowing cnti(lcents
An13 ServJce Branch
amli TnlVeJa l5tmh
f-eco Gulf Co W LL
Jolinson Controls Qattl WJL
28
Aamal Company QSc
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended ) L December 20 13
SEGMENT INFORMATION (Co ntinued)
Head Office It provides corporate services to the branches and subsidiaries of the Group
The managiog d irector of the Group monitors the operating results o f its business units separately for the purpose of making decisions about resource allocation and perfonnance assessment Segment perfonnance is evaluated based Oil operating profit or loss of these segments Transfer pricing between operating segments are on anns length basis in a manoec similar to Iraosactions with third parties
Aamal Company QSC
NOTES TO THE CONSOLIDATED FINAN CIAL STATEMENTS For the year ended 3 1 December 20 13
28 SEGMENT INFORl1ATlON (continued)
Operating segments The operat ing segment after elimination or ioter-bra nch and inter-co mpany lrnnsaclioos is presented as follows
Trading (nd Industrial Managed For fh e year elided 31 December 2013 Properly disirjblli ioll manujocljlring services
QR QR QR QR Revenues
- h lemal parties 260360172 578909983 1231522768 S l802210 - Inter segments 1253914 6843 11 8 29639873 3445052 1
Heat Office QR
Eliminoions QR
(n187426) II
Tolal
QR
2J22595133
261614086 585753 lOI 126116264 1 8625273 1 (721 87426) 2122595133
Opera ti ng results Fair vallie gains
Profit I (loss) ror the year
Depreciotion
200811944
245051 107
445863051
2066290
86492834
86492834
4345438
22636250
22636250
33049 089
5157436
5157436
1760305
(47864882)
(47864882)
1334382
267233582
245051107
512 284689
42555504
36
Aamal Company QS
NOTES TO Tl CONSOLIDATED FfNANClAL STATEMENTS For the yeM ended 31 December 20 13
28 SEGMENf INFORMAnON (c)tltioucd)
FOf the yearrnrkti J f DccemOer 2(J12 QR
Revellues - ExlcmlJ partiel 2331 17 509 bull Inter segmcI11S 1168935
-- 234236434 --~- -~--
Openning results 18S2367t Fmt value gains J8S79-4~G
pront LOllS) for the rear 570616154
gt3659
No(
lnlermiddotgment revenues are eliminated on tQHs)idntiOH_
Tadiug ftfid disl d)Ntion
QR
S2S3l7661
324 j
5335493114 ~ -~-----
51384831
54384338
4J9R71(i
Indus idi mamfmturing
QR
1255694537
129U25lS4
56727059
56727059
32752742
slnltic(s QR
55216665 2939H31
S46lOJ96
7427414
7437
[908067
ilfild ()jice QR
(64(41976
Elimination QR
(74tHi2oJ Iii
Totul QR
206936372
2069336372
235721
(64641
131 f613
6245
42541)861
Amnal Company Q$l
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Por tnt yeartndeJ 31 De~embcr 2013
28 SEGMENT JNFORMATlON (contiutlld
Assc-ts and labilities
Tng alld lndtrstfw At31 December 2(113 distnbllrior manufacturIng senices HeadOJJicc EliminatioilS lola1
QR QR QR QR QR
Cumnl 3tS 227552338 620807979 61349 j 415 S()6)86922 (301636995) 1477366090 Noolucrcnt DSeIS 6411868160 12604763 622386238 4348876 (i624548 __p2438051 780
fotal asstl$ 6639420498 1194 1243194217 65698291 513Ql1470 ==-lt03H8l~O()) 853295-870 -~----~ ~---~ -
CUIT)llliabilitics 280995335 1(3511J60 6344(12777 2l0708lJ2 496261185 (3CH636995) 1249603264 Non-current iiatJlitics 7l70L5V2 8008485 HlDi16~43_ 3181668 t433799 ____ ilj534_~57 __ --Totul liahililics 353696897 ___~4159~4~ 734419720 ~4976~~~~~ 1434945711
---~~--~ -~-~~ - _2~~~4~~ (~~~~9~
C1pild expcndimn HI) WO743OOj 1397742_~471l2~--~50 ~51 ~1~623821~~1~_ -~----~------ -~
3amp
28
Aamal Company Q SC
NOTES TO THE CONSOLIDATED FfNANClAL STATEMENTS For the year ended 31 December 20 13
SEGMFNT INFORMATION (continued)
Assets and liabilities (continued)
AI 31 December 2012 Properly QR
Trading and d iSfriblllion
QR
Indusrial manufacfuring
QR
Managed senices QR
Currenl assels
Non-current assets
146491 186
6121 864484
2964425 12 903 7264
73468 1258
549267235
51387098 471 1439
Tolal assets 6268355670 305479776 1283948493 56098537
Head Office QR
468325024
6713643
475038667
Currentliabil iies
Non-current liabiLities 273444 748 1 J10 15024
86054583 7434286
669214261 1288 14977
2 1938953
287 1199
480393637 1253084
Totil lliabiliti cs 390459772 93488869 798029238 248 10 152 48J64672 1
Capila expendirure (ltII L 72865 878 1281254 6647 J356 7169 13 149045
Notes
(i)
(Ii)
Inter-segmeot balances are e limioafed 00 consolidatio n
Capi tal expendiTU res consist of additions 10 propeny plant and equip ment and iovestmenl properties
Eliminations QR
To wl QR
(273735776) (i )
(20308351(i)
1423591302
6689563230
(27576661 1) 8 113154532
(273135777) (i) 12573 10405
257388570
(273735177) 15 14698975
24 1484446
39
29
Aamal Company QSC
NOTES TO THE CONSOLIDATED FrNANCIAL STATEMENTS For the year ended 31 Dcltmber 1013
Fr-A]~ClAL RISK MANAGpoundMamp1H
Objccthes and policies fe Groups principal )uaucill liabilities comprise imltresl bctmllg loons and IxmowHgs baRlt ovetda1s amounts due to fclaled par1ies and tracte accounts payable The main pUlJXSi of thesc financial liabilities is 4J mise firmne or 610 Grmps operations The G0JP bas various fimmcial assets such as ttadc accounts receivable lInlOlmts due from related parties bark balances tltCntion receivable and other receivables which arisgt directly fran its cperuoonamp
The maiH ri~ks an3ing Joru (be Groups UnariCJlll illslrumenls jle market risk cretiJt nsk and hmdity risk Til BoarD ofDtrcctO$ reviews end agrees policies for mzrAgbg Caltt f hespound ri~k ihkh arc summariscd beloW
VIarktt risk yenfatket risk is the risk Um changes in market prices $Uch as intfcst rates and hreig lttmeocy ect14nge rilles Vltl1 affect the Groups profit eqwty Dr value tf its hoJdiI15 of financial instrl[Thnls rile objecivpoundj of marke1 risk mUnllgcrlcnt is to manage uld 1~ontr(ll tho tr))rket risk expo-sure vithir acceptable parfI-etcJ$ while optimising rerUID
Equit) price risk ampjuity prtce risk is the risk hilt the Group ampearnings will be affected as a rcmt (If luctttltions in fm vdue of ~qui-gt
mstwnents Eqlliry price risk arises from availabtetor~sale inv2strnems However the Groups exposure to eqmty price risk IS minima as II doesn hold sitl)iftrmt ailableAor-511le inYestrmmrs
[merest rate risk The Groups fimiruial poundS5ot ampId liaojlilies (at Rl $uJject to int~~ rate mk compnse brmk depoils interst bearing loans and bOITQwjags and bank overdr-afts At the reponwg dalt tbe [merest rale pronle of Ill Goups intexst bearing fbi4rdd instruments as fliows
11113 20i3 QR QR
Fued liIeryS refc insfrvrnellts
Fmmcial assets 113035962 111913394 FrOltwial liabilities --1~203712l) 1252t43~1
9)OI~ (13350972)
Fhlllting inireSI rate ns1lmlttrs Fanctl~ Isseis 127024345 ID43848o Fllllocial liabilities _-(i~9347~ (94))48926)
(836)64116)
The Groups exposure to t~ ris of changes in marXet interest fltltes relztes primariiy to the Groups financial assets and lizbitdic$ with t1Oltttirg interest mte~
lhe loEowing able demonstrates the ampmitivity nf the eonsolidattXI statemen1 of income 1) caonaly possible chonges in in1jfgtst rmes by 25 basis points with all othe vari)ble3 hdc umstant The sensitivity of the CooiK~ljclatid statement of inc(me $ the eft(ct of tb assumed changes in lnterdt rales for one year bf1sec on the floating rate financial assets and fimmcial hablhw$ held at 31 f~r The effect of deae-ascs in interest ral~ is cXp0Ctct to be equal and opposite to the effect oHlle increases sllQvro
Changes it Eftx OIl
00513 [oms profit QR
2013 Floating mterest Hlte instruments ----2$ bp (1649776)
2012 Flv-ating irkfiSt rale instrumenls +25 bp (209[9(1))
~--------- -~~ 40-middot------ _ _ shy
29
Aamal Company QSC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 3 1 December 2013
FINANCIAL RISK MANAGEMENT (continued)
Foreign currency risk Foreign currency risk is the risk lhilt the value of lhe fi nancial instruments will fluctuate due 10 changes in fore ign exchange rates
T rade aCcOlmts payable and accrued expenses include amounts due in foreign currencies mliniy US Dollars UAB Dirhams Great Britain Pounds (GB P) and Euros of which the Group has a currency risk primruily on the baJmces payable in Euros and GBP amoWlting 10 QR 14400634 (2012 QR 17214046)
The Group does not hedge its foreign currency exposure As both Qatari Riyal and UAE Dirhams are pegged to the US Dollar balances in US Dollars and UAE Dirhams are not considered to represent significant currency ris k to the Group
The table below indicates the Group s fore ign c urrency exposure on its monetary assets a nd liabilities The analysis calculates the effect o f a reasonably poss ib le move ment of the QR curre nc y rale against the Euro and GBP with all other variables held constant on the consolidated slate menl o f income (due to the fa ir va lue of currency sensitive monetary asse ts a nd liabilities) The e ffect o f decreases in fo reign c urre ncy exchange rates is expected to he equal and opposile 10 the e ffect of the increases shown
Incramp1se ill
f oreign cUlrency rate
0
the QR
Ellecl on profil
QR
2013 +5 (720032)
20 12 +5 (860 702)
C redit Tisk Credit risk is the risk that one party to a financial instrume nt wi ll fa il to discharge an obligation and cause the other party to incur a financial loss TIle Groups exposure to credit risk is indica ted by the carrying amoWlt o f its financia l asse ts whic h consist principally oftmde accollilts receivable retention receivable amounts due from related parties othe r receivables and bank baLances
The Group sells its products and prov ides services to vario us panies It is the G ro ups policy that all customers who wish to obtain on credit lerms are subject to credit verificalion procedures to ensure c redit Ilonhiness Each new customer is analysed individually for creditworthiness before the de livery o f products Of services Custo mm tbat fai l to met t the credi tworthiness may transact with the Group only o n prepayme nt basis Property rentals are mostl y received in ad vtnce or conlrlCled wi th post dated cheques 10 additio n receivable balances are monitored on an ongoing basis a nd the purchase limils are established for each c redit custoroer which are reviewed reguJarly based on the level o f past transactions and senlement The Groups max im wn exposure with regard to trade aCCOWlts receivab le net ofa llowance re nected allhe reporting date was ilS fo llows
2013 2012
Business SJgmelll QR QR
Property 15478832 19386326 Trading and distributio n 194343 597 179748274 Industrial ma nufac turing 183119753 131578668 Managed services 18069385 14547389
411 011 567 345260657
41
29
Aamal Company QSc
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For tbe year eoded 3 J December 20 13
FlNAJICIAL RISK MANAG EMENT (c-o Dtinued)
Credit risk (continued) With respect to credit risk arising from the other financi31 assets of the Group the Groups exposure to credit risk arises from default of the counterparty with a maximum exposure equal 10 the canying amount of these instruments as follows
2013 QR
202
QR
Bank balances Amounts due from related parties Retention and other receivables
436136756 214439950 48290351
36788129 t 171525363 74082203
698867057 613488857
The group reduces the expoSltre of credit risk arising from other financial assets by maintaining bank accounts in reputed banks and providing services only to creditworthy re lated parties
The management cons iders the bank balances and a mQUIIIS due from related parties as high grade fi nancial assets and lfade accounls receivable and other receivables as sundard grade financial assets When a finltmcial asset is identified 10 be impaired the managemoot downgrades such assets to impaired category and provides adequate allowances
Liquidity risk Liquidity risk is the risk that the Group will not be able to meet its fmancial obligations as they fu ll due The Groups 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 nonnal and stressed conditiom without incurring unacceptable losses or risking damage to the Groups reputa tion and is to maintain a balance belWeen continuity of fuoding and f1eilibility through the use of bank overdrafts and bank loans and borrowings
The Group monitors its risk to a shortage o f funds using a recuning liquidity plaOfling 1001 TIllS tool considers the manuiry o f financial assets (eg accounts receivable) and projected cash flows from operations The Groups teons ofsales or services require arooUIlts to be paid within 30-90 days from the invoiced dale
42
29
Aamal Company QSc
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For tbe year ended 3 1 December 2013
FrNANClAL ruSK MANAGEMENT (contiQued)
Uqujdity risk (continued) The table below summarises the ruaruriJy profile of the Groups financial 1iabililies a t 31 December based on contractual undiscountcd paymeots
2013 Interest bearing loans and borrowings Bank overdrafts Trade accowus payable Other payables Amounl~ due (0 related panles
201l Interest bearing loans and borrowings
Baok overdrafts Trade accounts payable Other payables Amounts due to related parties
On demand
QR
6836280
6836280
011 demand QR
2885090
2885090
Less than 3 months
QR
521324473
303638792
47406830
2530~480
898675575
Less thall 3
months
QR
469839033
10754JJIO 37543236
1964504 1
634568620
3 10 J2 mOlllh$
QR
239333328
16378865 20210580
2289~11l
298816884
3 to 12 monlhs
QR
365476972
159621 37 J 24745342
30092716
579936401
1to 5 years
QR
J 60092748
160092148
1 to 5 years
QR
248472226
248472226
gt 5 years
QR
25261598
25261 598
gt 5 years
QR
7648000
7648000
TOlaf
QR
947012147 6836280
320017657
67617410 48199591
1389681085
Tota
QR
109 1436231
1885090 267162681
622 88578
49737757
14735 10337
43
30
Aamal Company QSltc NOTES TO THE CONSOLIDATED FlANCIAL STATEMETS For the year ended 31 December 20 t3
21 F~ANClAL RlSK MAiAGEMElT (continued)
Capital management The Boards policy is to maintain a strong cepit1 base so as to rnainmin investor creditor and market ronfoonee and to SUSWlJ) fumre dcltclonnent Gf the buinest The Board of Directors rronitortl the tapital whkh tbe Group defines as wlal $parcloders equity excluding nonmiddotcornroliing imerests and the level of dividends to orrunury srarellOJdcfS
The Board also reeks to ITIaimain a balance between the higher (ctums (hat might be fA-~$ihle With higher leves of borrnwings end Lle edvnrJages and security named Sy it sOMd Cilpitai posi[ion The GfCup~ k1rget is to achievfl a return on slureholders equity (exclJding aonwurrolJiug iorcf(sts) greater lll(ll1 he wcighlcd average inres exxmse on mrerest bearing Ivens and oorrowing
The (lf0t-p nl)nDg-e ils cnpital structure and makes adjustneal lOll in light ofchang2s in economic nd bttincss cordjlons and shareholders expe1ationJo chmges veremiddot maCo HI Lleuro objecttves polilCS or proCCSSC3 during the years erded 31 D~mber 2013md 31 Dtccmlxr2Ql2
The Group monitors the capit2J using a gClting fatio which IS dep divided by caplla plus debL The GtOwgts policy is to keep ttJe ge-anng rmio bclew 40 Tbe Group iLdtdes withb debt imete-51 beagting loans ard ~OITORlngs less cash and cash equtVaknts Capltal includes eqmty attributable 10 the equity tolders oft~e parcrt
2013 QR
2(i2 QR
fmerest bearing loans and borrowings lcss- Cash and cas ltYJUvalcnts
9i4lJ05301 _~ (429JfJl4761
1004845296 (649)6201)
Net debt
Toa capital
Capita and net debt
699849045
~ringrttio
FAIR VALtES OF Fl~ANOAL f~STRUMETS
Finarcial iostrumenL~ cOlnprise tina~lctal assetS carl finailcialliabilities
Fmancial assets colJist of bank balance) short 1Cm bank dcposis amounL dve dom rc)ltted partilt)$ rekntion and other receivables and ttade accolmis rceivabe Finatlclll habiilics cgtmsist of banilt ovcrdratls jnerest bearing lOil1S and bOrowings amounts due (0 nliled partiG~ ane trade x-ounls payable
The- fair values of hese financial inStrumen1S except Jo-- imCfest bearing loam lHld bOlToving aproKimate lhdr cMryinJ vlhes due to the Slort temt mzrutiiles or these instrument
Tllc faiT value of iotcnst beating Nns and borrowin2s ae estimate( based on discoumed ltash flows twin int(s rale- cune-ntly nvailagtk fur tilt debt or sinuiar tetnlS an-a rell1lmng matunties
31
Aamal Company~Q=-ScC ______________~______
~OTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For fhe year ended 31 December 20 t3
SlGNIFICANT ASUMPTIONS ACCOUJTING JUDGElE1TS AND F8TIMATFS
impairment (If accoonts receivable n etrnwe of lhe collectible anoun of trade accounlgt reccvable is made when collection of the full lHl1OUt i~ nO looger probabk FOI nCividualty significitIl amounts this estimation is p~rformed on an indh-idllai a$[$ Amomts wHcb arc not indivldl11Uy significant but wluch are past due ZTe tsscssed collectively and an aJlQwaccc applied ucc()r~Jng to the length of lime past due based oc histnncal recovery nlJes
hnpalrment of inHntnries lavenoncs are held at tho lower of col and nol realisable value InIOn inventoncent$ becone old or 0-~amplete an estilTJte is mate of their net j alisable vulue For indiviolhlUy significant amountS this cstinaunrt is performec all aD lndividwl osis Amotlnts whieh are fl0t individually significan( btll which ltIre old at obsolete wx LltSessed wllecivdy md a provisior is applied sccnrding to the invenrory type and be dep)ee of ageing 0 cDsolescc1ce based on anticipUled selling prices
Classifigt1ltion of El Sew(gtdy Cable Qatar WLI ali a j(lint vwture pound1 Sovedy Cables Qatar is a limited hability company whose kgal fum confers SCprm11ior bernten tbe jXliiies 10 ~he jomi lfranpement Snd the Company Itself FurthenrlOre then IS no oontractua] arrmgelTeot or any oibe aus aod circumstriliCe$ that iocik41to tht he putic5 [0 the joint flJTIlrgernelit bave rights to the ssetl and obligrtdons fo~ the liabilities of the joint ilrrongement Acoordingly El Sewed- C[jbl~s Qamr WLL is dassifiecl 7S a joiut enrtrr of he GWtp
impairment of goodwill G0oovj)1 embedded in th~ cot 0 aquisitior of subsidiaries and eqmtj-iccounled iflV(stees ire teswt for irl1jXlirmnt aHuaily Tbe calculations of value [n use fO( cfish gecj~r)lilg units (loring to real nte projecg are rtost sensitive to tin IDHowing assumpti015
Grosgt i1wginmiddot Gross Ilmrgins arc lmsed on avrage values tuhje0d in (he [Xrioo preeedhli (e siaM of the budge xnod T1esC at( mcreased over the budgel period for mticipatltX efficiency Hnprovemots
DisC)unr r(es Discount rotes represent th cl1tent mark as~ssmetlt of the risks specific te ech cash geocroting unit regarding lhe time value of money ilnd mdividu)l risks of he tmtieriyilg assets whICh have not been inwrport1eti it the Citik flow estimates The dj~(OUrl flte tlkulation is based on the speclfte circurnsthLCes of lile Group and its opltllatJng segn)~nts (md derived (ff)rC it weighted avaage (XSt 0f apilaJ (WACC) Tb fACe (akw into uoount both deb and equity The 0$1 of equity is denved from dlC expected return 01 investmenl by the Groups investors TJc Gos10( deb is based on l1e borrvwings the Gmup IS obllsxl to service SC~lletllmiddotspecific r5k IS incorxt4too by applying individual bera facto The betn mctors ire evauatcentd annuaHy bhseci on pubJicly aVflllabe murked earn
Fair value ()fnHstmeni proputies The fuit laHe 0 nvestmel~ propertis is deltrrnlnzd b cxterrwl indepzfldell property valuers laving appr0priate recognised professional quabfiillions and recenl xperience H1 the localjl)n and G-tegory 0 the oroperty being valued
Useful hes of PfQPcrly plmr (llld zqulpment The Groups management detennints th estiunted useful jives Df It~ property plan and equipmnl fix calnurjng depreciation Thi5 e~timJte is 6lermind after cinsidring 1b expeelcd usage (1f the a5sclt [hysical l101t and (eas tedmiltal Dr com~ercia obsolesccnce
Gotlg Qncen
ibe Groups mangerncnt UiS made aJ assessmeot cf the 011115 ability (0 COllllOUC liS a going conct11l Imd is satsl1ed hat me Group ms the resources to contmue in business for he foreseeable fu1urc he1hennort he management is no aware oC lny material Hncertainties that lray CH~t signinchnt doubt tlPDfl the Groups ability 10 continue as a going umcem Therefore titpound lotlsolidatcd finilllcij stftemeols comirme to be prepltd on li g0ing concern basis
Aamal Company QSc
NOTES TO THE CONSOLIDATED FlNANC[AL STATEMENTS For the year ended 3 1 December 20 13
32 INCOME TAX
Certa in subsidiaries of the Group which have non-GCe ownership are subject to income tax under Qatar Income Tax Law No 2 1 of2009 The iocome tax is charged on the share of profits attributable to non-GCe shareholders For the purpose of these conso lidated fi nancial statements the income tax liability oftbe foreign shareholders has been excluded given that the non-GCe shareholders have agreed under the shareholder agreements signed with the Group to bear the fh lliiability and make necessary payments
33 COMPARATIVE INFORMATION
Certain comparative figw-es of the previous year have been reclassified 0 coofonn to the current years presentation However such reclassifications are oat materia and do not have an impact on tbe previously reported net profit other comprehensive income or the total equity for the comparative year
The impact from the resta tement of comparative infonnalion as a resuh of adoption of IFRS I I - Joint arrangements is detailed in Note 32 Changes in aCCQu(lting policies
46
7
8
9
Aamal Company QSc
NOTES TO THE CONSOLIDATED FfNANClAL STATEMENTS For the year ended 3 1 December 2013
At10(JNTS DUE FROM RELATED PA RTIES (continued)
NO les (i) Transactions witll related parties are eam ed out through open account and Directors do not consider any
receivables to be past due or impaired
(ii) Related party transactions ore disclosed ill Note 26
INVENTORIES
Goods for rew le Raw materials and spare pans Work in pTOgresS Goods in transit
Less Provision fOI obsolete and slow moving invenlories
1013 QR
165499699 38388307 19944678 9671 8553
320551237 (3851692)
31 6699545
Movements in the provision for obsolete and slow moving inventories were as follov~
At I January Charge for the year (Note 19) Reversals Amounts wri tten off
At 31 December
E QUITY-ACCOUNTED INVESTEES
TIle Group has the followiog invesllnenfs in equity-accounted investees
Interests in joint venrure Interests in associa tes
At 31 December
G roup s snare of profits fr om the equity-ncco unted iovcstees arc AS follows
Profit share from in vestment iojotnt venture Profit share from investment in associates
202 QR
232597650 36608394 30622960
10521 9695
405048699 Q 145826)
40 I902873
203 QR
3145826 1 380617 (535695)
( 1139056)
385 1692
20 12 QR
2795992 2208263 (137995)
( 1720434)
3 145826
2013 QR
2012 QR
129462184 3644723
124124803 2545188
133106907 12666999 1
17330368 22869454 1169533 534050
18499901 23403504
22
10
Aama Company QSC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 31 December 201 3
9 EQUITY-ACCOUNTED INVESTEES (continued)
Counlry of incorportllion
Relationship Proportion ofownership and lotilfg power held by the Group
203 2012
EI S~wedy Cables Qatar W LL Frij ns Structural S teel Middle East WLL Al Ftfazdaq Company WLL
Qat~
Qatar Qatar
loint venture Associate Associate
55 20
55 20 35
Note With effect from 1 January 20 13 the mlnagemeot of the Group has reclassified the investment in Al Farazdaq Company W L-L from investment in associate to investment in subsidiary This is based on the transfer of share holding by the other shareholder whereby the conlroi o f AI FOl razdaq Company W LL bas been assigned 10 tbe Company
INVESTM ENT PROPERTIES
a) Reconciliation of carry ing amounl 2013 202 QR QR
AI I January 611334701 8 555 1835348 Additions 9568047 1727191 87 Transferred from property plant and equipment (Note II ) 34519828 Net gain iTo m fa if value adjlls tment 245051107 388792483
At 31 December 6402486000 6 11334701 8
b) Measurement of fair value
The fair values of the Groups inveS hnent properties as at 31 December 201 3 and 3 1 December 2012 have been arrived al on the basis of valuations carried Ollt on the respective dates by professionally qualified independent valuers not related to the Group The independent valuers have appropriate qUlli ficatioos and (eceJ11 experience in the valuation of properties in fhe relevant locations The fa ir value WltlS determined based on market comparable approach that reflocl s recent transaction prices for simillt1r properties and discounted cash flo w and income approach techniques
Details of the Group s iovestment properties and infonnation about the fa ir vn lue hierarchy as at ) I December 20 I J are as fo llows
IIvestment propenies
Level 3 fair vallie
Al I Janu ary 6 [ 13347018 Additions and trans fers from property plant and equipment 44087875
Gain included iu prom and loss Net gain from fair value lt1djuslmem 245051 107
AI J I December
The Group recognizes transfers between levels of fair value hierarchy as o f the end of the reponing period during whicb the transfer has occurred There were no transfers between the fai r va lue hierarchy during the year
23
10
Aamal Company QSc
NOTES TO THE ONSOLlDA TED FINANCIAL STATEMENTS For the year ended 3 I ecember 201 3
LNVESTM ENT ROPERTIES (contin ued)
b) Measuremen t 0 (air value (conti nued)
Vau t ion technique an significant unobservable in puts
The valuer has applied t e income capitali zation discounted cash flow and comparab le methods to detennine the market value of the lnve tment propen ies Significant unobservable inputs used included expected market rental growth rates (an average 425) occupancy rates (approximately 90 to 95) and risk adjusted discount rates (approximately 5 to 7 0) M y significant change in these inputs can impact lhe fair valuation of investment propcnies
24
Aamal Company QS c
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For che year ended 31 December 2013
11 PROPERTY PLAi~T AND EQUIPMENT
FumilUre Truck mixers fIXtures and Complllers
Leasehold and maor Plum (fd office and relaed eapiowork Buidings improvements vehicles machinery eqllipmcni sofMore in progmiddotcss Total
QR QR QR QR QR QR QJl QR
At I January 2013 137870126 371 88 132 9595813 1 262536261 19 580954 14864 385 561 32447 6241 30436 Additions 948)65 2618 100 5367399 859061 111 5268 137147581 148055774
Relating to d isposalswrite-off (1042642) (4390496) (77157L) (589150) ( 184075) (6977934) Transfer from capilal work in progress 1505 310 164 336 3601776 ( 150000) 1182741 (6304 163) Transrer to investment properlies (Note (0) (345 19828) (345 19828)
At J I Dttember 201 J 139375436 J7 258~ ~1 85735 270733865 19700865 169783 19 152456037 _73068~448
Depreciation AI I January 2013 16133915 J6902 529 49087707 68783 065 11 980009 tl71 595 3 174603 178 Charge for the year 7059805 3237150 5390767 12249797 2849162 1768823 42555504 Relating 10 disposalsJvri te-off (664709) (4 3 1716 1) (724322) (552939) ( 18 1993) (6441 124)
At 31 December 201 3 23193 720 19474 9 70 50161 313 90303540 14276232 13302783 2 107 17558
Net carrying amounts At 31 December 2013 116181J16 _17783221 44024422 180415325 5424633 3675536 __l2456O37 JJ9970~890
Notes (i) Depreciation charge for the year amounting 10 QR 33 164382 (201 1 QR 3303091 6) is included in tbe direct costs and an amount of QR 60055 (20 12 QR 36939)
has been capiulised under capital work in progress
(ii) The capital work in progress includes capitalised borrowing costs amounting to QR 125645 (20 12 QR 15358)
(ii i) The buildings are constructed on a plot ofland taken on a loog term operating lease
25
Aamal Company QS c
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 31 December 201 3
II PROPERTY PLANT AND EQUIPM ENT (continued)
C05I~
At 1 January 2012 Additions Acquired through business combinations (Note 4) Relating to d isposalswrite-off Transfer from capital work in progress Transfers
Buildings QR
137434400 435726
Leasehold improvemellls
QR
38137377 446J 04
144 103 ( 1539452)
Truck mLCers and molO
velricles QR
83427661 11464679
1697609 (631824)
Plant and machinery
QR
249335437 97264 85
35 14 132 (99498)
59705
Furniture fir ures and
office equipmem
QR
22845309 667586
192042 (3696457)
98000 (525526)
Computers and related
software
QR
158 19519 87 14 14
141837 (266 1733)
908078 (2 l4730)
Capitol work in progress
QR
12104889 451 53265
( 1065783) (59924)
Total (JR
55910459 8 68765259
5689723 (862 8964)
(800180)
AI 31 Dttember 2012 137870) 26 371881 32 95958 13 1 262536261 19580954 14864385 56132447 624 130436
Depreciation AI Jaouary2012 Charge for the year Acquired wough business combinations (Note 4) Relating to disposalswrite-off Transfers
9144666 6989249
)4 3 16620 3410618
144103
(96 812)
42558404 548 1613
1671942 (6242 52)
44555 290 2 1398849
2890797 (6 187 1)
12392584 3 182899
169005 (3558466)
(206013 )
12235266 2077633
136959 (2627283)
(J 0662)
135202830 42540861
5012806 (7840684)
(312635)
At 3 L December 201 2 161339J5 16902529 49087701 68783065 11 980009 11715953 174603 178
Nel canying amoWlts
At 31 December 201 2 12 173 6211 2028560 3 46870424 193753 196 7600945 3148432 56132447 449527258
26
12
13
Aamal Company QSC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 31 December 20 13
ACCOUNTS PA YABLE AND ACCRUALS
Trade accouots payable Advances from customers and tenants Accmals Social and sports activities levy Other payables
AJIOUNTS DUE TO RELATED PARTIES
Name
Arab Compaey for Fiber Products EI Sewedy EIC( lric Ho lding Egypiasl Egypt Egyptlech Egypt United Industri es Company WLL Johnson Controls Air condi tioning aod Refrigeration Qatar WLL pound1 Sewedy Cables Egypt Johnson Controls Air conditioning and Refrigeration rNC Dubai United Wire Company WL L Gelteo Company W LL - Gelteo Refr igera tion and Airconditioo ing CampC Lightway nc AI Shaab Group of Companies Other related pruties
NO M Related party transactio l)s a re disclosed in Note 26
2013 QR
320017657 30486837 26924669 41 761 843 25855567
445046573
2013 QR
18517474
4902528
6531231 6404578 3215821
2825884 75 7825
3467288 263715
1313247
48199591
2011 QR
26716268 1 27410234 222575 76 28954726 33)33852
379119069
2012 QR
18380528 91458 82 54 13849 1 11 6 135 5374039 35291 2020359 1693323 1064744
670 179
11 0873 12 18650
49737757
27
14
Aamal Company QSC
NOTES TO THE CONSOLIDATED f fNANCIAL STATEMENTS For the year ended 31 December 201 3
INTEREST BEARING LOANS AND BORROWINGS
NOles Malilrify
2013 QR
2012 QR
CoMl Loan 2 Loan ) Loac4 Loan 5 Loan 6 Loan 7 CoMB Loan 9 Bills discounted
(0 (ii) (iii) (iv) (v) (vi) (vii) (viii) ( ix) (x)
lune2014 Seplember2014 January 2015 November 2016 December 20 16 November 2017 Jllne20 l J December 20 7 OClober 20 19
172070387 440000000 50544000 40261 621 81387109 19920036
6] 43890 62626967 42522794
915676804
298324180 440000000 10 J088000 57955030
100 168750 2 1300492
407728 1 782871 1
35000000
1065742444
Less Defe rred finatlcing cost (771 503) (897148)
914905301 1064845296
Presented in the consolidated statement of financial positioo as fo llows 20)3 QR
201 2 QR
Current ponion Non-current ponion
749520820 165384481
825568489 239276807
914905301 1064845296
The dete rred financing costs consSt of arrangement fees The movements m the deferred financing costs were as fo llows
203 2012 QR QR
At I January 897148 332 661 Addjtions during the year 1 062565 912506 Amortised during the year (218amp210) (34801 9)
At 3 1 December 771503 89 7148
28
Aamal Company QS C
NOTES TO THE CONSOUDATED FlNANCIAL STATEMENTS For tbe year ended 31 December 2013
14 INTEREST BEARING LOANS AND BORROWINGS (continued)
Nolec
(i) Loao I i USD 93000000 impon 10n moi lily obtoined to refimnee he Icne~ of edit The 10 IT interest at commercial fate and the interest is paid at monthly intervals The fucility is repayable within ISO days including the usage period under letter ofc redits
(ii) Loan 2 is a secured bridge loan obtained to settle an existing loan and working capital requirements of the Company The loan carries interest al coOlJllercial rates and interest is 10 be paid on quarterly basis
(iii) Loan 3 was obtained for the pWpOse of financing capital ependiture and direct payment to suppliers contractors and 5ub-controctors The 10011 CMries interest at commercial rate and the inte rest is to be paid q Uar1erly The fac ility is repayable in IS quarterly iostallmenls starting I July 20 11 and ending I January 2015
(iv) Loan 4 was obla ined for conSlruclion o r an inveslmenl property The loan is seclJed by 0 primary mortgage over the some property and corporate guarantee of the Aamal Company QSC Tbe loan carries interest at commercial marke t rate and is payable in quarterly instalments
(v) Loan 5 represents a loan fOlcility obtained in two sepnrole tranches amounting to QR 309 825 000 (USD 85 million) for the purpose of refurbi shment and construction of fociJities io one of the investment properties The loan is repayable In 16 equal quanerly instalmcnlS for individua l tranche commencing from March 20 1J The loan carries interest at conunercial rJtes
(vi) Loan 6 represents secured loans obtained ffom a commercial bank in the previous periods for the purchase of heavy equipment and machines and were merged on 15 November 20 12 as a comb ined loan This loan is payable by 59 equal instalments of QR 426000 with (I last inSlalment of OR 438 326 with effect fro m 01 October 201 3 The loan carries interest at commercial market ra tes
(vii) Loan 7 is il tmst receipt banking facility obtained for the purchase of inventories This carried interest at conunercial market rates This loan was full y settled during the year
(vii i) Loan 8 represents secured loans obuined from a commercial bank in the previous periods for the purchase of delivery trucks and machinery and were merged on 22 October 2012 as a combined loan The loan carries inte rest at commercial market Tates and is payable by 59 equal insta lments o rQR 160000 with a last inSlOlmem ofQ R 128000 with effect from 3 1 December 2012
(ix) Loan 9 is an Islamic Financi ng Arrangement obtained for construction o f a manufacturing plam and as o f yearend ba lance represents partially drawn amount out of totil1 facility of QR 655 68000 The loan is secured by joint corvorate guarantee by the shareholders The loan carries profit at Islamic Financing rates and re-payable in quarterly instalments starting from the end of the 24 months gmce period from the date of loan drawn
(x) Bi ll discounting is a loan fac ility from banks The purpose of the arrangement is to discount bills locally and carries interest at current commercia l filte
15 EM PLOYEES END OF SERVICE BENEFITS
Movements in the provision reHectelt in the consolidated SLo1tement of financia l position were as fo llows 2013 201] QR QR
At I Jan uary 18111 763 17877937 Provision made during the year 4056969 4205499 Acquirelt through business combinations (Note 4) 349272 End of service benefits paid during the year (2210756) (4320945)
At 3 1 December 19957976 18 111763
29
Aamal Company Q5C
NOTES TO THE CONSOLIDATED FINANCIAL STATEMETS For tile y~ar ended 31 Dee~mber 2013
16 SHARE CAPITAL
2013 2012 QR Qq
AtI1l1)nud 60000)000 (20 2 544500JJOfn shares ofQR iii Cilch 60i)iQOOlOO 54450lt)0000
21)13 2012 Numher of
siMtS QR shares QR Issued Mtldfully paM At lJamld) 544SfWllOfJ 5445(100001) 495000000 49500000)0 1511C ofbonus S1i1-C ___ 5550~OOO 555000000 49SGOOOO 495000000
At 31 Decenef 6(OOampQllf1(1 ---14450O000 544~OOOOOO
All ampates m~ of a110 clss and caL equal voting rights
17 LEGAL Reuro5ERVE
As required by Qatar Comnertai COfrp7lnies Lav No5 of 2002 lOfp of the profit for the ye1J as a rru1imllli silould be mmsfened to legal re~erve The reserve is lot normay [lytiabe tor distribution except ill he cixcuJUstllrtUS stipulated m the above ~lemi0ntd GIW
IS HEVE1TE
2013 l)n QR QR
Sale of goods 1726893265 i709057~(iO
Renlal income UiO362322 133117509 S-ice income 858695 33940731 CornrrusslOlL Incentives and agency fces 44695S1 422~_632
212259$)33
19 DIRECT COSTS
2013 2)i2 QR
C 051 of inven(feS recognisedlIS an exptns 1522929956 497210830 Dind sL1ries lmd wages 601 [1336 5137856-8 Operating eXpenses on nml estate p~opet1les 36)711316 3041H504 fJepreciatiort (Kate I J) 33164382 B03091pound Operators marhgerrt6nt fees 14508588 li667989 Provisicn Qr obsolete and skwlt moving mvenlories (K)tc 8) 2380617 2208263 Other operating ilxpenses _31~3982 _ 3674946
1702139171 JS9653OI tgt
Aamal Compall-yQSC________________
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For lthe year ended 31 December 20 11
2G OTHER NeOiI
2013 20J3 QR QR
Interest mcume 2824216 2)314392 Profiv( loss) 00 disposal of property plant aoe eqUlpmem 737647 (l7362G) Eargain ptmnJse gain (Kote t) 8360793 MIsceJlaneous income 5723356
2013 2012 QR QR
ManllgetnUI hrQ empl(yees ws 55170302 55lt035middot1 Rent 23596799 2594915 Allowance for impaimlcot oUrsue aCQl1ot$ rc(Xjvalle (Nole 6) 129459(i 11613120 flBumcce ane profcampiitmJI fees 2IU9263 209J902 Corununication OOtHS 1935123 1649155 Trllining tid ouSfjt$s developmccl 950476 L095764 Re]X1in and mainle-nilnce 21)11SflS 2)2 I Poslag-c prjnting acri stationery 610299 541159shyvllsltdlancous expenses _~~~664 1lt2
-~~~ 125162812
22 fIN~lCE COSTS
2013 2amp2 QR QR
Inleres epen~ 42866312 5773U4B Am(vtisJliorgt ofdefcentrred financiog coStS __ 2l)tl26~~ gt3661
44930877----=
58063009
23 BASIC A~n nHUfED EARilNGS PER SHARi~
Basic trdTJogs per hue is caculatid 0y llividing the pwfill0( Ihc year attriouiabk (0- equity roldc-5 of the parent by lhi w~iglwxi avrage number of ordinary shares 0JstandirJg dulting tht_ year During Ihe year lil~ Conpmy i-sued and CBpii3lzed bonus shares lnd awmJingl) me previously ~eportod earnings per shac have blOM restatc(i
20i3 2012
Profit feT the year auributable to Cluity holderlt of the- paren (QR)
Weighted aVCTage number ofshares outstanding during the year (i)
Basic Jd diluted earnings per share (QR) 085
59985U413 shy
~~--~~~~- ~------J 1
23
Aamal Company QSc
NOTES TO THE CONSO LIDATED FfNANC[AL STATEMENTS For tbe year ended 3 l December 2013
BASIC AND DILUTED poundARNINCS PER SHARE (continued)
NOles (i) Th wigh d m nlg urnb of hres foc h P of lruling ~migs pee share h bee kulated
as follows 2013 20J2
QU3lifying shrues allhe begi ll1ling of the year 544500000 544500000 Effect of bonus shares issued and capitalised 55500000 55500000
600000000 600000000
Less T reasury shares (149587) (i357SI)
Weighted average number of shares at the end of the year 599850413 599864249
(ii) There were no potentia lly dilutiw shares outstanding at any time during tbe year and hence the diluted earnings per share is equal to the basic earnings per share
24 COItIMITMENTS
20 1] 2012 QR QR
Estimated capital expenditure approved and contracted for at the year eod but not provided for
Investment properties 2964000 8 139063 Property plant and equipment 16386500 63759762
19350500 71 898825
Operating lease commiIOlenlS under noncancellable lease agreemenlS
Payable wilhin one year 990806 702000
990806 702000
25 CONTINGENT UABILITlES
The Group had the following contingent liabi lities from which it is anticipated thai no malerial liabilities will arise
2013 2012 QR QR
Letters of guaramee 474551239 394255203
Letters of credit 7678499 194299384
NQles
(i) leHlaquogt of gu indud penonmnlaquo tend nd bid bonds d pymenlt g gi to suppliers and contractors by the Group in the ordina ry course of bus iness which will matme within twelve months fro m the reporting da te
(i i) Letters o f credit are provided by lodging documents to the bank tor purchase of trading goods fro m foreign suppliers wruch will maMC within thJee to six months from the date or tile Iransaclion
J2
26
Aamal Company QSc
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year eoded 31 December 2013
RELATED PARTY DISCLOSURES
Related party transactions Related parties represent major shareholders directors and key management persortOei of the Group and entities controlled joimly controlled or signjficamly innueoced by such parties Pricing policies md tenns of these tnlOSaclions are approved by the Group s management
Transactions with related parties induded in the consolidated financial stalemenls were as follows
20lJ 2012 QR QR
Sale o f goods and SClVices 419034048 415225221
Rental income 1980473 2069386
Purchase of goods and services 1591 38018 300835596
Rental expense 21 780G78 23397334
Bargain purchase gain 8360793
Net assets acquired 78803585
Relat ed party bal nnces AmountS due from and due to re lated parties are disclosed in Notes 7 and 13 respectively These balances do oot carry interest and are repayable OIl mulUlUy agreed dates generally within one year
The Group did not record any impairment of receivables reJatiog to amounts due from related pat1ies in either year This assessment is undertaken each fina ncial year through examining the ftnanc ial position of the related party and the market in which the related patty operates
Parent The Groups ultimate parent is Al Faisal Ho lding Company WLL
Compensa tion or key management personn el The remuneration of key management dming the year was as fullows
2013 2012 QR QR
Short-term benefi ts 7904794 1079595 Employees end of service benefits 408934 439776
8313 728 11235727
33
AamaJ Company QSC
NOTES TO THE CONSOLIDATED FINANCIAL 5T ATEMENTS For the year ended t Decernber 2013
Dilling the year 1he Group issued a XHlUS share of 10 928 of the paid tiP share capilal hdd ilS at 31 DiX2mber 2(JJ 2 mnmuning to OR 555000000 using retamed earnings as of3 December 2012 (20l2 Doe share for every ten shues held as of 31 Dcember Oll amuunting 10 QR 495OO()OOO ling reta1ned earmrgs 28 or 31 Decencer 2D II Jshy
18 SEGMENT INFORMATION
For J)iloogement PUIpltJM rhe Group i organised into business unit bused On LlJeir nature of Acttvitics lud nas fonY reportable segments and the Head Oftklt as bllow$
Propert Tbe segntn cOlists of City C~nler Qlta~ Brunch and Aamal Rea Esmte Branch whicb ll[c invoived in lampIiiog the faJ1ities of retail outlet conpex red e5ttlte nve(mltn$ and property remal buines~s
Trading mld distrib-wion The segmeul Involves wholesalB andlor rBtail distribution of phamlaceutlcai and consunable i1ems hume Epplianccs medica equimenl t-Tes ill1d lubricmtlaquo and II1UllitnEl printing The scgn(rtt includes 6c following entities
Eotl Sina Medical Branch
Aaen Medical Braudt
Amcill Troding and DistoolltlqO Branch bull Foot Care (erier HRnd) Good llre Pbannacy Bf4Uch bull Al FllfJdaq COllpafY wJ~L
InduSNol manuacturing TIle s0groent IOvolves Ulahuactrumg whole~we aliaor rewi dimibUlioti of dccnc cables lid tools ggregJ1es_ ready-IUx connole and cement bI0C~ lI1d provi$ion of servlCcent$ in rdation to iODllltroa Itvestment repair aJ-d Gonstruction of power plwts liiiding of LED ilgluitlg products und management of industnl enterpnses The segment ircludes be folloVting centntitis
bull Aam1 Cemert Industries LL AuraJ Redy1Yl(A BrQTlch
bull Doha Cables Qawf lLL Senyaf IoolJic1es Qatar Holding W LL Advanced Pipes ard Casfs CompQTly WJ L bull GuJfRoch Coroany WLL Ci~San Trading Company WLL hmovafive Lighting Compary WLL
Managed services le segment inyolvc~ provisloH of hOllseiltecpmg mi cleaning services fucditics n-anagemerJ services C1egy s(tvices ttl centfe sltrvicf)s buildiqg lnaintemHlelt aml acting as travel gens The 5cgnltnt includes the foUowing cnti(lcents
An13 ServJce Branch
amli TnlVeJa l5tmh
f-eco Gulf Co W LL
Jolinson Controls Qattl WJL
28
Aamal Company QSc
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended ) L December 20 13
SEGMENT INFORMATION (Co ntinued)
Head Office It provides corporate services to the branches and subsidiaries of the Group
The managiog d irector of the Group monitors the operating results o f its business units separately for the purpose of making decisions about resource allocation and perfonnance assessment Segment perfonnance is evaluated based Oil operating profit or loss of these segments Transfer pricing between operating segments are on anns length basis in a manoec similar to Iraosactions with third parties
Aamal Company QSC
NOTES TO THE CONSOLIDATED FINAN CIAL STATEMENTS For the year ended 3 1 December 20 13
28 SEGMENT INFORl1ATlON (continued)
Operating segments The operat ing segment after elimination or ioter-bra nch and inter-co mpany lrnnsaclioos is presented as follows
Trading (nd Industrial Managed For fh e year elided 31 December 2013 Properly disirjblli ioll manujocljlring services
QR QR QR QR Revenues
- h lemal parties 260360172 578909983 1231522768 S l802210 - Inter segments 1253914 6843 11 8 29639873 3445052 1
Heat Office QR
Eliminoions QR
(n187426) II
Tolal
QR
2J22595133
261614086 585753 lOI 126116264 1 8625273 1 (721 87426) 2122595133
Opera ti ng results Fair vallie gains
Profit I (loss) ror the year
Depreciotion
200811944
245051 107
445863051
2066290
86492834
86492834
4345438
22636250
22636250
33049 089
5157436
5157436
1760305
(47864882)
(47864882)
1334382
267233582
245051107
512 284689
42555504
36
Aamal Company QS
NOTES TO Tl CONSOLIDATED FfNANClAL STATEMENTS For the yeM ended 31 December 20 13
28 SEGMENf INFORMAnON (c)tltioucd)
FOf the yearrnrkti J f DccemOer 2(J12 QR
Revellues - ExlcmlJ partiel 2331 17 509 bull Inter segmcI11S 1168935
-- 234236434 --~- -~--
Openning results 18S2367t Fmt value gains J8S79-4~G
pront LOllS) for the rear 570616154
gt3659
No(
lnlermiddotgment revenues are eliminated on tQHs)idntiOH_
Tadiug ftfid disl d)Ntion
QR
S2S3l7661
324 j
5335493114 ~ -~-----
51384831
54384338
4J9R71(i
Indus idi mamfmturing
QR
1255694537
129U25lS4
56727059
56727059
32752742
slnltic(s QR
55216665 2939H31
S46lOJ96
7427414
7437
[908067
ilfild ()jice QR
(64(41976
Elimination QR
(74tHi2oJ Iii
Totul QR
206936372
2069336372
235721
(64641
131 f613
6245
42541)861
Amnal Company Q$l
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Por tnt yeartndeJ 31 De~embcr 2013
28 SEGMENT JNFORMATlON (contiutlld
Assc-ts and labilities
Tng alld lndtrstfw At31 December 2(113 distnbllrior manufacturIng senices HeadOJJicc EliminatioilS lola1
QR QR QR QR QR
Cumnl 3tS 227552338 620807979 61349 j 415 S()6)86922 (301636995) 1477366090 Noolucrcnt DSeIS 6411868160 12604763 622386238 4348876 (i624548 __p2438051 780
fotal asstl$ 6639420498 1194 1243194217 65698291 513Ql1470 ==-lt03H8l~O()) 853295-870 -~----~ ~---~ -
CUIT)llliabilitics 280995335 1(3511J60 6344(12777 2l0708lJ2 496261185 (3CH636995) 1249603264 Non-current iiatJlitics 7l70L5V2 8008485 HlDi16~43_ 3181668 t433799 ____ ilj534_~57 __ --Totul liahililics 353696897 ___~4159~4~ 734419720 ~4976~~~~~ 1434945711
---~~--~ -~-~~ - _2~~~4~~ (~~~~9~
C1pild expcndimn HI) WO743OOj 1397742_~471l2~--~50 ~51 ~1~623821~~1~_ -~----~------ -~
3amp
28
Aamal Company Q SC
NOTES TO THE CONSOLIDATED FfNANClAL STATEMENTS For the year ended 31 December 20 13
SEGMFNT INFORMATION (continued)
Assets and liabilities (continued)
AI 31 December 2012 Properly QR
Trading and d iSfriblllion
QR
Indusrial manufacfuring
QR
Managed senices QR
Currenl assels
Non-current assets
146491 186
6121 864484
2964425 12 903 7264
73468 1258
549267235
51387098 471 1439
Tolal assets 6268355670 305479776 1283948493 56098537
Head Office QR
468325024
6713643
475038667
Currentliabil iies
Non-current liabiLities 273444 748 1 J10 15024
86054583 7434286
669214261 1288 14977
2 1938953
287 1199
480393637 1253084
Totil lliabiliti cs 390459772 93488869 798029238 248 10 152 48J64672 1
Capila expendirure (ltII L 72865 878 1281254 6647 J356 7169 13 149045
Notes
(i)
(Ii)
Inter-segmeot balances are e limioafed 00 consolidatio n
Capi tal expendiTU res consist of additions 10 propeny plant and equip ment and iovestmenl properties
Eliminations QR
To wl QR
(273735776) (i )
(20308351(i)
1423591302
6689563230
(27576661 1) 8 113154532
(273135777) (i) 12573 10405
257388570
(273735177) 15 14698975
24 1484446
39
29
Aamal Company QSC
NOTES TO THE CONSOLIDATED FrNANCIAL STATEMENTS For the year ended 31 Dcltmber 1013
Fr-A]~ClAL RISK MANAGpoundMamp1H
Objccthes and policies fe Groups principal )uaucill liabilities comprise imltresl bctmllg loons and IxmowHgs baRlt ovetda1s amounts due to fclaled par1ies and tracte accounts payable The main pUlJXSi of thesc financial liabilities is 4J mise firmne or 610 Grmps operations The G0JP bas various fimmcial assets such as ttadc accounts receivable lInlOlmts due from related parties bark balances tltCntion receivable and other receivables which arisgt directly fran its cperuoonamp
The maiH ri~ks an3ing Joru (be Groups UnariCJlll illslrumenls jle market risk cretiJt nsk and hmdity risk Til BoarD ofDtrcctO$ reviews end agrees policies for mzrAgbg Caltt f hespound ri~k ihkh arc summariscd beloW
VIarktt risk yenfatket risk is the risk Um changes in market prices $Uch as intfcst rates and hreig lttmeocy ect14nge rilles Vltl1 affect the Groups profit eqwty Dr value tf its hoJdiI15 of financial instrl[Thnls rile objecivpoundj of marke1 risk mUnllgcrlcnt is to manage uld 1~ontr(ll tho tr))rket risk expo-sure vithir acceptable parfI-etcJ$ while optimising rerUID
Equit) price risk ampjuity prtce risk is the risk hilt the Group ampearnings will be affected as a rcmt (If luctttltions in fm vdue of ~qui-gt
mstwnents Eqlliry price risk arises from availabtetor~sale inv2strnems However the Groups exposure to eqmty price risk IS minima as II doesn hold sitl)iftrmt ailableAor-511le inYestrmmrs
[merest rate risk The Groups fimiruial poundS5ot ampId liaojlilies (at Rl $uJject to int~~ rate mk compnse brmk depoils interst bearing loans and bOITQwjags and bank overdr-afts At the reponwg dalt tbe [merest rale pronle of Ill Goups intexst bearing fbi4rdd instruments as fliows
11113 20i3 QR QR
Fued liIeryS refc insfrvrnellts
Fmmcial assets 113035962 111913394 FrOltwial liabilities --1~203712l) 1252t43~1
9)OI~ (13350972)
Fhlllting inireSI rate ns1lmlttrs Fanctl~ Isseis 127024345 ID43848o Fllllocial liabilities _-(i~9347~ (94))48926)
(836)64116)
The Groups exposure to t~ ris of changes in marXet interest fltltes relztes primariiy to the Groups financial assets and lizbitdic$ with t1Oltttirg interest mte~
lhe loEowing able demonstrates the ampmitivity nf the eonsolidattXI statemen1 of income 1) caonaly possible chonges in in1jfgtst rmes by 25 basis points with all othe vari)ble3 hdc umstant The sensitivity of the CooiK~ljclatid statement of inc(me $ the eft(ct of tb assumed changes in lnterdt rales for one year bf1sec on the floating rate financial assets and fimmcial hablhw$ held at 31 f~r The effect of deae-ascs in interest ral~ is cXp0Ctct to be equal and opposite to the effect oHlle increases sllQvro
Changes it Eftx OIl
00513 [oms profit QR
2013 Floating mterest Hlte instruments ----2$ bp (1649776)
2012 Flv-ating irkfiSt rale instrumenls +25 bp (209[9(1))
~--------- -~~ 40-middot------ _ _ shy
29
Aamal Company QSC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 3 1 December 2013
FINANCIAL RISK MANAGEMENT (continued)
Foreign currency risk Foreign currency risk is the risk lhilt the value of lhe fi nancial instruments will fluctuate due 10 changes in fore ign exchange rates
T rade aCcOlmts payable and accrued expenses include amounts due in foreign currencies mliniy US Dollars UAB Dirhams Great Britain Pounds (GB P) and Euros of which the Group has a currency risk primruily on the baJmces payable in Euros and GBP amoWlting 10 QR 14400634 (2012 QR 17214046)
The Group does not hedge its foreign currency exposure As both Qatari Riyal and UAE Dirhams are pegged to the US Dollar balances in US Dollars and UAE Dirhams are not considered to represent significant currency ris k to the Group
The table below indicates the Group s fore ign c urrency exposure on its monetary assets a nd liabilities The analysis calculates the effect o f a reasonably poss ib le move ment of the QR curre nc y rale against the Euro and GBP with all other variables held constant on the consolidated slate menl o f income (due to the fa ir va lue of currency sensitive monetary asse ts a nd liabilities) The e ffect o f decreases in fo reign c urre ncy exchange rates is expected to he equal and opposile 10 the e ffect of the increases shown
Incramp1se ill
f oreign cUlrency rate
0
the QR
Ellecl on profil
QR
2013 +5 (720032)
20 12 +5 (860 702)
C redit Tisk Credit risk is the risk that one party to a financial instrume nt wi ll fa il to discharge an obligation and cause the other party to incur a financial loss TIle Groups exposure to credit risk is indica ted by the carrying amoWlt o f its financia l asse ts whic h consist principally oftmde accollilts receivable retention receivable amounts due from related parties othe r receivables and bank baLances
The Group sells its products and prov ides services to vario us panies It is the G ro ups policy that all customers who wish to obtain on credit lerms are subject to credit verificalion procedures to ensure c redit Ilonhiness Each new customer is analysed individually for creditworthiness before the de livery o f products Of services Custo mm tbat fai l to met t the credi tworthiness may transact with the Group only o n prepayme nt basis Property rentals are mostl y received in ad vtnce or conlrlCled wi th post dated cheques 10 additio n receivable balances are monitored on an ongoing basis a nd the purchase limils are established for each c redit custoroer which are reviewed reguJarly based on the level o f past transactions and senlement The Groups max im wn exposure with regard to trade aCCOWlts receivab le net ofa llowance re nected allhe reporting date was ilS fo llows
2013 2012
Business SJgmelll QR QR
Property 15478832 19386326 Trading and distributio n 194343 597 179748274 Industrial ma nufac turing 183119753 131578668 Managed services 18069385 14547389
411 011 567 345260657
41
29
Aamal Company QSc
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For tbe year eoded 3 J December 20 13
FlNAJICIAL RISK MANAG EMENT (c-o Dtinued)
Credit risk (continued) With respect to credit risk arising from the other financi31 assets of the Group the Groups exposure to credit risk arises from default of the counterparty with a maximum exposure equal 10 the canying amount of these instruments as follows
2013 QR
202
QR
Bank balances Amounts due from related parties Retention and other receivables
436136756 214439950 48290351
36788129 t 171525363 74082203
698867057 613488857
The group reduces the expoSltre of credit risk arising from other financial assets by maintaining bank accounts in reputed banks and providing services only to creditworthy re lated parties
The management cons iders the bank balances and a mQUIIIS due from related parties as high grade fi nancial assets and lfade accounls receivable and other receivables as sundard grade financial assets When a finltmcial asset is identified 10 be impaired the managemoot downgrades such assets to impaired category and provides adequate allowances
Liquidity risk Liquidity risk is the risk that the Group will not be able to meet its fmancial obligations as they fu ll due The Groups 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 nonnal and stressed conditiom without incurring unacceptable losses or risking damage to the Groups reputa tion and is to maintain a balance belWeen continuity of fuoding and f1eilibility through the use of bank overdrafts and bank loans and borrowings
The Group monitors its risk to a shortage o f funds using a recuning liquidity plaOfling 1001 TIllS tool considers the manuiry o f financial assets (eg accounts receivable) and projected cash flows from operations The Groups teons ofsales or services require arooUIlts to be paid within 30-90 days from the invoiced dale
42
29
Aamal Company QSc
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For tbe year ended 3 1 December 2013
FrNANClAL ruSK MANAGEMENT (contiQued)
Uqujdity risk (continued) The table below summarises the ruaruriJy profile of the Groups financial 1iabililies a t 31 December based on contractual undiscountcd paymeots
2013 Interest bearing loans and borrowings Bank overdrafts Trade accowus payable Other payables Amounl~ due (0 related panles
201l Interest bearing loans and borrowings
Baok overdrafts Trade accounts payable Other payables Amounts due to related parties
On demand
QR
6836280
6836280
011 demand QR
2885090
2885090
Less than 3 months
QR
521324473
303638792
47406830
2530~480
898675575
Less thall 3
months
QR
469839033
10754JJIO 37543236
1964504 1
634568620
3 10 J2 mOlllh$
QR
239333328
16378865 20210580
2289~11l
298816884
3 to 12 monlhs
QR
365476972
159621 37 J 24745342
30092716
579936401
1to 5 years
QR
J 60092748
160092148
1 to 5 years
QR
248472226
248472226
gt 5 years
QR
25261598
25261 598
gt 5 years
QR
7648000
7648000
TOlaf
QR
947012147 6836280
320017657
67617410 48199591
1389681085
Tota
QR
109 1436231
1885090 267162681
622 88578
49737757
14735 10337
43
30
Aamal Company QSltc NOTES TO THE CONSOLIDATED FlANCIAL STATEMETS For the year ended 31 December 20 t3
21 F~ANClAL RlSK MAiAGEMElT (continued)
Capital management The Boards policy is to maintain a strong cepit1 base so as to rnainmin investor creditor and market ronfoonee and to SUSWlJ) fumre dcltclonnent Gf the buinest The Board of Directors rronitortl the tapital whkh tbe Group defines as wlal $parcloders equity excluding nonmiddotcornroliing imerests and the level of dividends to orrunury srarellOJdcfS
The Board also reeks to ITIaimain a balance between the higher (ctums (hat might be fA-~$ihle With higher leves of borrnwings end Lle edvnrJages and security named Sy it sOMd Cilpitai posi[ion The GfCup~ k1rget is to achievfl a return on slureholders equity (exclJding aonwurrolJiug iorcf(sts) greater lll(ll1 he wcighlcd average inres exxmse on mrerest bearing Ivens and oorrowing
The (lf0t-p nl)nDg-e ils cnpital structure and makes adjustneal lOll in light ofchang2s in economic nd bttincss cordjlons and shareholders expe1ationJo chmges veremiddot maCo HI Lleuro objecttves polilCS or proCCSSC3 during the years erded 31 D~mber 2013md 31 Dtccmlxr2Ql2
The Group monitors the capit2J using a gClting fatio which IS dep divided by caplla plus debL The GtOwgts policy is to keep ttJe ge-anng rmio bclew 40 Tbe Group iLdtdes withb debt imete-51 beagting loans ard ~OITORlngs less cash and cash equtVaknts Capltal includes eqmty attributable 10 the equity tolders oft~e parcrt
2013 QR
2(i2 QR
fmerest bearing loans and borrowings lcss- Cash and cas ltYJUvalcnts
9i4lJ05301 _~ (429JfJl4761
1004845296 (649)6201)
Net debt
Toa capital
Capita and net debt
699849045
~ringrttio
FAIR VALtES OF Fl~ANOAL f~STRUMETS
Finarcial iostrumenL~ cOlnprise tina~lctal assetS carl finailcialliabilities
Fmancial assets colJist of bank balance) short 1Cm bank dcposis amounL dve dom rc)ltted partilt)$ rekntion and other receivables and ttade accolmis rceivabe Finatlclll habiilics cgtmsist of banilt ovcrdratls jnerest bearing lOil1S and bOrowings amounts due (0 nliled partiG~ ane trade x-ounls payable
The- fair values of hese financial inStrumen1S except Jo-- imCfest bearing loam lHld bOlToving aproKimate lhdr cMryinJ vlhes due to the Slort temt mzrutiiles or these instrument
Tllc faiT value of iotcnst beating Nns and borrowin2s ae estimate( based on discoumed ltash flows twin int(s rale- cune-ntly nvailagtk fur tilt debt or sinuiar tetnlS an-a rell1lmng matunties
31
Aamal Company~Q=-ScC ______________~______
~OTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For fhe year ended 31 December 20 t3
SlGNIFICANT ASUMPTIONS ACCOUJTING JUDGElE1TS AND F8TIMATFS
impairment (If accoonts receivable n etrnwe of lhe collectible anoun of trade accounlgt reccvable is made when collection of the full lHl1OUt i~ nO looger probabk FOI nCividualty significitIl amounts this estimation is p~rformed on an indh-idllai a$[$ Amomts wHcb arc not indivldl11Uy significant but wluch are past due ZTe tsscssed collectively and an aJlQwaccc applied ucc()r~Jng to the length of lime past due based oc histnncal recovery nlJes
hnpalrment of inHntnries lavenoncs are held at tho lower of col and nol realisable value InIOn inventoncent$ becone old or 0-~amplete an estilTJte is mate of their net j alisable vulue For indiviolhlUy significant amountS this cstinaunrt is performec all aD lndividwl osis Amotlnts whieh are fl0t individually significan( btll which ltIre old at obsolete wx LltSessed wllecivdy md a provisior is applied sccnrding to the invenrory type and be dep)ee of ageing 0 cDsolescc1ce based on anticipUled selling prices
Classifigt1ltion of El Sew(gtdy Cable Qatar WLI ali a j(lint vwture pound1 Sovedy Cables Qatar is a limited hability company whose kgal fum confers SCprm11ior bernten tbe jXliiies 10 ~he jomi lfranpement Snd the Company Itself FurthenrlOre then IS no oontractua] arrmgelTeot or any oibe aus aod circumstriliCe$ that iocik41to tht he putic5 [0 the joint flJTIlrgernelit bave rights to the ssetl and obligrtdons fo~ the liabilities of the joint ilrrongement Acoordingly El Sewed- C[jbl~s Qamr WLL is dassifiecl 7S a joiut enrtrr of he GWtp
impairment of goodwill G0oovj)1 embedded in th~ cot 0 aquisitior of subsidiaries and eqmtj-iccounled iflV(stees ire teswt for irl1jXlirmnt aHuaily Tbe calculations of value [n use fO( cfish gecj~r)lilg units (loring to real nte projecg are rtost sensitive to tin IDHowing assumpti015
Grosgt i1wginmiddot Gross Ilmrgins arc lmsed on avrage values tuhje0d in (he [Xrioo preeedhli (e siaM of the budge xnod T1esC at( mcreased over the budgel period for mticipatltX efficiency Hnprovemots
DisC)unr r(es Discount rotes represent th cl1tent mark as~ssmetlt of the risks specific te ech cash geocroting unit regarding lhe time value of money ilnd mdividu)l risks of he tmtieriyilg assets whICh have not been inwrport1eti it the Citik flow estimates The dj~(OUrl flte tlkulation is based on the speclfte circurnsthLCes of lile Group and its opltllatJng segn)~nts (md derived (ff)rC it weighted avaage (XSt 0f apilaJ (WACC) Tb fACe (akw into uoount both deb and equity The 0$1 of equity is denved from dlC expected return 01 investmenl by the Groups investors TJc Gos10( deb is based on l1e borrvwings the Gmup IS obllsxl to service SC~lletllmiddotspecific r5k IS incorxt4too by applying individual bera facto The betn mctors ire evauatcentd annuaHy bhseci on pubJicly aVflllabe murked earn
Fair value ()fnHstmeni proputies The fuit laHe 0 nvestmel~ propertis is deltrrnlnzd b cxterrwl indepzfldell property valuers laving appr0priate recognised professional quabfiillions and recenl xperience H1 the localjl)n and G-tegory 0 the oroperty being valued
Useful hes of PfQPcrly plmr (llld zqulpment The Groups management detennints th estiunted useful jives Df It~ property plan and equipmnl fix calnurjng depreciation Thi5 e~timJte is 6lermind after cinsidring 1b expeelcd usage (1f the a5sclt [hysical l101t and (eas tedmiltal Dr com~ercia obsolesccnce
Gotlg Qncen
ibe Groups mangerncnt UiS made aJ assessmeot cf the 011115 ability (0 COllllOUC liS a going conct11l Imd is satsl1ed hat me Group ms the resources to contmue in business for he foreseeable fu1urc he1hennort he management is no aware oC lny material Hncertainties that lray CH~t signinchnt doubt tlPDfl the Groups ability 10 continue as a going umcem Therefore titpound lotlsolidatcd finilllcij stftemeols comirme to be prepltd on li g0ing concern basis
Aamal Company QSc
NOTES TO THE CONSOLIDATED FlNANC[AL STATEMENTS For the year ended 3 1 December 20 13
32 INCOME TAX
Certa in subsidiaries of the Group which have non-GCe ownership are subject to income tax under Qatar Income Tax Law No 2 1 of2009 The iocome tax is charged on the share of profits attributable to non-GCe shareholders For the purpose of these conso lidated fi nancial statements the income tax liability oftbe foreign shareholders has been excluded given that the non-GCe shareholders have agreed under the shareholder agreements signed with the Group to bear the fh lliiability and make necessary payments
33 COMPARATIVE INFORMATION
Certain comparative figw-es of the previous year have been reclassified 0 coofonn to the current years presentation However such reclassifications are oat materia and do not have an impact on tbe previously reported net profit other comprehensive income or the total equity for the comparative year
The impact from the resta tement of comparative infonnalion as a resuh of adoption of IFRS I I - Joint arrangements is detailed in Note 32 Changes in aCCQu(lting policies
46
10
Aama Company QSC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 31 December 201 3
9 EQUITY-ACCOUNTED INVESTEES (continued)
Counlry of incorportllion
Relationship Proportion ofownership and lotilfg power held by the Group
203 2012
EI S~wedy Cables Qatar W LL Frij ns Structural S teel Middle East WLL Al Ftfazdaq Company WLL
Qat~
Qatar Qatar
loint venture Associate Associate
55 20
55 20 35
Note With effect from 1 January 20 13 the mlnagemeot of the Group has reclassified the investment in Al Farazdaq Company W L-L from investment in associate to investment in subsidiary This is based on the transfer of share holding by the other shareholder whereby the conlroi o f AI FOl razdaq Company W LL bas been assigned 10 tbe Company
INVESTM ENT PROPERTIES
a) Reconciliation of carry ing amounl 2013 202 QR QR
AI I January 611334701 8 555 1835348 Additions 9568047 1727191 87 Transferred from property plant and equipment (Note II ) 34519828 Net gain iTo m fa if value adjlls tment 245051107 388792483
At 31 December 6402486000 6 11334701 8
b) Measurement of fair value
The fair values of the Groups inveS hnent properties as at 31 December 201 3 and 3 1 December 2012 have been arrived al on the basis of valuations carried Ollt on the respective dates by professionally qualified independent valuers not related to the Group The independent valuers have appropriate qUlli ficatioos and (eceJ11 experience in the valuation of properties in fhe relevant locations The fa ir value WltlS determined based on market comparable approach that reflocl s recent transaction prices for simillt1r properties and discounted cash flo w and income approach techniques
Details of the Group s iovestment properties and infonnation about the fa ir vn lue hierarchy as at ) I December 20 I J are as fo llows
IIvestment propenies
Level 3 fair vallie
Al I Janu ary 6 [ 13347018 Additions and trans fers from property plant and equipment 44087875
Gain included iu prom and loss Net gain from fair value lt1djuslmem 245051 107
AI J I December
The Group recognizes transfers between levels of fair value hierarchy as o f the end of the reponing period during whicb the transfer has occurred There were no transfers between the fai r va lue hierarchy during the year
23
10
Aamal Company QSc
NOTES TO THE ONSOLlDA TED FINANCIAL STATEMENTS For the year ended 3 I ecember 201 3
LNVESTM ENT ROPERTIES (contin ued)
b) Measuremen t 0 (air value (conti nued)
Vau t ion technique an significant unobservable in puts
The valuer has applied t e income capitali zation discounted cash flow and comparab le methods to detennine the market value of the lnve tment propen ies Significant unobservable inputs used included expected market rental growth rates (an average 425) occupancy rates (approximately 90 to 95) and risk adjusted discount rates (approximately 5 to 7 0) M y significant change in these inputs can impact lhe fair valuation of investment propcnies
24
Aamal Company QS c
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For che year ended 31 December 2013
11 PROPERTY PLAi~T AND EQUIPMENT
FumilUre Truck mixers fIXtures and Complllers
Leasehold and maor Plum (fd office and relaed eapiowork Buidings improvements vehicles machinery eqllipmcni sofMore in progmiddotcss Total
QR QR QR QR QR QR QJl QR
At I January 2013 137870126 371 88 132 9595813 1 262536261 19 580954 14864 385 561 32447 6241 30436 Additions 948)65 2618 100 5367399 859061 111 5268 137147581 148055774
Relating to d isposalswrite-off (1042642) (4390496) (77157L) (589150) ( 184075) (6977934) Transfer from capilal work in progress 1505 310 164 336 3601776 ( 150000) 1182741 (6304 163) Transrer to investment properlies (Note (0) (345 19828) (345 19828)
At J I Dttember 201 J 139375436 J7 258~ ~1 85735 270733865 19700865 169783 19 152456037 _73068~448
Depreciation AI I January 2013 16133915 J6902 529 49087707 68783 065 11 980009 tl71 595 3 174603 178 Charge for the year 7059805 3237150 5390767 12249797 2849162 1768823 42555504 Relating 10 disposalsJvri te-off (664709) (4 3 1716 1) (724322) (552939) ( 18 1993) (6441 124)
At 31 December 201 3 23193 720 19474 9 70 50161 313 90303540 14276232 13302783 2 107 17558
Net carrying amounts At 31 December 2013 116181J16 _17783221 44024422 180415325 5424633 3675536 __l2456O37 JJ9970~890
Notes (i) Depreciation charge for the year amounting 10 QR 33 164382 (201 1 QR 3303091 6) is included in tbe direct costs and an amount of QR 60055 (20 12 QR 36939)
has been capiulised under capital work in progress
(ii) The capital work in progress includes capitalised borrowing costs amounting to QR 125645 (20 12 QR 15358)
(ii i) The buildings are constructed on a plot ofland taken on a loog term operating lease
25
Aamal Company QS c
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 31 December 201 3
II PROPERTY PLANT AND EQUIPM ENT (continued)
C05I~
At 1 January 2012 Additions Acquired through business combinations (Note 4) Relating to d isposalswrite-off Transfer from capital work in progress Transfers
Buildings QR
137434400 435726
Leasehold improvemellls
QR
38137377 446J 04
144 103 ( 1539452)
Truck mLCers and molO
velricles QR
83427661 11464679
1697609 (631824)
Plant and machinery
QR
249335437 97264 85
35 14 132 (99498)
59705
Furniture fir ures and
office equipmem
QR
22845309 667586
192042 (3696457)
98000 (525526)
Computers and related
software
QR
158 19519 87 14 14
141837 (266 1733)
908078 (2 l4730)
Capitol work in progress
QR
12104889 451 53265
( 1065783) (59924)
Total (JR
55910459 8 68765259
5689723 (862 8964)
(800180)
AI 31 Dttember 2012 137870) 26 371881 32 95958 13 1 262536261 19580954 14864385 56132447 624 130436
Depreciation AI Jaouary2012 Charge for the year Acquired wough business combinations (Note 4) Relating to disposalswrite-off Transfers
9144666 6989249
)4 3 16620 3410618
144103
(96 812)
42558404 548 1613
1671942 (6242 52)
44555 290 2 1398849
2890797 (6 187 1)
12392584 3 182899
169005 (3558466)
(206013 )
12235266 2077633
136959 (2627283)
(J 0662)
135202830 42540861
5012806 (7840684)
(312635)
At 3 L December 201 2 161339J5 16902529 49087701 68783065 11 980009 11715953 174603 178
Nel canying amoWlts
At 31 December 201 2 12 173 6211 2028560 3 46870424 193753 196 7600945 3148432 56132447 449527258
26
12
13
Aamal Company QSC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 31 December 20 13
ACCOUNTS PA YABLE AND ACCRUALS
Trade accouots payable Advances from customers and tenants Accmals Social and sports activities levy Other payables
AJIOUNTS DUE TO RELATED PARTIES
Name
Arab Compaey for Fiber Products EI Sewedy EIC( lric Ho lding Egypiasl Egypt Egyptlech Egypt United Industri es Company WLL Johnson Controls Air condi tioning aod Refrigeration Qatar WLL pound1 Sewedy Cables Egypt Johnson Controls Air conditioning and Refrigeration rNC Dubai United Wire Company WL L Gelteo Company W LL - Gelteo Refr igera tion and Airconditioo ing CampC Lightway nc AI Shaab Group of Companies Other related pruties
NO M Related party transactio l)s a re disclosed in Note 26
2013 QR
320017657 30486837 26924669 41 761 843 25855567
445046573
2013 QR
18517474
4902528
6531231 6404578 3215821
2825884 75 7825
3467288 263715
1313247
48199591
2011 QR
26716268 1 27410234 222575 76 28954726 33)33852
379119069
2012 QR
18380528 91458 82 54 13849 1 11 6 135 5374039 35291 2020359 1693323 1064744
670 179
11 0873 12 18650
49737757
27
14
Aamal Company QSC
NOTES TO THE CONSOLIDATED f fNANCIAL STATEMENTS For the year ended 31 December 201 3
INTEREST BEARING LOANS AND BORROWINGS
NOles Malilrify
2013 QR
2012 QR
CoMl Loan 2 Loan ) Loac4 Loan 5 Loan 6 Loan 7 CoMB Loan 9 Bills discounted
(0 (ii) (iii) (iv) (v) (vi) (vii) (viii) ( ix) (x)
lune2014 Seplember2014 January 2015 November 2016 December 20 16 November 2017 Jllne20 l J December 20 7 OClober 20 19
172070387 440000000 50544000 40261 621 81387109 19920036
6] 43890 62626967 42522794
915676804
298324180 440000000 10 J088000 57955030
100 168750 2 1300492
407728 1 782871 1
35000000
1065742444
Less Defe rred finatlcing cost (771 503) (897148)
914905301 1064845296
Presented in the consolidated statement of financial positioo as fo llows 20)3 QR
201 2 QR
Current ponion Non-current ponion
749520820 165384481
825568489 239276807
914905301 1064845296
The dete rred financing costs consSt of arrangement fees The movements m the deferred financing costs were as fo llows
203 2012 QR QR
At I January 897148 332 661 Addjtions during the year 1 062565 912506 Amortised during the year (218amp210) (34801 9)
At 3 1 December 771503 89 7148
28
Aamal Company QS C
NOTES TO THE CONSOUDATED FlNANCIAL STATEMENTS For tbe year ended 31 December 2013
14 INTEREST BEARING LOANS AND BORROWINGS (continued)
Nolec
(i) Loao I i USD 93000000 impon 10n moi lily obtoined to refimnee he Icne~ of edit The 10 IT interest at commercial fate and the interest is paid at monthly intervals The fucility is repayable within ISO days including the usage period under letter ofc redits
(ii) Loan 2 is a secured bridge loan obtained to settle an existing loan and working capital requirements of the Company The loan carries interest al coOlJllercial rates and interest is 10 be paid on quarterly basis
(iii) Loan 3 was obtained for the pWpOse of financing capital ependiture and direct payment to suppliers contractors and 5ub-controctors The 10011 CMries interest at commercial rate and the inte rest is to be paid q Uar1erly The fac ility is repayable in IS quarterly iostallmenls starting I July 20 11 and ending I January 2015
(iv) Loan 4 was obla ined for conSlruclion o r an inveslmenl property The loan is seclJed by 0 primary mortgage over the some property and corporate guarantee of the Aamal Company QSC Tbe loan carries interest at commercial marke t rate and is payable in quarterly instalments
(v) Loan 5 represents a loan fOlcility obtained in two sepnrole tranches amounting to QR 309 825 000 (USD 85 million) for the purpose of refurbi shment and construction of fociJities io one of the investment properties The loan is repayable In 16 equal quanerly instalmcnlS for individua l tranche commencing from March 20 1J The loan carries interest at conunercial rJtes
(vi) Loan 6 represents secured loans obtained ffom a commercial bank in the previous periods for the purchase of heavy equipment and machines and were merged on 15 November 20 12 as a comb ined loan This loan is payable by 59 equal instalments of QR 426000 with (I last inSlalment of OR 438 326 with effect fro m 01 October 201 3 The loan carries interest at commercial market ra tes
(vii) Loan 7 is il tmst receipt banking facility obtained for the purchase of inventories This carried interest at conunercial market rates This loan was full y settled during the year
(vii i) Loan 8 represents secured loans obuined from a commercial bank in the previous periods for the purchase of delivery trucks and machinery and were merged on 22 October 2012 as a combined loan The loan carries inte rest at commercial market Tates and is payable by 59 equal insta lments o rQR 160000 with a last inSlOlmem ofQ R 128000 with effect from 3 1 December 2012
(ix) Loan 9 is an Islamic Financi ng Arrangement obtained for construction o f a manufacturing plam and as o f yearend ba lance represents partially drawn amount out of totil1 facility of QR 655 68000 The loan is secured by joint corvorate guarantee by the shareholders The loan carries profit at Islamic Financing rates and re-payable in quarterly instalments starting from the end of the 24 months gmce period from the date of loan drawn
(x) Bi ll discounting is a loan fac ility from banks The purpose of the arrangement is to discount bills locally and carries interest at current commercia l filte
15 EM PLOYEES END OF SERVICE BENEFITS
Movements in the provision reHectelt in the consolidated SLo1tement of financia l position were as fo llows 2013 201] QR QR
At I Jan uary 18111 763 17877937 Provision made during the year 4056969 4205499 Acquirelt through business combinations (Note 4) 349272 End of service benefits paid during the year (2210756) (4320945)
At 3 1 December 19957976 18 111763
29
Aamal Company Q5C
NOTES TO THE CONSOLIDATED FINANCIAL STATEMETS For tile y~ar ended 31 Dee~mber 2013
16 SHARE CAPITAL
2013 2012 QR Qq
AtI1l1)nud 60000)000 (20 2 544500JJOfn shares ofQR iii Cilch 60i)iQOOlOO 54450lt)0000
21)13 2012 Numher of
siMtS QR shares QR Issued Mtldfully paM At lJamld) 544SfWllOfJ 5445(100001) 495000000 49500000)0 1511C ofbonus S1i1-C ___ 5550~OOO 555000000 49SGOOOO 495000000
At 31 Decenef 6(OOampQllf1(1 ---14450O000 544~OOOOOO
All ampates m~ of a110 clss and caL equal voting rights
17 LEGAL Reuro5ERVE
As required by Qatar Comnertai COfrp7lnies Lav No5 of 2002 lOfp of the profit for the ye1J as a rru1imllli silould be mmsfened to legal re~erve The reserve is lot normay [lytiabe tor distribution except ill he cixcuJUstllrtUS stipulated m the above ~lemi0ntd GIW
IS HEVE1TE
2013 l)n QR QR
Sale of goods 1726893265 i709057~(iO
Renlal income UiO362322 133117509 S-ice income 858695 33940731 CornrrusslOlL Incentives and agency fces 44695S1 422~_632
212259$)33
19 DIRECT COSTS
2013 2)i2 QR
C 051 of inven(feS recognisedlIS an exptns 1522929956 497210830 Dind sL1ries lmd wages 601 [1336 5137856-8 Operating eXpenses on nml estate p~opet1les 36)711316 3041H504 fJepreciatiort (Kate I J) 33164382 B03091pound Operators marhgerrt6nt fees 14508588 li667989 Provisicn Qr obsolete and skwlt moving mvenlories (K)tc 8) 2380617 2208263 Other operating ilxpenses _31~3982 _ 3674946
1702139171 JS9653OI tgt
Aamal Compall-yQSC________________
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For lthe year ended 31 December 20 11
2G OTHER NeOiI
2013 20J3 QR QR
Interest mcume 2824216 2)314392 Profiv( loss) 00 disposal of property plant aoe eqUlpmem 737647 (l7362G) Eargain ptmnJse gain (Kote t) 8360793 MIsceJlaneous income 5723356
2013 2012 QR QR
ManllgetnUI hrQ empl(yees ws 55170302 55lt035middot1 Rent 23596799 2594915 Allowance for impaimlcot oUrsue aCQl1ot$ rc(Xjvalle (Nole 6) 129459(i 11613120 flBumcce ane profcampiitmJI fees 2IU9263 209J902 Corununication OOtHS 1935123 1649155 Trllining tid ouSfjt$s developmccl 950476 L095764 Re]X1in and mainle-nilnce 21)11SflS 2)2 I Poslag-c prjnting acri stationery 610299 541159shyvllsltdlancous expenses _~~~664 1lt2
-~~~ 125162812
22 fIN~lCE COSTS
2013 2amp2 QR QR
Inleres epen~ 42866312 5773U4B Am(vtisJliorgt ofdefcentrred financiog coStS __ 2l)tl26~~ gt3661
44930877----=
58063009
23 BASIC A~n nHUfED EARilNGS PER SHARi~
Basic trdTJogs per hue is caculatid 0y llividing the pwfill0( Ihc year attriouiabk (0- equity roldc-5 of the parent by lhi w~iglwxi avrage number of ordinary shares 0JstandirJg dulting tht_ year During Ihe year lil~ Conpmy i-sued and CBpii3lzed bonus shares lnd awmJingl) me previously ~eportod earnings per shac have blOM restatc(i
20i3 2012
Profit feT the year auributable to Cluity holderlt of the- paren (QR)
Weighted aVCTage number ofshares outstanding during the year (i)
Basic Jd diluted earnings per share (QR) 085
59985U413 shy
~~--~~~~- ~------J 1
23
Aamal Company QSc
NOTES TO THE CONSO LIDATED FfNANC[AL STATEMENTS For tbe year ended 3 l December 2013
BASIC AND DILUTED poundARNINCS PER SHARE (continued)
NOles (i) Th wigh d m nlg urnb of hres foc h P of lruling ~migs pee share h bee kulated
as follows 2013 20J2
QU3lifying shrues allhe begi ll1ling of the year 544500000 544500000 Effect of bonus shares issued and capitalised 55500000 55500000
600000000 600000000
Less T reasury shares (149587) (i357SI)
Weighted average number of shares at the end of the year 599850413 599864249
(ii) There were no potentia lly dilutiw shares outstanding at any time during tbe year and hence the diluted earnings per share is equal to the basic earnings per share
24 COItIMITMENTS
20 1] 2012 QR QR
Estimated capital expenditure approved and contracted for at the year eod but not provided for
Investment properties 2964000 8 139063 Property plant and equipment 16386500 63759762
19350500 71 898825
Operating lease commiIOlenlS under noncancellable lease agreemenlS
Payable wilhin one year 990806 702000
990806 702000
25 CONTINGENT UABILITlES
The Group had the following contingent liabi lities from which it is anticipated thai no malerial liabilities will arise
2013 2012 QR QR
Letters of guaramee 474551239 394255203
Letters of credit 7678499 194299384
NQles
(i) leHlaquogt of gu indud penonmnlaquo tend nd bid bonds d pymenlt g gi to suppliers and contractors by the Group in the ordina ry course of bus iness which will matme within twelve months fro m the reporting da te
(i i) Letters o f credit are provided by lodging documents to the bank tor purchase of trading goods fro m foreign suppliers wruch will maMC within thJee to six months from the date or tile Iransaclion
J2
26
Aamal Company QSc
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year eoded 31 December 2013
RELATED PARTY DISCLOSURES
Related party transactions Related parties represent major shareholders directors and key management persortOei of the Group and entities controlled joimly controlled or signjficamly innueoced by such parties Pricing policies md tenns of these tnlOSaclions are approved by the Group s management
Transactions with related parties induded in the consolidated financial stalemenls were as follows
20lJ 2012 QR QR
Sale o f goods and SClVices 419034048 415225221
Rental income 1980473 2069386
Purchase of goods and services 1591 38018 300835596
Rental expense 21 780G78 23397334
Bargain purchase gain 8360793
Net assets acquired 78803585
Relat ed party bal nnces AmountS due from and due to re lated parties are disclosed in Notes 7 and 13 respectively These balances do oot carry interest and are repayable OIl mulUlUy agreed dates generally within one year
The Group did not record any impairment of receivables reJatiog to amounts due from related pat1ies in either year This assessment is undertaken each fina ncial year through examining the ftnanc ial position of the related party and the market in which the related patty operates
Parent The Groups ultimate parent is Al Faisal Ho lding Company WLL
Compensa tion or key management personn el The remuneration of key management dming the year was as fullows
2013 2012 QR QR
Short-term benefi ts 7904794 1079595 Employees end of service benefits 408934 439776
8313 728 11235727
33
AamaJ Company QSC
NOTES TO THE CONSOLIDATED FINANCIAL 5T ATEMENTS For the year ended t Decernber 2013
Dilling the year 1he Group issued a XHlUS share of 10 928 of the paid tiP share capilal hdd ilS at 31 DiX2mber 2(JJ 2 mnmuning to OR 555000000 using retamed earnings as of3 December 2012 (20l2 Doe share for every ten shues held as of 31 Dcember Oll amuunting 10 QR 495OO()OOO ling reta1ned earmrgs 28 or 31 Decencer 2D II Jshy
18 SEGMENT INFORMATION
For J)iloogement PUIpltJM rhe Group i organised into business unit bused On LlJeir nature of Acttvitics lud nas fonY reportable segments and the Head Oftklt as bllow$
Propert Tbe segntn cOlists of City C~nler Qlta~ Brunch and Aamal Rea Esmte Branch whicb ll[c invoived in lampIiiog the faJ1ities of retail outlet conpex red e5ttlte nve(mltn$ and property remal buines~s
Trading mld distrib-wion The segmeul Involves wholesalB andlor rBtail distribution of phamlaceutlcai and consunable i1ems hume Epplianccs medica equimenl t-Tes ill1d lubricmtlaquo and II1UllitnEl printing The scgn(rtt includes 6c following entities
Eotl Sina Medical Branch
Aaen Medical Braudt
Amcill Troding and DistoolltlqO Branch bull Foot Care (erier HRnd) Good llre Pbannacy Bf4Uch bull Al FllfJdaq COllpafY wJ~L
InduSNol manuacturing TIle s0groent IOvolves Ulahuactrumg whole~we aliaor rewi dimibUlioti of dccnc cables lid tools ggregJ1es_ ready-IUx connole and cement bI0C~ lI1d provi$ion of servlCcent$ in rdation to iODllltroa Itvestment repair aJ-d Gonstruction of power plwts liiiding of LED ilgluitlg products und management of industnl enterpnses The segment ircludes be folloVting centntitis
bull Aam1 Cemert Industries LL AuraJ Redy1Yl(A BrQTlch
bull Doha Cables Qawf lLL Senyaf IoolJic1es Qatar Holding W LL Advanced Pipes ard Casfs CompQTly WJ L bull GuJfRoch Coroany WLL Ci~San Trading Company WLL hmovafive Lighting Compary WLL
Managed services le segment inyolvc~ provisloH of hOllseiltecpmg mi cleaning services fucditics n-anagemerJ services C1egy s(tvices ttl centfe sltrvicf)s buildiqg lnaintemHlelt aml acting as travel gens The 5cgnltnt includes the foUowing cnti(lcents
An13 ServJce Branch
amli TnlVeJa l5tmh
f-eco Gulf Co W LL
Jolinson Controls Qattl WJL
28
Aamal Company QSc
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended ) L December 20 13
SEGMENT INFORMATION (Co ntinued)
Head Office It provides corporate services to the branches and subsidiaries of the Group
The managiog d irector of the Group monitors the operating results o f its business units separately for the purpose of making decisions about resource allocation and perfonnance assessment Segment perfonnance is evaluated based Oil operating profit or loss of these segments Transfer pricing between operating segments are on anns length basis in a manoec similar to Iraosactions with third parties
Aamal Company QSC
NOTES TO THE CONSOLIDATED FINAN CIAL STATEMENTS For the year ended 3 1 December 20 13
28 SEGMENT INFORl1ATlON (continued)
Operating segments The operat ing segment after elimination or ioter-bra nch and inter-co mpany lrnnsaclioos is presented as follows
Trading (nd Industrial Managed For fh e year elided 31 December 2013 Properly disirjblli ioll manujocljlring services
QR QR QR QR Revenues
- h lemal parties 260360172 578909983 1231522768 S l802210 - Inter segments 1253914 6843 11 8 29639873 3445052 1
Heat Office QR
Eliminoions QR
(n187426) II
Tolal
QR
2J22595133
261614086 585753 lOI 126116264 1 8625273 1 (721 87426) 2122595133
Opera ti ng results Fair vallie gains
Profit I (loss) ror the year
Depreciotion
200811944
245051 107
445863051
2066290
86492834
86492834
4345438
22636250
22636250
33049 089
5157436
5157436
1760305
(47864882)
(47864882)
1334382
267233582
245051107
512 284689
42555504
36
Aamal Company QS
NOTES TO Tl CONSOLIDATED FfNANClAL STATEMENTS For the yeM ended 31 December 20 13
28 SEGMENf INFORMAnON (c)tltioucd)
FOf the yearrnrkti J f DccemOer 2(J12 QR
Revellues - ExlcmlJ partiel 2331 17 509 bull Inter segmcI11S 1168935
-- 234236434 --~- -~--
Openning results 18S2367t Fmt value gains J8S79-4~G
pront LOllS) for the rear 570616154
gt3659
No(
lnlermiddotgment revenues are eliminated on tQHs)idntiOH_
Tadiug ftfid disl d)Ntion
QR
S2S3l7661
324 j
5335493114 ~ -~-----
51384831
54384338
4J9R71(i
Indus idi mamfmturing
QR
1255694537
129U25lS4
56727059
56727059
32752742
slnltic(s QR
55216665 2939H31
S46lOJ96
7427414
7437
[908067
ilfild ()jice QR
(64(41976
Elimination QR
(74tHi2oJ Iii
Totul QR
206936372
2069336372
235721
(64641
131 f613
6245
42541)861
Amnal Company Q$l
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Por tnt yeartndeJ 31 De~embcr 2013
28 SEGMENT JNFORMATlON (contiutlld
Assc-ts and labilities
Tng alld lndtrstfw At31 December 2(113 distnbllrior manufacturIng senices HeadOJJicc EliminatioilS lola1
QR QR QR QR QR
Cumnl 3tS 227552338 620807979 61349 j 415 S()6)86922 (301636995) 1477366090 Noolucrcnt DSeIS 6411868160 12604763 622386238 4348876 (i624548 __p2438051 780
fotal asstl$ 6639420498 1194 1243194217 65698291 513Ql1470 ==-lt03H8l~O()) 853295-870 -~----~ ~---~ -
CUIT)llliabilitics 280995335 1(3511J60 6344(12777 2l0708lJ2 496261185 (3CH636995) 1249603264 Non-current iiatJlitics 7l70L5V2 8008485 HlDi16~43_ 3181668 t433799 ____ ilj534_~57 __ --Totul liahililics 353696897 ___~4159~4~ 734419720 ~4976~~~~~ 1434945711
---~~--~ -~-~~ - _2~~~4~~ (~~~~9~
C1pild expcndimn HI) WO743OOj 1397742_~471l2~--~50 ~51 ~1~623821~~1~_ -~----~------ -~
3amp
28
Aamal Company Q SC
NOTES TO THE CONSOLIDATED FfNANClAL STATEMENTS For the year ended 31 December 20 13
SEGMFNT INFORMATION (continued)
Assets and liabilities (continued)
AI 31 December 2012 Properly QR
Trading and d iSfriblllion
QR
Indusrial manufacfuring
QR
Managed senices QR
Currenl assels
Non-current assets
146491 186
6121 864484
2964425 12 903 7264
73468 1258
549267235
51387098 471 1439
Tolal assets 6268355670 305479776 1283948493 56098537
Head Office QR
468325024
6713643
475038667
Currentliabil iies
Non-current liabiLities 273444 748 1 J10 15024
86054583 7434286
669214261 1288 14977
2 1938953
287 1199
480393637 1253084
Totil lliabiliti cs 390459772 93488869 798029238 248 10 152 48J64672 1
Capila expendirure (ltII L 72865 878 1281254 6647 J356 7169 13 149045
Notes
(i)
(Ii)
Inter-segmeot balances are e limioafed 00 consolidatio n
Capi tal expendiTU res consist of additions 10 propeny plant and equip ment and iovestmenl properties
Eliminations QR
To wl QR
(273735776) (i )
(20308351(i)
1423591302
6689563230
(27576661 1) 8 113154532
(273135777) (i) 12573 10405
257388570
(273735177) 15 14698975
24 1484446
39
29
Aamal Company QSC
NOTES TO THE CONSOLIDATED FrNANCIAL STATEMENTS For the year ended 31 Dcltmber 1013
Fr-A]~ClAL RISK MANAGpoundMamp1H
Objccthes and policies fe Groups principal )uaucill liabilities comprise imltresl bctmllg loons and IxmowHgs baRlt ovetda1s amounts due to fclaled par1ies and tracte accounts payable The main pUlJXSi of thesc financial liabilities is 4J mise firmne or 610 Grmps operations The G0JP bas various fimmcial assets such as ttadc accounts receivable lInlOlmts due from related parties bark balances tltCntion receivable and other receivables which arisgt directly fran its cperuoonamp
The maiH ri~ks an3ing Joru (be Groups UnariCJlll illslrumenls jle market risk cretiJt nsk and hmdity risk Til BoarD ofDtrcctO$ reviews end agrees policies for mzrAgbg Caltt f hespound ri~k ihkh arc summariscd beloW
VIarktt risk yenfatket risk is the risk Um changes in market prices $Uch as intfcst rates and hreig lttmeocy ect14nge rilles Vltl1 affect the Groups profit eqwty Dr value tf its hoJdiI15 of financial instrl[Thnls rile objecivpoundj of marke1 risk mUnllgcrlcnt is to manage uld 1~ontr(ll tho tr))rket risk expo-sure vithir acceptable parfI-etcJ$ while optimising rerUID
Equit) price risk ampjuity prtce risk is the risk hilt the Group ampearnings will be affected as a rcmt (If luctttltions in fm vdue of ~qui-gt
mstwnents Eqlliry price risk arises from availabtetor~sale inv2strnems However the Groups exposure to eqmty price risk IS minima as II doesn hold sitl)iftrmt ailableAor-511le inYestrmmrs
[merest rate risk The Groups fimiruial poundS5ot ampId liaojlilies (at Rl $uJject to int~~ rate mk compnse brmk depoils interst bearing loans and bOITQwjags and bank overdr-afts At the reponwg dalt tbe [merest rale pronle of Ill Goups intexst bearing fbi4rdd instruments as fliows
11113 20i3 QR QR
Fued liIeryS refc insfrvrnellts
Fmmcial assets 113035962 111913394 FrOltwial liabilities --1~203712l) 1252t43~1
9)OI~ (13350972)
Fhlllting inireSI rate ns1lmlttrs Fanctl~ Isseis 127024345 ID43848o Fllllocial liabilities _-(i~9347~ (94))48926)
(836)64116)
The Groups exposure to t~ ris of changes in marXet interest fltltes relztes primariiy to the Groups financial assets and lizbitdic$ with t1Oltttirg interest mte~
lhe loEowing able demonstrates the ampmitivity nf the eonsolidattXI statemen1 of income 1) caonaly possible chonges in in1jfgtst rmes by 25 basis points with all othe vari)ble3 hdc umstant The sensitivity of the CooiK~ljclatid statement of inc(me $ the eft(ct of tb assumed changes in lnterdt rales for one year bf1sec on the floating rate financial assets and fimmcial hablhw$ held at 31 f~r The effect of deae-ascs in interest ral~ is cXp0Ctct to be equal and opposite to the effect oHlle increases sllQvro
Changes it Eftx OIl
00513 [oms profit QR
2013 Floating mterest Hlte instruments ----2$ bp (1649776)
2012 Flv-ating irkfiSt rale instrumenls +25 bp (209[9(1))
~--------- -~~ 40-middot------ _ _ shy
29
Aamal Company QSC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 3 1 December 2013
FINANCIAL RISK MANAGEMENT (continued)
Foreign currency risk Foreign currency risk is the risk lhilt the value of lhe fi nancial instruments will fluctuate due 10 changes in fore ign exchange rates
T rade aCcOlmts payable and accrued expenses include amounts due in foreign currencies mliniy US Dollars UAB Dirhams Great Britain Pounds (GB P) and Euros of which the Group has a currency risk primruily on the baJmces payable in Euros and GBP amoWlting 10 QR 14400634 (2012 QR 17214046)
The Group does not hedge its foreign currency exposure As both Qatari Riyal and UAE Dirhams are pegged to the US Dollar balances in US Dollars and UAE Dirhams are not considered to represent significant currency ris k to the Group
The table below indicates the Group s fore ign c urrency exposure on its monetary assets a nd liabilities The analysis calculates the effect o f a reasonably poss ib le move ment of the QR curre nc y rale against the Euro and GBP with all other variables held constant on the consolidated slate menl o f income (due to the fa ir va lue of currency sensitive monetary asse ts a nd liabilities) The e ffect o f decreases in fo reign c urre ncy exchange rates is expected to he equal and opposile 10 the e ffect of the increases shown
Incramp1se ill
f oreign cUlrency rate
0
the QR
Ellecl on profil
QR
2013 +5 (720032)
20 12 +5 (860 702)
C redit Tisk Credit risk is the risk that one party to a financial instrume nt wi ll fa il to discharge an obligation and cause the other party to incur a financial loss TIle Groups exposure to credit risk is indica ted by the carrying amoWlt o f its financia l asse ts whic h consist principally oftmde accollilts receivable retention receivable amounts due from related parties othe r receivables and bank baLances
The Group sells its products and prov ides services to vario us panies It is the G ro ups policy that all customers who wish to obtain on credit lerms are subject to credit verificalion procedures to ensure c redit Ilonhiness Each new customer is analysed individually for creditworthiness before the de livery o f products Of services Custo mm tbat fai l to met t the credi tworthiness may transact with the Group only o n prepayme nt basis Property rentals are mostl y received in ad vtnce or conlrlCled wi th post dated cheques 10 additio n receivable balances are monitored on an ongoing basis a nd the purchase limils are established for each c redit custoroer which are reviewed reguJarly based on the level o f past transactions and senlement The Groups max im wn exposure with regard to trade aCCOWlts receivab le net ofa llowance re nected allhe reporting date was ilS fo llows
2013 2012
Business SJgmelll QR QR
Property 15478832 19386326 Trading and distributio n 194343 597 179748274 Industrial ma nufac turing 183119753 131578668 Managed services 18069385 14547389
411 011 567 345260657
41
29
Aamal Company QSc
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For tbe year eoded 3 J December 20 13
FlNAJICIAL RISK MANAG EMENT (c-o Dtinued)
Credit risk (continued) With respect to credit risk arising from the other financi31 assets of the Group the Groups exposure to credit risk arises from default of the counterparty with a maximum exposure equal 10 the canying amount of these instruments as follows
2013 QR
202
QR
Bank balances Amounts due from related parties Retention and other receivables
436136756 214439950 48290351
36788129 t 171525363 74082203
698867057 613488857
The group reduces the expoSltre of credit risk arising from other financial assets by maintaining bank accounts in reputed banks and providing services only to creditworthy re lated parties
The management cons iders the bank balances and a mQUIIIS due from related parties as high grade fi nancial assets and lfade accounls receivable and other receivables as sundard grade financial assets When a finltmcial asset is identified 10 be impaired the managemoot downgrades such assets to impaired category and provides adequate allowances
Liquidity risk Liquidity risk is the risk that the Group will not be able to meet its fmancial obligations as they fu ll due The Groups 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 nonnal and stressed conditiom without incurring unacceptable losses or risking damage to the Groups reputa tion and is to maintain a balance belWeen continuity of fuoding and f1eilibility through the use of bank overdrafts and bank loans and borrowings
The Group monitors its risk to a shortage o f funds using a recuning liquidity plaOfling 1001 TIllS tool considers the manuiry o f financial assets (eg accounts receivable) and projected cash flows from operations The Groups teons ofsales or services require arooUIlts to be paid within 30-90 days from the invoiced dale
42
29
Aamal Company QSc
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For tbe year ended 3 1 December 2013
FrNANClAL ruSK MANAGEMENT (contiQued)
Uqujdity risk (continued) The table below summarises the ruaruriJy profile of the Groups financial 1iabililies a t 31 December based on contractual undiscountcd paymeots
2013 Interest bearing loans and borrowings Bank overdrafts Trade accowus payable Other payables Amounl~ due (0 related panles
201l Interest bearing loans and borrowings
Baok overdrafts Trade accounts payable Other payables Amounts due to related parties
On demand
QR
6836280
6836280
011 demand QR
2885090
2885090
Less than 3 months
QR
521324473
303638792
47406830
2530~480
898675575
Less thall 3
months
QR
469839033
10754JJIO 37543236
1964504 1
634568620
3 10 J2 mOlllh$
QR
239333328
16378865 20210580
2289~11l
298816884
3 to 12 monlhs
QR
365476972
159621 37 J 24745342
30092716
579936401
1to 5 years
QR
J 60092748
160092148
1 to 5 years
QR
248472226
248472226
gt 5 years
QR
25261598
25261 598
gt 5 years
QR
7648000
7648000
TOlaf
QR
947012147 6836280
320017657
67617410 48199591
1389681085
Tota
QR
109 1436231
1885090 267162681
622 88578
49737757
14735 10337
43
30
Aamal Company QSltc NOTES TO THE CONSOLIDATED FlANCIAL STATEMETS For the year ended 31 December 20 t3
21 F~ANClAL RlSK MAiAGEMElT (continued)
Capital management The Boards policy is to maintain a strong cepit1 base so as to rnainmin investor creditor and market ronfoonee and to SUSWlJ) fumre dcltclonnent Gf the buinest The Board of Directors rronitortl the tapital whkh tbe Group defines as wlal $parcloders equity excluding nonmiddotcornroliing imerests and the level of dividends to orrunury srarellOJdcfS
The Board also reeks to ITIaimain a balance between the higher (ctums (hat might be fA-~$ihle With higher leves of borrnwings end Lle edvnrJages and security named Sy it sOMd Cilpitai posi[ion The GfCup~ k1rget is to achievfl a return on slureholders equity (exclJding aonwurrolJiug iorcf(sts) greater lll(ll1 he wcighlcd average inres exxmse on mrerest bearing Ivens and oorrowing
The (lf0t-p nl)nDg-e ils cnpital structure and makes adjustneal lOll in light ofchang2s in economic nd bttincss cordjlons and shareholders expe1ationJo chmges veremiddot maCo HI Lleuro objecttves polilCS or proCCSSC3 during the years erded 31 D~mber 2013md 31 Dtccmlxr2Ql2
The Group monitors the capit2J using a gClting fatio which IS dep divided by caplla plus debL The GtOwgts policy is to keep ttJe ge-anng rmio bclew 40 Tbe Group iLdtdes withb debt imete-51 beagting loans ard ~OITORlngs less cash and cash equtVaknts Capltal includes eqmty attributable 10 the equity tolders oft~e parcrt
2013 QR
2(i2 QR
fmerest bearing loans and borrowings lcss- Cash and cas ltYJUvalcnts
9i4lJ05301 _~ (429JfJl4761
1004845296 (649)6201)
Net debt
Toa capital
Capita and net debt
699849045
~ringrttio
FAIR VALtES OF Fl~ANOAL f~STRUMETS
Finarcial iostrumenL~ cOlnprise tina~lctal assetS carl finailcialliabilities
Fmancial assets colJist of bank balance) short 1Cm bank dcposis amounL dve dom rc)ltted partilt)$ rekntion and other receivables and ttade accolmis rceivabe Finatlclll habiilics cgtmsist of banilt ovcrdratls jnerest bearing lOil1S and bOrowings amounts due (0 nliled partiG~ ane trade x-ounls payable
The- fair values of hese financial inStrumen1S except Jo-- imCfest bearing loam lHld bOlToving aproKimate lhdr cMryinJ vlhes due to the Slort temt mzrutiiles or these instrument
Tllc faiT value of iotcnst beating Nns and borrowin2s ae estimate( based on discoumed ltash flows twin int(s rale- cune-ntly nvailagtk fur tilt debt or sinuiar tetnlS an-a rell1lmng matunties
31
Aamal Company~Q=-ScC ______________~______
~OTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For fhe year ended 31 December 20 t3
SlGNIFICANT ASUMPTIONS ACCOUJTING JUDGElE1TS AND F8TIMATFS
impairment (If accoonts receivable n etrnwe of lhe collectible anoun of trade accounlgt reccvable is made when collection of the full lHl1OUt i~ nO looger probabk FOI nCividualty significitIl amounts this estimation is p~rformed on an indh-idllai a$[$ Amomts wHcb arc not indivldl11Uy significant but wluch are past due ZTe tsscssed collectively and an aJlQwaccc applied ucc()r~Jng to the length of lime past due based oc histnncal recovery nlJes
hnpalrment of inHntnries lavenoncs are held at tho lower of col and nol realisable value InIOn inventoncent$ becone old or 0-~amplete an estilTJte is mate of their net j alisable vulue For indiviolhlUy significant amountS this cstinaunrt is performec all aD lndividwl osis Amotlnts whieh are fl0t individually significan( btll which ltIre old at obsolete wx LltSessed wllecivdy md a provisior is applied sccnrding to the invenrory type and be dep)ee of ageing 0 cDsolescc1ce based on anticipUled selling prices
Classifigt1ltion of El Sew(gtdy Cable Qatar WLI ali a j(lint vwture pound1 Sovedy Cables Qatar is a limited hability company whose kgal fum confers SCprm11ior bernten tbe jXliiies 10 ~he jomi lfranpement Snd the Company Itself FurthenrlOre then IS no oontractua] arrmgelTeot or any oibe aus aod circumstriliCe$ that iocik41to tht he putic5 [0 the joint flJTIlrgernelit bave rights to the ssetl and obligrtdons fo~ the liabilities of the joint ilrrongement Acoordingly El Sewed- C[jbl~s Qamr WLL is dassifiecl 7S a joiut enrtrr of he GWtp
impairment of goodwill G0oovj)1 embedded in th~ cot 0 aquisitior of subsidiaries and eqmtj-iccounled iflV(stees ire teswt for irl1jXlirmnt aHuaily Tbe calculations of value [n use fO( cfish gecj~r)lilg units (loring to real nte projecg are rtost sensitive to tin IDHowing assumpti015
Grosgt i1wginmiddot Gross Ilmrgins arc lmsed on avrage values tuhje0d in (he [Xrioo preeedhli (e siaM of the budge xnod T1esC at( mcreased over the budgel period for mticipatltX efficiency Hnprovemots
DisC)unr r(es Discount rotes represent th cl1tent mark as~ssmetlt of the risks specific te ech cash geocroting unit regarding lhe time value of money ilnd mdividu)l risks of he tmtieriyilg assets whICh have not been inwrport1eti it the Citik flow estimates The dj~(OUrl flte tlkulation is based on the speclfte circurnsthLCes of lile Group and its opltllatJng segn)~nts (md derived (ff)rC it weighted avaage (XSt 0f apilaJ (WACC) Tb fACe (akw into uoount both deb and equity The 0$1 of equity is denved from dlC expected return 01 investmenl by the Groups investors TJc Gos10( deb is based on l1e borrvwings the Gmup IS obllsxl to service SC~lletllmiddotspecific r5k IS incorxt4too by applying individual bera facto The betn mctors ire evauatcentd annuaHy bhseci on pubJicly aVflllabe murked earn
Fair value ()fnHstmeni proputies The fuit laHe 0 nvestmel~ propertis is deltrrnlnzd b cxterrwl indepzfldell property valuers laving appr0priate recognised professional quabfiillions and recenl xperience H1 the localjl)n and G-tegory 0 the oroperty being valued
Useful hes of PfQPcrly plmr (llld zqulpment The Groups management detennints th estiunted useful jives Df It~ property plan and equipmnl fix calnurjng depreciation Thi5 e~timJte is 6lermind after cinsidring 1b expeelcd usage (1f the a5sclt [hysical l101t and (eas tedmiltal Dr com~ercia obsolesccnce
Gotlg Qncen
ibe Groups mangerncnt UiS made aJ assessmeot cf the 011115 ability (0 COllllOUC liS a going conct11l Imd is satsl1ed hat me Group ms the resources to contmue in business for he foreseeable fu1urc he1hennort he management is no aware oC lny material Hncertainties that lray CH~t signinchnt doubt tlPDfl the Groups ability 10 continue as a going umcem Therefore titpound lotlsolidatcd finilllcij stftemeols comirme to be prepltd on li g0ing concern basis
Aamal Company QSc
NOTES TO THE CONSOLIDATED FlNANC[AL STATEMENTS For the year ended 3 1 December 20 13
32 INCOME TAX
Certa in subsidiaries of the Group which have non-GCe ownership are subject to income tax under Qatar Income Tax Law No 2 1 of2009 The iocome tax is charged on the share of profits attributable to non-GCe shareholders For the purpose of these conso lidated fi nancial statements the income tax liability oftbe foreign shareholders has been excluded given that the non-GCe shareholders have agreed under the shareholder agreements signed with the Group to bear the fh lliiability and make necessary payments
33 COMPARATIVE INFORMATION
Certain comparative figw-es of the previous year have been reclassified 0 coofonn to the current years presentation However such reclassifications are oat materia and do not have an impact on tbe previously reported net profit other comprehensive income or the total equity for the comparative year
The impact from the resta tement of comparative infonnalion as a resuh of adoption of IFRS I I - Joint arrangements is detailed in Note 32 Changes in aCCQu(lting policies
46
10
Aamal Company QSc
NOTES TO THE ONSOLlDA TED FINANCIAL STATEMENTS For the year ended 3 I ecember 201 3
LNVESTM ENT ROPERTIES (contin ued)
b) Measuremen t 0 (air value (conti nued)
Vau t ion technique an significant unobservable in puts
The valuer has applied t e income capitali zation discounted cash flow and comparab le methods to detennine the market value of the lnve tment propen ies Significant unobservable inputs used included expected market rental growth rates (an average 425) occupancy rates (approximately 90 to 95) and risk adjusted discount rates (approximately 5 to 7 0) M y significant change in these inputs can impact lhe fair valuation of investment propcnies
24
Aamal Company QS c
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For che year ended 31 December 2013
11 PROPERTY PLAi~T AND EQUIPMENT
FumilUre Truck mixers fIXtures and Complllers
Leasehold and maor Plum (fd office and relaed eapiowork Buidings improvements vehicles machinery eqllipmcni sofMore in progmiddotcss Total
QR QR QR QR QR QR QJl QR
At I January 2013 137870126 371 88 132 9595813 1 262536261 19 580954 14864 385 561 32447 6241 30436 Additions 948)65 2618 100 5367399 859061 111 5268 137147581 148055774
Relating to d isposalswrite-off (1042642) (4390496) (77157L) (589150) ( 184075) (6977934) Transfer from capilal work in progress 1505 310 164 336 3601776 ( 150000) 1182741 (6304 163) Transrer to investment properlies (Note (0) (345 19828) (345 19828)
At J I Dttember 201 J 139375436 J7 258~ ~1 85735 270733865 19700865 169783 19 152456037 _73068~448
Depreciation AI I January 2013 16133915 J6902 529 49087707 68783 065 11 980009 tl71 595 3 174603 178 Charge for the year 7059805 3237150 5390767 12249797 2849162 1768823 42555504 Relating 10 disposalsJvri te-off (664709) (4 3 1716 1) (724322) (552939) ( 18 1993) (6441 124)
At 31 December 201 3 23193 720 19474 9 70 50161 313 90303540 14276232 13302783 2 107 17558
Net carrying amounts At 31 December 2013 116181J16 _17783221 44024422 180415325 5424633 3675536 __l2456O37 JJ9970~890
Notes (i) Depreciation charge for the year amounting 10 QR 33 164382 (201 1 QR 3303091 6) is included in tbe direct costs and an amount of QR 60055 (20 12 QR 36939)
has been capiulised under capital work in progress
(ii) The capital work in progress includes capitalised borrowing costs amounting to QR 125645 (20 12 QR 15358)
(ii i) The buildings are constructed on a plot ofland taken on a loog term operating lease
25
Aamal Company QS c
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 31 December 201 3
II PROPERTY PLANT AND EQUIPM ENT (continued)
C05I~
At 1 January 2012 Additions Acquired through business combinations (Note 4) Relating to d isposalswrite-off Transfer from capital work in progress Transfers
Buildings QR
137434400 435726
Leasehold improvemellls
QR
38137377 446J 04
144 103 ( 1539452)
Truck mLCers and molO
velricles QR
83427661 11464679
1697609 (631824)
Plant and machinery
QR
249335437 97264 85
35 14 132 (99498)
59705
Furniture fir ures and
office equipmem
QR
22845309 667586
192042 (3696457)
98000 (525526)
Computers and related
software
QR
158 19519 87 14 14
141837 (266 1733)
908078 (2 l4730)
Capitol work in progress
QR
12104889 451 53265
( 1065783) (59924)
Total (JR
55910459 8 68765259
5689723 (862 8964)
(800180)
AI 31 Dttember 2012 137870) 26 371881 32 95958 13 1 262536261 19580954 14864385 56132447 624 130436
Depreciation AI Jaouary2012 Charge for the year Acquired wough business combinations (Note 4) Relating to disposalswrite-off Transfers
9144666 6989249
)4 3 16620 3410618
144103
(96 812)
42558404 548 1613
1671942 (6242 52)
44555 290 2 1398849
2890797 (6 187 1)
12392584 3 182899
169005 (3558466)
(206013 )
12235266 2077633
136959 (2627283)
(J 0662)
135202830 42540861
5012806 (7840684)
(312635)
At 3 L December 201 2 161339J5 16902529 49087701 68783065 11 980009 11715953 174603 178
Nel canying amoWlts
At 31 December 201 2 12 173 6211 2028560 3 46870424 193753 196 7600945 3148432 56132447 449527258
26
12
13
Aamal Company QSC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 31 December 20 13
ACCOUNTS PA YABLE AND ACCRUALS
Trade accouots payable Advances from customers and tenants Accmals Social and sports activities levy Other payables
AJIOUNTS DUE TO RELATED PARTIES
Name
Arab Compaey for Fiber Products EI Sewedy EIC( lric Ho lding Egypiasl Egypt Egyptlech Egypt United Industri es Company WLL Johnson Controls Air condi tioning aod Refrigeration Qatar WLL pound1 Sewedy Cables Egypt Johnson Controls Air conditioning and Refrigeration rNC Dubai United Wire Company WL L Gelteo Company W LL - Gelteo Refr igera tion and Airconditioo ing CampC Lightway nc AI Shaab Group of Companies Other related pruties
NO M Related party transactio l)s a re disclosed in Note 26
2013 QR
320017657 30486837 26924669 41 761 843 25855567
445046573
2013 QR
18517474
4902528
6531231 6404578 3215821
2825884 75 7825
3467288 263715
1313247
48199591
2011 QR
26716268 1 27410234 222575 76 28954726 33)33852
379119069
2012 QR
18380528 91458 82 54 13849 1 11 6 135 5374039 35291 2020359 1693323 1064744
670 179
11 0873 12 18650
49737757
27
14
Aamal Company QSC
NOTES TO THE CONSOLIDATED f fNANCIAL STATEMENTS For the year ended 31 December 201 3
INTEREST BEARING LOANS AND BORROWINGS
NOles Malilrify
2013 QR
2012 QR
CoMl Loan 2 Loan ) Loac4 Loan 5 Loan 6 Loan 7 CoMB Loan 9 Bills discounted
(0 (ii) (iii) (iv) (v) (vi) (vii) (viii) ( ix) (x)
lune2014 Seplember2014 January 2015 November 2016 December 20 16 November 2017 Jllne20 l J December 20 7 OClober 20 19
172070387 440000000 50544000 40261 621 81387109 19920036
6] 43890 62626967 42522794
915676804
298324180 440000000 10 J088000 57955030
100 168750 2 1300492
407728 1 782871 1
35000000
1065742444
Less Defe rred finatlcing cost (771 503) (897148)
914905301 1064845296
Presented in the consolidated statement of financial positioo as fo llows 20)3 QR
201 2 QR
Current ponion Non-current ponion
749520820 165384481
825568489 239276807
914905301 1064845296
The dete rred financing costs consSt of arrangement fees The movements m the deferred financing costs were as fo llows
203 2012 QR QR
At I January 897148 332 661 Addjtions during the year 1 062565 912506 Amortised during the year (218amp210) (34801 9)
At 3 1 December 771503 89 7148
28
Aamal Company QS C
NOTES TO THE CONSOUDATED FlNANCIAL STATEMENTS For tbe year ended 31 December 2013
14 INTEREST BEARING LOANS AND BORROWINGS (continued)
Nolec
(i) Loao I i USD 93000000 impon 10n moi lily obtoined to refimnee he Icne~ of edit The 10 IT interest at commercial fate and the interest is paid at monthly intervals The fucility is repayable within ISO days including the usage period under letter ofc redits
(ii) Loan 2 is a secured bridge loan obtained to settle an existing loan and working capital requirements of the Company The loan carries interest al coOlJllercial rates and interest is 10 be paid on quarterly basis
(iii) Loan 3 was obtained for the pWpOse of financing capital ependiture and direct payment to suppliers contractors and 5ub-controctors The 10011 CMries interest at commercial rate and the inte rest is to be paid q Uar1erly The fac ility is repayable in IS quarterly iostallmenls starting I July 20 11 and ending I January 2015
(iv) Loan 4 was obla ined for conSlruclion o r an inveslmenl property The loan is seclJed by 0 primary mortgage over the some property and corporate guarantee of the Aamal Company QSC Tbe loan carries interest at commercial marke t rate and is payable in quarterly instalments
(v) Loan 5 represents a loan fOlcility obtained in two sepnrole tranches amounting to QR 309 825 000 (USD 85 million) for the purpose of refurbi shment and construction of fociJities io one of the investment properties The loan is repayable In 16 equal quanerly instalmcnlS for individua l tranche commencing from March 20 1J The loan carries interest at conunercial rJtes
(vi) Loan 6 represents secured loans obtained ffom a commercial bank in the previous periods for the purchase of heavy equipment and machines and were merged on 15 November 20 12 as a comb ined loan This loan is payable by 59 equal instalments of QR 426000 with (I last inSlalment of OR 438 326 with effect fro m 01 October 201 3 The loan carries interest at commercial market ra tes
(vii) Loan 7 is il tmst receipt banking facility obtained for the purchase of inventories This carried interest at conunercial market rates This loan was full y settled during the year
(vii i) Loan 8 represents secured loans obuined from a commercial bank in the previous periods for the purchase of delivery trucks and machinery and were merged on 22 October 2012 as a combined loan The loan carries inte rest at commercial market Tates and is payable by 59 equal insta lments o rQR 160000 with a last inSlOlmem ofQ R 128000 with effect from 3 1 December 2012
(ix) Loan 9 is an Islamic Financi ng Arrangement obtained for construction o f a manufacturing plam and as o f yearend ba lance represents partially drawn amount out of totil1 facility of QR 655 68000 The loan is secured by joint corvorate guarantee by the shareholders The loan carries profit at Islamic Financing rates and re-payable in quarterly instalments starting from the end of the 24 months gmce period from the date of loan drawn
(x) Bi ll discounting is a loan fac ility from banks The purpose of the arrangement is to discount bills locally and carries interest at current commercia l filte
15 EM PLOYEES END OF SERVICE BENEFITS
Movements in the provision reHectelt in the consolidated SLo1tement of financia l position were as fo llows 2013 201] QR QR
At I Jan uary 18111 763 17877937 Provision made during the year 4056969 4205499 Acquirelt through business combinations (Note 4) 349272 End of service benefits paid during the year (2210756) (4320945)
At 3 1 December 19957976 18 111763
29
Aamal Company Q5C
NOTES TO THE CONSOLIDATED FINANCIAL STATEMETS For tile y~ar ended 31 Dee~mber 2013
16 SHARE CAPITAL
2013 2012 QR Qq
AtI1l1)nud 60000)000 (20 2 544500JJOfn shares ofQR iii Cilch 60i)iQOOlOO 54450lt)0000
21)13 2012 Numher of
siMtS QR shares QR Issued Mtldfully paM At lJamld) 544SfWllOfJ 5445(100001) 495000000 49500000)0 1511C ofbonus S1i1-C ___ 5550~OOO 555000000 49SGOOOO 495000000
At 31 Decenef 6(OOampQllf1(1 ---14450O000 544~OOOOOO
All ampates m~ of a110 clss and caL equal voting rights
17 LEGAL Reuro5ERVE
As required by Qatar Comnertai COfrp7lnies Lav No5 of 2002 lOfp of the profit for the ye1J as a rru1imllli silould be mmsfened to legal re~erve The reserve is lot normay [lytiabe tor distribution except ill he cixcuJUstllrtUS stipulated m the above ~lemi0ntd GIW
IS HEVE1TE
2013 l)n QR QR
Sale of goods 1726893265 i709057~(iO
Renlal income UiO362322 133117509 S-ice income 858695 33940731 CornrrusslOlL Incentives and agency fces 44695S1 422~_632
212259$)33
19 DIRECT COSTS
2013 2)i2 QR
C 051 of inven(feS recognisedlIS an exptns 1522929956 497210830 Dind sL1ries lmd wages 601 [1336 5137856-8 Operating eXpenses on nml estate p~opet1les 36)711316 3041H504 fJepreciatiort (Kate I J) 33164382 B03091pound Operators marhgerrt6nt fees 14508588 li667989 Provisicn Qr obsolete and skwlt moving mvenlories (K)tc 8) 2380617 2208263 Other operating ilxpenses _31~3982 _ 3674946
1702139171 JS9653OI tgt
Aamal Compall-yQSC________________
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For lthe year ended 31 December 20 11
2G OTHER NeOiI
2013 20J3 QR QR
Interest mcume 2824216 2)314392 Profiv( loss) 00 disposal of property plant aoe eqUlpmem 737647 (l7362G) Eargain ptmnJse gain (Kote t) 8360793 MIsceJlaneous income 5723356
2013 2012 QR QR
ManllgetnUI hrQ empl(yees ws 55170302 55lt035middot1 Rent 23596799 2594915 Allowance for impaimlcot oUrsue aCQl1ot$ rc(Xjvalle (Nole 6) 129459(i 11613120 flBumcce ane profcampiitmJI fees 2IU9263 209J902 Corununication OOtHS 1935123 1649155 Trllining tid ouSfjt$s developmccl 950476 L095764 Re]X1in and mainle-nilnce 21)11SflS 2)2 I Poslag-c prjnting acri stationery 610299 541159shyvllsltdlancous expenses _~~~664 1lt2
-~~~ 125162812
22 fIN~lCE COSTS
2013 2amp2 QR QR
Inleres epen~ 42866312 5773U4B Am(vtisJliorgt ofdefcentrred financiog coStS __ 2l)tl26~~ gt3661
44930877----=
58063009
23 BASIC A~n nHUfED EARilNGS PER SHARi~
Basic trdTJogs per hue is caculatid 0y llividing the pwfill0( Ihc year attriouiabk (0- equity roldc-5 of the parent by lhi w~iglwxi avrage number of ordinary shares 0JstandirJg dulting tht_ year During Ihe year lil~ Conpmy i-sued and CBpii3lzed bonus shares lnd awmJingl) me previously ~eportod earnings per shac have blOM restatc(i
20i3 2012
Profit feT the year auributable to Cluity holderlt of the- paren (QR)
Weighted aVCTage number ofshares outstanding during the year (i)
Basic Jd diluted earnings per share (QR) 085
59985U413 shy
~~--~~~~- ~------J 1
23
Aamal Company QSc
NOTES TO THE CONSO LIDATED FfNANC[AL STATEMENTS For tbe year ended 3 l December 2013
BASIC AND DILUTED poundARNINCS PER SHARE (continued)
NOles (i) Th wigh d m nlg urnb of hres foc h P of lruling ~migs pee share h bee kulated
as follows 2013 20J2
QU3lifying shrues allhe begi ll1ling of the year 544500000 544500000 Effect of bonus shares issued and capitalised 55500000 55500000
600000000 600000000
Less T reasury shares (149587) (i357SI)
Weighted average number of shares at the end of the year 599850413 599864249
(ii) There were no potentia lly dilutiw shares outstanding at any time during tbe year and hence the diluted earnings per share is equal to the basic earnings per share
24 COItIMITMENTS
20 1] 2012 QR QR
Estimated capital expenditure approved and contracted for at the year eod but not provided for
Investment properties 2964000 8 139063 Property plant and equipment 16386500 63759762
19350500 71 898825
Operating lease commiIOlenlS under noncancellable lease agreemenlS
Payable wilhin one year 990806 702000
990806 702000
25 CONTINGENT UABILITlES
The Group had the following contingent liabi lities from which it is anticipated thai no malerial liabilities will arise
2013 2012 QR QR
Letters of guaramee 474551239 394255203
Letters of credit 7678499 194299384
NQles
(i) leHlaquogt of gu indud penonmnlaquo tend nd bid bonds d pymenlt g gi to suppliers and contractors by the Group in the ordina ry course of bus iness which will matme within twelve months fro m the reporting da te
(i i) Letters o f credit are provided by lodging documents to the bank tor purchase of trading goods fro m foreign suppliers wruch will maMC within thJee to six months from the date or tile Iransaclion
J2
26
Aamal Company QSc
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year eoded 31 December 2013
RELATED PARTY DISCLOSURES
Related party transactions Related parties represent major shareholders directors and key management persortOei of the Group and entities controlled joimly controlled or signjficamly innueoced by such parties Pricing policies md tenns of these tnlOSaclions are approved by the Group s management
Transactions with related parties induded in the consolidated financial stalemenls were as follows
20lJ 2012 QR QR
Sale o f goods and SClVices 419034048 415225221
Rental income 1980473 2069386
Purchase of goods and services 1591 38018 300835596
Rental expense 21 780G78 23397334
Bargain purchase gain 8360793
Net assets acquired 78803585
Relat ed party bal nnces AmountS due from and due to re lated parties are disclosed in Notes 7 and 13 respectively These balances do oot carry interest and are repayable OIl mulUlUy agreed dates generally within one year
The Group did not record any impairment of receivables reJatiog to amounts due from related pat1ies in either year This assessment is undertaken each fina ncial year through examining the ftnanc ial position of the related party and the market in which the related patty operates
Parent The Groups ultimate parent is Al Faisal Ho lding Company WLL
Compensa tion or key management personn el The remuneration of key management dming the year was as fullows
2013 2012 QR QR
Short-term benefi ts 7904794 1079595 Employees end of service benefits 408934 439776
8313 728 11235727
33
AamaJ Company QSC
NOTES TO THE CONSOLIDATED FINANCIAL 5T ATEMENTS For the year ended t Decernber 2013
Dilling the year 1he Group issued a XHlUS share of 10 928 of the paid tiP share capilal hdd ilS at 31 DiX2mber 2(JJ 2 mnmuning to OR 555000000 using retamed earnings as of3 December 2012 (20l2 Doe share for every ten shues held as of 31 Dcember Oll amuunting 10 QR 495OO()OOO ling reta1ned earmrgs 28 or 31 Decencer 2D II Jshy
18 SEGMENT INFORMATION
For J)iloogement PUIpltJM rhe Group i organised into business unit bused On LlJeir nature of Acttvitics lud nas fonY reportable segments and the Head Oftklt as bllow$
Propert Tbe segntn cOlists of City C~nler Qlta~ Brunch and Aamal Rea Esmte Branch whicb ll[c invoived in lampIiiog the faJ1ities of retail outlet conpex red e5ttlte nve(mltn$ and property remal buines~s
Trading mld distrib-wion The segmeul Involves wholesalB andlor rBtail distribution of phamlaceutlcai and consunable i1ems hume Epplianccs medica equimenl t-Tes ill1d lubricmtlaquo and II1UllitnEl printing The scgn(rtt includes 6c following entities
Eotl Sina Medical Branch
Aaen Medical Braudt
Amcill Troding and DistoolltlqO Branch bull Foot Care (erier HRnd) Good llre Pbannacy Bf4Uch bull Al FllfJdaq COllpafY wJ~L
InduSNol manuacturing TIle s0groent IOvolves Ulahuactrumg whole~we aliaor rewi dimibUlioti of dccnc cables lid tools ggregJ1es_ ready-IUx connole and cement bI0C~ lI1d provi$ion of servlCcent$ in rdation to iODllltroa Itvestment repair aJ-d Gonstruction of power plwts liiiding of LED ilgluitlg products und management of industnl enterpnses The segment ircludes be folloVting centntitis
bull Aam1 Cemert Industries LL AuraJ Redy1Yl(A BrQTlch
bull Doha Cables Qawf lLL Senyaf IoolJic1es Qatar Holding W LL Advanced Pipes ard Casfs CompQTly WJ L bull GuJfRoch Coroany WLL Ci~San Trading Company WLL hmovafive Lighting Compary WLL
Managed services le segment inyolvc~ provisloH of hOllseiltecpmg mi cleaning services fucditics n-anagemerJ services C1egy s(tvices ttl centfe sltrvicf)s buildiqg lnaintemHlelt aml acting as travel gens The 5cgnltnt includes the foUowing cnti(lcents
An13 ServJce Branch
amli TnlVeJa l5tmh
f-eco Gulf Co W LL
Jolinson Controls Qattl WJL
28
Aamal Company QSc
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended ) L December 20 13
SEGMENT INFORMATION (Co ntinued)
Head Office It provides corporate services to the branches and subsidiaries of the Group
The managiog d irector of the Group monitors the operating results o f its business units separately for the purpose of making decisions about resource allocation and perfonnance assessment Segment perfonnance is evaluated based Oil operating profit or loss of these segments Transfer pricing between operating segments are on anns length basis in a manoec similar to Iraosactions with third parties
Aamal Company QSC
NOTES TO THE CONSOLIDATED FINAN CIAL STATEMENTS For the year ended 3 1 December 20 13
28 SEGMENT INFORl1ATlON (continued)
Operating segments The operat ing segment after elimination or ioter-bra nch and inter-co mpany lrnnsaclioos is presented as follows
Trading (nd Industrial Managed For fh e year elided 31 December 2013 Properly disirjblli ioll manujocljlring services
QR QR QR QR Revenues
- h lemal parties 260360172 578909983 1231522768 S l802210 - Inter segments 1253914 6843 11 8 29639873 3445052 1
Heat Office QR
Eliminoions QR
(n187426) II
Tolal
QR
2J22595133
261614086 585753 lOI 126116264 1 8625273 1 (721 87426) 2122595133
Opera ti ng results Fair vallie gains
Profit I (loss) ror the year
Depreciotion
200811944
245051 107
445863051
2066290
86492834
86492834
4345438
22636250
22636250
33049 089
5157436
5157436
1760305
(47864882)
(47864882)
1334382
267233582
245051107
512 284689
42555504
36
Aamal Company QS
NOTES TO Tl CONSOLIDATED FfNANClAL STATEMENTS For the yeM ended 31 December 20 13
28 SEGMENf INFORMAnON (c)tltioucd)
FOf the yearrnrkti J f DccemOer 2(J12 QR
Revellues - ExlcmlJ partiel 2331 17 509 bull Inter segmcI11S 1168935
-- 234236434 --~- -~--
Openning results 18S2367t Fmt value gains J8S79-4~G
pront LOllS) for the rear 570616154
gt3659
No(
lnlermiddotgment revenues are eliminated on tQHs)idntiOH_
Tadiug ftfid disl d)Ntion
QR
S2S3l7661
324 j
5335493114 ~ -~-----
51384831
54384338
4J9R71(i
Indus idi mamfmturing
QR
1255694537
129U25lS4
56727059
56727059
32752742
slnltic(s QR
55216665 2939H31
S46lOJ96
7427414
7437
[908067
ilfild ()jice QR
(64(41976
Elimination QR
(74tHi2oJ Iii
Totul QR
206936372
2069336372
235721
(64641
131 f613
6245
42541)861
Amnal Company Q$l
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Por tnt yeartndeJ 31 De~embcr 2013
28 SEGMENT JNFORMATlON (contiutlld
Assc-ts and labilities
Tng alld lndtrstfw At31 December 2(113 distnbllrior manufacturIng senices HeadOJJicc EliminatioilS lola1
QR QR QR QR QR
Cumnl 3tS 227552338 620807979 61349 j 415 S()6)86922 (301636995) 1477366090 Noolucrcnt DSeIS 6411868160 12604763 622386238 4348876 (i624548 __p2438051 780
fotal asstl$ 6639420498 1194 1243194217 65698291 513Ql1470 ==-lt03H8l~O()) 853295-870 -~----~ ~---~ -
CUIT)llliabilitics 280995335 1(3511J60 6344(12777 2l0708lJ2 496261185 (3CH636995) 1249603264 Non-current iiatJlitics 7l70L5V2 8008485 HlDi16~43_ 3181668 t433799 ____ ilj534_~57 __ --Totul liahililics 353696897 ___~4159~4~ 734419720 ~4976~~~~~ 1434945711
---~~--~ -~-~~ - _2~~~4~~ (~~~~9~
C1pild expcndimn HI) WO743OOj 1397742_~471l2~--~50 ~51 ~1~623821~~1~_ -~----~------ -~
3amp
28
Aamal Company Q SC
NOTES TO THE CONSOLIDATED FfNANClAL STATEMENTS For the year ended 31 December 20 13
SEGMFNT INFORMATION (continued)
Assets and liabilities (continued)
AI 31 December 2012 Properly QR
Trading and d iSfriblllion
QR
Indusrial manufacfuring
QR
Managed senices QR
Currenl assels
Non-current assets
146491 186
6121 864484
2964425 12 903 7264
73468 1258
549267235
51387098 471 1439
Tolal assets 6268355670 305479776 1283948493 56098537
Head Office QR
468325024
6713643
475038667
Currentliabil iies
Non-current liabiLities 273444 748 1 J10 15024
86054583 7434286
669214261 1288 14977
2 1938953
287 1199
480393637 1253084
Totil lliabiliti cs 390459772 93488869 798029238 248 10 152 48J64672 1
Capila expendirure (ltII L 72865 878 1281254 6647 J356 7169 13 149045
Notes
(i)
(Ii)
Inter-segmeot balances are e limioafed 00 consolidatio n
Capi tal expendiTU res consist of additions 10 propeny plant and equip ment and iovestmenl properties
Eliminations QR
To wl QR
(273735776) (i )
(20308351(i)
1423591302
6689563230
(27576661 1) 8 113154532
(273135777) (i) 12573 10405
257388570
(273735177) 15 14698975
24 1484446
39
29
Aamal Company QSC
NOTES TO THE CONSOLIDATED FrNANCIAL STATEMENTS For the year ended 31 Dcltmber 1013
Fr-A]~ClAL RISK MANAGpoundMamp1H
Objccthes and policies fe Groups principal )uaucill liabilities comprise imltresl bctmllg loons and IxmowHgs baRlt ovetda1s amounts due to fclaled par1ies and tracte accounts payable The main pUlJXSi of thesc financial liabilities is 4J mise firmne or 610 Grmps operations The G0JP bas various fimmcial assets such as ttadc accounts receivable lInlOlmts due from related parties bark balances tltCntion receivable and other receivables which arisgt directly fran its cperuoonamp
The maiH ri~ks an3ing Joru (be Groups UnariCJlll illslrumenls jle market risk cretiJt nsk and hmdity risk Til BoarD ofDtrcctO$ reviews end agrees policies for mzrAgbg Caltt f hespound ri~k ihkh arc summariscd beloW
VIarktt risk yenfatket risk is the risk Um changes in market prices $Uch as intfcst rates and hreig lttmeocy ect14nge rilles Vltl1 affect the Groups profit eqwty Dr value tf its hoJdiI15 of financial instrl[Thnls rile objecivpoundj of marke1 risk mUnllgcrlcnt is to manage uld 1~ontr(ll tho tr))rket risk expo-sure vithir acceptable parfI-etcJ$ while optimising rerUID
Equit) price risk ampjuity prtce risk is the risk hilt the Group ampearnings will be affected as a rcmt (If luctttltions in fm vdue of ~qui-gt
mstwnents Eqlliry price risk arises from availabtetor~sale inv2strnems However the Groups exposure to eqmty price risk IS minima as II doesn hold sitl)iftrmt ailableAor-511le inYestrmmrs
[merest rate risk The Groups fimiruial poundS5ot ampId liaojlilies (at Rl $uJject to int~~ rate mk compnse brmk depoils interst bearing loans and bOITQwjags and bank overdr-afts At the reponwg dalt tbe [merest rale pronle of Ill Goups intexst bearing fbi4rdd instruments as fliows
11113 20i3 QR QR
Fued liIeryS refc insfrvrnellts
Fmmcial assets 113035962 111913394 FrOltwial liabilities --1~203712l) 1252t43~1
9)OI~ (13350972)
Fhlllting inireSI rate ns1lmlttrs Fanctl~ Isseis 127024345 ID43848o Fllllocial liabilities _-(i~9347~ (94))48926)
(836)64116)
The Groups exposure to t~ ris of changes in marXet interest fltltes relztes primariiy to the Groups financial assets and lizbitdic$ with t1Oltttirg interest mte~
lhe loEowing able demonstrates the ampmitivity nf the eonsolidattXI statemen1 of income 1) caonaly possible chonges in in1jfgtst rmes by 25 basis points with all othe vari)ble3 hdc umstant The sensitivity of the CooiK~ljclatid statement of inc(me $ the eft(ct of tb assumed changes in lnterdt rales for one year bf1sec on the floating rate financial assets and fimmcial hablhw$ held at 31 f~r The effect of deae-ascs in interest ral~ is cXp0Ctct to be equal and opposite to the effect oHlle increases sllQvro
Changes it Eftx OIl
00513 [oms profit QR
2013 Floating mterest Hlte instruments ----2$ bp (1649776)
2012 Flv-ating irkfiSt rale instrumenls +25 bp (209[9(1))
~--------- -~~ 40-middot------ _ _ shy
29
Aamal Company QSC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 3 1 December 2013
FINANCIAL RISK MANAGEMENT (continued)
Foreign currency risk Foreign currency risk is the risk lhilt the value of lhe fi nancial instruments will fluctuate due 10 changes in fore ign exchange rates
T rade aCcOlmts payable and accrued expenses include amounts due in foreign currencies mliniy US Dollars UAB Dirhams Great Britain Pounds (GB P) and Euros of which the Group has a currency risk primruily on the baJmces payable in Euros and GBP amoWlting 10 QR 14400634 (2012 QR 17214046)
The Group does not hedge its foreign currency exposure As both Qatari Riyal and UAE Dirhams are pegged to the US Dollar balances in US Dollars and UAE Dirhams are not considered to represent significant currency ris k to the Group
The table below indicates the Group s fore ign c urrency exposure on its monetary assets a nd liabilities The analysis calculates the effect o f a reasonably poss ib le move ment of the QR curre nc y rale against the Euro and GBP with all other variables held constant on the consolidated slate menl o f income (due to the fa ir va lue of currency sensitive monetary asse ts a nd liabilities) The e ffect o f decreases in fo reign c urre ncy exchange rates is expected to he equal and opposile 10 the e ffect of the increases shown
Incramp1se ill
f oreign cUlrency rate
0
the QR
Ellecl on profil
QR
2013 +5 (720032)
20 12 +5 (860 702)
C redit Tisk Credit risk is the risk that one party to a financial instrume nt wi ll fa il to discharge an obligation and cause the other party to incur a financial loss TIle Groups exposure to credit risk is indica ted by the carrying amoWlt o f its financia l asse ts whic h consist principally oftmde accollilts receivable retention receivable amounts due from related parties othe r receivables and bank baLances
The Group sells its products and prov ides services to vario us panies It is the G ro ups policy that all customers who wish to obtain on credit lerms are subject to credit verificalion procedures to ensure c redit Ilonhiness Each new customer is analysed individually for creditworthiness before the de livery o f products Of services Custo mm tbat fai l to met t the credi tworthiness may transact with the Group only o n prepayme nt basis Property rentals are mostl y received in ad vtnce or conlrlCled wi th post dated cheques 10 additio n receivable balances are monitored on an ongoing basis a nd the purchase limils are established for each c redit custoroer which are reviewed reguJarly based on the level o f past transactions and senlement The Groups max im wn exposure with regard to trade aCCOWlts receivab le net ofa llowance re nected allhe reporting date was ilS fo llows
2013 2012
Business SJgmelll QR QR
Property 15478832 19386326 Trading and distributio n 194343 597 179748274 Industrial ma nufac turing 183119753 131578668 Managed services 18069385 14547389
411 011 567 345260657
41
29
Aamal Company QSc
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For tbe year eoded 3 J December 20 13
FlNAJICIAL RISK MANAG EMENT (c-o Dtinued)
Credit risk (continued) With respect to credit risk arising from the other financi31 assets of the Group the Groups exposure to credit risk arises from default of the counterparty with a maximum exposure equal 10 the canying amount of these instruments as follows
2013 QR
202
QR
Bank balances Amounts due from related parties Retention and other receivables
436136756 214439950 48290351
36788129 t 171525363 74082203
698867057 613488857
The group reduces the expoSltre of credit risk arising from other financial assets by maintaining bank accounts in reputed banks and providing services only to creditworthy re lated parties
The management cons iders the bank balances and a mQUIIIS due from related parties as high grade fi nancial assets and lfade accounls receivable and other receivables as sundard grade financial assets When a finltmcial asset is identified 10 be impaired the managemoot downgrades such assets to impaired category and provides adequate allowances
Liquidity risk Liquidity risk is the risk that the Group will not be able to meet its fmancial obligations as they fu ll due The Groups 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 nonnal and stressed conditiom without incurring unacceptable losses or risking damage to the Groups reputa tion and is to maintain a balance belWeen continuity of fuoding and f1eilibility through the use of bank overdrafts and bank loans and borrowings
The Group monitors its risk to a shortage o f funds using a recuning liquidity plaOfling 1001 TIllS tool considers the manuiry o f financial assets (eg accounts receivable) and projected cash flows from operations The Groups teons ofsales or services require arooUIlts to be paid within 30-90 days from the invoiced dale
42
29
Aamal Company QSc
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For tbe year ended 3 1 December 2013
FrNANClAL ruSK MANAGEMENT (contiQued)
Uqujdity risk (continued) The table below summarises the ruaruriJy profile of the Groups financial 1iabililies a t 31 December based on contractual undiscountcd paymeots
2013 Interest bearing loans and borrowings Bank overdrafts Trade accowus payable Other payables Amounl~ due (0 related panles
201l Interest bearing loans and borrowings
Baok overdrafts Trade accounts payable Other payables Amounts due to related parties
On demand
QR
6836280
6836280
011 demand QR
2885090
2885090
Less than 3 months
QR
521324473
303638792
47406830
2530~480
898675575
Less thall 3
months
QR
469839033
10754JJIO 37543236
1964504 1
634568620
3 10 J2 mOlllh$
QR
239333328
16378865 20210580
2289~11l
298816884
3 to 12 monlhs
QR
365476972
159621 37 J 24745342
30092716
579936401
1to 5 years
QR
J 60092748
160092148
1 to 5 years
QR
248472226
248472226
gt 5 years
QR
25261598
25261 598
gt 5 years
QR
7648000
7648000
TOlaf
QR
947012147 6836280
320017657
67617410 48199591
1389681085
Tota
QR
109 1436231
1885090 267162681
622 88578
49737757
14735 10337
43
30
Aamal Company QSltc NOTES TO THE CONSOLIDATED FlANCIAL STATEMETS For the year ended 31 December 20 t3
21 F~ANClAL RlSK MAiAGEMElT (continued)
Capital management The Boards policy is to maintain a strong cepit1 base so as to rnainmin investor creditor and market ronfoonee and to SUSWlJ) fumre dcltclonnent Gf the buinest The Board of Directors rronitortl the tapital whkh tbe Group defines as wlal $parcloders equity excluding nonmiddotcornroliing imerests and the level of dividends to orrunury srarellOJdcfS
The Board also reeks to ITIaimain a balance between the higher (ctums (hat might be fA-~$ihle With higher leves of borrnwings end Lle edvnrJages and security named Sy it sOMd Cilpitai posi[ion The GfCup~ k1rget is to achievfl a return on slureholders equity (exclJding aonwurrolJiug iorcf(sts) greater lll(ll1 he wcighlcd average inres exxmse on mrerest bearing Ivens and oorrowing
The (lf0t-p nl)nDg-e ils cnpital structure and makes adjustneal lOll in light ofchang2s in economic nd bttincss cordjlons and shareholders expe1ationJo chmges veremiddot maCo HI Lleuro objecttves polilCS or proCCSSC3 during the years erded 31 D~mber 2013md 31 Dtccmlxr2Ql2
The Group monitors the capit2J using a gClting fatio which IS dep divided by caplla plus debL The GtOwgts policy is to keep ttJe ge-anng rmio bclew 40 Tbe Group iLdtdes withb debt imete-51 beagting loans ard ~OITORlngs less cash and cash equtVaknts Capltal includes eqmty attributable 10 the equity tolders oft~e parcrt
2013 QR
2(i2 QR
fmerest bearing loans and borrowings lcss- Cash and cas ltYJUvalcnts
9i4lJ05301 _~ (429JfJl4761
1004845296 (649)6201)
Net debt
Toa capital
Capita and net debt
699849045
~ringrttio
FAIR VALtES OF Fl~ANOAL f~STRUMETS
Finarcial iostrumenL~ cOlnprise tina~lctal assetS carl finailcialliabilities
Fmancial assets colJist of bank balance) short 1Cm bank dcposis amounL dve dom rc)ltted partilt)$ rekntion and other receivables and ttade accolmis rceivabe Finatlclll habiilics cgtmsist of banilt ovcrdratls jnerest bearing lOil1S and bOrowings amounts due (0 nliled partiG~ ane trade x-ounls payable
The- fair values of hese financial inStrumen1S except Jo-- imCfest bearing loam lHld bOlToving aproKimate lhdr cMryinJ vlhes due to the Slort temt mzrutiiles or these instrument
Tllc faiT value of iotcnst beating Nns and borrowin2s ae estimate( based on discoumed ltash flows twin int(s rale- cune-ntly nvailagtk fur tilt debt or sinuiar tetnlS an-a rell1lmng matunties
31
Aamal Company~Q=-ScC ______________~______
~OTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For fhe year ended 31 December 20 t3
SlGNIFICANT ASUMPTIONS ACCOUJTING JUDGElE1TS AND F8TIMATFS
impairment (If accoonts receivable n etrnwe of lhe collectible anoun of trade accounlgt reccvable is made when collection of the full lHl1OUt i~ nO looger probabk FOI nCividualty significitIl amounts this estimation is p~rformed on an indh-idllai a$[$ Amomts wHcb arc not indivldl11Uy significant but wluch are past due ZTe tsscssed collectively and an aJlQwaccc applied ucc()r~Jng to the length of lime past due based oc histnncal recovery nlJes
hnpalrment of inHntnries lavenoncs are held at tho lower of col and nol realisable value InIOn inventoncent$ becone old or 0-~amplete an estilTJte is mate of their net j alisable vulue For indiviolhlUy significant amountS this cstinaunrt is performec all aD lndividwl osis Amotlnts whieh are fl0t individually significan( btll which ltIre old at obsolete wx LltSessed wllecivdy md a provisior is applied sccnrding to the invenrory type and be dep)ee of ageing 0 cDsolescc1ce based on anticipUled selling prices
Classifigt1ltion of El Sew(gtdy Cable Qatar WLI ali a j(lint vwture pound1 Sovedy Cables Qatar is a limited hability company whose kgal fum confers SCprm11ior bernten tbe jXliiies 10 ~he jomi lfranpement Snd the Company Itself FurthenrlOre then IS no oontractua] arrmgelTeot or any oibe aus aod circumstriliCe$ that iocik41to tht he putic5 [0 the joint flJTIlrgernelit bave rights to the ssetl and obligrtdons fo~ the liabilities of the joint ilrrongement Acoordingly El Sewed- C[jbl~s Qamr WLL is dassifiecl 7S a joiut enrtrr of he GWtp
impairment of goodwill G0oovj)1 embedded in th~ cot 0 aquisitior of subsidiaries and eqmtj-iccounled iflV(stees ire teswt for irl1jXlirmnt aHuaily Tbe calculations of value [n use fO( cfish gecj~r)lilg units (loring to real nte projecg are rtost sensitive to tin IDHowing assumpti015
Grosgt i1wginmiddot Gross Ilmrgins arc lmsed on avrage values tuhje0d in (he [Xrioo preeedhli (e siaM of the budge xnod T1esC at( mcreased over the budgel period for mticipatltX efficiency Hnprovemots
DisC)unr r(es Discount rotes represent th cl1tent mark as~ssmetlt of the risks specific te ech cash geocroting unit regarding lhe time value of money ilnd mdividu)l risks of he tmtieriyilg assets whICh have not been inwrport1eti it the Citik flow estimates The dj~(OUrl flte tlkulation is based on the speclfte circurnsthLCes of lile Group and its opltllatJng segn)~nts (md derived (ff)rC it weighted avaage (XSt 0f apilaJ (WACC) Tb fACe (akw into uoount both deb and equity The 0$1 of equity is denved from dlC expected return 01 investmenl by the Groups investors TJc Gos10( deb is based on l1e borrvwings the Gmup IS obllsxl to service SC~lletllmiddotspecific r5k IS incorxt4too by applying individual bera facto The betn mctors ire evauatcentd annuaHy bhseci on pubJicly aVflllabe murked earn
Fair value ()fnHstmeni proputies The fuit laHe 0 nvestmel~ propertis is deltrrnlnzd b cxterrwl indepzfldell property valuers laving appr0priate recognised professional quabfiillions and recenl xperience H1 the localjl)n and G-tegory 0 the oroperty being valued
Useful hes of PfQPcrly plmr (llld zqulpment The Groups management detennints th estiunted useful jives Df It~ property plan and equipmnl fix calnurjng depreciation Thi5 e~timJte is 6lermind after cinsidring 1b expeelcd usage (1f the a5sclt [hysical l101t and (eas tedmiltal Dr com~ercia obsolesccnce
Gotlg Qncen
ibe Groups mangerncnt UiS made aJ assessmeot cf the 011115 ability (0 COllllOUC liS a going conct11l Imd is satsl1ed hat me Group ms the resources to contmue in business for he foreseeable fu1urc he1hennort he management is no aware oC lny material Hncertainties that lray CH~t signinchnt doubt tlPDfl the Groups ability 10 continue as a going umcem Therefore titpound lotlsolidatcd finilllcij stftemeols comirme to be prepltd on li g0ing concern basis
Aamal Company QSc
NOTES TO THE CONSOLIDATED FlNANC[AL STATEMENTS For the year ended 3 1 December 20 13
32 INCOME TAX
Certa in subsidiaries of the Group which have non-GCe ownership are subject to income tax under Qatar Income Tax Law No 2 1 of2009 The iocome tax is charged on the share of profits attributable to non-GCe shareholders For the purpose of these conso lidated fi nancial statements the income tax liability oftbe foreign shareholders has been excluded given that the non-GCe shareholders have agreed under the shareholder agreements signed with the Group to bear the fh lliiability and make necessary payments
33 COMPARATIVE INFORMATION
Certain comparative figw-es of the previous year have been reclassified 0 coofonn to the current years presentation However such reclassifications are oat materia and do not have an impact on tbe previously reported net profit other comprehensive income or the total equity for the comparative year
The impact from the resta tement of comparative infonnalion as a resuh of adoption of IFRS I I - Joint arrangements is detailed in Note 32 Changes in aCCQu(lting policies
46
Aamal Company QS c
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For che year ended 31 December 2013
11 PROPERTY PLAi~T AND EQUIPMENT
FumilUre Truck mixers fIXtures and Complllers
Leasehold and maor Plum (fd office and relaed eapiowork Buidings improvements vehicles machinery eqllipmcni sofMore in progmiddotcss Total
QR QR QR QR QR QR QJl QR
At I January 2013 137870126 371 88 132 9595813 1 262536261 19 580954 14864 385 561 32447 6241 30436 Additions 948)65 2618 100 5367399 859061 111 5268 137147581 148055774
Relating to d isposalswrite-off (1042642) (4390496) (77157L) (589150) ( 184075) (6977934) Transfer from capilal work in progress 1505 310 164 336 3601776 ( 150000) 1182741 (6304 163) Transrer to investment properlies (Note (0) (345 19828) (345 19828)
At J I Dttember 201 J 139375436 J7 258~ ~1 85735 270733865 19700865 169783 19 152456037 _73068~448
Depreciation AI I January 2013 16133915 J6902 529 49087707 68783 065 11 980009 tl71 595 3 174603 178 Charge for the year 7059805 3237150 5390767 12249797 2849162 1768823 42555504 Relating 10 disposalsJvri te-off (664709) (4 3 1716 1) (724322) (552939) ( 18 1993) (6441 124)
At 31 December 201 3 23193 720 19474 9 70 50161 313 90303540 14276232 13302783 2 107 17558
Net carrying amounts At 31 December 2013 116181J16 _17783221 44024422 180415325 5424633 3675536 __l2456O37 JJ9970~890
Notes (i) Depreciation charge for the year amounting 10 QR 33 164382 (201 1 QR 3303091 6) is included in tbe direct costs and an amount of QR 60055 (20 12 QR 36939)
has been capiulised under capital work in progress
(ii) The capital work in progress includes capitalised borrowing costs amounting to QR 125645 (20 12 QR 15358)
(ii i) The buildings are constructed on a plot ofland taken on a loog term operating lease
25
Aamal Company QS c
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 31 December 201 3
II PROPERTY PLANT AND EQUIPM ENT (continued)
C05I~
At 1 January 2012 Additions Acquired through business combinations (Note 4) Relating to d isposalswrite-off Transfer from capital work in progress Transfers
Buildings QR
137434400 435726
Leasehold improvemellls
QR
38137377 446J 04
144 103 ( 1539452)
Truck mLCers and molO
velricles QR
83427661 11464679
1697609 (631824)
Plant and machinery
QR
249335437 97264 85
35 14 132 (99498)
59705
Furniture fir ures and
office equipmem
QR
22845309 667586
192042 (3696457)
98000 (525526)
Computers and related
software
QR
158 19519 87 14 14
141837 (266 1733)
908078 (2 l4730)
Capitol work in progress
QR
12104889 451 53265
( 1065783) (59924)
Total (JR
55910459 8 68765259
5689723 (862 8964)
(800180)
AI 31 Dttember 2012 137870) 26 371881 32 95958 13 1 262536261 19580954 14864385 56132447 624 130436
Depreciation AI Jaouary2012 Charge for the year Acquired wough business combinations (Note 4) Relating to disposalswrite-off Transfers
9144666 6989249
)4 3 16620 3410618
144103
(96 812)
42558404 548 1613
1671942 (6242 52)
44555 290 2 1398849
2890797 (6 187 1)
12392584 3 182899
169005 (3558466)
(206013 )
12235266 2077633
136959 (2627283)
(J 0662)
135202830 42540861
5012806 (7840684)
(312635)
At 3 L December 201 2 161339J5 16902529 49087701 68783065 11 980009 11715953 174603 178
Nel canying amoWlts
At 31 December 201 2 12 173 6211 2028560 3 46870424 193753 196 7600945 3148432 56132447 449527258
26
12
13
Aamal Company QSC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 31 December 20 13
ACCOUNTS PA YABLE AND ACCRUALS
Trade accouots payable Advances from customers and tenants Accmals Social and sports activities levy Other payables
AJIOUNTS DUE TO RELATED PARTIES
Name
Arab Compaey for Fiber Products EI Sewedy EIC( lric Ho lding Egypiasl Egypt Egyptlech Egypt United Industri es Company WLL Johnson Controls Air condi tioning aod Refrigeration Qatar WLL pound1 Sewedy Cables Egypt Johnson Controls Air conditioning and Refrigeration rNC Dubai United Wire Company WL L Gelteo Company W LL - Gelteo Refr igera tion and Airconditioo ing CampC Lightway nc AI Shaab Group of Companies Other related pruties
NO M Related party transactio l)s a re disclosed in Note 26
2013 QR
320017657 30486837 26924669 41 761 843 25855567
445046573
2013 QR
18517474
4902528
6531231 6404578 3215821
2825884 75 7825
3467288 263715
1313247
48199591
2011 QR
26716268 1 27410234 222575 76 28954726 33)33852
379119069
2012 QR
18380528 91458 82 54 13849 1 11 6 135 5374039 35291 2020359 1693323 1064744
670 179
11 0873 12 18650
49737757
27
14
Aamal Company QSC
NOTES TO THE CONSOLIDATED f fNANCIAL STATEMENTS For the year ended 31 December 201 3
INTEREST BEARING LOANS AND BORROWINGS
NOles Malilrify
2013 QR
2012 QR
CoMl Loan 2 Loan ) Loac4 Loan 5 Loan 6 Loan 7 CoMB Loan 9 Bills discounted
(0 (ii) (iii) (iv) (v) (vi) (vii) (viii) ( ix) (x)
lune2014 Seplember2014 January 2015 November 2016 December 20 16 November 2017 Jllne20 l J December 20 7 OClober 20 19
172070387 440000000 50544000 40261 621 81387109 19920036
6] 43890 62626967 42522794
915676804
298324180 440000000 10 J088000 57955030
100 168750 2 1300492
407728 1 782871 1
35000000
1065742444
Less Defe rred finatlcing cost (771 503) (897148)
914905301 1064845296
Presented in the consolidated statement of financial positioo as fo llows 20)3 QR
201 2 QR
Current ponion Non-current ponion
749520820 165384481
825568489 239276807
914905301 1064845296
The dete rred financing costs consSt of arrangement fees The movements m the deferred financing costs were as fo llows
203 2012 QR QR
At I January 897148 332 661 Addjtions during the year 1 062565 912506 Amortised during the year (218amp210) (34801 9)
At 3 1 December 771503 89 7148
28
Aamal Company QS C
NOTES TO THE CONSOUDATED FlNANCIAL STATEMENTS For tbe year ended 31 December 2013
14 INTEREST BEARING LOANS AND BORROWINGS (continued)
Nolec
(i) Loao I i USD 93000000 impon 10n moi lily obtoined to refimnee he Icne~ of edit The 10 IT interest at commercial fate and the interest is paid at monthly intervals The fucility is repayable within ISO days including the usage period under letter ofc redits
(ii) Loan 2 is a secured bridge loan obtained to settle an existing loan and working capital requirements of the Company The loan carries interest al coOlJllercial rates and interest is 10 be paid on quarterly basis
(iii) Loan 3 was obtained for the pWpOse of financing capital ependiture and direct payment to suppliers contractors and 5ub-controctors The 10011 CMries interest at commercial rate and the inte rest is to be paid q Uar1erly The fac ility is repayable in IS quarterly iostallmenls starting I July 20 11 and ending I January 2015
(iv) Loan 4 was obla ined for conSlruclion o r an inveslmenl property The loan is seclJed by 0 primary mortgage over the some property and corporate guarantee of the Aamal Company QSC Tbe loan carries interest at commercial marke t rate and is payable in quarterly instalments
(v) Loan 5 represents a loan fOlcility obtained in two sepnrole tranches amounting to QR 309 825 000 (USD 85 million) for the purpose of refurbi shment and construction of fociJities io one of the investment properties The loan is repayable In 16 equal quanerly instalmcnlS for individua l tranche commencing from March 20 1J The loan carries interest at conunercial rJtes
(vi) Loan 6 represents secured loans obtained ffom a commercial bank in the previous periods for the purchase of heavy equipment and machines and were merged on 15 November 20 12 as a comb ined loan This loan is payable by 59 equal instalments of QR 426000 with (I last inSlalment of OR 438 326 with effect fro m 01 October 201 3 The loan carries interest at commercial market ra tes
(vii) Loan 7 is il tmst receipt banking facility obtained for the purchase of inventories This carried interest at conunercial market rates This loan was full y settled during the year
(vii i) Loan 8 represents secured loans obuined from a commercial bank in the previous periods for the purchase of delivery trucks and machinery and were merged on 22 October 2012 as a combined loan The loan carries inte rest at commercial market Tates and is payable by 59 equal insta lments o rQR 160000 with a last inSlOlmem ofQ R 128000 with effect from 3 1 December 2012
(ix) Loan 9 is an Islamic Financi ng Arrangement obtained for construction o f a manufacturing plam and as o f yearend ba lance represents partially drawn amount out of totil1 facility of QR 655 68000 The loan is secured by joint corvorate guarantee by the shareholders The loan carries profit at Islamic Financing rates and re-payable in quarterly instalments starting from the end of the 24 months gmce period from the date of loan drawn
(x) Bi ll discounting is a loan fac ility from banks The purpose of the arrangement is to discount bills locally and carries interest at current commercia l filte
15 EM PLOYEES END OF SERVICE BENEFITS
Movements in the provision reHectelt in the consolidated SLo1tement of financia l position were as fo llows 2013 201] QR QR
At I Jan uary 18111 763 17877937 Provision made during the year 4056969 4205499 Acquirelt through business combinations (Note 4) 349272 End of service benefits paid during the year (2210756) (4320945)
At 3 1 December 19957976 18 111763
29
Aamal Company Q5C
NOTES TO THE CONSOLIDATED FINANCIAL STATEMETS For tile y~ar ended 31 Dee~mber 2013
16 SHARE CAPITAL
2013 2012 QR Qq
AtI1l1)nud 60000)000 (20 2 544500JJOfn shares ofQR iii Cilch 60i)iQOOlOO 54450lt)0000
21)13 2012 Numher of
siMtS QR shares QR Issued Mtldfully paM At lJamld) 544SfWllOfJ 5445(100001) 495000000 49500000)0 1511C ofbonus S1i1-C ___ 5550~OOO 555000000 49SGOOOO 495000000
At 31 Decenef 6(OOampQllf1(1 ---14450O000 544~OOOOOO
All ampates m~ of a110 clss and caL equal voting rights
17 LEGAL Reuro5ERVE
As required by Qatar Comnertai COfrp7lnies Lav No5 of 2002 lOfp of the profit for the ye1J as a rru1imllli silould be mmsfened to legal re~erve The reserve is lot normay [lytiabe tor distribution except ill he cixcuJUstllrtUS stipulated m the above ~lemi0ntd GIW
IS HEVE1TE
2013 l)n QR QR
Sale of goods 1726893265 i709057~(iO
Renlal income UiO362322 133117509 S-ice income 858695 33940731 CornrrusslOlL Incentives and agency fces 44695S1 422~_632
212259$)33
19 DIRECT COSTS
2013 2)i2 QR
C 051 of inven(feS recognisedlIS an exptns 1522929956 497210830 Dind sL1ries lmd wages 601 [1336 5137856-8 Operating eXpenses on nml estate p~opet1les 36)711316 3041H504 fJepreciatiort (Kate I J) 33164382 B03091pound Operators marhgerrt6nt fees 14508588 li667989 Provisicn Qr obsolete and skwlt moving mvenlories (K)tc 8) 2380617 2208263 Other operating ilxpenses _31~3982 _ 3674946
1702139171 JS9653OI tgt
Aamal Compall-yQSC________________
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For lthe year ended 31 December 20 11
2G OTHER NeOiI
2013 20J3 QR QR
Interest mcume 2824216 2)314392 Profiv( loss) 00 disposal of property plant aoe eqUlpmem 737647 (l7362G) Eargain ptmnJse gain (Kote t) 8360793 MIsceJlaneous income 5723356
2013 2012 QR QR
ManllgetnUI hrQ empl(yees ws 55170302 55lt035middot1 Rent 23596799 2594915 Allowance for impaimlcot oUrsue aCQl1ot$ rc(Xjvalle (Nole 6) 129459(i 11613120 flBumcce ane profcampiitmJI fees 2IU9263 209J902 Corununication OOtHS 1935123 1649155 Trllining tid ouSfjt$s developmccl 950476 L095764 Re]X1in and mainle-nilnce 21)11SflS 2)2 I Poslag-c prjnting acri stationery 610299 541159shyvllsltdlancous expenses _~~~664 1lt2
-~~~ 125162812
22 fIN~lCE COSTS
2013 2amp2 QR QR
Inleres epen~ 42866312 5773U4B Am(vtisJliorgt ofdefcentrred financiog coStS __ 2l)tl26~~ gt3661
44930877----=
58063009
23 BASIC A~n nHUfED EARilNGS PER SHARi~
Basic trdTJogs per hue is caculatid 0y llividing the pwfill0( Ihc year attriouiabk (0- equity roldc-5 of the parent by lhi w~iglwxi avrage number of ordinary shares 0JstandirJg dulting tht_ year During Ihe year lil~ Conpmy i-sued and CBpii3lzed bonus shares lnd awmJingl) me previously ~eportod earnings per shac have blOM restatc(i
20i3 2012
Profit feT the year auributable to Cluity holderlt of the- paren (QR)
Weighted aVCTage number ofshares outstanding during the year (i)
Basic Jd diluted earnings per share (QR) 085
59985U413 shy
~~--~~~~- ~------J 1
23
Aamal Company QSc
NOTES TO THE CONSO LIDATED FfNANC[AL STATEMENTS For tbe year ended 3 l December 2013
BASIC AND DILUTED poundARNINCS PER SHARE (continued)
NOles (i) Th wigh d m nlg urnb of hres foc h P of lruling ~migs pee share h bee kulated
as follows 2013 20J2
QU3lifying shrues allhe begi ll1ling of the year 544500000 544500000 Effect of bonus shares issued and capitalised 55500000 55500000
600000000 600000000
Less T reasury shares (149587) (i357SI)
Weighted average number of shares at the end of the year 599850413 599864249
(ii) There were no potentia lly dilutiw shares outstanding at any time during tbe year and hence the diluted earnings per share is equal to the basic earnings per share
24 COItIMITMENTS
20 1] 2012 QR QR
Estimated capital expenditure approved and contracted for at the year eod but not provided for
Investment properties 2964000 8 139063 Property plant and equipment 16386500 63759762
19350500 71 898825
Operating lease commiIOlenlS under noncancellable lease agreemenlS
Payable wilhin one year 990806 702000
990806 702000
25 CONTINGENT UABILITlES
The Group had the following contingent liabi lities from which it is anticipated thai no malerial liabilities will arise
2013 2012 QR QR
Letters of guaramee 474551239 394255203
Letters of credit 7678499 194299384
NQles
(i) leHlaquogt of gu indud penonmnlaquo tend nd bid bonds d pymenlt g gi to suppliers and contractors by the Group in the ordina ry course of bus iness which will matme within twelve months fro m the reporting da te
(i i) Letters o f credit are provided by lodging documents to the bank tor purchase of trading goods fro m foreign suppliers wruch will maMC within thJee to six months from the date or tile Iransaclion
J2
26
Aamal Company QSc
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year eoded 31 December 2013
RELATED PARTY DISCLOSURES
Related party transactions Related parties represent major shareholders directors and key management persortOei of the Group and entities controlled joimly controlled or signjficamly innueoced by such parties Pricing policies md tenns of these tnlOSaclions are approved by the Group s management
Transactions with related parties induded in the consolidated financial stalemenls were as follows
20lJ 2012 QR QR
Sale o f goods and SClVices 419034048 415225221
Rental income 1980473 2069386
Purchase of goods and services 1591 38018 300835596
Rental expense 21 780G78 23397334
Bargain purchase gain 8360793
Net assets acquired 78803585
Relat ed party bal nnces AmountS due from and due to re lated parties are disclosed in Notes 7 and 13 respectively These balances do oot carry interest and are repayable OIl mulUlUy agreed dates generally within one year
The Group did not record any impairment of receivables reJatiog to amounts due from related pat1ies in either year This assessment is undertaken each fina ncial year through examining the ftnanc ial position of the related party and the market in which the related patty operates
Parent The Groups ultimate parent is Al Faisal Ho lding Company WLL
Compensa tion or key management personn el The remuneration of key management dming the year was as fullows
2013 2012 QR QR
Short-term benefi ts 7904794 1079595 Employees end of service benefits 408934 439776
8313 728 11235727
33
AamaJ Company QSC
NOTES TO THE CONSOLIDATED FINANCIAL 5T ATEMENTS For the year ended t Decernber 2013
Dilling the year 1he Group issued a XHlUS share of 10 928 of the paid tiP share capilal hdd ilS at 31 DiX2mber 2(JJ 2 mnmuning to OR 555000000 using retamed earnings as of3 December 2012 (20l2 Doe share for every ten shues held as of 31 Dcember Oll amuunting 10 QR 495OO()OOO ling reta1ned earmrgs 28 or 31 Decencer 2D II Jshy
18 SEGMENT INFORMATION
For J)iloogement PUIpltJM rhe Group i organised into business unit bused On LlJeir nature of Acttvitics lud nas fonY reportable segments and the Head Oftklt as bllow$
Propert Tbe segntn cOlists of City C~nler Qlta~ Brunch and Aamal Rea Esmte Branch whicb ll[c invoived in lampIiiog the faJ1ities of retail outlet conpex red e5ttlte nve(mltn$ and property remal buines~s
Trading mld distrib-wion The segmeul Involves wholesalB andlor rBtail distribution of phamlaceutlcai and consunable i1ems hume Epplianccs medica equimenl t-Tes ill1d lubricmtlaquo and II1UllitnEl printing The scgn(rtt includes 6c following entities
Eotl Sina Medical Branch
Aaen Medical Braudt
Amcill Troding and DistoolltlqO Branch bull Foot Care (erier HRnd) Good llre Pbannacy Bf4Uch bull Al FllfJdaq COllpafY wJ~L
InduSNol manuacturing TIle s0groent IOvolves Ulahuactrumg whole~we aliaor rewi dimibUlioti of dccnc cables lid tools ggregJ1es_ ready-IUx connole and cement bI0C~ lI1d provi$ion of servlCcent$ in rdation to iODllltroa Itvestment repair aJ-d Gonstruction of power plwts liiiding of LED ilgluitlg products und management of industnl enterpnses The segment ircludes be folloVting centntitis
bull Aam1 Cemert Industries LL AuraJ Redy1Yl(A BrQTlch
bull Doha Cables Qawf lLL Senyaf IoolJic1es Qatar Holding W LL Advanced Pipes ard Casfs CompQTly WJ L bull GuJfRoch Coroany WLL Ci~San Trading Company WLL hmovafive Lighting Compary WLL
Managed services le segment inyolvc~ provisloH of hOllseiltecpmg mi cleaning services fucditics n-anagemerJ services C1egy s(tvices ttl centfe sltrvicf)s buildiqg lnaintemHlelt aml acting as travel gens The 5cgnltnt includes the foUowing cnti(lcents
An13 ServJce Branch
amli TnlVeJa l5tmh
f-eco Gulf Co W LL
Jolinson Controls Qattl WJL
28
Aamal Company QSc
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended ) L December 20 13
SEGMENT INFORMATION (Co ntinued)
Head Office It provides corporate services to the branches and subsidiaries of the Group
The managiog d irector of the Group monitors the operating results o f its business units separately for the purpose of making decisions about resource allocation and perfonnance assessment Segment perfonnance is evaluated based Oil operating profit or loss of these segments Transfer pricing between operating segments are on anns length basis in a manoec similar to Iraosactions with third parties
Aamal Company QSC
NOTES TO THE CONSOLIDATED FINAN CIAL STATEMENTS For the year ended 3 1 December 20 13
28 SEGMENT INFORl1ATlON (continued)
Operating segments The operat ing segment after elimination or ioter-bra nch and inter-co mpany lrnnsaclioos is presented as follows
Trading (nd Industrial Managed For fh e year elided 31 December 2013 Properly disirjblli ioll manujocljlring services
QR QR QR QR Revenues
- h lemal parties 260360172 578909983 1231522768 S l802210 - Inter segments 1253914 6843 11 8 29639873 3445052 1
Heat Office QR
Eliminoions QR
(n187426) II
Tolal
QR
2J22595133
261614086 585753 lOI 126116264 1 8625273 1 (721 87426) 2122595133
Opera ti ng results Fair vallie gains
Profit I (loss) ror the year
Depreciotion
200811944
245051 107
445863051
2066290
86492834
86492834
4345438
22636250
22636250
33049 089
5157436
5157436
1760305
(47864882)
(47864882)
1334382
267233582
245051107
512 284689
42555504
36
Aamal Company QS
NOTES TO Tl CONSOLIDATED FfNANClAL STATEMENTS For the yeM ended 31 December 20 13
28 SEGMENf INFORMAnON (c)tltioucd)
FOf the yearrnrkti J f DccemOer 2(J12 QR
Revellues - ExlcmlJ partiel 2331 17 509 bull Inter segmcI11S 1168935
-- 234236434 --~- -~--
Openning results 18S2367t Fmt value gains J8S79-4~G
pront LOllS) for the rear 570616154
gt3659
No(
lnlermiddotgment revenues are eliminated on tQHs)idntiOH_
Tadiug ftfid disl d)Ntion
QR
S2S3l7661
324 j
5335493114 ~ -~-----
51384831
54384338
4J9R71(i
Indus idi mamfmturing
QR
1255694537
129U25lS4
56727059
56727059
32752742
slnltic(s QR
55216665 2939H31
S46lOJ96
7427414
7437
[908067
ilfild ()jice QR
(64(41976
Elimination QR
(74tHi2oJ Iii
Totul QR
206936372
2069336372
235721
(64641
131 f613
6245
42541)861
Amnal Company Q$l
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Por tnt yeartndeJ 31 De~embcr 2013
28 SEGMENT JNFORMATlON (contiutlld
Assc-ts and labilities
Tng alld lndtrstfw At31 December 2(113 distnbllrior manufacturIng senices HeadOJJicc EliminatioilS lola1
QR QR QR QR QR
Cumnl 3tS 227552338 620807979 61349 j 415 S()6)86922 (301636995) 1477366090 Noolucrcnt DSeIS 6411868160 12604763 622386238 4348876 (i624548 __p2438051 780
fotal asstl$ 6639420498 1194 1243194217 65698291 513Ql1470 ==-lt03H8l~O()) 853295-870 -~----~ ~---~ -
CUIT)llliabilitics 280995335 1(3511J60 6344(12777 2l0708lJ2 496261185 (3CH636995) 1249603264 Non-current iiatJlitics 7l70L5V2 8008485 HlDi16~43_ 3181668 t433799 ____ ilj534_~57 __ --Totul liahililics 353696897 ___~4159~4~ 734419720 ~4976~~~~~ 1434945711
---~~--~ -~-~~ - _2~~~4~~ (~~~~9~
C1pild expcndimn HI) WO743OOj 1397742_~471l2~--~50 ~51 ~1~623821~~1~_ -~----~------ -~
3amp
28
Aamal Company Q SC
NOTES TO THE CONSOLIDATED FfNANClAL STATEMENTS For the year ended 31 December 20 13
SEGMFNT INFORMATION (continued)
Assets and liabilities (continued)
AI 31 December 2012 Properly QR
Trading and d iSfriblllion
QR
Indusrial manufacfuring
QR
Managed senices QR
Currenl assels
Non-current assets
146491 186
6121 864484
2964425 12 903 7264
73468 1258
549267235
51387098 471 1439
Tolal assets 6268355670 305479776 1283948493 56098537
Head Office QR
468325024
6713643
475038667
Currentliabil iies
Non-current liabiLities 273444 748 1 J10 15024
86054583 7434286
669214261 1288 14977
2 1938953
287 1199
480393637 1253084
Totil lliabiliti cs 390459772 93488869 798029238 248 10 152 48J64672 1
Capila expendirure (ltII L 72865 878 1281254 6647 J356 7169 13 149045
Notes
(i)
(Ii)
Inter-segmeot balances are e limioafed 00 consolidatio n
Capi tal expendiTU res consist of additions 10 propeny plant and equip ment and iovestmenl properties
Eliminations QR
To wl QR
(273735776) (i )
(20308351(i)
1423591302
6689563230
(27576661 1) 8 113154532
(273135777) (i) 12573 10405
257388570
(273735177) 15 14698975
24 1484446
39
29
Aamal Company QSC
NOTES TO THE CONSOLIDATED FrNANCIAL STATEMENTS For the year ended 31 Dcltmber 1013
Fr-A]~ClAL RISK MANAGpoundMamp1H
Objccthes and policies fe Groups principal )uaucill liabilities comprise imltresl bctmllg loons and IxmowHgs baRlt ovetda1s amounts due to fclaled par1ies and tracte accounts payable The main pUlJXSi of thesc financial liabilities is 4J mise firmne or 610 Grmps operations The G0JP bas various fimmcial assets such as ttadc accounts receivable lInlOlmts due from related parties bark balances tltCntion receivable and other receivables which arisgt directly fran its cperuoonamp
The maiH ri~ks an3ing Joru (be Groups UnariCJlll illslrumenls jle market risk cretiJt nsk and hmdity risk Til BoarD ofDtrcctO$ reviews end agrees policies for mzrAgbg Caltt f hespound ri~k ihkh arc summariscd beloW
VIarktt risk yenfatket risk is the risk Um changes in market prices $Uch as intfcst rates and hreig lttmeocy ect14nge rilles Vltl1 affect the Groups profit eqwty Dr value tf its hoJdiI15 of financial instrl[Thnls rile objecivpoundj of marke1 risk mUnllgcrlcnt is to manage uld 1~ontr(ll tho tr))rket risk expo-sure vithir acceptable parfI-etcJ$ while optimising rerUID
Equit) price risk ampjuity prtce risk is the risk hilt the Group ampearnings will be affected as a rcmt (If luctttltions in fm vdue of ~qui-gt
mstwnents Eqlliry price risk arises from availabtetor~sale inv2strnems However the Groups exposure to eqmty price risk IS minima as II doesn hold sitl)iftrmt ailableAor-511le inYestrmmrs
[merest rate risk The Groups fimiruial poundS5ot ampId liaojlilies (at Rl $uJject to int~~ rate mk compnse brmk depoils interst bearing loans and bOITQwjags and bank overdr-afts At the reponwg dalt tbe [merest rale pronle of Ill Goups intexst bearing fbi4rdd instruments as fliows
11113 20i3 QR QR
Fued liIeryS refc insfrvrnellts
Fmmcial assets 113035962 111913394 FrOltwial liabilities --1~203712l) 1252t43~1
9)OI~ (13350972)
Fhlllting inireSI rate ns1lmlttrs Fanctl~ Isseis 127024345 ID43848o Fllllocial liabilities _-(i~9347~ (94))48926)
(836)64116)
The Groups exposure to t~ ris of changes in marXet interest fltltes relztes primariiy to the Groups financial assets and lizbitdic$ with t1Oltttirg interest mte~
lhe loEowing able demonstrates the ampmitivity nf the eonsolidattXI statemen1 of income 1) caonaly possible chonges in in1jfgtst rmes by 25 basis points with all othe vari)ble3 hdc umstant The sensitivity of the CooiK~ljclatid statement of inc(me $ the eft(ct of tb assumed changes in lnterdt rales for one year bf1sec on the floating rate financial assets and fimmcial hablhw$ held at 31 f~r The effect of deae-ascs in interest ral~ is cXp0Ctct to be equal and opposite to the effect oHlle increases sllQvro
Changes it Eftx OIl
00513 [oms profit QR
2013 Floating mterest Hlte instruments ----2$ bp (1649776)
2012 Flv-ating irkfiSt rale instrumenls +25 bp (209[9(1))
~--------- -~~ 40-middot------ _ _ shy
29
Aamal Company QSC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 3 1 December 2013
FINANCIAL RISK MANAGEMENT (continued)
Foreign currency risk Foreign currency risk is the risk lhilt the value of lhe fi nancial instruments will fluctuate due 10 changes in fore ign exchange rates
T rade aCcOlmts payable and accrued expenses include amounts due in foreign currencies mliniy US Dollars UAB Dirhams Great Britain Pounds (GB P) and Euros of which the Group has a currency risk primruily on the baJmces payable in Euros and GBP amoWlting 10 QR 14400634 (2012 QR 17214046)
The Group does not hedge its foreign currency exposure As both Qatari Riyal and UAE Dirhams are pegged to the US Dollar balances in US Dollars and UAE Dirhams are not considered to represent significant currency ris k to the Group
The table below indicates the Group s fore ign c urrency exposure on its monetary assets a nd liabilities The analysis calculates the effect o f a reasonably poss ib le move ment of the QR curre nc y rale against the Euro and GBP with all other variables held constant on the consolidated slate menl o f income (due to the fa ir va lue of currency sensitive monetary asse ts a nd liabilities) The e ffect o f decreases in fo reign c urre ncy exchange rates is expected to he equal and opposile 10 the e ffect of the increases shown
Incramp1se ill
f oreign cUlrency rate
0
the QR
Ellecl on profil
QR
2013 +5 (720032)
20 12 +5 (860 702)
C redit Tisk Credit risk is the risk that one party to a financial instrume nt wi ll fa il to discharge an obligation and cause the other party to incur a financial loss TIle Groups exposure to credit risk is indica ted by the carrying amoWlt o f its financia l asse ts whic h consist principally oftmde accollilts receivable retention receivable amounts due from related parties othe r receivables and bank baLances
The Group sells its products and prov ides services to vario us panies It is the G ro ups policy that all customers who wish to obtain on credit lerms are subject to credit verificalion procedures to ensure c redit Ilonhiness Each new customer is analysed individually for creditworthiness before the de livery o f products Of services Custo mm tbat fai l to met t the credi tworthiness may transact with the Group only o n prepayme nt basis Property rentals are mostl y received in ad vtnce or conlrlCled wi th post dated cheques 10 additio n receivable balances are monitored on an ongoing basis a nd the purchase limils are established for each c redit custoroer which are reviewed reguJarly based on the level o f past transactions and senlement The Groups max im wn exposure with regard to trade aCCOWlts receivab le net ofa llowance re nected allhe reporting date was ilS fo llows
2013 2012
Business SJgmelll QR QR
Property 15478832 19386326 Trading and distributio n 194343 597 179748274 Industrial ma nufac turing 183119753 131578668 Managed services 18069385 14547389
411 011 567 345260657
41
29
Aamal Company QSc
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For tbe year eoded 3 J December 20 13
FlNAJICIAL RISK MANAG EMENT (c-o Dtinued)
Credit risk (continued) With respect to credit risk arising from the other financi31 assets of the Group the Groups exposure to credit risk arises from default of the counterparty with a maximum exposure equal 10 the canying amount of these instruments as follows
2013 QR
202
QR
Bank balances Amounts due from related parties Retention and other receivables
436136756 214439950 48290351
36788129 t 171525363 74082203
698867057 613488857
The group reduces the expoSltre of credit risk arising from other financial assets by maintaining bank accounts in reputed banks and providing services only to creditworthy re lated parties
The management cons iders the bank balances and a mQUIIIS due from related parties as high grade fi nancial assets and lfade accounls receivable and other receivables as sundard grade financial assets When a finltmcial asset is identified 10 be impaired the managemoot downgrades such assets to impaired category and provides adequate allowances
Liquidity risk Liquidity risk is the risk that the Group will not be able to meet its fmancial obligations as they fu ll due The Groups 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 nonnal and stressed conditiom without incurring unacceptable losses or risking damage to the Groups reputa tion and is to maintain a balance belWeen continuity of fuoding and f1eilibility through the use of bank overdrafts and bank loans and borrowings
The Group monitors its risk to a shortage o f funds using a recuning liquidity plaOfling 1001 TIllS tool considers the manuiry o f financial assets (eg accounts receivable) and projected cash flows from operations The Groups teons ofsales or services require arooUIlts to be paid within 30-90 days from the invoiced dale
42
29
Aamal Company QSc
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For tbe year ended 3 1 December 2013
FrNANClAL ruSK MANAGEMENT (contiQued)
Uqujdity risk (continued) The table below summarises the ruaruriJy profile of the Groups financial 1iabililies a t 31 December based on contractual undiscountcd paymeots
2013 Interest bearing loans and borrowings Bank overdrafts Trade accowus payable Other payables Amounl~ due (0 related panles
201l Interest bearing loans and borrowings
Baok overdrafts Trade accounts payable Other payables Amounts due to related parties
On demand
QR
6836280
6836280
011 demand QR
2885090
2885090
Less than 3 months
QR
521324473
303638792
47406830
2530~480
898675575
Less thall 3
months
QR
469839033
10754JJIO 37543236
1964504 1
634568620
3 10 J2 mOlllh$
QR
239333328
16378865 20210580
2289~11l
298816884
3 to 12 monlhs
QR
365476972
159621 37 J 24745342
30092716
579936401
1to 5 years
QR
J 60092748
160092148
1 to 5 years
QR
248472226
248472226
gt 5 years
QR
25261598
25261 598
gt 5 years
QR
7648000
7648000
TOlaf
QR
947012147 6836280
320017657
67617410 48199591
1389681085
Tota
QR
109 1436231
1885090 267162681
622 88578
49737757
14735 10337
43
30
Aamal Company QSltc NOTES TO THE CONSOLIDATED FlANCIAL STATEMETS For the year ended 31 December 20 t3
21 F~ANClAL RlSK MAiAGEMElT (continued)
Capital management The Boards policy is to maintain a strong cepit1 base so as to rnainmin investor creditor and market ronfoonee and to SUSWlJ) fumre dcltclonnent Gf the buinest The Board of Directors rronitortl the tapital whkh tbe Group defines as wlal $parcloders equity excluding nonmiddotcornroliing imerests and the level of dividends to orrunury srarellOJdcfS
The Board also reeks to ITIaimain a balance between the higher (ctums (hat might be fA-~$ihle With higher leves of borrnwings end Lle edvnrJages and security named Sy it sOMd Cilpitai posi[ion The GfCup~ k1rget is to achievfl a return on slureholders equity (exclJding aonwurrolJiug iorcf(sts) greater lll(ll1 he wcighlcd average inres exxmse on mrerest bearing Ivens and oorrowing
The (lf0t-p nl)nDg-e ils cnpital structure and makes adjustneal lOll in light ofchang2s in economic nd bttincss cordjlons and shareholders expe1ationJo chmges veremiddot maCo HI Lleuro objecttves polilCS or proCCSSC3 during the years erded 31 D~mber 2013md 31 Dtccmlxr2Ql2
The Group monitors the capit2J using a gClting fatio which IS dep divided by caplla plus debL The GtOwgts policy is to keep ttJe ge-anng rmio bclew 40 Tbe Group iLdtdes withb debt imete-51 beagting loans ard ~OITORlngs less cash and cash equtVaknts Capltal includes eqmty attributable 10 the equity tolders oft~e parcrt
2013 QR
2(i2 QR
fmerest bearing loans and borrowings lcss- Cash and cas ltYJUvalcnts
9i4lJ05301 _~ (429JfJl4761
1004845296 (649)6201)
Net debt
Toa capital
Capita and net debt
699849045
~ringrttio
FAIR VALtES OF Fl~ANOAL f~STRUMETS
Finarcial iostrumenL~ cOlnprise tina~lctal assetS carl finailcialliabilities
Fmancial assets colJist of bank balance) short 1Cm bank dcposis amounL dve dom rc)ltted partilt)$ rekntion and other receivables and ttade accolmis rceivabe Finatlclll habiilics cgtmsist of banilt ovcrdratls jnerest bearing lOil1S and bOrowings amounts due (0 nliled partiG~ ane trade x-ounls payable
The- fair values of hese financial inStrumen1S except Jo-- imCfest bearing loam lHld bOlToving aproKimate lhdr cMryinJ vlhes due to the Slort temt mzrutiiles or these instrument
Tllc faiT value of iotcnst beating Nns and borrowin2s ae estimate( based on discoumed ltash flows twin int(s rale- cune-ntly nvailagtk fur tilt debt or sinuiar tetnlS an-a rell1lmng matunties
31
Aamal Company~Q=-ScC ______________~______
~OTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For fhe year ended 31 December 20 t3
SlGNIFICANT ASUMPTIONS ACCOUJTING JUDGElE1TS AND F8TIMATFS
impairment (If accoonts receivable n etrnwe of lhe collectible anoun of trade accounlgt reccvable is made when collection of the full lHl1OUt i~ nO looger probabk FOI nCividualty significitIl amounts this estimation is p~rformed on an indh-idllai a$[$ Amomts wHcb arc not indivldl11Uy significant but wluch are past due ZTe tsscssed collectively and an aJlQwaccc applied ucc()r~Jng to the length of lime past due based oc histnncal recovery nlJes
hnpalrment of inHntnries lavenoncs are held at tho lower of col and nol realisable value InIOn inventoncent$ becone old or 0-~amplete an estilTJte is mate of their net j alisable vulue For indiviolhlUy significant amountS this cstinaunrt is performec all aD lndividwl osis Amotlnts whieh are fl0t individually significan( btll which ltIre old at obsolete wx LltSessed wllecivdy md a provisior is applied sccnrding to the invenrory type and be dep)ee of ageing 0 cDsolescc1ce based on anticipUled selling prices
Classifigt1ltion of El Sew(gtdy Cable Qatar WLI ali a j(lint vwture pound1 Sovedy Cables Qatar is a limited hability company whose kgal fum confers SCprm11ior bernten tbe jXliiies 10 ~he jomi lfranpement Snd the Company Itself FurthenrlOre then IS no oontractua] arrmgelTeot or any oibe aus aod circumstriliCe$ that iocik41to tht he putic5 [0 the joint flJTIlrgernelit bave rights to the ssetl and obligrtdons fo~ the liabilities of the joint ilrrongement Acoordingly El Sewed- C[jbl~s Qamr WLL is dassifiecl 7S a joiut enrtrr of he GWtp
impairment of goodwill G0oovj)1 embedded in th~ cot 0 aquisitior of subsidiaries and eqmtj-iccounled iflV(stees ire teswt for irl1jXlirmnt aHuaily Tbe calculations of value [n use fO( cfish gecj~r)lilg units (loring to real nte projecg are rtost sensitive to tin IDHowing assumpti015
Grosgt i1wginmiddot Gross Ilmrgins arc lmsed on avrage values tuhje0d in (he [Xrioo preeedhli (e siaM of the budge xnod T1esC at( mcreased over the budgel period for mticipatltX efficiency Hnprovemots
DisC)unr r(es Discount rotes represent th cl1tent mark as~ssmetlt of the risks specific te ech cash geocroting unit regarding lhe time value of money ilnd mdividu)l risks of he tmtieriyilg assets whICh have not been inwrport1eti it the Citik flow estimates The dj~(OUrl flte tlkulation is based on the speclfte circurnsthLCes of lile Group and its opltllatJng segn)~nts (md derived (ff)rC it weighted avaage (XSt 0f apilaJ (WACC) Tb fACe (akw into uoount both deb and equity The 0$1 of equity is denved from dlC expected return 01 investmenl by the Groups investors TJc Gos10( deb is based on l1e borrvwings the Gmup IS obllsxl to service SC~lletllmiddotspecific r5k IS incorxt4too by applying individual bera facto The betn mctors ire evauatcentd annuaHy bhseci on pubJicly aVflllabe murked earn
Fair value ()fnHstmeni proputies The fuit laHe 0 nvestmel~ propertis is deltrrnlnzd b cxterrwl indepzfldell property valuers laving appr0priate recognised professional quabfiillions and recenl xperience H1 the localjl)n and G-tegory 0 the oroperty being valued
Useful hes of PfQPcrly plmr (llld zqulpment The Groups management detennints th estiunted useful jives Df It~ property plan and equipmnl fix calnurjng depreciation Thi5 e~timJte is 6lermind after cinsidring 1b expeelcd usage (1f the a5sclt [hysical l101t and (eas tedmiltal Dr com~ercia obsolesccnce
Gotlg Qncen
ibe Groups mangerncnt UiS made aJ assessmeot cf the 011115 ability (0 COllllOUC liS a going conct11l Imd is satsl1ed hat me Group ms the resources to contmue in business for he foreseeable fu1urc he1hennort he management is no aware oC lny material Hncertainties that lray CH~t signinchnt doubt tlPDfl the Groups ability 10 continue as a going umcem Therefore titpound lotlsolidatcd finilllcij stftemeols comirme to be prepltd on li g0ing concern basis
Aamal Company QSc
NOTES TO THE CONSOLIDATED FlNANC[AL STATEMENTS For the year ended 3 1 December 20 13
32 INCOME TAX
Certa in subsidiaries of the Group which have non-GCe ownership are subject to income tax under Qatar Income Tax Law No 2 1 of2009 The iocome tax is charged on the share of profits attributable to non-GCe shareholders For the purpose of these conso lidated fi nancial statements the income tax liability oftbe foreign shareholders has been excluded given that the non-GCe shareholders have agreed under the shareholder agreements signed with the Group to bear the fh lliiability and make necessary payments
33 COMPARATIVE INFORMATION
Certain comparative figw-es of the previous year have been reclassified 0 coofonn to the current years presentation However such reclassifications are oat materia and do not have an impact on tbe previously reported net profit other comprehensive income or the total equity for the comparative year
The impact from the resta tement of comparative infonnalion as a resuh of adoption of IFRS I I - Joint arrangements is detailed in Note 32 Changes in aCCQu(lting policies
46
Aamal Company QS c
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 31 December 201 3
II PROPERTY PLANT AND EQUIPM ENT (continued)
C05I~
At 1 January 2012 Additions Acquired through business combinations (Note 4) Relating to d isposalswrite-off Transfer from capital work in progress Transfers
Buildings QR
137434400 435726
Leasehold improvemellls
QR
38137377 446J 04
144 103 ( 1539452)
Truck mLCers and molO
velricles QR
83427661 11464679
1697609 (631824)
Plant and machinery
QR
249335437 97264 85
35 14 132 (99498)
59705
Furniture fir ures and
office equipmem
QR
22845309 667586
192042 (3696457)
98000 (525526)
Computers and related
software
QR
158 19519 87 14 14
141837 (266 1733)
908078 (2 l4730)
Capitol work in progress
QR
12104889 451 53265
( 1065783) (59924)
Total (JR
55910459 8 68765259
5689723 (862 8964)
(800180)
AI 31 Dttember 2012 137870) 26 371881 32 95958 13 1 262536261 19580954 14864385 56132447 624 130436
Depreciation AI Jaouary2012 Charge for the year Acquired wough business combinations (Note 4) Relating to disposalswrite-off Transfers
9144666 6989249
)4 3 16620 3410618
144103
(96 812)
42558404 548 1613
1671942 (6242 52)
44555 290 2 1398849
2890797 (6 187 1)
12392584 3 182899
169005 (3558466)
(206013 )
12235266 2077633
136959 (2627283)
(J 0662)
135202830 42540861
5012806 (7840684)
(312635)
At 3 L December 201 2 161339J5 16902529 49087701 68783065 11 980009 11715953 174603 178
Nel canying amoWlts
At 31 December 201 2 12 173 6211 2028560 3 46870424 193753 196 7600945 3148432 56132447 449527258
26
12
13
Aamal Company QSC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 31 December 20 13
ACCOUNTS PA YABLE AND ACCRUALS
Trade accouots payable Advances from customers and tenants Accmals Social and sports activities levy Other payables
AJIOUNTS DUE TO RELATED PARTIES
Name
Arab Compaey for Fiber Products EI Sewedy EIC( lric Ho lding Egypiasl Egypt Egyptlech Egypt United Industri es Company WLL Johnson Controls Air condi tioning aod Refrigeration Qatar WLL pound1 Sewedy Cables Egypt Johnson Controls Air conditioning and Refrigeration rNC Dubai United Wire Company WL L Gelteo Company W LL - Gelteo Refr igera tion and Airconditioo ing CampC Lightway nc AI Shaab Group of Companies Other related pruties
NO M Related party transactio l)s a re disclosed in Note 26
2013 QR
320017657 30486837 26924669 41 761 843 25855567
445046573
2013 QR
18517474
4902528
6531231 6404578 3215821
2825884 75 7825
3467288 263715
1313247
48199591
2011 QR
26716268 1 27410234 222575 76 28954726 33)33852
379119069
2012 QR
18380528 91458 82 54 13849 1 11 6 135 5374039 35291 2020359 1693323 1064744
670 179
11 0873 12 18650
49737757
27
14
Aamal Company QSC
NOTES TO THE CONSOLIDATED f fNANCIAL STATEMENTS For the year ended 31 December 201 3
INTEREST BEARING LOANS AND BORROWINGS
NOles Malilrify
2013 QR
2012 QR
CoMl Loan 2 Loan ) Loac4 Loan 5 Loan 6 Loan 7 CoMB Loan 9 Bills discounted
(0 (ii) (iii) (iv) (v) (vi) (vii) (viii) ( ix) (x)
lune2014 Seplember2014 January 2015 November 2016 December 20 16 November 2017 Jllne20 l J December 20 7 OClober 20 19
172070387 440000000 50544000 40261 621 81387109 19920036
6] 43890 62626967 42522794
915676804
298324180 440000000 10 J088000 57955030
100 168750 2 1300492
407728 1 782871 1
35000000
1065742444
Less Defe rred finatlcing cost (771 503) (897148)
914905301 1064845296
Presented in the consolidated statement of financial positioo as fo llows 20)3 QR
201 2 QR
Current ponion Non-current ponion
749520820 165384481
825568489 239276807
914905301 1064845296
The dete rred financing costs consSt of arrangement fees The movements m the deferred financing costs were as fo llows
203 2012 QR QR
At I January 897148 332 661 Addjtions during the year 1 062565 912506 Amortised during the year (218amp210) (34801 9)
At 3 1 December 771503 89 7148
28
Aamal Company QS C
NOTES TO THE CONSOUDATED FlNANCIAL STATEMENTS For tbe year ended 31 December 2013
14 INTEREST BEARING LOANS AND BORROWINGS (continued)
Nolec
(i) Loao I i USD 93000000 impon 10n moi lily obtoined to refimnee he Icne~ of edit The 10 IT interest at commercial fate and the interest is paid at monthly intervals The fucility is repayable within ISO days including the usage period under letter ofc redits
(ii) Loan 2 is a secured bridge loan obtained to settle an existing loan and working capital requirements of the Company The loan carries interest al coOlJllercial rates and interest is 10 be paid on quarterly basis
(iii) Loan 3 was obtained for the pWpOse of financing capital ependiture and direct payment to suppliers contractors and 5ub-controctors The 10011 CMries interest at commercial rate and the inte rest is to be paid q Uar1erly The fac ility is repayable in IS quarterly iostallmenls starting I July 20 11 and ending I January 2015
(iv) Loan 4 was obla ined for conSlruclion o r an inveslmenl property The loan is seclJed by 0 primary mortgage over the some property and corporate guarantee of the Aamal Company QSC Tbe loan carries interest at commercial marke t rate and is payable in quarterly instalments
(v) Loan 5 represents a loan fOlcility obtained in two sepnrole tranches amounting to QR 309 825 000 (USD 85 million) for the purpose of refurbi shment and construction of fociJities io one of the investment properties The loan is repayable In 16 equal quanerly instalmcnlS for individua l tranche commencing from March 20 1J The loan carries interest at conunercial rJtes
(vi) Loan 6 represents secured loans obtained ffom a commercial bank in the previous periods for the purchase of heavy equipment and machines and were merged on 15 November 20 12 as a comb ined loan This loan is payable by 59 equal instalments of QR 426000 with (I last inSlalment of OR 438 326 with effect fro m 01 October 201 3 The loan carries interest at commercial market ra tes
(vii) Loan 7 is il tmst receipt banking facility obtained for the purchase of inventories This carried interest at conunercial market rates This loan was full y settled during the year
(vii i) Loan 8 represents secured loans obuined from a commercial bank in the previous periods for the purchase of delivery trucks and machinery and were merged on 22 October 2012 as a combined loan The loan carries inte rest at commercial market Tates and is payable by 59 equal insta lments o rQR 160000 with a last inSlOlmem ofQ R 128000 with effect from 3 1 December 2012
(ix) Loan 9 is an Islamic Financi ng Arrangement obtained for construction o f a manufacturing plam and as o f yearend ba lance represents partially drawn amount out of totil1 facility of QR 655 68000 The loan is secured by joint corvorate guarantee by the shareholders The loan carries profit at Islamic Financing rates and re-payable in quarterly instalments starting from the end of the 24 months gmce period from the date of loan drawn
(x) Bi ll discounting is a loan fac ility from banks The purpose of the arrangement is to discount bills locally and carries interest at current commercia l filte
15 EM PLOYEES END OF SERVICE BENEFITS
Movements in the provision reHectelt in the consolidated SLo1tement of financia l position were as fo llows 2013 201] QR QR
At I Jan uary 18111 763 17877937 Provision made during the year 4056969 4205499 Acquirelt through business combinations (Note 4) 349272 End of service benefits paid during the year (2210756) (4320945)
At 3 1 December 19957976 18 111763
29
Aamal Company Q5C
NOTES TO THE CONSOLIDATED FINANCIAL STATEMETS For tile y~ar ended 31 Dee~mber 2013
16 SHARE CAPITAL
2013 2012 QR Qq
AtI1l1)nud 60000)000 (20 2 544500JJOfn shares ofQR iii Cilch 60i)iQOOlOO 54450lt)0000
21)13 2012 Numher of
siMtS QR shares QR Issued Mtldfully paM At lJamld) 544SfWllOfJ 5445(100001) 495000000 49500000)0 1511C ofbonus S1i1-C ___ 5550~OOO 555000000 49SGOOOO 495000000
At 31 Decenef 6(OOampQllf1(1 ---14450O000 544~OOOOOO
All ampates m~ of a110 clss and caL equal voting rights
17 LEGAL Reuro5ERVE
As required by Qatar Comnertai COfrp7lnies Lav No5 of 2002 lOfp of the profit for the ye1J as a rru1imllli silould be mmsfened to legal re~erve The reserve is lot normay [lytiabe tor distribution except ill he cixcuJUstllrtUS stipulated m the above ~lemi0ntd GIW
IS HEVE1TE
2013 l)n QR QR
Sale of goods 1726893265 i709057~(iO
Renlal income UiO362322 133117509 S-ice income 858695 33940731 CornrrusslOlL Incentives and agency fces 44695S1 422~_632
212259$)33
19 DIRECT COSTS
2013 2)i2 QR
C 051 of inven(feS recognisedlIS an exptns 1522929956 497210830 Dind sL1ries lmd wages 601 [1336 5137856-8 Operating eXpenses on nml estate p~opet1les 36)711316 3041H504 fJepreciatiort (Kate I J) 33164382 B03091pound Operators marhgerrt6nt fees 14508588 li667989 Provisicn Qr obsolete and skwlt moving mvenlories (K)tc 8) 2380617 2208263 Other operating ilxpenses _31~3982 _ 3674946
1702139171 JS9653OI tgt
Aamal Compall-yQSC________________
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For lthe year ended 31 December 20 11
2G OTHER NeOiI
2013 20J3 QR QR
Interest mcume 2824216 2)314392 Profiv( loss) 00 disposal of property plant aoe eqUlpmem 737647 (l7362G) Eargain ptmnJse gain (Kote t) 8360793 MIsceJlaneous income 5723356
2013 2012 QR QR
ManllgetnUI hrQ empl(yees ws 55170302 55lt035middot1 Rent 23596799 2594915 Allowance for impaimlcot oUrsue aCQl1ot$ rc(Xjvalle (Nole 6) 129459(i 11613120 flBumcce ane profcampiitmJI fees 2IU9263 209J902 Corununication OOtHS 1935123 1649155 Trllining tid ouSfjt$s developmccl 950476 L095764 Re]X1in and mainle-nilnce 21)11SflS 2)2 I Poslag-c prjnting acri stationery 610299 541159shyvllsltdlancous expenses _~~~664 1lt2
-~~~ 125162812
22 fIN~lCE COSTS
2013 2amp2 QR QR
Inleres epen~ 42866312 5773U4B Am(vtisJliorgt ofdefcentrred financiog coStS __ 2l)tl26~~ gt3661
44930877----=
58063009
23 BASIC A~n nHUfED EARilNGS PER SHARi~
Basic trdTJogs per hue is caculatid 0y llividing the pwfill0( Ihc year attriouiabk (0- equity roldc-5 of the parent by lhi w~iglwxi avrage number of ordinary shares 0JstandirJg dulting tht_ year During Ihe year lil~ Conpmy i-sued and CBpii3lzed bonus shares lnd awmJingl) me previously ~eportod earnings per shac have blOM restatc(i
20i3 2012
Profit feT the year auributable to Cluity holderlt of the- paren (QR)
Weighted aVCTage number ofshares outstanding during the year (i)
Basic Jd diluted earnings per share (QR) 085
59985U413 shy
~~--~~~~- ~------J 1
23
Aamal Company QSc
NOTES TO THE CONSO LIDATED FfNANC[AL STATEMENTS For tbe year ended 3 l December 2013
BASIC AND DILUTED poundARNINCS PER SHARE (continued)
NOles (i) Th wigh d m nlg urnb of hres foc h P of lruling ~migs pee share h bee kulated
as follows 2013 20J2
QU3lifying shrues allhe begi ll1ling of the year 544500000 544500000 Effect of bonus shares issued and capitalised 55500000 55500000
600000000 600000000
Less T reasury shares (149587) (i357SI)
Weighted average number of shares at the end of the year 599850413 599864249
(ii) There were no potentia lly dilutiw shares outstanding at any time during tbe year and hence the diluted earnings per share is equal to the basic earnings per share
24 COItIMITMENTS
20 1] 2012 QR QR
Estimated capital expenditure approved and contracted for at the year eod but not provided for
Investment properties 2964000 8 139063 Property plant and equipment 16386500 63759762
19350500 71 898825
Operating lease commiIOlenlS under noncancellable lease agreemenlS
Payable wilhin one year 990806 702000
990806 702000
25 CONTINGENT UABILITlES
The Group had the following contingent liabi lities from which it is anticipated thai no malerial liabilities will arise
2013 2012 QR QR
Letters of guaramee 474551239 394255203
Letters of credit 7678499 194299384
NQles
(i) leHlaquogt of gu indud penonmnlaquo tend nd bid bonds d pymenlt g gi to suppliers and contractors by the Group in the ordina ry course of bus iness which will matme within twelve months fro m the reporting da te
(i i) Letters o f credit are provided by lodging documents to the bank tor purchase of trading goods fro m foreign suppliers wruch will maMC within thJee to six months from the date or tile Iransaclion
J2
26
Aamal Company QSc
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year eoded 31 December 2013
RELATED PARTY DISCLOSURES
Related party transactions Related parties represent major shareholders directors and key management persortOei of the Group and entities controlled joimly controlled or signjficamly innueoced by such parties Pricing policies md tenns of these tnlOSaclions are approved by the Group s management
Transactions with related parties induded in the consolidated financial stalemenls were as follows
20lJ 2012 QR QR
Sale o f goods and SClVices 419034048 415225221
Rental income 1980473 2069386
Purchase of goods and services 1591 38018 300835596
Rental expense 21 780G78 23397334
Bargain purchase gain 8360793
Net assets acquired 78803585
Relat ed party bal nnces AmountS due from and due to re lated parties are disclosed in Notes 7 and 13 respectively These balances do oot carry interest and are repayable OIl mulUlUy agreed dates generally within one year
The Group did not record any impairment of receivables reJatiog to amounts due from related pat1ies in either year This assessment is undertaken each fina ncial year through examining the ftnanc ial position of the related party and the market in which the related patty operates
Parent The Groups ultimate parent is Al Faisal Ho lding Company WLL
Compensa tion or key management personn el The remuneration of key management dming the year was as fullows
2013 2012 QR QR
Short-term benefi ts 7904794 1079595 Employees end of service benefits 408934 439776
8313 728 11235727
33
AamaJ Company QSC
NOTES TO THE CONSOLIDATED FINANCIAL 5T ATEMENTS For the year ended t Decernber 2013
Dilling the year 1he Group issued a XHlUS share of 10 928 of the paid tiP share capilal hdd ilS at 31 DiX2mber 2(JJ 2 mnmuning to OR 555000000 using retamed earnings as of3 December 2012 (20l2 Doe share for every ten shues held as of 31 Dcember Oll amuunting 10 QR 495OO()OOO ling reta1ned earmrgs 28 or 31 Decencer 2D II Jshy
18 SEGMENT INFORMATION
For J)iloogement PUIpltJM rhe Group i organised into business unit bused On LlJeir nature of Acttvitics lud nas fonY reportable segments and the Head Oftklt as bllow$
Propert Tbe segntn cOlists of City C~nler Qlta~ Brunch and Aamal Rea Esmte Branch whicb ll[c invoived in lampIiiog the faJ1ities of retail outlet conpex red e5ttlte nve(mltn$ and property remal buines~s
Trading mld distrib-wion The segmeul Involves wholesalB andlor rBtail distribution of phamlaceutlcai and consunable i1ems hume Epplianccs medica equimenl t-Tes ill1d lubricmtlaquo and II1UllitnEl printing The scgn(rtt includes 6c following entities
Eotl Sina Medical Branch
Aaen Medical Braudt
Amcill Troding and DistoolltlqO Branch bull Foot Care (erier HRnd) Good llre Pbannacy Bf4Uch bull Al FllfJdaq COllpafY wJ~L
InduSNol manuacturing TIle s0groent IOvolves Ulahuactrumg whole~we aliaor rewi dimibUlioti of dccnc cables lid tools ggregJ1es_ ready-IUx connole and cement bI0C~ lI1d provi$ion of servlCcent$ in rdation to iODllltroa Itvestment repair aJ-d Gonstruction of power plwts liiiding of LED ilgluitlg products und management of industnl enterpnses The segment ircludes be folloVting centntitis
bull Aam1 Cemert Industries LL AuraJ Redy1Yl(A BrQTlch
bull Doha Cables Qawf lLL Senyaf IoolJic1es Qatar Holding W LL Advanced Pipes ard Casfs CompQTly WJ L bull GuJfRoch Coroany WLL Ci~San Trading Company WLL hmovafive Lighting Compary WLL
Managed services le segment inyolvc~ provisloH of hOllseiltecpmg mi cleaning services fucditics n-anagemerJ services C1egy s(tvices ttl centfe sltrvicf)s buildiqg lnaintemHlelt aml acting as travel gens The 5cgnltnt includes the foUowing cnti(lcents
An13 ServJce Branch
amli TnlVeJa l5tmh
f-eco Gulf Co W LL
Jolinson Controls Qattl WJL
28
Aamal Company QSc
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended ) L December 20 13
SEGMENT INFORMATION (Co ntinued)
Head Office It provides corporate services to the branches and subsidiaries of the Group
The managiog d irector of the Group monitors the operating results o f its business units separately for the purpose of making decisions about resource allocation and perfonnance assessment Segment perfonnance is evaluated based Oil operating profit or loss of these segments Transfer pricing between operating segments are on anns length basis in a manoec similar to Iraosactions with third parties
Aamal Company QSC
NOTES TO THE CONSOLIDATED FINAN CIAL STATEMENTS For the year ended 3 1 December 20 13
28 SEGMENT INFORl1ATlON (continued)
Operating segments The operat ing segment after elimination or ioter-bra nch and inter-co mpany lrnnsaclioos is presented as follows
Trading (nd Industrial Managed For fh e year elided 31 December 2013 Properly disirjblli ioll manujocljlring services
QR QR QR QR Revenues
- h lemal parties 260360172 578909983 1231522768 S l802210 - Inter segments 1253914 6843 11 8 29639873 3445052 1
Heat Office QR
Eliminoions QR
(n187426) II
Tolal
QR
2J22595133
261614086 585753 lOI 126116264 1 8625273 1 (721 87426) 2122595133
Opera ti ng results Fair vallie gains
Profit I (loss) ror the year
Depreciotion
200811944
245051 107
445863051
2066290
86492834
86492834
4345438
22636250
22636250
33049 089
5157436
5157436
1760305
(47864882)
(47864882)
1334382
267233582
245051107
512 284689
42555504
36
Aamal Company QS
NOTES TO Tl CONSOLIDATED FfNANClAL STATEMENTS For the yeM ended 31 December 20 13
28 SEGMENf INFORMAnON (c)tltioucd)
FOf the yearrnrkti J f DccemOer 2(J12 QR
Revellues - ExlcmlJ partiel 2331 17 509 bull Inter segmcI11S 1168935
-- 234236434 --~- -~--
Openning results 18S2367t Fmt value gains J8S79-4~G
pront LOllS) for the rear 570616154
gt3659
No(
lnlermiddotgment revenues are eliminated on tQHs)idntiOH_
Tadiug ftfid disl d)Ntion
QR
S2S3l7661
324 j
5335493114 ~ -~-----
51384831
54384338
4J9R71(i
Indus idi mamfmturing
QR
1255694537
129U25lS4
56727059
56727059
32752742
slnltic(s QR
55216665 2939H31
S46lOJ96
7427414
7437
[908067
ilfild ()jice QR
(64(41976
Elimination QR
(74tHi2oJ Iii
Totul QR
206936372
2069336372
235721
(64641
131 f613
6245
42541)861
Amnal Company Q$l
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Por tnt yeartndeJ 31 De~embcr 2013
28 SEGMENT JNFORMATlON (contiutlld
Assc-ts and labilities
Tng alld lndtrstfw At31 December 2(113 distnbllrior manufacturIng senices HeadOJJicc EliminatioilS lola1
QR QR QR QR QR
Cumnl 3tS 227552338 620807979 61349 j 415 S()6)86922 (301636995) 1477366090 Noolucrcnt DSeIS 6411868160 12604763 622386238 4348876 (i624548 __p2438051 780
fotal asstl$ 6639420498 1194 1243194217 65698291 513Ql1470 ==-lt03H8l~O()) 853295-870 -~----~ ~---~ -
CUIT)llliabilitics 280995335 1(3511J60 6344(12777 2l0708lJ2 496261185 (3CH636995) 1249603264 Non-current iiatJlitics 7l70L5V2 8008485 HlDi16~43_ 3181668 t433799 ____ ilj534_~57 __ --Totul liahililics 353696897 ___~4159~4~ 734419720 ~4976~~~~~ 1434945711
---~~--~ -~-~~ - _2~~~4~~ (~~~~9~
C1pild expcndimn HI) WO743OOj 1397742_~471l2~--~50 ~51 ~1~623821~~1~_ -~----~------ -~
3amp
28
Aamal Company Q SC
NOTES TO THE CONSOLIDATED FfNANClAL STATEMENTS For the year ended 31 December 20 13
SEGMFNT INFORMATION (continued)
Assets and liabilities (continued)
AI 31 December 2012 Properly QR
Trading and d iSfriblllion
QR
Indusrial manufacfuring
QR
Managed senices QR
Currenl assels
Non-current assets
146491 186
6121 864484
2964425 12 903 7264
73468 1258
549267235
51387098 471 1439
Tolal assets 6268355670 305479776 1283948493 56098537
Head Office QR
468325024
6713643
475038667
Currentliabil iies
Non-current liabiLities 273444 748 1 J10 15024
86054583 7434286
669214261 1288 14977
2 1938953
287 1199
480393637 1253084
Totil lliabiliti cs 390459772 93488869 798029238 248 10 152 48J64672 1
Capila expendirure (ltII L 72865 878 1281254 6647 J356 7169 13 149045
Notes
(i)
(Ii)
Inter-segmeot balances are e limioafed 00 consolidatio n
Capi tal expendiTU res consist of additions 10 propeny plant and equip ment and iovestmenl properties
Eliminations QR
To wl QR
(273735776) (i )
(20308351(i)
1423591302
6689563230
(27576661 1) 8 113154532
(273135777) (i) 12573 10405
257388570
(273735177) 15 14698975
24 1484446
39
29
Aamal Company QSC
NOTES TO THE CONSOLIDATED FrNANCIAL STATEMENTS For the year ended 31 Dcltmber 1013
Fr-A]~ClAL RISK MANAGpoundMamp1H
Objccthes and policies fe Groups principal )uaucill liabilities comprise imltresl bctmllg loons and IxmowHgs baRlt ovetda1s amounts due to fclaled par1ies and tracte accounts payable The main pUlJXSi of thesc financial liabilities is 4J mise firmne or 610 Grmps operations The G0JP bas various fimmcial assets such as ttadc accounts receivable lInlOlmts due from related parties bark balances tltCntion receivable and other receivables which arisgt directly fran its cperuoonamp
The maiH ri~ks an3ing Joru (be Groups UnariCJlll illslrumenls jle market risk cretiJt nsk and hmdity risk Til BoarD ofDtrcctO$ reviews end agrees policies for mzrAgbg Caltt f hespound ri~k ihkh arc summariscd beloW
VIarktt risk yenfatket risk is the risk Um changes in market prices $Uch as intfcst rates and hreig lttmeocy ect14nge rilles Vltl1 affect the Groups profit eqwty Dr value tf its hoJdiI15 of financial instrl[Thnls rile objecivpoundj of marke1 risk mUnllgcrlcnt is to manage uld 1~ontr(ll tho tr))rket risk expo-sure vithir acceptable parfI-etcJ$ while optimising rerUID
Equit) price risk ampjuity prtce risk is the risk hilt the Group ampearnings will be affected as a rcmt (If luctttltions in fm vdue of ~qui-gt
mstwnents Eqlliry price risk arises from availabtetor~sale inv2strnems However the Groups exposure to eqmty price risk IS minima as II doesn hold sitl)iftrmt ailableAor-511le inYestrmmrs
[merest rate risk The Groups fimiruial poundS5ot ampId liaojlilies (at Rl $uJject to int~~ rate mk compnse brmk depoils interst bearing loans and bOITQwjags and bank overdr-afts At the reponwg dalt tbe [merest rale pronle of Ill Goups intexst bearing fbi4rdd instruments as fliows
11113 20i3 QR QR
Fued liIeryS refc insfrvrnellts
Fmmcial assets 113035962 111913394 FrOltwial liabilities --1~203712l) 1252t43~1
9)OI~ (13350972)
Fhlllting inireSI rate ns1lmlttrs Fanctl~ Isseis 127024345 ID43848o Fllllocial liabilities _-(i~9347~ (94))48926)
(836)64116)
The Groups exposure to t~ ris of changes in marXet interest fltltes relztes primariiy to the Groups financial assets and lizbitdic$ with t1Oltttirg interest mte~
lhe loEowing able demonstrates the ampmitivity nf the eonsolidattXI statemen1 of income 1) caonaly possible chonges in in1jfgtst rmes by 25 basis points with all othe vari)ble3 hdc umstant The sensitivity of the CooiK~ljclatid statement of inc(me $ the eft(ct of tb assumed changes in lnterdt rales for one year bf1sec on the floating rate financial assets and fimmcial hablhw$ held at 31 f~r The effect of deae-ascs in interest ral~ is cXp0Ctct to be equal and opposite to the effect oHlle increases sllQvro
Changes it Eftx OIl
00513 [oms profit QR
2013 Floating mterest Hlte instruments ----2$ bp (1649776)
2012 Flv-ating irkfiSt rale instrumenls +25 bp (209[9(1))
~--------- -~~ 40-middot------ _ _ shy
29
Aamal Company QSC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 3 1 December 2013
FINANCIAL RISK MANAGEMENT (continued)
Foreign currency risk Foreign currency risk is the risk lhilt the value of lhe fi nancial instruments will fluctuate due 10 changes in fore ign exchange rates
T rade aCcOlmts payable and accrued expenses include amounts due in foreign currencies mliniy US Dollars UAB Dirhams Great Britain Pounds (GB P) and Euros of which the Group has a currency risk primruily on the baJmces payable in Euros and GBP amoWlting 10 QR 14400634 (2012 QR 17214046)
The Group does not hedge its foreign currency exposure As both Qatari Riyal and UAE Dirhams are pegged to the US Dollar balances in US Dollars and UAE Dirhams are not considered to represent significant currency ris k to the Group
The table below indicates the Group s fore ign c urrency exposure on its monetary assets a nd liabilities The analysis calculates the effect o f a reasonably poss ib le move ment of the QR curre nc y rale against the Euro and GBP with all other variables held constant on the consolidated slate menl o f income (due to the fa ir va lue of currency sensitive monetary asse ts a nd liabilities) The e ffect o f decreases in fo reign c urre ncy exchange rates is expected to he equal and opposile 10 the e ffect of the increases shown
Incramp1se ill
f oreign cUlrency rate
0
the QR
Ellecl on profil
QR
2013 +5 (720032)
20 12 +5 (860 702)
C redit Tisk Credit risk is the risk that one party to a financial instrume nt wi ll fa il to discharge an obligation and cause the other party to incur a financial loss TIle Groups exposure to credit risk is indica ted by the carrying amoWlt o f its financia l asse ts whic h consist principally oftmde accollilts receivable retention receivable amounts due from related parties othe r receivables and bank baLances
The Group sells its products and prov ides services to vario us panies It is the G ro ups policy that all customers who wish to obtain on credit lerms are subject to credit verificalion procedures to ensure c redit Ilonhiness Each new customer is analysed individually for creditworthiness before the de livery o f products Of services Custo mm tbat fai l to met t the credi tworthiness may transact with the Group only o n prepayme nt basis Property rentals are mostl y received in ad vtnce or conlrlCled wi th post dated cheques 10 additio n receivable balances are monitored on an ongoing basis a nd the purchase limils are established for each c redit custoroer which are reviewed reguJarly based on the level o f past transactions and senlement The Groups max im wn exposure with regard to trade aCCOWlts receivab le net ofa llowance re nected allhe reporting date was ilS fo llows
2013 2012
Business SJgmelll QR QR
Property 15478832 19386326 Trading and distributio n 194343 597 179748274 Industrial ma nufac turing 183119753 131578668 Managed services 18069385 14547389
411 011 567 345260657
41
29
Aamal Company QSc
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For tbe year eoded 3 J December 20 13
FlNAJICIAL RISK MANAG EMENT (c-o Dtinued)
Credit risk (continued) With respect to credit risk arising from the other financi31 assets of the Group the Groups exposure to credit risk arises from default of the counterparty with a maximum exposure equal 10 the canying amount of these instruments as follows
2013 QR
202
QR
Bank balances Amounts due from related parties Retention and other receivables
436136756 214439950 48290351
36788129 t 171525363 74082203
698867057 613488857
The group reduces the expoSltre of credit risk arising from other financial assets by maintaining bank accounts in reputed banks and providing services only to creditworthy re lated parties
The management cons iders the bank balances and a mQUIIIS due from related parties as high grade fi nancial assets and lfade accounls receivable and other receivables as sundard grade financial assets When a finltmcial asset is identified 10 be impaired the managemoot downgrades such assets to impaired category and provides adequate allowances
Liquidity risk Liquidity risk is the risk that the Group will not be able to meet its fmancial obligations as they fu ll due The Groups 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 nonnal and stressed conditiom without incurring unacceptable losses or risking damage to the Groups reputa tion and is to maintain a balance belWeen continuity of fuoding and f1eilibility through the use of bank overdrafts and bank loans and borrowings
The Group monitors its risk to a shortage o f funds using a recuning liquidity plaOfling 1001 TIllS tool considers the manuiry o f financial assets (eg accounts receivable) and projected cash flows from operations The Groups teons ofsales or services require arooUIlts to be paid within 30-90 days from the invoiced dale
42
29
Aamal Company QSc
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For tbe year ended 3 1 December 2013
FrNANClAL ruSK MANAGEMENT (contiQued)
Uqujdity risk (continued) The table below summarises the ruaruriJy profile of the Groups financial 1iabililies a t 31 December based on contractual undiscountcd paymeots
2013 Interest bearing loans and borrowings Bank overdrafts Trade accowus payable Other payables Amounl~ due (0 related panles
201l Interest bearing loans and borrowings
Baok overdrafts Trade accounts payable Other payables Amounts due to related parties
On demand
QR
6836280
6836280
011 demand QR
2885090
2885090
Less than 3 months
QR
521324473
303638792
47406830
2530~480
898675575
Less thall 3
months
QR
469839033
10754JJIO 37543236
1964504 1
634568620
3 10 J2 mOlllh$
QR
239333328
16378865 20210580
2289~11l
298816884
3 to 12 monlhs
QR
365476972
159621 37 J 24745342
30092716
579936401
1to 5 years
QR
J 60092748
160092148
1 to 5 years
QR
248472226
248472226
gt 5 years
QR
25261598
25261 598
gt 5 years
QR
7648000
7648000
TOlaf
QR
947012147 6836280
320017657
67617410 48199591
1389681085
Tota
QR
109 1436231
1885090 267162681
622 88578
49737757
14735 10337
43
30
Aamal Company QSltc NOTES TO THE CONSOLIDATED FlANCIAL STATEMETS For the year ended 31 December 20 t3
21 F~ANClAL RlSK MAiAGEMElT (continued)
Capital management The Boards policy is to maintain a strong cepit1 base so as to rnainmin investor creditor and market ronfoonee and to SUSWlJ) fumre dcltclonnent Gf the buinest The Board of Directors rronitortl the tapital whkh tbe Group defines as wlal $parcloders equity excluding nonmiddotcornroliing imerests and the level of dividends to orrunury srarellOJdcfS
The Board also reeks to ITIaimain a balance between the higher (ctums (hat might be fA-~$ihle With higher leves of borrnwings end Lle edvnrJages and security named Sy it sOMd Cilpitai posi[ion The GfCup~ k1rget is to achievfl a return on slureholders equity (exclJding aonwurrolJiug iorcf(sts) greater lll(ll1 he wcighlcd average inres exxmse on mrerest bearing Ivens and oorrowing
The (lf0t-p nl)nDg-e ils cnpital structure and makes adjustneal lOll in light ofchang2s in economic nd bttincss cordjlons and shareholders expe1ationJo chmges veremiddot maCo HI Lleuro objecttves polilCS or proCCSSC3 during the years erded 31 D~mber 2013md 31 Dtccmlxr2Ql2
The Group monitors the capit2J using a gClting fatio which IS dep divided by caplla plus debL The GtOwgts policy is to keep ttJe ge-anng rmio bclew 40 Tbe Group iLdtdes withb debt imete-51 beagting loans ard ~OITORlngs less cash and cash equtVaknts Capltal includes eqmty attributable 10 the equity tolders oft~e parcrt
2013 QR
2(i2 QR
fmerest bearing loans and borrowings lcss- Cash and cas ltYJUvalcnts
9i4lJ05301 _~ (429JfJl4761
1004845296 (649)6201)
Net debt
Toa capital
Capita and net debt
699849045
~ringrttio
FAIR VALtES OF Fl~ANOAL f~STRUMETS
Finarcial iostrumenL~ cOlnprise tina~lctal assetS carl finailcialliabilities
Fmancial assets colJist of bank balance) short 1Cm bank dcposis amounL dve dom rc)ltted partilt)$ rekntion and other receivables and ttade accolmis rceivabe Finatlclll habiilics cgtmsist of banilt ovcrdratls jnerest bearing lOil1S and bOrowings amounts due (0 nliled partiG~ ane trade x-ounls payable
The- fair values of hese financial inStrumen1S except Jo-- imCfest bearing loam lHld bOlToving aproKimate lhdr cMryinJ vlhes due to the Slort temt mzrutiiles or these instrument
Tllc faiT value of iotcnst beating Nns and borrowin2s ae estimate( based on discoumed ltash flows twin int(s rale- cune-ntly nvailagtk fur tilt debt or sinuiar tetnlS an-a rell1lmng matunties
31
Aamal Company~Q=-ScC ______________~______
~OTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For fhe year ended 31 December 20 t3
SlGNIFICANT ASUMPTIONS ACCOUJTING JUDGElE1TS AND F8TIMATFS
impairment (If accoonts receivable n etrnwe of lhe collectible anoun of trade accounlgt reccvable is made when collection of the full lHl1OUt i~ nO looger probabk FOI nCividualty significitIl amounts this estimation is p~rformed on an indh-idllai a$[$ Amomts wHcb arc not indivldl11Uy significant but wluch are past due ZTe tsscssed collectively and an aJlQwaccc applied ucc()r~Jng to the length of lime past due based oc histnncal recovery nlJes
hnpalrment of inHntnries lavenoncs are held at tho lower of col and nol realisable value InIOn inventoncent$ becone old or 0-~amplete an estilTJte is mate of their net j alisable vulue For indiviolhlUy significant amountS this cstinaunrt is performec all aD lndividwl osis Amotlnts whieh are fl0t individually significan( btll which ltIre old at obsolete wx LltSessed wllecivdy md a provisior is applied sccnrding to the invenrory type and be dep)ee of ageing 0 cDsolescc1ce based on anticipUled selling prices
Classifigt1ltion of El Sew(gtdy Cable Qatar WLI ali a j(lint vwture pound1 Sovedy Cables Qatar is a limited hability company whose kgal fum confers SCprm11ior bernten tbe jXliiies 10 ~he jomi lfranpement Snd the Company Itself FurthenrlOre then IS no oontractua] arrmgelTeot or any oibe aus aod circumstriliCe$ that iocik41to tht he putic5 [0 the joint flJTIlrgernelit bave rights to the ssetl and obligrtdons fo~ the liabilities of the joint ilrrongement Acoordingly El Sewed- C[jbl~s Qamr WLL is dassifiecl 7S a joiut enrtrr of he GWtp
impairment of goodwill G0oovj)1 embedded in th~ cot 0 aquisitior of subsidiaries and eqmtj-iccounled iflV(stees ire teswt for irl1jXlirmnt aHuaily Tbe calculations of value [n use fO( cfish gecj~r)lilg units (loring to real nte projecg are rtost sensitive to tin IDHowing assumpti015
Grosgt i1wginmiddot Gross Ilmrgins arc lmsed on avrage values tuhje0d in (he [Xrioo preeedhli (e siaM of the budge xnod T1esC at( mcreased over the budgel period for mticipatltX efficiency Hnprovemots
DisC)unr r(es Discount rotes represent th cl1tent mark as~ssmetlt of the risks specific te ech cash geocroting unit regarding lhe time value of money ilnd mdividu)l risks of he tmtieriyilg assets whICh have not been inwrport1eti it the Citik flow estimates The dj~(OUrl flte tlkulation is based on the speclfte circurnsthLCes of lile Group and its opltllatJng segn)~nts (md derived (ff)rC it weighted avaage (XSt 0f apilaJ (WACC) Tb fACe (akw into uoount both deb and equity The 0$1 of equity is denved from dlC expected return 01 investmenl by the Groups investors TJc Gos10( deb is based on l1e borrvwings the Gmup IS obllsxl to service SC~lletllmiddotspecific r5k IS incorxt4too by applying individual bera facto The betn mctors ire evauatcentd annuaHy bhseci on pubJicly aVflllabe murked earn
Fair value ()fnHstmeni proputies The fuit laHe 0 nvestmel~ propertis is deltrrnlnzd b cxterrwl indepzfldell property valuers laving appr0priate recognised professional quabfiillions and recenl xperience H1 the localjl)n and G-tegory 0 the oroperty being valued
Useful hes of PfQPcrly plmr (llld zqulpment The Groups management detennints th estiunted useful jives Df It~ property plan and equipmnl fix calnurjng depreciation Thi5 e~timJte is 6lermind after cinsidring 1b expeelcd usage (1f the a5sclt [hysical l101t and (eas tedmiltal Dr com~ercia obsolesccnce
Gotlg Qncen
ibe Groups mangerncnt UiS made aJ assessmeot cf the 011115 ability (0 COllllOUC liS a going conct11l Imd is satsl1ed hat me Group ms the resources to contmue in business for he foreseeable fu1urc he1hennort he management is no aware oC lny material Hncertainties that lray CH~t signinchnt doubt tlPDfl the Groups ability 10 continue as a going umcem Therefore titpound lotlsolidatcd finilllcij stftemeols comirme to be prepltd on li g0ing concern basis
Aamal Company QSc
NOTES TO THE CONSOLIDATED FlNANC[AL STATEMENTS For the year ended 3 1 December 20 13
32 INCOME TAX
Certa in subsidiaries of the Group which have non-GCe ownership are subject to income tax under Qatar Income Tax Law No 2 1 of2009 The iocome tax is charged on the share of profits attributable to non-GCe shareholders For the purpose of these conso lidated fi nancial statements the income tax liability oftbe foreign shareholders has been excluded given that the non-GCe shareholders have agreed under the shareholder agreements signed with the Group to bear the fh lliiability and make necessary payments
33 COMPARATIVE INFORMATION
Certain comparative figw-es of the previous year have been reclassified 0 coofonn to the current years presentation However such reclassifications are oat materia and do not have an impact on tbe previously reported net profit other comprehensive income or the total equity for the comparative year
The impact from the resta tement of comparative infonnalion as a resuh of adoption of IFRS I I - Joint arrangements is detailed in Note 32 Changes in aCCQu(lting policies
46
12
13
Aamal Company QSC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 31 December 20 13
ACCOUNTS PA YABLE AND ACCRUALS
Trade accouots payable Advances from customers and tenants Accmals Social and sports activities levy Other payables
AJIOUNTS DUE TO RELATED PARTIES
Name
Arab Compaey for Fiber Products EI Sewedy EIC( lric Ho lding Egypiasl Egypt Egyptlech Egypt United Industri es Company WLL Johnson Controls Air condi tioning aod Refrigeration Qatar WLL pound1 Sewedy Cables Egypt Johnson Controls Air conditioning and Refrigeration rNC Dubai United Wire Company WL L Gelteo Company W LL - Gelteo Refr igera tion and Airconditioo ing CampC Lightway nc AI Shaab Group of Companies Other related pruties
NO M Related party transactio l)s a re disclosed in Note 26
2013 QR
320017657 30486837 26924669 41 761 843 25855567
445046573
2013 QR
18517474
4902528
6531231 6404578 3215821
2825884 75 7825
3467288 263715
1313247
48199591
2011 QR
26716268 1 27410234 222575 76 28954726 33)33852
379119069
2012 QR
18380528 91458 82 54 13849 1 11 6 135 5374039 35291 2020359 1693323 1064744
670 179
11 0873 12 18650
49737757
27
14
Aamal Company QSC
NOTES TO THE CONSOLIDATED f fNANCIAL STATEMENTS For the year ended 31 December 201 3
INTEREST BEARING LOANS AND BORROWINGS
NOles Malilrify
2013 QR
2012 QR
CoMl Loan 2 Loan ) Loac4 Loan 5 Loan 6 Loan 7 CoMB Loan 9 Bills discounted
(0 (ii) (iii) (iv) (v) (vi) (vii) (viii) ( ix) (x)
lune2014 Seplember2014 January 2015 November 2016 December 20 16 November 2017 Jllne20 l J December 20 7 OClober 20 19
172070387 440000000 50544000 40261 621 81387109 19920036
6] 43890 62626967 42522794
915676804
298324180 440000000 10 J088000 57955030
100 168750 2 1300492
407728 1 782871 1
35000000
1065742444
Less Defe rred finatlcing cost (771 503) (897148)
914905301 1064845296
Presented in the consolidated statement of financial positioo as fo llows 20)3 QR
201 2 QR
Current ponion Non-current ponion
749520820 165384481
825568489 239276807
914905301 1064845296
The dete rred financing costs consSt of arrangement fees The movements m the deferred financing costs were as fo llows
203 2012 QR QR
At I January 897148 332 661 Addjtions during the year 1 062565 912506 Amortised during the year (218amp210) (34801 9)
At 3 1 December 771503 89 7148
28
Aamal Company QS C
NOTES TO THE CONSOUDATED FlNANCIAL STATEMENTS For tbe year ended 31 December 2013
14 INTEREST BEARING LOANS AND BORROWINGS (continued)
Nolec
(i) Loao I i USD 93000000 impon 10n moi lily obtoined to refimnee he Icne~ of edit The 10 IT interest at commercial fate and the interest is paid at monthly intervals The fucility is repayable within ISO days including the usage period under letter ofc redits
(ii) Loan 2 is a secured bridge loan obtained to settle an existing loan and working capital requirements of the Company The loan carries interest al coOlJllercial rates and interest is 10 be paid on quarterly basis
(iii) Loan 3 was obtained for the pWpOse of financing capital ependiture and direct payment to suppliers contractors and 5ub-controctors The 10011 CMries interest at commercial rate and the inte rest is to be paid q Uar1erly The fac ility is repayable in IS quarterly iostallmenls starting I July 20 11 and ending I January 2015
(iv) Loan 4 was obla ined for conSlruclion o r an inveslmenl property The loan is seclJed by 0 primary mortgage over the some property and corporate guarantee of the Aamal Company QSC Tbe loan carries interest at commercial marke t rate and is payable in quarterly instalments
(v) Loan 5 represents a loan fOlcility obtained in two sepnrole tranches amounting to QR 309 825 000 (USD 85 million) for the purpose of refurbi shment and construction of fociJities io one of the investment properties The loan is repayable In 16 equal quanerly instalmcnlS for individua l tranche commencing from March 20 1J The loan carries interest at conunercial rJtes
(vi) Loan 6 represents secured loans obtained ffom a commercial bank in the previous periods for the purchase of heavy equipment and machines and were merged on 15 November 20 12 as a comb ined loan This loan is payable by 59 equal instalments of QR 426000 with (I last inSlalment of OR 438 326 with effect fro m 01 October 201 3 The loan carries interest at commercial market ra tes
(vii) Loan 7 is il tmst receipt banking facility obtained for the purchase of inventories This carried interest at conunercial market rates This loan was full y settled during the year
(vii i) Loan 8 represents secured loans obuined from a commercial bank in the previous periods for the purchase of delivery trucks and machinery and were merged on 22 October 2012 as a combined loan The loan carries inte rest at commercial market Tates and is payable by 59 equal insta lments o rQR 160000 with a last inSlOlmem ofQ R 128000 with effect from 3 1 December 2012
(ix) Loan 9 is an Islamic Financi ng Arrangement obtained for construction o f a manufacturing plam and as o f yearend ba lance represents partially drawn amount out of totil1 facility of QR 655 68000 The loan is secured by joint corvorate guarantee by the shareholders The loan carries profit at Islamic Financing rates and re-payable in quarterly instalments starting from the end of the 24 months gmce period from the date of loan drawn
(x) Bi ll discounting is a loan fac ility from banks The purpose of the arrangement is to discount bills locally and carries interest at current commercia l filte
15 EM PLOYEES END OF SERVICE BENEFITS
Movements in the provision reHectelt in the consolidated SLo1tement of financia l position were as fo llows 2013 201] QR QR
At I Jan uary 18111 763 17877937 Provision made during the year 4056969 4205499 Acquirelt through business combinations (Note 4) 349272 End of service benefits paid during the year (2210756) (4320945)
At 3 1 December 19957976 18 111763
29
Aamal Company Q5C
NOTES TO THE CONSOLIDATED FINANCIAL STATEMETS For tile y~ar ended 31 Dee~mber 2013
16 SHARE CAPITAL
2013 2012 QR Qq
AtI1l1)nud 60000)000 (20 2 544500JJOfn shares ofQR iii Cilch 60i)iQOOlOO 54450lt)0000
21)13 2012 Numher of
siMtS QR shares QR Issued Mtldfully paM At lJamld) 544SfWllOfJ 5445(100001) 495000000 49500000)0 1511C ofbonus S1i1-C ___ 5550~OOO 555000000 49SGOOOO 495000000
At 31 Decenef 6(OOampQllf1(1 ---14450O000 544~OOOOOO
All ampates m~ of a110 clss and caL equal voting rights
17 LEGAL Reuro5ERVE
As required by Qatar Comnertai COfrp7lnies Lav No5 of 2002 lOfp of the profit for the ye1J as a rru1imllli silould be mmsfened to legal re~erve The reserve is lot normay [lytiabe tor distribution except ill he cixcuJUstllrtUS stipulated m the above ~lemi0ntd GIW
IS HEVE1TE
2013 l)n QR QR
Sale of goods 1726893265 i709057~(iO
Renlal income UiO362322 133117509 S-ice income 858695 33940731 CornrrusslOlL Incentives and agency fces 44695S1 422~_632
212259$)33
19 DIRECT COSTS
2013 2)i2 QR
C 051 of inven(feS recognisedlIS an exptns 1522929956 497210830 Dind sL1ries lmd wages 601 [1336 5137856-8 Operating eXpenses on nml estate p~opet1les 36)711316 3041H504 fJepreciatiort (Kate I J) 33164382 B03091pound Operators marhgerrt6nt fees 14508588 li667989 Provisicn Qr obsolete and skwlt moving mvenlories (K)tc 8) 2380617 2208263 Other operating ilxpenses _31~3982 _ 3674946
1702139171 JS9653OI tgt
Aamal Compall-yQSC________________
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For lthe year ended 31 December 20 11
2G OTHER NeOiI
2013 20J3 QR QR
Interest mcume 2824216 2)314392 Profiv( loss) 00 disposal of property plant aoe eqUlpmem 737647 (l7362G) Eargain ptmnJse gain (Kote t) 8360793 MIsceJlaneous income 5723356
2013 2012 QR QR
ManllgetnUI hrQ empl(yees ws 55170302 55lt035middot1 Rent 23596799 2594915 Allowance for impaimlcot oUrsue aCQl1ot$ rc(Xjvalle (Nole 6) 129459(i 11613120 flBumcce ane profcampiitmJI fees 2IU9263 209J902 Corununication OOtHS 1935123 1649155 Trllining tid ouSfjt$s developmccl 950476 L095764 Re]X1in and mainle-nilnce 21)11SflS 2)2 I Poslag-c prjnting acri stationery 610299 541159shyvllsltdlancous expenses _~~~664 1lt2
-~~~ 125162812
22 fIN~lCE COSTS
2013 2amp2 QR QR
Inleres epen~ 42866312 5773U4B Am(vtisJliorgt ofdefcentrred financiog coStS __ 2l)tl26~~ gt3661
44930877----=
58063009
23 BASIC A~n nHUfED EARilNGS PER SHARi~
Basic trdTJogs per hue is caculatid 0y llividing the pwfill0( Ihc year attriouiabk (0- equity roldc-5 of the parent by lhi w~iglwxi avrage number of ordinary shares 0JstandirJg dulting tht_ year During Ihe year lil~ Conpmy i-sued and CBpii3lzed bonus shares lnd awmJingl) me previously ~eportod earnings per shac have blOM restatc(i
20i3 2012
Profit feT the year auributable to Cluity holderlt of the- paren (QR)
Weighted aVCTage number ofshares outstanding during the year (i)
Basic Jd diluted earnings per share (QR) 085
59985U413 shy
~~--~~~~- ~------J 1
23
Aamal Company QSc
NOTES TO THE CONSO LIDATED FfNANC[AL STATEMENTS For tbe year ended 3 l December 2013
BASIC AND DILUTED poundARNINCS PER SHARE (continued)
NOles (i) Th wigh d m nlg urnb of hres foc h P of lruling ~migs pee share h bee kulated
as follows 2013 20J2
QU3lifying shrues allhe begi ll1ling of the year 544500000 544500000 Effect of bonus shares issued and capitalised 55500000 55500000
600000000 600000000
Less T reasury shares (149587) (i357SI)
Weighted average number of shares at the end of the year 599850413 599864249
(ii) There were no potentia lly dilutiw shares outstanding at any time during tbe year and hence the diluted earnings per share is equal to the basic earnings per share
24 COItIMITMENTS
20 1] 2012 QR QR
Estimated capital expenditure approved and contracted for at the year eod but not provided for
Investment properties 2964000 8 139063 Property plant and equipment 16386500 63759762
19350500 71 898825
Operating lease commiIOlenlS under noncancellable lease agreemenlS
Payable wilhin one year 990806 702000
990806 702000
25 CONTINGENT UABILITlES
The Group had the following contingent liabi lities from which it is anticipated thai no malerial liabilities will arise
2013 2012 QR QR
Letters of guaramee 474551239 394255203
Letters of credit 7678499 194299384
NQles
(i) leHlaquogt of gu indud penonmnlaquo tend nd bid bonds d pymenlt g gi to suppliers and contractors by the Group in the ordina ry course of bus iness which will matme within twelve months fro m the reporting da te
(i i) Letters o f credit are provided by lodging documents to the bank tor purchase of trading goods fro m foreign suppliers wruch will maMC within thJee to six months from the date or tile Iransaclion
J2
26
Aamal Company QSc
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year eoded 31 December 2013
RELATED PARTY DISCLOSURES
Related party transactions Related parties represent major shareholders directors and key management persortOei of the Group and entities controlled joimly controlled or signjficamly innueoced by such parties Pricing policies md tenns of these tnlOSaclions are approved by the Group s management
Transactions with related parties induded in the consolidated financial stalemenls were as follows
20lJ 2012 QR QR
Sale o f goods and SClVices 419034048 415225221
Rental income 1980473 2069386
Purchase of goods and services 1591 38018 300835596
Rental expense 21 780G78 23397334
Bargain purchase gain 8360793
Net assets acquired 78803585
Relat ed party bal nnces AmountS due from and due to re lated parties are disclosed in Notes 7 and 13 respectively These balances do oot carry interest and are repayable OIl mulUlUy agreed dates generally within one year
The Group did not record any impairment of receivables reJatiog to amounts due from related pat1ies in either year This assessment is undertaken each fina ncial year through examining the ftnanc ial position of the related party and the market in which the related patty operates
Parent The Groups ultimate parent is Al Faisal Ho lding Company WLL
Compensa tion or key management personn el The remuneration of key management dming the year was as fullows
2013 2012 QR QR
Short-term benefi ts 7904794 1079595 Employees end of service benefits 408934 439776
8313 728 11235727
33
AamaJ Company QSC
NOTES TO THE CONSOLIDATED FINANCIAL 5T ATEMENTS For the year ended t Decernber 2013
Dilling the year 1he Group issued a XHlUS share of 10 928 of the paid tiP share capilal hdd ilS at 31 DiX2mber 2(JJ 2 mnmuning to OR 555000000 using retamed earnings as of3 December 2012 (20l2 Doe share for every ten shues held as of 31 Dcember Oll amuunting 10 QR 495OO()OOO ling reta1ned earmrgs 28 or 31 Decencer 2D II Jshy
18 SEGMENT INFORMATION
For J)iloogement PUIpltJM rhe Group i organised into business unit bused On LlJeir nature of Acttvitics lud nas fonY reportable segments and the Head Oftklt as bllow$
Propert Tbe segntn cOlists of City C~nler Qlta~ Brunch and Aamal Rea Esmte Branch whicb ll[c invoived in lampIiiog the faJ1ities of retail outlet conpex red e5ttlte nve(mltn$ and property remal buines~s
Trading mld distrib-wion The segmeul Involves wholesalB andlor rBtail distribution of phamlaceutlcai and consunable i1ems hume Epplianccs medica equimenl t-Tes ill1d lubricmtlaquo and II1UllitnEl printing The scgn(rtt includes 6c following entities
Eotl Sina Medical Branch
Aaen Medical Braudt
Amcill Troding and DistoolltlqO Branch bull Foot Care (erier HRnd) Good llre Pbannacy Bf4Uch bull Al FllfJdaq COllpafY wJ~L
InduSNol manuacturing TIle s0groent IOvolves Ulahuactrumg whole~we aliaor rewi dimibUlioti of dccnc cables lid tools ggregJ1es_ ready-IUx connole and cement bI0C~ lI1d provi$ion of servlCcent$ in rdation to iODllltroa Itvestment repair aJ-d Gonstruction of power plwts liiiding of LED ilgluitlg products und management of industnl enterpnses The segment ircludes be folloVting centntitis
bull Aam1 Cemert Industries LL AuraJ Redy1Yl(A BrQTlch
bull Doha Cables Qawf lLL Senyaf IoolJic1es Qatar Holding W LL Advanced Pipes ard Casfs CompQTly WJ L bull GuJfRoch Coroany WLL Ci~San Trading Company WLL hmovafive Lighting Compary WLL
Managed services le segment inyolvc~ provisloH of hOllseiltecpmg mi cleaning services fucditics n-anagemerJ services C1egy s(tvices ttl centfe sltrvicf)s buildiqg lnaintemHlelt aml acting as travel gens The 5cgnltnt includes the foUowing cnti(lcents
An13 ServJce Branch
amli TnlVeJa l5tmh
f-eco Gulf Co W LL
Jolinson Controls Qattl WJL
28
Aamal Company QSc
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended ) L December 20 13
SEGMENT INFORMATION (Co ntinued)
Head Office It provides corporate services to the branches and subsidiaries of the Group
The managiog d irector of the Group monitors the operating results o f its business units separately for the purpose of making decisions about resource allocation and perfonnance assessment Segment perfonnance is evaluated based Oil operating profit or loss of these segments Transfer pricing between operating segments are on anns length basis in a manoec similar to Iraosactions with third parties
Aamal Company QSC
NOTES TO THE CONSOLIDATED FINAN CIAL STATEMENTS For the year ended 3 1 December 20 13
28 SEGMENT INFORl1ATlON (continued)
Operating segments The operat ing segment after elimination or ioter-bra nch and inter-co mpany lrnnsaclioos is presented as follows
Trading (nd Industrial Managed For fh e year elided 31 December 2013 Properly disirjblli ioll manujocljlring services
QR QR QR QR Revenues
- h lemal parties 260360172 578909983 1231522768 S l802210 - Inter segments 1253914 6843 11 8 29639873 3445052 1
Heat Office QR
Eliminoions QR
(n187426) II
Tolal
QR
2J22595133
261614086 585753 lOI 126116264 1 8625273 1 (721 87426) 2122595133
Opera ti ng results Fair vallie gains
Profit I (loss) ror the year
Depreciotion
200811944
245051 107
445863051
2066290
86492834
86492834
4345438
22636250
22636250
33049 089
5157436
5157436
1760305
(47864882)
(47864882)
1334382
267233582
245051107
512 284689
42555504
36
Aamal Company QS
NOTES TO Tl CONSOLIDATED FfNANClAL STATEMENTS For the yeM ended 31 December 20 13
28 SEGMENf INFORMAnON (c)tltioucd)
FOf the yearrnrkti J f DccemOer 2(J12 QR
Revellues - ExlcmlJ partiel 2331 17 509 bull Inter segmcI11S 1168935
-- 234236434 --~- -~--
Openning results 18S2367t Fmt value gains J8S79-4~G
pront LOllS) for the rear 570616154
gt3659
No(
lnlermiddotgment revenues are eliminated on tQHs)idntiOH_
Tadiug ftfid disl d)Ntion
QR
S2S3l7661
324 j
5335493114 ~ -~-----
51384831
54384338
4J9R71(i
Indus idi mamfmturing
QR
1255694537
129U25lS4
56727059
56727059
32752742
slnltic(s QR
55216665 2939H31
S46lOJ96
7427414
7437
[908067
ilfild ()jice QR
(64(41976
Elimination QR
(74tHi2oJ Iii
Totul QR
206936372
2069336372
235721
(64641
131 f613
6245
42541)861
Amnal Company Q$l
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Por tnt yeartndeJ 31 De~embcr 2013
28 SEGMENT JNFORMATlON (contiutlld
Assc-ts and labilities
Tng alld lndtrstfw At31 December 2(113 distnbllrior manufacturIng senices HeadOJJicc EliminatioilS lola1
QR QR QR QR QR
Cumnl 3tS 227552338 620807979 61349 j 415 S()6)86922 (301636995) 1477366090 Noolucrcnt DSeIS 6411868160 12604763 622386238 4348876 (i624548 __p2438051 780
fotal asstl$ 6639420498 1194 1243194217 65698291 513Ql1470 ==-lt03H8l~O()) 853295-870 -~----~ ~---~ -
CUIT)llliabilitics 280995335 1(3511J60 6344(12777 2l0708lJ2 496261185 (3CH636995) 1249603264 Non-current iiatJlitics 7l70L5V2 8008485 HlDi16~43_ 3181668 t433799 ____ ilj534_~57 __ --Totul liahililics 353696897 ___~4159~4~ 734419720 ~4976~~~~~ 1434945711
---~~--~ -~-~~ - _2~~~4~~ (~~~~9~
C1pild expcndimn HI) WO743OOj 1397742_~471l2~--~50 ~51 ~1~623821~~1~_ -~----~------ -~
3amp
28
Aamal Company Q SC
NOTES TO THE CONSOLIDATED FfNANClAL STATEMENTS For the year ended 31 December 20 13
SEGMFNT INFORMATION (continued)
Assets and liabilities (continued)
AI 31 December 2012 Properly QR
Trading and d iSfriblllion
QR
Indusrial manufacfuring
QR
Managed senices QR
Currenl assels
Non-current assets
146491 186
6121 864484
2964425 12 903 7264
73468 1258
549267235
51387098 471 1439
Tolal assets 6268355670 305479776 1283948493 56098537
Head Office QR
468325024
6713643
475038667
Currentliabil iies
Non-current liabiLities 273444 748 1 J10 15024
86054583 7434286
669214261 1288 14977
2 1938953
287 1199
480393637 1253084
Totil lliabiliti cs 390459772 93488869 798029238 248 10 152 48J64672 1
Capila expendirure (ltII L 72865 878 1281254 6647 J356 7169 13 149045
Notes
(i)
(Ii)
Inter-segmeot balances are e limioafed 00 consolidatio n
Capi tal expendiTU res consist of additions 10 propeny plant and equip ment and iovestmenl properties
Eliminations QR
To wl QR
(273735776) (i )
(20308351(i)
1423591302
6689563230
(27576661 1) 8 113154532
(273135777) (i) 12573 10405
257388570
(273735177) 15 14698975
24 1484446
39
29
Aamal Company QSC
NOTES TO THE CONSOLIDATED FrNANCIAL STATEMENTS For the year ended 31 Dcltmber 1013
Fr-A]~ClAL RISK MANAGpoundMamp1H
Objccthes and policies fe Groups principal )uaucill liabilities comprise imltresl bctmllg loons and IxmowHgs baRlt ovetda1s amounts due to fclaled par1ies and tracte accounts payable The main pUlJXSi of thesc financial liabilities is 4J mise firmne or 610 Grmps operations The G0JP bas various fimmcial assets such as ttadc accounts receivable lInlOlmts due from related parties bark balances tltCntion receivable and other receivables which arisgt directly fran its cperuoonamp
The maiH ri~ks an3ing Joru (be Groups UnariCJlll illslrumenls jle market risk cretiJt nsk and hmdity risk Til BoarD ofDtrcctO$ reviews end agrees policies for mzrAgbg Caltt f hespound ri~k ihkh arc summariscd beloW
VIarktt risk yenfatket risk is the risk Um changes in market prices $Uch as intfcst rates and hreig lttmeocy ect14nge rilles Vltl1 affect the Groups profit eqwty Dr value tf its hoJdiI15 of financial instrl[Thnls rile objecivpoundj of marke1 risk mUnllgcrlcnt is to manage uld 1~ontr(ll tho tr))rket risk expo-sure vithir acceptable parfI-etcJ$ while optimising rerUID
Equit) price risk ampjuity prtce risk is the risk hilt the Group ampearnings will be affected as a rcmt (If luctttltions in fm vdue of ~qui-gt
mstwnents Eqlliry price risk arises from availabtetor~sale inv2strnems However the Groups exposure to eqmty price risk IS minima as II doesn hold sitl)iftrmt ailableAor-511le inYestrmmrs
[merest rate risk The Groups fimiruial poundS5ot ampId liaojlilies (at Rl $uJject to int~~ rate mk compnse brmk depoils interst bearing loans and bOITQwjags and bank overdr-afts At the reponwg dalt tbe [merest rale pronle of Ill Goups intexst bearing fbi4rdd instruments as fliows
11113 20i3 QR QR
Fued liIeryS refc insfrvrnellts
Fmmcial assets 113035962 111913394 FrOltwial liabilities --1~203712l) 1252t43~1
9)OI~ (13350972)
Fhlllting inireSI rate ns1lmlttrs Fanctl~ Isseis 127024345 ID43848o Fllllocial liabilities _-(i~9347~ (94))48926)
(836)64116)
The Groups exposure to t~ ris of changes in marXet interest fltltes relztes primariiy to the Groups financial assets and lizbitdic$ with t1Oltttirg interest mte~
lhe loEowing able demonstrates the ampmitivity nf the eonsolidattXI statemen1 of income 1) caonaly possible chonges in in1jfgtst rmes by 25 basis points with all othe vari)ble3 hdc umstant The sensitivity of the CooiK~ljclatid statement of inc(me $ the eft(ct of tb assumed changes in lnterdt rales for one year bf1sec on the floating rate financial assets and fimmcial hablhw$ held at 31 f~r The effect of deae-ascs in interest ral~ is cXp0Ctct to be equal and opposite to the effect oHlle increases sllQvro
Changes it Eftx OIl
00513 [oms profit QR
2013 Floating mterest Hlte instruments ----2$ bp (1649776)
2012 Flv-ating irkfiSt rale instrumenls +25 bp (209[9(1))
~--------- -~~ 40-middot------ _ _ shy
29
Aamal Company QSC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 3 1 December 2013
FINANCIAL RISK MANAGEMENT (continued)
Foreign currency risk Foreign currency risk is the risk lhilt the value of lhe fi nancial instruments will fluctuate due 10 changes in fore ign exchange rates
T rade aCcOlmts payable and accrued expenses include amounts due in foreign currencies mliniy US Dollars UAB Dirhams Great Britain Pounds (GB P) and Euros of which the Group has a currency risk primruily on the baJmces payable in Euros and GBP amoWlting 10 QR 14400634 (2012 QR 17214046)
The Group does not hedge its foreign currency exposure As both Qatari Riyal and UAE Dirhams are pegged to the US Dollar balances in US Dollars and UAE Dirhams are not considered to represent significant currency ris k to the Group
The table below indicates the Group s fore ign c urrency exposure on its monetary assets a nd liabilities The analysis calculates the effect o f a reasonably poss ib le move ment of the QR curre nc y rale against the Euro and GBP with all other variables held constant on the consolidated slate menl o f income (due to the fa ir va lue of currency sensitive monetary asse ts a nd liabilities) The e ffect o f decreases in fo reign c urre ncy exchange rates is expected to he equal and opposile 10 the e ffect of the increases shown
Incramp1se ill
f oreign cUlrency rate
0
the QR
Ellecl on profil
QR
2013 +5 (720032)
20 12 +5 (860 702)
C redit Tisk Credit risk is the risk that one party to a financial instrume nt wi ll fa il to discharge an obligation and cause the other party to incur a financial loss TIle Groups exposure to credit risk is indica ted by the carrying amoWlt o f its financia l asse ts whic h consist principally oftmde accollilts receivable retention receivable amounts due from related parties othe r receivables and bank baLances
The Group sells its products and prov ides services to vario us panies It is the G ro ups policy that all customers who wish to obtain on credit lerms are subject to credit verificalion procedures to ensure c redit Ilonhiness Each new customer is analysed individually for creditworthiness before the de livery o f products Of services Custo mm tbat fai l to met t the credi tworthiness may transact with the Group only o n prepayme nt basis Property rentals are mostl y received in ad vtnce or conlrlCled wi th post dated cheques 10 additio n receivable balances are monitored on an ongoing basis a nd the purchase limils are established for each c redit custoroer which are reviewed reguJarly based on the level o f past transactions and senlement The Groups max im wn exposure with regard to trade aCCOWlts receivab le net ofa llowance re nected allhe reporting date was ilS fo llows
2013 2012
Business SJgmelll QR QR
Property 15478832 19386326 Trading and distributio n 194343 597 179748274 Industrial ma nufac turing 183119753 131578668 Managed services 18069385 14547389
411 011 567 345260657
41
29
Aamal Company QSc
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For tbe year eoded 3 J December 20 13
FlNAJICIAL RISK MANAG EMENT (c-o Dtinued)
Credit risk (continued) With respect to credit risk arising from the other financi31 assets of the Group the Groups exposure to credit risk arises from default of the counterparty with a maximum exposure equal 10 the canying amount of these instruments as follows
2013 QR
202
QR
Bank balances Amounts due from related parties Retention and other receivables
436136756 214439950 48290351
36788129 t 171525363 74082203
698867057 613488857
The group reduces the expoSltre of credit risk arising from other financial assets by maintaining bank accounts in reputed banks and providing services only to creditworthy re lated parties
The management cons iders the bank balances and a mQUIIIS due from related parties as high grade fi nancial assets and lfade accounls receivable and other receivables as sundard grade financial assets When a finltmcial asset is identified 10 be impaired the managemoot downgrades such assets to impaired category and provides adequate allowances
Liquidity risk Liquidity risk is the risk that the Group will not be able to meet its fmancial obligations as they fu ll due The Groups 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 nonnal and stressed conditiom without incurring unacceptable losses or risking damage to the Groups reputa tion and is to maintain a balance belWeen continuity of fuoding and f1eilibility through the use of bank overdrafts and bank loans and borrowings
The Group monitors its risk to a shortage o f funds using a recuning liquidity plaOfling 1001 TIllS tool considers the manuiry o f financial assets (eg accounts receivable) and projected cash flows from operations The Groups teons ofsales or services require arooUIlts to be paid within 30-90 days from the invoiced dale
42
29
Aamal Company QSc
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For tbe year ended 3 1 December 2013
FrNANClAL ruSK MANAGEMENT (contiQued)
Uqujdity risk (continued) The table below summarises the ruaruriJy profile of the Groups financial 1iabililies a t 31 December based on contractual undiscountcd paymeots
2013 Interest bearing loans and borrowings Bank overdrafts Trade accowus payable Other payables Amounl~ due (0 related panles
201l Interest bearing loans and borrowings
Baok overdrafts Trade accounts payable Other payables Amounts due to related parties
On demand
QR
6836280
6836280
011 demand QR
2885090
2885090
Less than 3 months
QR
521324473
303638792
47406830
2530~480
898675575
Less thall 3
months
QR
469839033
10754JJIO 37543236
1964504 1
634568620
3 10 J2 mOlllh$
QR
239333328
16378865 20210580
2289~11l
298816884
3 to 12 monlhs
QR
365476972
159621 37 J 24745342
30092716
579936401
1to 5 years
QR
J 60092748
160092148
1 to 5 years
QR
248472226
248472226
gt 5 years
QR
25261598
25261 598
gt 5 years
QR
7648000
7648000
TOlaf
QR
947012147 6836280
320017657
67617410 48199591
1389681085
Tota
QR
109 1436231
1885090 267162681
622 88578
49737757
14735 10337
43
30
Aamal Company QSltc NOTES TO THE CONSOLIDATED FlANCIAL STATEMETS For the year ended 31 December 20 t3
21 F~ANClAL RlSK MAiAGEMElT (continued)
Capital management The Boards policy is to maintain a strong cepit1 base so as to rnainmin investor creditor and market ronfoonee and to SUSWlJ) fumre dcltclonnent Gf the buinest The Board of Directors rronitortl the tapital whkh tbe Group defines as wlal $parcloders equity excluding nonmiddotcornroliing imerests and the level of dividends to orrunury srarellOJdcfS
The Board also reeks to ITIaimain a balance between the higher (ctums (hat might be fA-~$ihle With higher leves of borrnwings end Lle edvnrJages and security named Sy it sOMd Cilpitai posi[ion The GfCup~ k1rget is to achievfl a return on slureholders equity (exclJding aonwurrolJiug iorcf(sts) greater lll(ll1 he wcighlcd average inres exxmse on mrerest bearing Ivens and oorrowing
The (lf0t-p nl)nDg-e ils cnpital structure and makes adjustneal lOll in light ofchang2s in economic nd bttincss cordjlons and shareholders expe1ationJo chmges veremiddot maCo HI Lleuro objecttves polilCS or proCCSSC3 during the years erded 31 D~mber 2013md 31 Dtccmlxr2Ql2
The Group monitors the capit2J using a gClting fatio which IS dep divided by caplla plus debL The GtOwgts policy is to keep ttJe ge-anng rmio bclew 40 Tbe Group iLdtdes withb debt imete-51 beagting loans ard ~OITORlngs less cash and cash equtVaknts Capltal includes eqmty attributable 10 the equity tolders oft~e parcrt
2013 QR
2(i2 QR
fmerest bearing loans and borrowings lcss- Cash and cas ltYJUvalcnts
9i4lJ05301 _~ (429JfJl4761
1004845296 (649)6201)
Net debt
Toa capital
Capita and net debt
699849045
~ringrttio
FAIR VALtES OF Fl~ANOAL f~STRUMETS
Finarcial iostrumenL~ cOlnprise tina~lctal assetS carl finailcialliabilities
Fmancial assets colJist of bank balance) short 1Cm bank dcposis amounL dve dom rc)ltted partilt)$ rekntion and other receivables and ttade accolmis rceivabe Finatlclll habiilics cgtmsist of banilt ovcrdratls jnerest bearing lOil1S and bOrowings amounts due (0 nliled partiG~ ane trade x-ounls payable
The- fair values of hese financial inStrumen1S except Jo-- imCfest bearing loam lHld bOlToving aproKimate lhdr cMryinJ vlhes due to the Slort temt mzrutiiles or these instrument
Tllc faiT value of iotcnst beating Nns and borrowin2s ae estimate( based on discoumed ltash flows twin int(s rale- cune-ntly nvailagtk fur tilt debt or sinuiar tetnlS an-a rell1lmng matunties
31
Aamal Company~Q=-ScC ______________~______
~OTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For fhe year ended 31 December 20 t3
SlGNIFICANT ASUMPTIONS ACCOUJTING JUDGElE1TS AND F8TIMATFS
impairment (If accoonts receivable n etrnwe of lhe collectible anoun of trade accounlgt reccvable is made when collection of the full lHl1OUt i~ nO looger probabk FOI nCividualty significitIl amounts this estimation is p~rformed on an indh-idllai a$[$ Amomts wHcb arc not indivldl11Uy significant but wluch are past due ZTe tsscssed collectively and an aJlQwaccc applied ucc()r~Jng to the length of lime past due based oc histnncal recovery nlJes
hnpalrment of inHntnries lavenoncs are held at tho lower of col and nol realisable value InIOn inventoncent$ becone old or 0-~amplete an estilTJte is mate of their net j alisable vulue For indiviolhlUy significant amountS this cstinaunrt is performec all aD lndividwl osis Amotlnts whieh are fl0t individually significan( btll which ltIre old at obsolete wx LltSessed wllecivdy md a provisior is applied sccnrding to the invenrory type and be dep)ee of ageing 0 cDsolescc1ce based on anticipUled selling prices
Classifigt1ltion of El Sew(gtdy Cable Qatar WLI ali a j(lint vwture pound1 Sovedy Cables Qatar is a limited hability company whose kgal fum confers SCprm11ior bernten tbe jXliiies 10 ~he jomi lfranpement Snd the Company Itself FurthenrlOre then IS no oontractua] arrmgelTeot or any oibe aus aod circumstriliCe$ that iocik41to tht he putic5 [0 the joint flJTIlrgernelit bave rights to the ssetl and obligrtdons fo~ the liabilities of the joint ilrrongement Acoordingly El Sewed- C[jbl~s Qamr WLL is dassifiecl 7S a joiut enrtrr of he GWtp
impairment of goodwill G0oovj)1 embedded in th~ cot 0 aquisitior of subsidiaries and eqmtj-iccounled iflV(stees ire teswt for irl1jXlirmnt aHuaily Tbe calculations of value [n use fO( cfish gecj~r)lilg units (loring to real nte projecg are rtost sensitive to tin IDHowing assumpti015
Grosgt i1wginmiddot Gross Ilmrgins arc lmsed on avrage values tuhje0d in (he [Xrioo preeedhli (e siaM of the budge xnod T1esC at( mcreased over the budgel period for mticipatltX efficiency Hnprovemots
DisC)unr r(es Discount rotes represent th cl1tent mark as~ssmetlt of the risks specific te ech cash geocroting unit regarding lhe time value of money ilnd mdividu)l risks of he tmtieriyilg assets whICh have not been inwrport1eti it the Citik flow estimates The dj~(OUrl flte tlkulation is based on the speclfte circurnsthLCes of lile Group and its opltllatJng segn)~nts (md derived (ff)rC it weighted avaage (XSt 0f apilaJ (WACC) Tb fACe (akw into uoount both deb and equity The 0$1 of equity is denved from dlC expected return 01 investmenl by the Groups investors TJc Gos10( deb is based on l1e borrvwings the Gmup IS obllsxl to service SC~lletllmiddotspecific r5k IS incorxt4too by applying individual bera facto The betn mctors ire evauatcentd annuaHy bhseci on pubJicly aVflllabe murked earn
Fair value ()fnHstmeni proputies The fuit laHe 0 nvestmel~ propertis is deltrrnlnzd b cxterrwl indepzfldell property valuers laving appr0priate recognised professional quabfiillions and recenl xperience H1 the localjl)n and G-tegory 0 the oroperty being valued
Useful hes of PfQPcrly plmr (llld zqulpment The Groups management detennints th estiunted useful jives Df It~ property plan and equipmnl fix calnurjng depreciation Thi5 e~timJte is 6lermind after cinsidring 1b expeelcd usage (1f the a5sclt [hysical l101t and (eas tedmiltal Dr com~ercia obsolesccnce
Gotlg Qncen
ibe Groups mangerncnt UiS made aJ assessmeot cf the 011115 ability (0 COllllOUC liS a going conct11l Imd is satsl1ed hat me Group ms the resources to contmue in business for he foreseeable fu1urc he1hennort he management is no aware oC lny material Hncertainties that lray CH~t signinchnt doubt tlPDfl the Groups ability 10 continue as a going umcem Therefore titpound lotlsolidatcd finilllcij stftemeols comirme to be prepltd on li g0ing concern basis
Aamal Company QSc
NOTES TO THE CONSOLIDATED FlNANC[AL STATEMENTS For the year ended 3 1 December 20 13
32 INCOME TAX
Certa in subsidiaries of the Group which have non-GCe ownership are subject to income tax under Qatar Income Tax Law No 2 1 of2009 The iocome tax is charged on the share of profits attributable to non-GCe shareholders For the purpose of these conso lidated fi nancial statements the income tax liability oftbe foreign shareholders has been excluded given that the non-GCe shareholders have agreed under the shareholder agreements signed with the Group to bear the fh lliiability and make necessary payments
33 COMPARATIVE INFORMATION
Certain comparative figw-es of the previous year have been reclassified 0 coofonn to the current years presentation However such reclassifications are oat materia and do not have an impact on tbe previously reported net profit other comprehensive income or the total equity for the comparative year
The impact from the resta tement of comparative infonnalion as a resuh of adoption of IFRS I I - Joint arrangements is detailed in Note 32 Changes in aCCQu(lting policies
46
14
Aamal Company QSC
NOTES TO THE CONSOLIDATED f fNANCIAL STATEMENTS For the year ended 31 December 201 3
INTEREST BEARING LOANS AND BORROWINGS
NOles Malilrify
2013 QR
2012 QR
CoMl Loan 2 Loan ) Loac4 Loan 5 Loan 6 Loan 7 CoMB Loan 9 Bills discounted
(0 (ii) (iii) (iv) (v) (vi) (vii) (viii) ( ix) (x)
lune2014 Seplember2014 January 2015 November 2016 December 20 16 November 2017 Jllne20 l J December 20 7 OClober 20 19
172070387 440000000 50544000 40261 621 81387109 19920036
6] 43890 62626967 42522794
915676804
298324180 440000000 10 J088000 57955030
100 168750 2 1300492
407728 1 782871 1
35000000
1065742444
Less Defe rred finatlcing cost (771 503) (897148)
914905301 1064845296
Presented in the consolidated statement of financial positioo as fo llows 20)3 QR
201 2 QR
Current ponion Non-current ponion
749520820 165384481
825568489 239276807
914905301 1064845296
The dete rred financing costs consSt of arrangement fees The movements m the deferred financing costs were as fo llows
203 2012 QR QR
At I January 897148 332 661 Addjtions during the year 1 062565 912506 Amortised during the year (218amp210) (34801 9)
At 3 1 December 771503 89 7148
28
Aamal Company QS C
NOTES TO THE CONSOUDATED FlNANCIAL STATEMENTS For tbe year ended 31 December 2013
14 INTEREST BEARING LOANS AND BORROWINGS (continued)
Nolec
(i) Loao I i USD 93000000 impon 10n moi lily obtoined to refimnee he Icne~ of edit The 10 IT interest at commercial fate and the interest is paid at monthly intervals The fucility is repayable within ISO days including the usage period under letter ofc redits
(ii) Loan 2 is a secured bridge loan obtained to settle an existing loan and working capital requirements of the Company The loan carries interest al coOlJllercial rates and interest is 10 be paid on quarterly basis
(iii) Loan 3 was obtained for the pWpOse of financing capital ependiture and direct payment to suppliers contractors and 5ub-controctors The 10011 CMries interest at commercial rate and the inte rest is to be paid q Uar1erly The fac ility is repayable in IS quarterly iostallmenls starting I July 20 11 and ending I January 2015
(iv) Loan 4 was obla ined for conSlruclion o r an inveslmenl property The loan is seclJed by 0 primary mortgage over the some property and corporate guarantee of the Aamal Company QSC Tbe loan carries interest at commercial marke t rate and is payable in quarterly instalments
(v) Loan 5 represents a loan fOlcility obtained in two sepnrole tranches amounting to QR 309 825 000 (USD 85 million) for the purpose of refurbi shment and construction of fociJities io one of the investment properties The loan is repayable In 16 equal quanerly instalmcnlS for individua l tranche commencing from March 20 1J The loan carries interest at conunercial rJtes
(vi) Loan 6 represents secured loans obtained ffom a commercial bank in the previous periods for the purchase of heavy equipment and machines and were merged on 15 November 20 12 as a comb ined loan This loan is payable by 59 equal instalments of QR 426000 with (I last inSlalment of OR 438 326 with effect fro m 01 October 201 3 The loan carries interest at commercial market ra tes
(vii) Loan 7 is il tmst receipt banking facility obtained for the purchase of inventories This carried interest at conunercial market rates This loan was full y settled during the year
(vii i) Loan 8 represents secured loans obuined from a commercial bank in the previous periods for the purchase of delivery trucks and machinery and were merged on 22 October 2012 as a combined loan The loan carries inte rest at commercial market Tates and is payable by 59 equal insta lments o rQR 160000 with a last inSlOlmem ofQ R 128000 with effect from 3 1 December 2012
(ix) Loan 9 is an Islamic Financi ng Arrangement obtained for construction o f a manufacturing plam and as o f yearend ba lance represents partially drawn amount out of totil1 facility of QR 655 68000 The loan is secured by joint corvorate guarantee by the shareholders The loan carries profit at Islamic Financing rates and re-payable in quarterly instalments starting from the end of the 24 months gmce period from the date of loan drawn
(x) Bi ll discounting is a loan fac ility from banks The purpose of the arrangement is to discount bills locally and carries interest at current commercia l filte
15 EM PLOYEES END OF SERVICE BENEFITS
Movements in the provision reHectelt in the consolidated SLo1tement of financia l position were as fo llows 2013 201] QR QR
At I Jan uary 18111 763 17877937 Provision made during the year 4056969 4205499 Acquirelt through business combinations (Note 4) 349272 End of service benefits paid during the year (2210756) (4320945)
At 3 1 December 19957976 18 111763
29
Aamal Company Q5C
NOTES TO THE CONSOLIDATED FINANCIAL STATEMETS For tile y~ar ended 31 Dee~mber 2013
16 SHARE CAPITAL
2013 2012 QR Qq
AtI1l1)nud 60000)000 (20 2 544500JJOfn shares ofQR iii Cilch 60i)iQOOlOO 54450lt)0000
21)13 2012 Numher of
siMtS QR shares QR Issued Mtldfully paM At lJamld) 544SfWllOfJ 5445(100001) 495000000 49500000)0 1511C ofbonus S1i1-C ___ 5550~OOO 555000000 49SGOOOO 495000000
At 31 Decenef 6(OOampQllf1(1 ---14450O000 544~OOOOOO
All ampates m~ of a110 clss and caL equal voting rights
17 LEGAL Reuro5ERVE
As required by Qatar Comnertai COfrp7lnies Lav No5 of 2002 lOfp of the profit for the ye1J as a rru1imllli silould be mmsfened to legal re~erve The reserve is lot normay [lytiabe tor distribution except ill he cixcuJUstllrtUS stipulated m the above ~lemi0ntd GIW
IS HEVE1TE
2013 l)n QR QR
Sale of goods 1726893265 i709057~(iO
Renlal income UiO362322 133117509 S-ice income 858695 33940731 CornrrusslOlL Incentives and agency fces 44695S1 422~_632
212259$)33
19 DIRECT COSTS
2013 2)i2 QR
C 051 of inven(feS recognisedlIS an exptns 1522929956 497210830 Dind sL1ries lmd wages 601 [1336 5137856-8 Operating eXpenses on nml estate p~opet1les 36)711316 3041H504 fJepreciatiort (Kate I J) 33164382 B03091pound Operators marhgerrt6nt fees 14508588 li667989 Provisicn Qr obsolete and skwlt moving mvenlories (K)tc 8) 2380617 2208263 Other operating ilxpenses _31~3982 _ 3674946
1702139171 JS9653OI tgt
Aamal Compall-yQSC________________
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For lthe year ended 31 December 20 11
2G OTHER NeOiI
2013 20J3 QR QR
Interest mcume 2824216 2)314392 Profiv( loss) 00 disposal of property plant aoe eqUlpmem 737647 (l7362G) Eargain ptmnJse gain (Kote t) 8360793 MIsceJlaneous income 5723356
2013 2012 QR QR
ManllgetnUI hrQ empl(yees ws 55170302 55lt035middot1 Rent 23596799 2594915 Allowance for impaimlcot oUrsue aCQl1ot$ rc(Xjvalle (Nole 6) 129459(i 11613120 flBumcce ane profcampiitmJI fees 2IU9263 209J902 Corununication OOtHS 1935123 1649155 Trllining tid ouSfjt$s developmccl 950476 L095764 Re]X1in and mainle-nilnce 21)11SflS 2)2 I Poslag-c prjnting acri stationery 610299 541159shyvllsltdlancous expenses _~~~664 1lt2
-~~~ 125162812
22 fIN~lCE COSTS
2013 2amp2 QR QR
Inleres epen~ 42866312 5773U4B Am(vtisJliorgt ofdefcentrred financiog coStS __ 2l)tl26~~ gt3661
44930877----=
58063009
23 BASIC A~n nHUfED EARilNGS PER SHARi~
Basic trdTJogs per hue is caculatid 0y llividing the pwfill0( Ihc year attriouiabk (0- equity roldc-5 of the parent by lhi w~iglwxi avrage number of ordinary shares 0JstandirJg dulting tht_ year During Ihe year lil~ Conpmy i-sued and CBpii3lzed bonus shares lnd awmJingl) me previously ~eportod earnings per shac have blOM restatc(i
20i3 2012
Profit feT the year auributable to Cluity holderlt of the- paren (QR)
Weighted aVCTage number ofshares outstanding during the year (i)
Basic Jd diluted earnings per share (QR) 085
59985U413 shy
~~--~~~~- ~------J 1
23
Aamal Company QSc
NOTES TO THE CONSO LIDATED FfNANC[AL STATEMENTS For tbe year ended 3 l December 2013
BASIC AND DILUTED poundARNINCS PER SHARE (continued)
NOles (i) Th wigh d m nlg urnb of hres foc h P of lruling ~migs pee share h bee kulated
as follows 2013 20J2
QU3lifying shrues allhe begi ll1ling of the year 544500000 544500000 Effect of bonus shares issued and capitalised 55500000 55500000
600000000 600000000
Less T reasury shares (149587) (i357SI)
Weighted average number of shares at the end of the year 599850413 599864249
(ii) There were no potentia lly dilutiw shares outstanding at any time during tbe year and hence the diluted earnings per share is equal to the basic earnings per share
24 COItIMITMENTS
20 1] 2012 QR QR
Estimated capital expenditure approved and contracted for at the year eod but not provided for
Investment properties 2964000 8 139063 Property plant and equipment 16386500 63759762
19350500 71 898825
Operating lease commiIOlenlS under noncancellable lease agreemenlS
Payable wilhin one year 990806 702000
990806 702000
25 CONTINGENT UABILITlES
The Group had the following contingent liabi lities from which it is anticipated thai no malerial liabilities will arise
2013 2012 QR QR
Letters of guaramee 474551239 394255203
Letters of credit 7678499 194299384
NQles
(i) leHlaquogt of gu indud penonmnlaquo tend nd bid bonds d pymenlt g gi to suppliers and contractors by the Group in the ordina ry course of bus iness which will matme within twelve months fro m the reporting da te
(i i) Letters o f credit are provided by lodging documents to the bank tor purchase of trading goods fro m foreign suppliers wruch will maMC within thJee to six months from the date or tile Iransaclion
J2
26
Aamal Company QSc
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year eoded 31 December 2013
RELATED PARTY DISCLOSURES
Related party transactions Related parties represent major shareholders directors and key management persortOei of the Group and entities controlled joimly controlled or signjficamly innueoced by such parties Pricing policies md tenns of these tnlOSaclions are approved by the Group s management
Transactions with related parties induded in the consolidated financial stalemenls were as follows
20lJ 2012 QR QR
Sale o f goods and SClVices 419034048 415225221
Rental income 1980473 2069386
Purchase of goods and services 1591 38018 300835596
Rental expense 21 780G78 23397334
Bargain purchase gain 8360793
Net assets acquired 78803585
Relat ed party bal nnces AmountS due from and due to re lated parties are disclosed in Notes 7 and 13 respectively These balances do oot carry interest and are repayable OIl mulUlUy agreed dates generally within one year
The Group did not record any impairment of receivables reJatiog to amounts due from related pat1ies in either year This assessment is undertaken each fina ncial year through examining the ftnanc ial position of the related party and the market in which the related patty operates
Parent The Groups ultimate parent is Al Faisal Ho lding Company WLL
Compensa tion or key management personn el The remuneration of key management dming the year was as fullows
2013 2012 QR QR
Short-term benefi ts 7904794 1079595 Employees end of service benefits 408934 439776
8313 728 11235727
33
AamaJ Company QSC
NOTES TO THE CONSOLIDATED FINANCIAL 5T ATEMENTS For the year ended t Decernber 2013
Dilling the year 1he Group issued a XHlUS share of 10 928 of the paid tiP share capilal hdd ilS at 31 DiX2mber 2(JJ 2 mnmuning to OR 555000000 using retamed earnings as of3 December 2012 (20l2 Doe share for every ten shues held as of 31 Dcember Oll amuunting 10 QR 495OO()OOO ling reta1ned earmrgs 28 or 31 Decencer 2D II Jshy
18 SEGMENT INFORMATION
For J)iloogement PUIpltJM rhe Group i organised into business unit bused On LlJeir nature of Acttvitics lud nas fonY reportable segments and the Head Oftklt as bllow$
Propert Tbe segntn cOlists of City C~nler Qlta~ Brunch and Aamal Rea Esmte Branch whicb ll[c invoived in lampIiiog the faJ1ities of retail outlet conpex red e5ttlte nve(mltn$ and property remal buines~s
Trading mld distrib-wion The segmeul Involves wholesalB andlor rBtail distribution of phamlaceutlcai and consunable i1ems hume Epplianccs medica equimenl t-Tes ill1d lubricmtlaquo and II1UllitnEl printing The scgn(rtt includes 6c following entities
Eotl Sina Medical Branch
Aaen Medical Braudt
Amcill Troding and DistoolltlqO Branch bull Foot Care (erier HRnd) Good llre Pbannacy Bf4Uch bull Al FllfJdaq COllpafY wJ~L
InduSNol manuacturing TIle s0groent IOvolves Ulahuactrumg whole~we aliaor rewi dimibUlioti of dccnc cables lid tools ggregJ1es_ ready-IUx connole and cement bI0C~ lI1d provi$ion of servlCcent$ in rdation to iODllltroa Itvestment repair aJ-d Gonstruction of power plwts liiiding of LED ilgluitlg products und management of industnl enterpnses The segment ircludes be folloVting centntitis
bull Aam1 Cemert Industries LL AuraJ Redy1Yl(A BrQTlch
bull Doha Cables Qawf lLL Senyaf IoolJic1es Qatar Holding W LL Advanced Pipes ard Casfs CompQTly WJ L bull GuJfRoch Coroany WLL Ci~San Trading Company WLL hmovafive Lighting Compary WLL
Managed services le segment inyolvc~ provisloH of hOllseiltecpmg mi cleaning services fucditics n-anagemerJ services C1egy s(tvices ttl centfe sltrvicf)s buildiqg lnaintemHlelt aml acting as travel gens The 5cgnltnt includes the foUowing cnti(lcents
An13 ServJce Branch
amli TnlVeJa l5tmh
f-eco Gulf Co W LL
Jolinson Controls Qattl WJL
28
Aamal Company QSc
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended ) L December 20 13
SEGMENT INFORMATION (Co ntinued)
Head Office It provides corporate services to the branches and subsidiaries of the Group
The managiog d irector of the Group monitors the operating results o f its business units separately for the purpose of making decisions about resource allocation and perfonnance assessment Segment perfonnance is evaluated based Oil operating profit or loss of these segments Transfer pricing between operating segments are on anns length basis in a manoec similar to Iraosactions with third parties
Aamal Company QSC
NOTES TO THE CONSOLIDATED FINAN CIAL STATEMENTS For the year ended 3 1 December 20 13
28 SEGMENT INFORl1ATlON (continued)
Operating segments The operat ing segment after elimination or ioter-bra nch and inter-co mpany lrnnsaclioos is presented as follows
Trading (nd Industrial Managed For fh e year elided 31 December 2013 Properly disirjblli ioll manujocljlring services
QR QR QR QR Revenues
- h lemal parties 260360172 578909983 1231522768 S l802210 - Inter segments 1253914 6843 11 8 29639873 3445052 1
Heat Office QR
Eliminoions QR
(n187426) II
Tolal
QR
2J22595133
261614086 585753 lOI 126116264 1 8625273 1 (721 87426) 2122595133
Opera ti ng results Fair vallie gains
Profit I (loss) ror the year
Depreciotion
200811944
245051 107
445863051
2066290
86492834
86492834
4345438
22636250
22636250
33049 089
5157436
5157436
1760305
(47864882)
(47864882)
1334382
267233582
245051107
512 284689
42555504
36
Aamal Company QS
NOTES TO Tl CONSOLIDATED FfNANClAL STATEMENTS For the yeM ended 31 December 20 13
28 SEGMENf INFORMAnON (c)tltioucd)
FOf the yearrnrkti J f DccemOer 2(J12 QR
Revellues - ExlcmlJ partiel 2331 17 509 bull Inter segmcI11S 1168935
-- 234236434 --~- -~--
Openning results 18S2367t Fmt value gains J8S79-4~G
pront LOllS) for the rear 570616154
gt3659
No(
lnlermiddotgment revenues are eliminated on tQHs)idntiOH_
Tadiug ftfid disl d)Ntion
QR
S2S3l7661
324 j
5335493114 ~ -~-----
51384831
54384338
4J9R71(i
Indus idi mamfmturing
QR
1255694537
129U25lS4
56727059
56727059
32752742
slnltic(s QR
55216665 2939H31
S46lOJ96
7427414
7437
[908067
ilfild ()jice QR
(64(41976
Elimination QR
(74tHi2oJ Iii
Totul QR
206936372
2069336372
235721
(64641
131 f613
6245
42541)861
Amnal Company Q$l
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Por tnt yeartndeJ 31 De~embcr 2013
28 SEGMENT JNFORMATlON (contiutlld
Assc-ts and labilities
Tng alld lndtrstfw At31 December 2(113 distnbllrior manufacturIng senices HeadOJJicc EliminatioilS lola1
QR QR QR QR QR
Cumnl 3tS 227552338 620807979 61349 j 415 S()6)86922 (301636995) 1477366090 Noolucrcnt DSeIS 6411868160 12604763 622386238 4348876 (i624548 __p2438051 780
fotal asstl$ 6639420498 1194 1243194217 65698291 513Ql1470 ==-lt03H8l~O()) 853295-870 -~----~ ~---~ -
CUIT)llliabilitics 280995335 1(3511J60 6344(12777 2l0708lJ2 496261185 (3CH636995) 1249603264 Non-current iiatJlitics 7l70L5V2 8008485 HlDi16~43_ 3181668 t433799 ____ ilj534_~57 __ --Totul liahililics 353696897 ___~4159~4~ 734419720 ~4976~~~~~ 1434945711
---~~--~ -~-~~ - _2~~~4~~ (~~~~9~
C1pild expcndimn HI) WO743OOj 1397742_~471l2~--~50 ~51 ~1~623821~~1~_ -~----~------ -~
3amp
28
Aamal Company Q SC
NOTES TO THE CONSOLIDATED FfNANClAL STATEMENTS For the year ended 31 December 20 13
SEGMFNT INFORMATION (continued)
Assets and liabilities (continued)
AI 31 December 2012 Properly QR
Trading and d iSfriblllion
QR
Indusrial manufacfuring
QR
Managed senices QR
Currenl assels
Non-current assets
146491 186
6121 864484
2964425 12 903 7264
73468 1258
549267235
51387098 471 1439
Tolal assets 6268355670 305479776 1283948493 56098537
Head Office QR
468325024
6713643
475038667
Currentliabil iies
Non-current liabiLities 273444 748 1 J10 15024
86054583 7434286
669214261 1288 14977
2 1938953
287 1199
480393637 1253084
Totil lliabiliti cs 390459772 93488869 798029238 248 10 152 48J64672 1
Capila expendirure (ltII L 72865 878 1281254 6647 J356 7169 13 149045
Notes
(i)
(Ii)
Inter-segmeot balances are e limioafed 00 consolidatio n
Capi tal expendiTU res consist of additions 10 propeny plant and equip ment and iovestmenl properties
Eliminations QR
To wl QR
(273735776) (i )
(20308351(i)
1423591302
6689563230
(27576661 1) 8 113154532
(273135777) (i) 12573 10405
257388570
(273735177) 15 14698975
24 1484446
39
29
Aamal Company QSC
NOTES TO THE CONSOLIDATED FrNANCIAL STATEMENTS For the year ended 31 Dcltmber 1013
Fr-A]~ClAL RISK MANAGpoundMamp1H
Objccthes and policies fe Groups principal )uaucill liabilities comprise imltresl bctmllg loons and IxmowHgs baRlt ovetda1s amounts due to fclaled par1ies and tracte accounts payable The main pUlJXSi of thesc financial liabilities is 4J mise firmne or 610 Grmps operations The G0JP bas various fimmcial assets such as ttadc accounts receivable lInlOlmts due from related parties bark balances tltCntion receivable and other receivables which arisgt directly fran its cperuoonamp
The maiH ri~ks an3ing Joru (be Groups UnariCJlll illslrumenls jle market risk cretiJt nsk and hmdity risk Til BoarD ofDtrcctO$ reviews end agrees policies for mzrAgbg Caltt f hespound ri~k ihkh arc summariscd beloW
VIarktt risk yenfatket risk is the risk Um changes in market prices $Uch as intfcst rates and hreig lttmeocy ect14nge rilles Vltl1 affect the Groups profit eqwty Dr value tf its hoJdiI15 of financial instrl[Thnls rile objecivpoundj of marke1 risk mUnllgcrlcnt is to manage uld 1~ontr(ll tho tr))rket risk expo-sure vithir acceptable parfI-etcJ$ while optimising rerUID
Equit) price risk ampjuity prtce risk is the risk hilt the Group ampearnings will be affected as a rcmt (If luctttltions in fm vdue of ~qui-gt
mstwnents Eqlliry price risk arises from availabtetor~sale inv2strnems However the Groups exposure to eqmty price risk IS minima as II doesn hold sitl)iftrmt ailableAor-511le inYestrmmrs
[merest rate risk The Groups fimiruial poundS5ot ampId liaojlilies (at Rl $uJject to int~~ rate mk compnse brmk depoils interst bearing loans and bOITQwjags and bank overdr-afts At the reponwg dalt tbe [merest rale pronle of Ill Goups intexst bearing fbi4rdd instruments as fliows
11113 20i3 QR QR
Fued liIeryS refc insfrvrnellts
Fmmcial assets 113035962 111913394 FrOltwial liabilities --1~203712l) 1252t43~1
9)OI~ (13350972)
Fhlllting inireSI rate ns1lmlttrs Fanctl~ Isseis 127024345 ID43848o Fllllocial liabilities _-(i~9347~ (94))48926)
(836)64116)
The Groups exposure to t~ ris of changes in marXet interest fltltes relztes primariiy to the Groups financial assets and lizbitdic$ with t1Oltttirg interest mte~
lhe loEowing able demonstrates the ampmitivity nf the eonsolidattXI statemen1 of income 1) caonaly possible chonges in in1jfgtst rmes by 25 basis points with all othe vari)ble3 hdc umstant The sensitivity of the CooiK~ljclatid statement of inc(me $ the eft(ct of tb assumed changes in lnterdt rales for one year bf1sec on the floating rate financial assets and fimmcial hablhw$ held at 31 f~r The effect of deae-ascs in interest ral~ is cXp0Ctct to be equal and opposite to the effect oHlle increases sllQvro
Changes it Eftx OIl
00513 [oms profit QR
2013 Floating mterest Hlte instruments ----2$ bp (1649776)
2012 Flv-ating irkfiSt rale instrumenls +25 bp (209[9(1))
~--------- -~~ 40-middot------ _ _ shy
29
Aamal Company QSC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 3 1 December 2013
FINANCIAL RISK MANAGEMENT (continued)
Foreign currency risk Foreign currency risk is the risk lhilt the value of lhe fi nancial instruments will fluctuate due 10 changes in fore ign exchange rates
T rade aCcOlmts payable and accrued expenses include amounts due in foreign currencies mliniy US Dollars UAB Dirhams Great Britain Pounds (GB P) and Euros of which the Group has a currency risk primruily on the baJmces payable in Euros and GBP amoWlting 10 QR 14400634 (2012 QR 17214046)
The Group does not hedge its foreign currency exposure As both Qatari Riyal and UAE Dirhams are pegged to the US Dollar balances in US Dollars and UAE Dirhams are not considered to represent significant currency ris k to the Group
The table below indicates the Group s fore ign c urrency exposure on its monetary assets a nd liabilities The analysis calculates the effect o f a reasonably poss ib le move ment of the QR curre nc y rale against the Euro and GBP with all other variables held constant on the consolidated slate menl o f income (due to the fa ir va lue of currency sensitive monetary asse ts a nd liabilities) The e ffect o f decreases in fo reign c urre ncy exchange rates is expected to he equal and opposile 10 the e ffect of the increases shown
Incramp1se ill
f oreign cUlrency rate
0
the QR
Ellecl on profil
QR
2013 +5 (720032)
20 12 +5 (860 702)
C redit Tisk Credit risk is the risk that one party to a financial instrume nt wi ll fa il to discharge an obligation and cause the other party to incur a financial loss TIle Groups exposure to credit risk is indica ted by the carrying amoWlt o f its financia l asse ts whic h consist principally oftmde accollilts receivable retention receivable amounts due from related parties othe r receivables and bank baLances
The Group sells its products and prov ides services to vario us panies It is the G ro ups policy that all customers who wish to obtain on credit lerms are subject to credit verificalion procedures to ensure c redit Ilonhiness Each new customer is analysed individually for creditworthiness before the de livery o f products Of services Custo mm tbat fai l to met t the credi tworthiness may transact with the Group only o n prepayme nt basis Property rentals are mostl y received in ad vtnce or conlrlCled wi th post dated cheques 10 additio n receivable balances are monitored on an ongoing basis a nd the purchase limils are established for each c redit custoroer which are reviewed reguJarly based on the level o f past transactions and senlement The Groups max im wn exposure with regard to trade aCCOWlts receivab le net ofa llowance re nected allhe reporting date was ilS fo llows
2013 2012
Business SJgmelll QR QR
Property 15478832 19386326 Trading and distributio n 194343 597 179748274 Industrial ma nufac turing 183119753 131578668 Managed services 18069385 14547389
411 011 567 345260657
41
29
Aamal Company QSc
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For tbe year eoded 3 J December 20 13
FlNAJICIAL RISK MANAG EMENT (c-o Dtinued)
Credit risk (continued) With respect to credit risk arising from the other financi31 assets of the Group the Groups exposure to credit risk arises from default of the counterparty with a maximum exposure equal 10 the canying amount of these instruments as follows
2013 QR
202
QR
Bank balances Amounts due from related parties Retention and other receivables
436136756 214439950 48290351
36788129 t 171525363 74082203
698867057 613488857
The group reduces the expoSltre of credit risk arising from other financial assets by maintaining bank accounts in reputed banks and providing services only to creditworthy re lated parties
The management cons iders the bank balances and a mQUIIIS due from related parties as high grade fi nancial assets and lfade accounls receivable and other receivables as sundard grade financial assets When a finltmcial asset is identified 10 be impaired the managemoot downgrades such assets to impaired category and provides adequate allowances
Liquidity risk Liquidity risk is the risk that the Group will not be able to meet its fmancial obligations as they fu ll due The Groups 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 nonnal and stressed conditiom without incurring unacceptable losses or risking damage to the Groups reputa tion and is to maintain a balance belWeen continuity of fuoding and f1eilibility through the use of bank overdrafts and bank loans and borrowings
The Group monitors its risk to a shortage o f funds using a recuning liquidity plaOfling 1001 TIllS tool considers the manuiry o f financial assets (eg accounts receivable) and projected cash flows from operations The Groups teons ofsales or services require arooUIlts to be paid within 30-90 days from the invoiced dale
42
29
Aamal Company QSc
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For tbe year ended 3 1 December 2013
FrNANClAL ruSK MANAGEMENT (contiQued)
Uqujdity risk (continued) The table below summarises the ruaruriJy profile of the Groups financial 1iabililies a t 31 December based on contractual undiscountcd paymeots
2013 Interest bearing loans and borrowings Bank overdrafts Trade accowus payable Other payables Amounl~ due (0 related panles
201l Interest bearing loans and borrowings
Baok overdrafts Trade accounts payable Other payables Amounts due to related parties
On demand
QR
6836280
6836280
011 demand QR
2885090
2885090
Less than 3 months
QR
521324473
303638792
47406830
2530~480
898675575
Less thall 3
months
QR
469839033
10754JJIO 37543236
1964504 1
634568620
3 10 J2 mOlllh$
QR
239333328
16378865 20210580
2289~11l
298816884
3 to 12 monlhs
QR
365476972
159621 37 J 24745342
30092716
579936401
1to 5 years
QR
J 60092748
160092148
1 to 5 years
QR
248472226
248472226
gt 5 years
QR
25261598
25261 598
gt 5 years
QR
7648000
7648000
TOlaf
QR
947012147 6836280
320017657
67617410 48199591
1389681085
Tota
QR
109 1436231
1885090 267162681
622 88578
49737757
14735 10337
43
30
Aamal Company QSltc NOTES TO THE CONSOLIDATED FlANCIAL STATEMETS For the year ended 31 December 20 t3
21 F~ANClAL RlSK MAiAGEMElT (continued)
Capital management The Boards policy is to maintain a strong cepit1 base so as to rnainmin investor creditor and market ronfoonee and to SUSWlJ) fumre dcltclonnent Gf the buinest The Board of Directors rronitortl the tapital whkh tbe Group defines as wlal $parcloders equity excluding nonmiddotcornroliing imerests and the level of dividends to orrunury srarellOJdcfS
The Board also reeks to ITIaimain a balance between the higher (ctums (hat might be fA-~$ihle With higher leves of borrnwings end Lle edvnrJages and security named Sy it sOMd Cilpitai posi[ion The GfCup~ k1rget is to achievfl a return on slureholders equity (exclJding aonwurrolJiug iorcf(sts) greater lll(ll1 he wcighlcd average inres exxmse on mrerest bearing Ivens and oorrowing
The (lf0t-p nl)nDg-e ils cnpital structure and makes adjustneal lOll in light ofchang2s in economic nd bttincss cordjlons and shareholders expe1ationJo chmges veremiddot maCo HI Lleuro objecttves polilCS or proCCSSC3 during the years erded 31 D~mber 2013md 31 Dtccmlxr2Ql2
The Group monitors the capit2J using a gClting fatio which IS dep divided by caplla plus debL The GtOwgts policy is to keep ttJe ge-anng rmio bclew 40 Tbe Group iLdtdes withb debt imete-51 beagting loans ard ~OITORlngs less cash and cash equtVaknts Capltal includes eqmty attributable 10 the equity tolders oft~e parcrt
2013 QR
2(i2 QR
fmerest bearing loans and borrowings lcss- Cash and cas ltYJUvalcnts
9i4lJ05301 _~ (429JfJl4761
1004845296 (649)6201)
Net debt
Toa capital
Capita and net debt
699849045
~ringrttio
FAIR VALtES OF Fl~ANOAL f~STRUMETS
Finarcial iostrumenL~ cOlnprise tina~lctal assetS carl finailcialliabilities
Fmancial assets colJist of bank balance) short 1Cm bank dcposis amounL dve dom rc)ltted partilt)$ rekntion and other receivables and ttade accolmis rceivabe Finatlclll habiilics cgtmsist of banilt ovcrdratls jnerest bearing lOil1S and bOrowings amounts due (0 nliled partiG~ ane trade x-ounls payable
The- fair values of hese financial inStrumen1S except Jo-- imCfest bearing loam lHld bOlToving aproKimate lhdr cMryinJ vlhes due to the Slort temt mzrutiiles or these instrument
Tllc faiT value of iotcnst beating Nns and borrowin2s ae estimate( based on discoumed ltash flows twin int(s rale- cune-ntly nvailagtk fur tilt debt or sinuiar tetnlS an-a rell1lmng matunties
31
Aamal Company~Q=-ScC ______________~______
~OTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For fhe year ended 31 December 20 t3
SlGNIFICANT ASUMPTIONS ACCOUJTING JUDGElE1TS AND F8TIMATFS
impairment (If accoonts receivable n etrnwe of lhe collectible anoun of trade accounlgt reccvable is made when collection of the full lHl1OUt i~ nO looger probabk FOI nCividualty significitIl amounts this estimation is p~rformed on an indh-idllai a$[$ Amomts wHcb arc not indivldl11Uy significant but wluch are past due ZTe tsscssed collectively and an aJlQwaccc applied ucc()r~Jng to the length of lime past due based oc histnncal recovery nlJes
hnpalrment of inHntnries lavenoncs are held at tho lower of col and nol realisable value InIOn inventoncent$ becone old or 0-~amplete an estilTJte is mate of their net j alisable vulue For indiviolhlUy significant amountS this cstinaunrt is performec all aD lndividwl osis Amotlnts whieh are fl0t individually significan( btll which ltIre old at obsolete wx LltSessed wllecivdy md a provisior is applied sccnrding to the invenrory type and be dep)ee of ageing 0 cDsolescc1ce based on anticipUled selling prices
Classifigt1ltion of El Sew(gtdy Cable Qatar WLI ali a j(lint vwture pound1 Sovedy Cables Qatar is a limited hability company whose kgal fum confers SCprm11ior bernten tbe jXliiies 10 ~he jomi lfranpement Snd the Company Itself FurthenrlOre then IS no oontractua] arrmgelTeot or any oibe aus aod circumstriliCe$ that iocik41to tht he putic5 [0 the joint flJTIlrgernelit bave rights to the ssetl and obligrtdons fo~ the liabilities of the joint ilrrongement Acoordingly El Sewed- C[jbl~s Qamr WLL is dassifiecl 7S a joiut enrtrr of he GWtp
impairment of goodwill G0oovj)1 embedded in th~ cot 0 aquisitior of subsidiaries and eqmtj-iccounled iflV(stees ire teswt for irl1jXlirmnt aHuaily Tbe calculations of value [n use fO( cfish gecj~r)lilg units (loring to real nte projecg are rtost sensitive to tin IDHowing assumpti015
Grosgt i1wginmiddot Gross Ilmrgins arc lmsed on avrage values tuhje0d in (he [Xrioo preeedhli (e siaM of the budge xnod T1esC at( mcreased over the budgel period for mticipatltX efficiency Hnprovemots
DisC)unr r(es Discount rotes represent th cl1tent mark as~ssmetlt of the risks specific te ech cash geocroting unit regarding lhe time value of money ilnd mdividu)l risks of he tmtieriyilg assets whICh have not been inwrport1eti it the Citik flow estimates The dj~(OUrl flte tlkulation is based on the speclfte circurnsthLCes of lile Group and its opltllatJng segn)~nts (md derived (ff)rC it weighted avaage (XSt 0f apilaJ (WACC) Tb fACe (akw into uoount both deb and equity The 0$1 of equity is denved from dlC expected return 01 investmenl by the Groups investors TJc Gos10( deb is based on l1e borrvwings the Gmup IS obllsxl to service SC~lletllmiddotspecific r5k IS incorxt4too by applying individual bera facto The betn mctors ire evauatcentd annuaHy bhseci on pubJicly aVflllabe murked earn
Fair value ()fnHstmeni proputies The fuit laHe 0 nvestmel~ propertis is deltrrnlnzd b cxterrwl indepzfldell property valuers laving appr0priate recognised professional quabfiillions and recenl xperience H1 the localjl)n and G-tegory 0 the oroperty being valued
Useful hes of PfQPcrly plmr (llld zqulpment The Groups management detennints th estiunted useful jives Df It~ property plan and equipmnl fix calnurjng depreciation Thi5 e~timJte is 6lermind after cinsidring 1b expeelcd usage (1f the a5sclt [hysical l101t and (eas tedmiltal Dr com~ercia obsolesccnce
Gotlg Qncen
ibe Groups mangerncnt UiS made aJ assessmeot cf the 011115 ability (0 COllllOUC liS a going conct11l Imd is satsl1ed hat me Group ms the resources to contmue in business for he foreseeable fu1urc he1hennort he management is no aware oC lny material Hncertainties that lray CH~t signinchnt doubt tlPDfl the Groups ability 10 continue as a going umcem Therefore titpound lotlsolidatcd finilllcij stftemeols comirme to be prepltd on li g0ing concern basis
Aamal Company QSc
NOTES TO THE CONSOLIDATED FlNANC[AL STATEMENTS For the year ended 3 1 December 20 13
32 INCOME TAX
Certa in subsidiaries of the Group which have non-GCe ownership are subject to income tax under Qatar Income Tax Law No 2 1 of2009 The iocome tax is charged on the share of profits attributable to non-GCe shareholders For the purpose of these conso lidated fi nancial statements the income tax liability oftbe foreign shareholders has been excluded given that the non-GCe shareholders have agreed under the shareholder agreements signed with the Group to bear the fh lliiability and make necessary payments
33 COMPARATIVE INFORMATION
Certain comparative figw-es of the previous year have been reclassified 0 coofonn to the current years presentation However such reclassifications are oat materia and do not have an impact on tbe previously reported net profit other comprehensive income or the total equity for the comparative year
The impact from the resta tement of comparative infonnalion as a resuh of adoption of IFRS I I - Joint arrangements is detailed in Note 32 Changes in aCCQu(lting policies
46
Aamal Company QS C
NOTES TO THE CONSOUDATED FlNANCIAL STATEMENTS For tbe year ended 31 December 2013
14 INTEREST BEARING LOANS AND BORROWINGS (continued)
Nolec
(i) Loao I i USD 93000000 impon 10n moi lily obtoined to refimnee he Icne~ of edit The 10 IT interest at commercial fate and the interest is paid at monthly intervals The fucility is repayable within ISO days including the usage period under letter ofc redits
(ii) Loan 2 is a secured bridge loan obtained to settle an existing loan and working capital requirements of the Company The loan carries interest al coOlJllercial rates and interest is 10 be paid on quarterly basis
(iii) Loan 3 was obtained for the pWpOse of financing capital ependiture and direct payment to suppliers contractors and 5ub-controctors The 10011 CMries interest at commercial rate and the inte rest is to be paid q Uar1erly The fac ility is repayable in IS quarterly iostallmenls starting I July 20 11 and ending I January 2015
(iv) Loan 4 was obla ined for conSlruclion o r an inveslmenl property The loan is seclJed by 0 primary mortgage over the some property and corporate guarantee of the Aamal Company QSC Tbe loan carries interest at commercial marke t rate and is payable in quarterly instalments
(v) Loan 5 represents a loan fOlcility obtained in two sepnrole tranches amounting to QR 309 825 000 (USD 85 million) for the purpose of refurbi shment and construction of fociJities io one of the investment properties The loan is repayable In 16 equal quanerly instalmcnlS for individua l tranche commencing from March 20 1J The loan carries interest at conunercial rJtes
(vi) Loan 6 represents secured loans obtained ffom a commercial bank in the previous periods for the purchase of heavy equipment and machines and were merged on 15 November 20 12 as a comb ined loan This loan is payable by 59 equal instalments of QR 426000 with (I last inSlalment of OR 438 326 with effect fro m 01 October 201 3 The loan carries interest at commercial market ra tes
(vii) Loan 7 is il tmst receipt banking facility obtained for the purchase of inventories This carried interest at conunercial market rates This loan was full y settled during the year
(vii i) Loan 8 represents secured loans obuined from a commercial bank in the previous periods for the purchase of delivery trucks and machinery and were merged on 22 October 2012 as a combined loan The loan carries inte rest at commercial market Tates and is payable by 59 equal insta lments o rQR 160000 with a last inSlOlmem ofQ R 128000 with effect from 3 1 December 2012
(ix) Loan 9 is an Islamic Financi ng Arrangement obtained for construction o f a manufacturing plam and as o f yearend ba lance represents partially drawn amount out of totil1 facility of QR 655 68000 The loan is secured by joint corvorate guarantee by the shareholders The loan carries profit at Islamic Financing rates and re-payable in quarterly instalments starting from the end of the 24 months gmce period from the date of loan drawn
(x) Bi ll discounting is a loan fac ility from banks The purpose of the arrangement is to discount bills locally and carries interest at current commercia l filte
15 EM PLOYEES END OF SERVICE BENEFITS
Movements in the provision reHectelt in the consolidated SLo1tement of financia l position were as fo llows 2013 201] QR QR
At I Jan uary 18111 763 17877937 Provision made during the year 4056969 4205499 Acquirelt through business combinations (Note 4) 349272 End of service benefits paid during the year (2210756) (4320945)
At 3 1 December 19957976 18 111763
29
Aamal Company Q5C
NOTES TO THE CONSOLIDATED FINANCIAL STATEMETS For tile y~ar ended 31 Dee~mber 2013
16 SHARE CAPITAL
2013 2012 QR Qq
AtI1l1)nud 60000)000 (20 2 544500JJOfn shares ofQR iii Cilch 60i)iQOOlOO 54450lt)0000
21)13 2012 Numher of
siMtS QR shares QR Issued Mtldfully paM At lJamld) 544SfWllOfJ 5445(100001) 495000000 49500000)0 1511C ofbonus S1i1-C ___ 5550~OOO 555000000 49SGOOOO 495000000
At 31 Decenef 6(OOampQllf1(1 ---14450O000 544~OOOOOO
All ampates m~ of a110 clss and caL equal voting rights
17 LEGAL Reuro5ERVE
As required by Qatar Comnertai COfrp7lnies Lav No5 of 2002 lOfp of the profit for the ye1J as a rru1imllli silould be mmsfened to legal re~erve The reserve is lot normay [lytiabe tor distribution except ill he cixcuJUstllrtUS stipulated m the above ~lemi0ntd GIW
IS HEVE1TE
2013 l)n QR QR
Sale of goods 1726893265 i709057~(iO
Renlal income UiO362322 133117509 S-ice income 858695 33940731 CornrrusslOlL Incentives and agency fces 44695S1 422~_632
212259$)33
19 DIRECT COSTS
2013 2)i2 QR
C 051 of inven(feS recognisedlIS an exptns 1522929956 497210830 Dind sL1ries lmd wages 601 [1336 5137856-8 Operating eXpenses on nml estate p~opet1les 36)711316 3041H504 fJepreciatiort (Kate I J) 33164382 B03091pound Operators marhgerrt6nt fees 14508588 li667989 Provisicn Qr obsolete and skwlt moving mvenlories (K)tc 8) 2380617 2208263 Other operating ilxpenses _31~3982 _ 3674946
1702139171 JS9653OI tgt
Aamal Compall-yQSC________________
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For lthe year ended 31 December 20 11
2G OTHER NeOiI
2013 20J3 QR QR
Interest mcume 2824216 2)314392 Profiv( loss) 00 disposal of property plant aoe eqUlpmem 737647 (l7362G) Eargain ptmnJse gain (Kote t) 8360793 MIsceJlaneous income 5723356
2013 2012 QR QR
ManllgetnUI hrQ empl(yees ws 55170302 55lt035middot1 Rent 23596799 2594915 Allowance for impaimlcot oUrsue aCQl1ot$ rc(Xjvalle (Nole 6) 129459(i 11613120 flBumcce ane profcampiitmJI fees 2IU9263 209J902 Corununication OOtHS 1935123 1649155 Trllining tid ouSfjt$s developmccl 950476 L095764 Re]X1in and mainle-nilnce 21)11SflS 2)2 I Poslag-c prjnting acri stationery 610299 541159shyvllsltdlancous expenses _~~~664 1lt2
-~~~ 125162812
22 fIN~lCE COSTS
2013 2amp2 QR QR
Inleres epen~ 42866312 5773U4B Am(vtisJliorgt ofdefcentrred financiog coStS __ 2l)tl26~~ gt3661
44930877----=
58063009
23 BASIC A~n nHUfED EARilNGS PER SHARi~
Basic trdTJogs per hue is caculatid 0y llividing the pwfill0( Ihc year attriouiabk (0- equity roldc-5 of the parent by lhi w~iglwxi avrage number of ordinary shares 0JstandirJg dulting tht_ year During Ihe year lil~ Conpmy i-sued and CBpii3lzed bonus shares lnd awmJingl) me previously ~eportod earnings per shac have blOM restatc(i
20i3 2012
Profit feT the year auributable to Cluity holderlt of the- paren (QR)
Weighted aVCTage number ofshares outstanding during the year (i)
Basic Jd diluted earnings per share (QR) 085
59985U413 shy
~~--~~~~- ~------J 1
23
Aamal Company QSc
NOTES TO THE CONSO LIDATED FfNANC[AL STATEMENTS For tbe year ended 3 l December 2013
BASIC AND DILUTED poundARNINCS PER SHARE (continued)
NOles (i) Th wigh d m nlg urnb of hres foc h P of lruling ~migs pee share h bee kulated
as follows 2013 20J2
QU3lifying shrues allhe begi ll1ling of the year 544500000 544500000 Effect of bonus shares issued and capitalised 55500000 55500000
600000000 600000000
Less T reasury shares (149587) (i357SI)
Weighted average number of shares at the end of the year 599850413 599864249
(ii) There were no potentia lly dilutiw shares outstanding at any time during tbe year and hence the diluted earnings per share is equal to the basic earnings per share
24 COItIMITMENTS
20 1] 2012 QR QR
Estimated capital expenditure approved and contracted for at the year eod but not provided for
Investment properties 2964000 8 139063 Property plant and equipment 16386500 63759762
19350500 71 898825
Operating lease commiIOlenlS under noncancellable lease agreemenlS
Payable wilhin one year 990806 702000
990806 702000
25 CONTINGENT UABILITlES
The Group had the following contingent liabi lities from which it is anticipated thai no malerial liabilities will arise
2013 2012 QR QR
Letters of guaramee 474551239 394255203
Letters of credit 7678499 194299384
NQles
(i) leHlaquogt of gu indud penonmnlaquo tend nd bid bonds d pymenlt g gi to suppliers and contractors by the Group in the ordina ry course of bus iness which will matme within twelve months fro m the reporting da te
(i i) Letters o f credit are provided by lodging documents to the bank tor purchase of trading goods fro m foreign suppliers wruch will maMC within thJee to six months from the date or tile Iransaclion
J2
26
Aamal Company QSc
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year eoded 31 December 2013
RELATED PARTY DISCLOSURES
Related party transactions Related parties represent major shareholders directors and key management persortOei of the Group and entities controlled joimly controlled or signjficamly innueoced by such parties Pricing policies md tenns of these tnlOSaclions are approved by the Group s management
Transactions with related parties induded in the consolidated financial stalemenls were as follows
20lJ 2012 QR QR
Sale o f goods and SClVices 419034048 415225221
Rental income 1980473 2069386
Purchase of goods and services 1591 38018 300835596
Rental expense 21 780G78 23397334
Bargain purchase gain 8360793
Net assets acquired 78803585
Relat ed party bal nnces AmountS due from and due to re lated parties are disclosed in Notes 7 and 13 respectively These balances do oot carry interest and are repayable OIl mulUlUy agreed dates generally within one year
The Group did not record any impairment of receivables reJatiog to amounts due from related pat1ies in either year This assessment is undertaken each fina ncial year through examining the ftnanc ial position of the related party and the market in which the related patty operates
Parent The Groups ultimate parent is Al Faisal Ho lding Company WLL
Compensa tion or key management personn el The remuneration of key management dming the year was as fullows
2013 2012 QR QR
Short-term benefi ts 7904794 1079595 Employees end of service benefits 408934 439776
8313 728 11235727
33
AamaJ Company QSC
NOTES TO THE CONSOLIDATED FINANCIAL 5T ATEMENTS For the year ended t Decernber 2013
Dilling the year 1he Group issued a XHlUS share of 10 928 of the paid tiP share capilal hdd ilS at 31 DiX2mber 2(JJ 2 mnmuning to OR 555000000 using retamed earnings as of3 December 2012 (20l2 Doe share for every ten shues held as of 31 Dcember Oll amuunting 10 QR 495OO()OOO ling reta1ned earmrgs 28 or 31 Decencer 2D II Jshy
18 SEGMENT INFORMATION
For J)iloogement PUIpltJM rhe Group i organised into business unit bused On LlJeir nature of Acttvitics lud nas fonY reportable segments and the Head Oftklt as bllow$
Propert Tbe segntn cOlists of City C~nler Qlta~ Brunch and Aamal Rea Esmte Branch whicb ll[c invoived in lampIiiog the faJ1ities of retail outlet conpex red e5ttlte nve(mltn$ and property remal buines~s
Trading mld distrib-wion The segmeul Involves wholesalB andlor rBtail distribution of phamlaceutlcai and consunable i1ems hume Epplianccs medica equimenl t-Tes ill1d lubricmtlaquo and II1UllitnEl printing The scgn(rtt includes 6c following entities
Eotl Sina Medical Branch
Aaen Medical Braudt
Amcill Troding and DistoolltlqO Branch bull Foot Care (erier HRnd) Good llre Pbannacy Bf4Uch bull Al FllfJdaq COllpafY wJ~L
InduSNol manuacturing TIle s0groent IOvolves Ulahuactrumg whole~we aliaor rewi dimibUlioti of dccnc cables lid tools ggregJ1es_ ready-IUx connole and cement bI0C~ lI1d provi$ion of servlCcent$ in rdation to iODllltroa Itvestment repair aJ-d Gonstruction of power plwts liiiding of LED ilgluitlg products und management of industnl enterpnses The segment ircludes be folloVting centntitis
bull Aam1 Cemert Industries LL AuraJ Redy1Yl(A BrQTlch
bull Doha Cables Qawf lLL Senyaf IoolJic1es Qatar Holding W LL Advanced Pipes ard Casfs CompQTly WJ L bull GuJfRoch Coroany WLL Ci~San Trading Company WLL hmovafive Lighting Compary WLL
Managed services le segment inyolvc~ provisloH of hOllseiltecpmg mi cleaning services fucditics n-anagemerJ services C1egy s(tvices ttl centfe sltrvicf)s buildiqg lnaintemHlelt aml acting as travel gens The 5cgnltnt includes the foUowing cnti(lcents
An13 ServJce Branch
amli TnlVeJa l5tmh
f-eco Gulf Co W LL
Jolinson Controls Qattl WJL
28
Aamal Company QSc
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended ) L December 20 13
SEGMENT INFORMATION (Co ntinued)
Head Office It provides corporate services to the branches and subsidiaries of the Group
The managiog d irector of the Group monitors the operating results o f its business units separately for the purpose of making decisions about resource allocation and perfonnance assessment Segment perfonnance is evaluated based Oil operating profit or loss of these segments Transfer pricing between operating segments are on anns length basis in a manoec similar to Iraosactions with third parties
Aamal Company QSC
NOTES TO THE CONSOLIDATED FINAN CIAL STATEMENTS For the year ended 3 1 December 20 13
28 SEGMENT INFORl1ATlON (continued)
Operating segments The operat ing segment after elimination or ioter-bra nch and inter-co mpany lrnnsaclioos is presented as follows
Trading (nd Industrial Managed For fh e year elided 31 December 2013 Properly disirjblli ioll manujocljlring services
QR QR QR QR Revenues
- h lemal parties 260360172 578909983 1231522768 S l802210 - Inter segments 1253914 6843 11 8 29639873 3445052 1
Heat Office QR
Eliminoions QR
(n187426) II
Tolal
QR
2J22595133
261614086 585753 lOI 126116264 1 8625273 1 (721 87426) 2122595133
Opera ti ng results Fair vallie gains
Profit I (loss) ror the year
Depreciotion
200811944
245051 107
445863051
2066290
86492834
86492834
4345438
22636250
22636250
33049 089
5157436
5157436
1760305
(47864882)
(47864882)
1334382
267233582
245051107
512 284689
42555504
36
Aamal Company QS
NOTES TO Tl CONSOLIDATED FfNANClAL STATEMENTS For the yeM ended 31 December 20 13
28 SEGMENf INFORMAnON (c)tltioucd)
FOf the yearrnrkti J f DccemOer 2(J12 QR
Revellues - ExlcmlJ partiel 2331 17 509 bull Inter segmcI11S 1168935
-- 234236434 --~- -~--
Openning results 18S2367t Fmt value gains J8S79-4~G
pront LOllS) for the rear 570616154
gt3659
No(
lnlermiddotgment revenues are eliminated on tQHs)idntiOH_
Tadiug ftfid disl d)Ntion
QR
S2S3l7661
324 j
5335493114 ~ -~-----
51384831
54384338
4J9R71(i
Indus idi mamfmturing
QR
1255694537
129U25lS4
56727059
56727059
32752742
slnltic(s QR
55216665 2939H31
S46lOJ96
7427414
7437
[908067
ilfild ()jice QR
(64(41976
Elimination QR
(74tHi2oJ Iii
Totul QR
206936372
2069336372
235721
(64641
131 f613
6245
42541)861
Amnal Company Q$l
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Por tnt yeartndeJ 31 De~embcr 2013
28 SEGMENT JNFORMATlON (contiutlld
Assc-ts and labilities
Tng alld lndtrstfw At31 December 2(113 distnbllrior manufacturIng senices HeadOJJicc EliminatioilS lola1
QR QR QR QR QR
Cumnl 3tS 227552338 620807979 61349 j 415 S()6)86922 (301636995) 1477366090 Noolucrcnt DSeIS 6411868160 12604763 622386238 4348876 (i624548 __p2438051 780
fotal asstl$ 6639420498 1194 1243194217 65698291 513Ql1470 ==-lt03H8l~O()) 853295-870 -~----~ ~---~ -
CUIT)llliabilitics 280995335 1(3511J60 6344(12777 2l0708lJ2 496261185 (3CH636995) 1249603264 Non-current iiatJlitics 7l70L5V2 8008485 HlDi16~43_ 3181668 t433799 ____ ilj534_~57 __ --Totul liahililics 353696897 ___~4159~4~ 734419720 ~4976~~~~~ 1434945711
---~~--~ -~-~~ - _2~~~4~~ (~~~~9~
C1pild expcndimn HI) WO743OOj 1397742_~471l2~--~50 ~51 ~1~623821~~1~_ -~----~------ -~
3amp
28
Aamal Company Q SC
NOTES TO THE CONSOLIDATED FfNANClAL STATEMENTS For the year ended 31 December 20 13
SEGMFNT INFORMATION (continued)
Assets and liabilities (continued)
AI 31 December 2012 Properly QR
Trading and d iSfriblllion
QR
Indusrial manufacfuring
QR
Managed senices QR
Currenl assels
Non-current assets
146491 186
6121 864484
2964425 12 903 7264
73468 1258
549267235
51387098 471 1439
Tolal assets 6268355670 305479776 1283948493 56098537
Head Office QR
468325024
6713643
475038667
Currentliabil iies
Non-current liabiLities 273444 748 1 J10 15024
86054583 7434286
669214261 1288 14977
2 1938953
287 1199
480393637 1253084
Totil lliabiliti cs 390459772 93488869 798029238 248 10 152 48J64672 1
Capila expendirure (ltII L 72865 878 1281254 6647 J356 7169 13 149045
Notes
(i)
(Ii)
Inter-segmeot balances are e limioafed 00 consolidatio n
Capi tal expendiTU res consist of additions 10 propeny plant and equip ment and iovestmenl properties
Eliminations QR
To wl QR
(273735776) (i )
(20308351(i)
1423591302
6689563230
(27576661 1) 8 113154532
(273135777) (i) 12573 10405
257388570
(273735177) 15 14698975
24 1484446
39
29
Aamal Company QSC
NOTES TO THE CONSOLIDATED FrNANCIAL STATEMENTS For the year ended 31 Dcltmber 1013
Fr-A]~ClAL RISK MANAGpoundMamp1H
Objccthes and policies fe Groups principal )uaucill liabilities comprise imltresl bctmllg loons and IxmowHgs baRlt ovetda1s amounts due to fclaled par1ies and tracte accounts payable The main pUlJXSi of thesc financial liabilities is 4J mise firmne or 610 Grmps operations The G0JP bas various fimmcial assets such as ttadc accounts receivable lInlOlmts due from related parties bark balances tltCntion receivable and other receivables which arisgt directly fran its cperuoonamp
The maiH ri~ks an3ing Joru (be Groups UnariCJlll illslrumenls jle market risk cretiJt nsk and hmdity risk Til BoarD ofDtrcctO$ reviews end agrees policies for mzrAgbg Caltt f hespound ri~k ihkh arc summariscd beloW
VIarktt risk yenfatket risk is the risk Um changes in market prices $Uch as intfcst rates and hreig lttmeocy ect14nge rilles Vltl1 affect the Groups profit eqwty Dr value tf its hoJdiI15 of financial instrl[Thnls rile objecivpoundj of marke1 risk mUnllgcrlcnt is to manage uld 1~ontr(ll tho tr))rket risk expo-sure vithir acceptable parfI-etcJ$ while optimising rerUID
Equit) price risk ampjuity prtce risk is the risk hilt the Group ampearnings will be affected as a rcmt (If luctttltions in fm vdue of ~qui-gt
mstwnents Eqlliry price risk arises from availabtetor~sale inv2strnems However the Groups exposure to eqmty price risk IS minima as II doesn hold sitl)iftrmt ailableAor-511le inYestrmmrs
[merest rate risk The Groups fimiruial poundS5ot ampId liaojlilies (at Rl $uJject to int~~ rate mk compnse brmk depoils interst bearing loans and bOITQwjags and bank overdr-afts At the reponwg dalt tbe [merest rale pronle of Ill Goups intexst bearing fbi4rdd instruments as fliows
11113 20i3 QR QR
Fued liIeryS refc insfrvrnellts
Fmmcial assets 113035962 111913394 FrOltwial liabilities --1~203712l) 1252t43~1
9)OI~ (13350972)
Fhlllting inireSI rate ns1lmlttrs Fanctl~ Isseis 127024345 ID43848o Fllllocial liabilities _-(i~9347~ (94))48926)
(836)64116)
The Groups exposure to t~ ris of changes in marXet interest fltltes relztes primariiy to the Groups financial assets and lizbitdic$ with t1Oltttirg interest mte~
lhe loEowing able demonstrates the ampmitivity nf the eonsolidattXI statemen1 of income 1) caonaly possible chonges in in1jfgtst rmes by 25 basis points with all othe vari)ble3 hdc umstant The sensitivity of the CooiK~ljclatid statement of inc(me $ the eft(ct of tb assumed changes in lnterdt rales for one year bf1sec on the floating rate financial assets and fimmcial hablhw$ held at 31 f~r The effect of deae-ascs in interest ral~ is cXp0Ctct to be equal and opposite to the effect oHlle increases sllQvro
Changes it Eftx OIl
00513 [oms profit QR
2013 Floating mterest Hlte instruments ----2$ bp (1649776)
2012 Flv-ating irkfiSt rale instrumenls +25 bp (209[9(1))
~--------- -~~ 40-middot------ _ _ shy
29
Aamal Company QSC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 3 1 December 2013
FINANCIAL RISK MANAGEMENT (continued)
Foreign currency risk Foreign currency risk is the risk lhilt the value of lhe fi nancial instruments will fluctuate due 10 changes in fore ign exchange rates
T rade aCcOlmts payable and accrued expenses include amounts due in foreign currencies mliniy US Dollars UAB Dirhams Great Britain Pounds (GB P) and Euros of which the Group has a currency risk primruily on the baJmces payable in Euros and GBP amoWlting 10 QR 14400634 (2012 QR 17214046)
The Group does not hedge its foreign currency exposure As both Qatari Riyal and UAE Dirhams are pegged to the US Dollar balances in US Dollars and UAE Dirhams are not considered to represent significant currency ris k to the Group
The table below indicates the Group s fore ign c urrency exposure on its monetary assets a nd liabilities The analysis calculates the effect o f a reasonably poss ib le move ment of the QR curre nc y rale against the Euro and GBP with all other variables held constant on the consolidated slate menl o f income (due to the fa ir va lue of currency sensitive monetary asse ts a nd liabilities) The e ffect o f decreases in fo reign c urre ncy exchange rates is expected to he equal and opposile 10 the e ffect of the increases shown
Incramp1se ill
f oreign cUlrency rate
0
the QR
Ellecl on profil
QR
2013 +5 (720032)
20 12 +5 (860 702)
C redit Tisk Credit risk is the risk that one party to a financial instrume nt wi ll fa il to discharge an obligation and cause the other party to incur a financial loss TIle Groups exposure to credit risk is indica ted by the carrying amoWlt o f its financia l asse ts whic h consist principally oftmde accollilts receivable retention receivable amounts due from related parties othe r receivables and bank baLances
The Group sells its products and prov ides services to vario us panies It is the G ro ups policy that all customers who wish to obtain on credit lerms are subject to credit verificalion procedures to ensure c redit Ilonhiness Each new customer is analysed individually for creditworthiness before the de livery o f products Of services Custo mm tbat fai l to met t the credi tworthiness may transact with the Group only o n prepayme nt basis Property rentals are mostl y received in ad vtnce or conlrlCled wi th post dated cheques 10 additio n receivable balances are monitored on an ongoing basis a nd the purchase limils are established for each c redit custoroer which are reviewed reguJarly based on the level o f past transactions and senlement The Groups max im wn exposure with regard to trade aCCOWlts receivab le net ofa llowance re nected allhe reporting date was ilS fo llows
2013 2012
Business SJgmelll QR QR
Property 15478832 19386326 Trading and distributio n 194343 597 179748274 Industrial ma nufac turing 183119753 131578668 Managed services 18069385 14547389
411 011 567 345260657
41
29
Aamal Company QSc
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For tbe year eoded 3 J December 20 13
FlNAJICIAL RISK MANAG EMENT (c-o Dtinued)
Credit risk (continued) With respect to credit risk arising from the other financi31 assets of the Group the Groups exposure to credit risk arises from default of the counterparty with a maximum exposure equal 10 the canying amount of these instruments as follows
2013 QR
202
QR
Bank balances Amounts due from related parties Retention and other receivables
436136756 214439950 48290351
36788129 t 171525363 74082203
698867057 613488857
The group reduces the expoSltre of credit risk arising from other financial assets by maintaining bank accounts in reputed banks and providing services only to creditworthy re lated parties
The management cons iders the bank balances and a mQUIIIS due from related parties as high grade fi nancial assets and lfade accounls receivable and other receivables as sundard grade financial assets When a finltmcial asset is identified 10 be impaired the managemoot downgrades such assets to impaired category and provides adequate allowances
Liquidity risk Liquidity risk is the risk that the Group will not be able to meet its fmancial obligations as they fu ll due The Groups 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 nonnal and stressed conditiom without incurring unacceptable losses or risking damage to the Groups reputa tion and is to maintain a balance belWeen continuity of fuoding and f1eilibility through the use of bank overdrafts and bank loans and borrowings
The Group monitors its risk to a shortage o f funds using a recuning liquidity plaOfling 1001 TIllS tool considers the manuiry o f financial assets (eg accounts receivable) and projected cash flows from operations The Groups teons ofsales or services require arooUIlts to be paid within 30-90 days from the invoiced dale
42
29
Aamal Company QSc
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For tbe year ended 3 1 December 2013
FrNANClAL ruSK MANAGEMENT (contiQued)
Uqujdity risk (continued) The table below summarises the ruaruriJy profile of the Groups financial 1iabililies a t 31 December based on contractual undiscountcd paymeots
2013 Interest bearing loans and borrowings Bank overdrafts Trade accowus payable Other payables Amounl~ due (0 related panles
201l Interest bearing loans and borrowings
Baok overdrafts Trade accounts payable Other payables Amounts due to related parties
On demand
QR
6836280
6836280
011 demand QR
2885090
2885090
Less than 3 months
QR
521324473
303638792
47406830
2530~480
898675575
Less thall 3
months
QR
469839033
10754JJIO 37543236
1964504 1
634568620
3 10 J2 mOlllh$
QR
239333328
16378865 20210580
2289~11l
298816884
3 to 12 monlhs
QR
365476972
159621 37 J 24745342
30092716
579936401
1to 5 years
QR
J 60092748
160092148
1 to 5 years
QR
248472226
248472226
gt 5 years
QR
25261598
25261 598
gt 5 years
QR
7648000
7648000
TOlaf
QR
947012147 6836280
320017657
67617410 48199591
1389681085
Tota
QR
109 1436231
1885090 267162681
622 88578
49737757
14735 10337
43
30
Aamal Company QSltc NOTES TO THE CONSOLIDATED FlANCIAL STATEMETS For the year ended 31 December 20 t3
21 F~ANClAL RlSK MAiAGEMElT (continued)
Capital management The Boards policy is to maintain a strong cepit1 base so as to rnainmin investor creditor and market ronfoonee and to SUSWlJ) fumre dcltclonnent Gf the buinest The Board of Directors rronitortl the tapital whkh tbe Group defines as wlal $parcloders equity excluding nonmiddotcornroliing imerests and the level of dividends to orrunury srarellOJdcfS
The Board also reeks to ITIaimain a balance between the higher (ctums (hat might be fA-~$ihle With higher leves of borrnwings end Lle edvnrJages and security named Sy it sOMd Cilpitai posi[ion The GfCup~ k1rget is to achievfl a return on slureholders equity (exclJding aonwurrolJiug iorcf(sts) greater lll(ll1 he wcighlcd average inres exxmse on mrerest bearing Ivens and oorrowing
The (lf0t-p nl)nDg-e ils cnpital structure and makes adjustneal lOll in light ofchang2s in economic nd bttincss cordjlons and shareholders expe1ationJo chmges veremiddot maCo HI Lleuro objecttves polilCS or proCCSSC3 during the years erded 31 D~mber 2013md 31 Dtccmlxr2Ql2
The Group monitors the capit2J using a gClting fatio which IS dep divided by caplla plus debL The GtOwgts policy is to keep ttJe ge-anng rmio bclew 40 Tbe Group iLdtdes withb debt imete-51 beagting loans ard ~OITORlngs less cash and cash equtVaknts Capltal includes eqmty attributable 10 the equity tolders oft~e parcrt
2013 QR
2(i2 QR
fmerest bearing loans and borrowings lcss- Cash and cas ltYJUvalcnts
9i4lJ05301 _~ (429JfJl4761
1004845296 (649)6201)
Net debt
Toa capital
Capita and net debt
699849045
~ringrttio
FAIR VALtES OF Fl~ANOAL f~STRUMETS
Finarcial iostrumenL~ cOlnprise tina~lctal assetS carl finailcialliabilities
Fmancial assets colJist of bank balance) short 1Cm bank dcposis amounL dve dom rc)ltted partilt)$ rekntion and other receivables and ttade accolmis rceivabe Finatlclll habiilics cgtmsist of banilt ovcrdratls jnerest bearing lOil1S and bOrowings amounts due (0 nliled partiG~ ane trade x-ounls payable
The- fair values of hese financial inStrumen1S except Jo-- imCfest bearing loam lHld bOlToving aproKimate lhdr cMryinJ vlhes due to the Slort temt mzrutiiles or these instrument
Tllc faiT value of iotcnst beating Nns and borrowin2s ae estimate( based on discoumed ltash flows twin int(s rale- cune-ntly nvailagtk fur tilt debt or sinuiar tetnlS an-a rell1lmng matunties
31
Aamal Company~Q=-ScC ______________~______
~OTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For fhe year ended 31 December 20 t3
SlGNIFICANT ASUMPTIONS ACCOUJTING JUDGElE1TS AND F8TIMATFS
impairment (If accoonts receivable n etrnwe of lhe collectible anoun of trade accounlgt reccvable is made when collection of the full lHl1OUt i~ nO looger probabk FOI nCividualty significitIl amounts this estimation is p~rformed on an indh-idllai a$[$ Amomts wHcb arc not indivldl11Uy significant but wluch are past due ZTe tsscssed collectively and an aJlQwaccc applied ucc()r~Jng to the length of lime past due based oc histnncal recovery nlJes
hnpalrment of inHntnries lavenoncs are held at tho lower of col and nol realisable value InIOn inventoncent$ becone old or 0-~amplete an estilTJte is mate of their net j alisable vulue For indiviolhlUy significant amountS this cstinaunrt is performec all aD lndividwl osis Amotlnts whieh are fl0t individually significan( btll which ltIre old at obsolete wx LltSessed wllecivdy md a provisior is applied sccnrding to the invenrory type and be dep)ee of ageing 0 cDsolescc1ce based on anticipUled selling prices
Classifigt1ltion of El Sew(gtdy Cable Qatar WLI ali a j(lint vwture pound1 Sovedy Cables Qatar is a limited hability company whose kgal fum confers SCprm11ior bernten tbe jXliiies 10 ~he jomi lfranpement Snd the Company Itself FurthenrlOre then IS no oontractua] arrmgelTeot or any oibe aus aod circumstriliCe$ that iocik41to tht he putic5 [0 the joint flJTIlrgernelit bave rights to the ssetl and obligrtdons fo~ the liabilities of the joint ilrrongement Acoordingly El Sewed- C[jbl~s Qamr WLL is dassifiecl 7S a joiut enrtrr of he GWtp
impairment of goodwill G0oovj)1 embedded in th~ cot 0 aquisitior of subsidiaries and eqmtj-iccounled iflV(stees ire teswt for irl1jXlirmnt aHuaily Tbe calculations of value [n use fO( cfish gecj~r)lilg units (loring to real nte projecg are rtost sensitive to tin IDHowing assumpti015
Grosgt i1wginmiddot Gross Ilmrgins arc lmsed on avrage values tuhje0d in (he [Xrioo preeedhli (e siaM of the budge xnod T1esC at( mcreased over the budgel period for mticipatltX efficiency Hnprovemots
DisC)unr r(es Discount rotes represent th cl1tent mark as~ssmetlt of the risks specific te ech cash geocroting unit regarding lhe time value of money ilnd mdividu)l risks of he tmtieriyilg assets whICh have not been inwrport1eti it the Citik flow estimates The dj~(OUrl flte tlkulation is based on the speclfte circurnsthLCes of lile Group and its opltllatJng segn)~nts (md derived (ff)rC it weighted avaage (XSt 0f apilaJ (WACC) Tb fACe (akw into uoount both deb and equity The 0$1 of equity is denved from dlC expected return 01 investmenl by the Groups investors TJc Gos10( deb is based on l1e borrvwings the Gmup IS obllsxl to service SC~lletllmiddotspecific r5k IS incorxt4too by applying individual bera facto The betn mctors ire evauatcentd annuaHy bhseci on pubJicly aVflllabe murked earn
Fair value ()fnHstmeni proputies The fuit laHe 0 nvestmel~ propertis is deltrrnlnzd b cxterrwl indepzfldell property valuers laving appr0priate recognised professional quabfiillions and recenl xperience H1 the localjl)n and G-tegory 0 the oroperty being valued
Useful hes of PfQPcrly plmr (llld zqulpment The Groups management detennints th estiunted useful jives Df It~ property plan and equipmnl fix calnurjng depreciation Thi5 e~timJte is 6lermind after cinsidring 1b expeelcd usage (1f the a5sclt [hysical l101t and (eas tedmiltal Dr com~ercia obsolesccnce
Gotlg Qncen
ibe Groups mangerncnt UiS made aJ assessmeot cf the 011115 ability (0 COllllOUC liS a going conct11l Imd is satsl1ed hat me Group ms the resources to contmue in business for he foreseeable fu1urc he1hennort he management is no aware oC lny material Hncertainties that lray CH~t signinchnt doubt tlPDfl the Groups ability 10 continue as a going umcem Therefore titpound lotlsolidatcd finilllcij stftemeols comirme to be prepltd on li g0ing concern basis
Aamal Company QSc
NOTES TO THE CONSOLIDATED FlNANC[AL STATEMENTS For the year ended 3 1 December 20 13
32 INCOME TAX
Certa in subsidiaries of the Group which have non-GCe ownership are subject to income tax under Qatar Income Tax Law No 2 1 of2009 The iocome tax is charged on the share of profits attributable to non-GCe shareholders For the purpose of these conso lidated fi nancial statements the income tax liability oftbe foreign shareholders has been excluded given that the non-GCe shareholders have agreed under the shareholder agreements signed with the Group to bear the fh lliiability and make necessary payments
33 COMPARATIVE INFORMATION
Certain comparative figw-es of the previous year have been reclassified 0 coofonn to the current years presentation However such reclassifications are oat materia and do not have an impact on tbe previously reported net profit other comprehensive income or the total equity for the comparative year
The impact from the resta tement of comparative infonnalion as a resuh of adoption of IFRS I I - Joint arrangements is detailed in Note 32 Changes in aCCQu(lting policies
46
Aamal Company Q5C
NOTES TO THE CONSOLIDATED FINANCIAL STATEMETS For tile y~ar ended 31 Dee~mber 2013
16 SHARE CAPITAL
2013 2012 QR Qq
AtI1l1)nud 60000)000 (20 2 544500JJOfn shares ofQR iii Cilch 60i)iQOOlOO 54450lt)0000
21)13 2012 Numher of
siMtS QR shares QR Issued Mtldfully paM At lJamld) 544SfWllOfJ 5445(100001) 495000000 49500000)0 1511C ofbonus S1i1-C ___ 5550~OOO 555000000 49SGOOOO 495000000
At 31 Decenef 6(OOampQllf1(1 ---14450O000 544~OOOOOO
All ampates m~ of a110 clss and caL equal voting rights
17 LEGAL Reuro5ERVE
As required by Qatar Comnertai COfrp7lnies Lav No5 of 2002 lOfp of the profit for the ye1J as a rru1imllli silould be mmsfened to legal re~erve The reserve is lot normay [lytiabe tor distribution except ill he cixcuJUstllrtUS stipulated m the above ~lemi0ntd GIW
IS HEVE1TE
2013 l)n QR QR
Sale of goods 1726893265 i709057~(iO
Renlal income UiO362322 133117509 S-ice income 858695 33940731 CornrrusslOlL Incentives and agency fces 44695S1 422~_632
212259$)33
19 DIRECT COSTS
2013 2)i2 QR
C 051 of inven(feS recognisedlIS an exptns 1522929956 497210830 Dind sL1ries lmd wages 601 [1336 5137856-8 Operating eXpenses on nml estate p~opet1les 36)711316 3041H504 fJepreciatiort (Kate I J) 33164382 B03091pound Operators marhgerrt6nt fees 14508588 li667989 Provisicn Qr obsolete and skwlt moving mvenlories (K)tc 8) 2380617 2208263 Other operating ilxpenses _31~3982 _ 3674946
1702139171 JS9653OI tgt
Aamal Compall-yQSC________________
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For lthe year ended 31 December 20 11
2G OTHER NeOiI
2013 20J3 QR QR
Interest mcume 2824216 2)314392 Profiv( loss) 00 disposal of property plant aoe eqUlpmem 737647 (l7362G) Eargain ptmnJse gain (Kote t) 8360793 MIsceJlaneous income 5723356
2013 2012 QR QR
ManllgetnUI hrQ empl(yees ws 55170302 55lt035middot1 Rent 23596799 2594915 Allowance for impaimlcot oUrsue aCQl1ot$ rc(Xjvalle (Nole 6) 129459(i 11613120 flBumcce ane profcampiitmJI fees 2IU9263 209J902 Corununication OOtHS 1935123 1649155 Trllining tid ouSfjt$s developmccl 950476 L095764 Re]X1in and mainle-nilnce 21)11SflS 2)2 I Poslag-c prjnting acri stationery 610299 541159shyvllsltdlancous expenses _~~~664 1lt2
-~~~ 125162812
22 fIN~lCE COSTS
2013 2amp2 QR QR
Inleres epen~ 42866312 5773U4B Am(vtisJliorgt ofdefcentrred financiog coStS __ 2l)tl26~~ gt3661
44930877----=
58063009
23 BASIC A~n nHUfED EARilNGS PER SHARi~
Basic trdTJogs per hue is caculatid 0y llividing the pwfill0( Ihc year attriouiabk (0- equity roldc-5 of the parent by lhi w~iglwxi avrage number of ordinary shares 0JstandirJg dulting tht_ year During Ihe year lil~ Conpmy i-sued and CBpii3lzed bonus shares lnd awmJingl) me previously ~eportod earnings per shac have blOM restatc(i
20i3 2012
Profit feT the year auributable to Cluity holderlt of the- paren (QR)
Weighted aVCTage number ofshares outstanding during the year (i)
Basic Jd diluted earnings per share (QR) 085
59985U413 shy
~~--~~~~- ~------J 1
23
Aamal Company QSc
NOTES TO THE CONSO LIDATED FfNANC[AL STATEMENTS For tbe year ended 3 l December 2013
BASIC AND DILUTED poundARNINCS PER SHARE (continued)
NOles (i) Th wigh d m nlg urnb of hres foc h P of lruling ~migs pee share h bee kulated
as follows 2013 20J2
QU3lifying shrues allhe begi ll1ling of the year 544500000 544500000 Effect of bonus shares issued and capitalised 55500000 55500000
600000000 600000000
Less T reasury shares (149587) (i357SI)
Weighted average number of shares at the end of the year 599850413 599864249
(ii) There were no potentia lly dilutiw shares outstanding at any time during tbe year and hence the diluted earnings per share is equal to the basic earnings per share
24 COItIMITMENTS
20 1] 2012 QR QR
Estimated capital expenditure approved and contracted for at the year eod but not provided for
Investment properties 2964000 8 139063 Property plant and equipment 16386500 63759762
19350500 71 898825
Operating lease commiIOlenlS under noncancellable lease agreemenlS
Payable wilhin one year 990806 702000
990806 702000
25 CONTINGENT UABILITlES
The Group had the following contingent liabi lities from which it is anticipated thai no malerial liabilities will arise
2013 2012 QR QR
Letters of guaramee 474551239 394255203
Letters of credit 7678499 194299384
NQles
(i) leHlaquogt of gu indud penonmnlaquo tend nd bid bonds d pymenlt g gi to suppliers and contractors by the Group in the ordina ry course of bus iness which will matme within twelve months fro m the reporting da te
(i i) Letters o f credit are provided by lodging documents to the bank tor purchase of trading goods fro m foreign suppliers wruch will maMC within thJee to six months from the date or tile Iransaclion
J2
26
Aamal Company QSc
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year eoded 31 December 2013
RELATED PARTY DISCLOSURES
Related party transactions Related parties represent major shareholders directors and key management persortOei of the Group and entities controlled joimly controlled or signjficamly innueoced by such parties Pricing policies md tenns of these tnlOSaclions are approved by the Group s management
Transactions with related parties induded in the consolidated financial stalemenls were as follows
20lJ 2012 QR QR
Sale o f goods and SClVices 419034048 415225221
Rental income 1980473 2069386
Purchase of goods and services 1591 38018 300835596
Rental expense 21 780G78 23397334
Bargain purchase gain 8360793
Net assets acquired 78803585
Relat ed party bal nnces AmountS due from and due to re lated parties are disclosed in Notes 7 and 13 respectively These balances do oot carry interest and are repayable OIl mulUlUy agreed dates generally within one year
The Group did not record any impairment of receivables reJatiog to amounts due from related pat1ies in either year This assessment is undertaken each fina ncial year through examining the ftnanc ial position of the related party and the market in which the related patty operates
Parent The Groups ultimate parent is Al Faisal Ho lding Company WLL
Compensa tion or key management personn el The remuneration of key management dming the year was as fullows
2013 2012 QR QR
Short-term benefi ts 7904794 1079595 Employees end of service benefits 408934 439776
8313 728 11235727
33
AamaJ Company QSC
NOTES TO THE CONSOLIDATED FINANCIAL 5T ATEMENTS For the year ended t Decernber 2013
Dilling the year 1he Group issued a XHlUS share of 10 928 of the paid tiP share capilal hdd ilS at 31 DiX2mber 2(JJ 2 mnmuning to OR 555000000 using retamed earnings as of3 December 2012 (20l2 Doe share for every ten shues held as of 31 Dcember Oll amuunting 10 QR 495OO()OOO ling reta1ned earmrgs 28 or 31 Decencer 2D II Jshy
18 SEGMENT INFORMATION
For J)iloogement PUIpltJM rhe Group i organised into business unit bused On LlJeir nature of Acttvitics lud nas fonY reportable segments and the Head Oftklt as bllow$
Propert Tbe segntn cOlists of City C~nler Qlta~ Brunch and Aamal Rea Esmte Branch whicb ll[c invoived in lampIiiog the faJ1ities of retail outlet conpex red e5ttlte nve(mltn$ and property remal buines~s
Trading mld distrib-wion The segmeul Involves wholesalB andlor rBtail distribution of phamlaceutlcai and consunable i1ems hume Epplianccs medica equimenl t-Tes ill1d lubricmtlaquo and II1UllitnEl printing The scgn(rtt includes 6c following entities
Eotl Sina Medical Branch
Aaen Medical Braudt
Amcill Troding and DistoolltlqO Branch bull Foot Care (erier HRnd) Good llre Pbannacy Bf4Uch bull Al FllfJdaq COllpafY wJ~L
InduSNol manuacturing TIle s0groent IOvolves Ulahuactrumg whole~we aliaor rewi dimibUlioti of dccnc cables lid tools ggregJ1es_ ready-IUx connole and cement bI0C~ lI1d provi$ion of servlCcent$ in rdation to iODllltroa Itvestment repair aJ-d Gonstruction of power plwts liiiding of LED ilgluitlg products und management of industnl enterpnses The segment ircludes be folloVting centntitis
bull Aam1 Cemert Industries LL AuraJ Redy1Yl(A BrQTlch
bull Doha Cables Qawf lLL Senyaf IoolJic1es Qatar Holding W LL Advanced Pipes ard Casfs CompQTly WJ L bull GuJfRoch Coroany WLL Ci~San Trading Company WLL hmovafive Lighting Compary WLL
Managed services le segment inyolvc~ provisloH of hOllseiltecpmg mi cleaning services fucditics n-anagemerJ services C1egy s(tvices ttl centfe sltrvicf)s buildiqg lnaintemHlelt aml acting as travel gens The 5cgnltnt includes the foUowing cnti(lcents
An13 ServJce Branch
amli TnlVeJa l5tmh
f-eco Gulf Co W LL
Jolinson Controls Qattl WJL
28
Aamal Company QSc
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended ) L December 20 13
SEGMENT INFORMATION (Co ntinued)
Head Office It provides corporate services to the branches and subsidiaries of the Group
The managiog d irector of the Group monitors the operating results o f its business units separately for the purpose of making decisions about resource allocation and perfonnance assessment Segment perfonnance is evaluated based Oil operating profit or loss of these segments Transfer pricing between operating segments are on anns length basis in a manoec similar to Iraosactions with third parties
Aamal Company QSC
NOTES TO THE CONSOLIDATED FINAN CIAL STATEMENTS For the year ended 3 1 December 20 13
28 SEGMENT INFORl1ATlON (continued)
Operating segments The operat ing segment after elimination or ioter-bra nch and inter-co mpany lrnnsaclioos is presented as follows
Trading (nd Industrial Managed For fh e year elided 31 December 2013 Properly disirjblli ioll manujocljlring services
QR QR QR QR Revenues
- h lemal parties 260360172 578909983 1231522768 S l802210 - Inter segments 1253914 6843 11 8 29639873 3445052 1
Heat Office QR
Eliminoions QR
(n187426) II
Tolal
QR
2J22595133
261614086 585753 lOI 126116264 1 8625273 1 (721 87426) 2122595133
Opera ti ng results Fair vallie gains
Profit I (loss) ror the year
Depreciotion
200811944
245051 107
445863051
2066290
86492834
86492834
4345438
22636250
22636250
33049 089
5157436
5157436
1760305
(47864882)
(47864882)
1334382
267233582
245051107
512 284689
42555504
36
Aamal Company QS
NOTES TO Tl CONSOLIDATED FfNANClAL STATEMENTS For the yeM ended 31 December 20 13
28 SEGMENf INFORMAnON (c)tltioucd)
FOf the yearrnrkti J f DccemOer 2(J12 QR
Revellues - ExlcmlJ partiel 2331 17 509 bull Inter segmcI11S 1168935
-- 234236434 --~- -~--
Openning results 18S2367t Fmt value gains J8S79-4~G
pront LOllS) for the rear 570616154
gt3659
No(
lnlermiddotgment revenues are eliminated on tQHs)idntiOH_
Tadiug ftfid disl d)Ntion
QR
S2S3l7661
324 j
5335493114 ~ -~-----
51384831
54384338
4J9R71(i
Indus idi mamfmturing
QR
1255694537
129U25lS4
56727059
56727059
32752742
slnltic(s QR
55216665 2939H31
S46lOJ96
7427414
7437
[908067
ilfild ()jice QR
(64(41976
Elimination QR
(74tHi2oJ Iii
Totul QR
206936372
2069336372
235721
(64641
131 f613
6245
42541)861
Amnal Company Q$l
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Por tnt yeartndeJ 31 De~embcr 2013
28 SEGMENT JNFORMATlON (contiutlld
Assc-ts and labilities
Tng alld lndtrstfw At31 December 2(113 distnbllrior manufacturIng senices HeadOJJicc EliminatioilS lola1
QR QR QR QR QR
Cumnl 3tS 227552338 620807979 61349 j 415 S()6)86922 (301636995) 1477366090 Noolucrcnt DSeIS 6411868160 12604763 622386238 4348876 (i624548 __p2438051 780
fotal asstl$ 6639420498 1194 1243194217 65698291 513Ql1470 ==-lt03H8l~O()) 853295-870 -~----~ ~---~ -
CUIT)llliabilitics 280995335 1(3511J60 6344(12777 2l0708lJ2 496261185 (3CH636995) 1249603264 Non-current iiatJlitics 7l70L5V2 8008485 HlDi16~43_ 3181668 t433799 ____ ilj534_~57 __ --Totul liahililics 353696897 ___~4159~4~ 734419720 ~4976~~~~~ 1434945711
---~~--~ -~-~~ - _2~~~4~~ (~~~~9~
C1pild expcndimn HI) WO743OOj 1397742_~471l2~--~50 ~51 ~1~623821~~1~_ -~----~------ -~
3amp
28
Aamal Company Q SC
NOTES TO THE CONSOLIDATED FfNANClAL STATEMENTS For the year ended 31 December 20 13
SEGMFNT INFORMATION (continued)
Assets and liabilities (continued)
AI 31 December 2012 Properly QR
Trading and d iSfriblllion
QR
Indusrial manufacfuring
QR
Managed senices QR
Currenl assels
Non-current assets
146491 186
6121 864484
2964425 12 903 7264
73468 1258
549267235
51387098 471 1439
Tolal assets 6268355670 305479776 1283948493 56098537
Head Office QR
468325024
6713643
475038667
Currentliabil iies
Non-current liabiLities 273444 748 1 J10 15024
86054583 7434286
669214261 1288 14977
2 1938953
287 1199
480393637 1253084
Totil lliabiliti cs 390459772 93488869 798029238 248 10 152 48J64672 1
Capila expendirure (ltII L 72865 878 1281254 6647 J356 7169 13 149045
Notes
(i)
(Ii)
Inter-segmeot balances are e limioafed 00 consolidatio n
Capi tal expendiTU res consist of additions 10 propeny plant and equip ment and iovestmenl properties
Eliminations QR
To wl QR
(273735776) (i )
(20308351(i)
1423591302
6689563230
(27576661 1) 8 113154532
(273135777) (i) 12573 10405
257388570
(273735177) 15 14698975
24 1484446
39
29
Aamal Company QSC
NOTES TO THE CONSOLIDATED FrNANCIAL STATEMENTS For the year ended 31 Dcltmber 1013
Fr-A]~ClAL RISK MANAGpoundMamp1H
Objccthes and policies fe Groups principal )uaucill liabilities comprise imltresl bctmllg loons and IxmowHgs baRlt ovetda1s amounts due to fclaled par1ies and tracte accounts payable The main pUlJXSi of thesc financial liabilities is 4J mise firmne or 610 Grmps operations The G0JP bas various fimmcial assets such as ttadc accounts receivable lInlOlmts due from related parties bark balances tltCntion receivable and other receivables which arisgt directly fran its cperuoonamp
The maiH ri~ks an3ing Joru (be Groups UnariCJlll illslrumenls jle market risk cretiJt nsk and hmdity risk Til BoarD ofDtrcctO$ reviews end agrees policies for mzrAgbg Caltt f hespound ri~k ihkh arc summariscd beloW
VIarktt risk yenfatket risk is the risk Um changes in market prices $Uch as intfcst rates and hreig lttmeocy ect14nge rilles Vltl1 affect the Groups profit eqwty Dr value tf its hoJdiI15 of financial instrl[Thnls rile objecivpoundj of marke1 risk mUnllgcrlcnt is to manage uld 1~ontr(ll tho tr))rket risk expo-sure vithir acceptable parfI-etcJ$ while optimising rerUID
Equit) price risk ampjuity prtce risk is the risk hilt the Group ampearnings will be affected as a rcmt (If luctttltions in fm vdue of ~qui-gt
mstwnents Eqlliry price risk arises from availabtetor~sale inv2strnems However the Groups exposure to eqmty price risk IS minima as II doesn hold sitl)iftrmt ailableAor-511le inYestrmmrs
[merest rate risk The Groups fimiruial poundS5ot ampId liaojlilies (at Rl $uJject to int~~ rate mk compnse brmk depoils interst bearing loans and bOITQwjags and bank overdr-afts At the reponwg dalt tbe [merest rale pronle of Ill Goups intexst bearing fbi4rdd instruments as fliows
11113 20i3 QR QR
Fued liIeryS refc insfrvrnellts
Fmmcial assets 113035962 111913394 FrOltwial liabilities --1~203712l) 1252t43~1
9)OI~ (13350972)
Fhlllting inireSI rate ns1lmlttrs Fanctl~ Isseis 127024345 ID43848o Fllllocial liabilities _-(i~9347~ (94))48926)
(836)64116)
The Groups exposure to t~ ris of changes in marXet interest fltltes relztes primariiy to the Groups financial assets and lizbitdic$ with t1Oltttirg interest mte~
lhe loEowing able demonstrates the ampmitivity nf the eonsolidattXI statemen1 of income 1) caonaly possible chonges in in1jfgtst rmes by 25 basis points with all othe vari)ble3 hdc umstant The sensitivity of the CooiK~ljclatid statement of inc(me $ the eft(ct of tb assumed changes in lnterdt rales for one year bf1sec on the floating rate financial assets and fimmcial hablhw$ held at 31 f~r The effect of deae-ascs in interest ral~ is cXp0Ctct to be equal and opposite to the effect oHlle increases sllQvro
Changes it Eftx OIl
00513 [oms profit QR
2013 Floating mterest Hlte instruments ----2$ bp (1649776)
2012 Flv-ating irkfiSt rale instrumenls +25 bp (209[9(1))
~--------- -~~ 40-middot------ _ _ shy
29
Aamal Company QSC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 3 1 December 2013
FINANCIAL RISK MANAGEMENT (continued)
Foreign currency risk Foreign currency risk is the risk lhilt the value of lhe fi nancial instruments will fluctuate due 10 changes in fore ign exchange rates
T rade aCcOlmts payable and accrued expenses include amounts due in foreign currencies mliniy US Dollars UAB Dirhams Great Britain Pounds (GB P) and Euros of which the Group has a currency risk primruily on the baJmces payable in Euros and GBP amoWlting 10 QR 14400634 (2012 QR 17214046)
The Group does not hedge its foreign currency exposure As both Qatari Riyal and UAE Dirhams are pegged to the US Dollar balances in US Dollars and UAE Dirhams are not considered to represent significant currency ris k to the Group
The table below indicates the Group s fore ign c urrency exposure on its monetary assets a nd liabilities The analysis calculates the effect o f a reasonably poss ib le move ment of the QR curre nc y rale against the Euro and GBP with all other variables held constant on the consolidated slate menl o f income (due to the fa ir va lue of currency sensitive monetary asse ts a nd liabilities) The e ffect o f decreases in fo reign c urre ncy exchange rates is expected to he equal and opposile 10 the e ffect of the increases shown
Incramp1se ill
f oreign cUlrency rate
0
the QR
Ellecl on profil
QR
2013 +5 (720032)
20 12 +5 (860 702)
C redit Tisk Credit risk is the risk that one party to a financial instrume nt wi ll fa il to discharge an obligation and cause the other party to incur a financial loss TIle Groups exposure to credit risk is indica ted by the carrying amoWlt o f its financia l asse ts whic h consist principally oftmde accollilts receivable retention receivable amounts due from related parties othe r receivables and bank baLances
The Group sells its products and prov ides services to vario us panies It is the G ro ups policy that all customers who wish to obtain on credit lerms are subject to credit verificalion procedures to ensure c redit Ilonhiness Each new customer is analysed individually for creditworthiness before the de livery o f products Of services Custo mm tbat fai l to met t the credi tworthiness may transact with the Group only o n prepayme nt basis Property rentals are mostl y received in ad vtnce or conlrlCled wi th post dated cheques 10 additio n receivable balances are monitored on an ongoing basis a nd the purchase limils are established for each c redit custoroer which are reviewed reguJarly based on the level o f past transactions and senlement The Groups max im wn exposure with regard to trade aCCOWlts receivab le net ofa llowance re nected allhe reporting date was ilS fo llows
2013 2012
Business SJgmelll QR QR
Property 15478832 19386326 Trading and distributio n 194343 597 179748274 Industrial ma nufac turing 183119753 131578668 Managed services 18069385 14547389
411 011 567 345260657
41
29
Aamal Company QSc
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For tbe year eoded 3 J December 20 13
FlNAJICIAL RISK MANAG EMENT (c-o Dtinued)
Credit risk (continued) With respect to credit risk arising from the other financi31 assets of the Group the Groups exposure to credit risk arises from default of the counterparty with a maximum exposure equal 10 the canying amount of these instruments as follows
2013 QR
202
QR
Bank balances Amounts due from related parties Retention and other receivables
436136756 214439950 48290351
36788129 t 171525363 74082203
698867057 613488857
The group reduces the expoSltre of credit risk arising from other financial assets by maintaining bank accounts in reputed banks and providing services only to creditworthy re lated parties
The management cons iders the bank balances and a mQUIIIS due from related parties as high grade fi nancial assets and lfade accounls receivable and other receivables as sundard grade financial assets When a finltmcial asset is identified 10 be impaired the managemoot downgrades such assets to impaired category and provides adequate allowances
Liquidity risk Liquidity risk is the risk that the Group will not be able to meet its fmancial obligations as they fu ll due The Groups 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 nonnal and stressed conditiom without incurring unacceptable losses or risking damage to the Groups reputa tion and is to maintain a balance belWeen continuity of fuoding and f1eilibility through the use of bank overdrafts and bank loans and borrowings
The Group monitors its risk to a shortage o f funds using a recuning liquidity plaOfling 1001 TIllS tool considers the manuiry o f financial assets (eg accounts receivable) and projected cash flows from operations The Groups teons ofsales or services require arooUIlts to be paid within 30-90 days from the invoiced dale
42
29
Aamal Company QSc
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For tbe year ended 3 1 December 2013
FrNANClAL ruSK MANAGEMENT (contiQued)
Uqujdity risk (continued) The table below summarises the ruaruriJy profile of the Groups financial 1iabililies a t 31 December based on contractual undiscountcd paymeots
2013 Interest bearing loans and borrowings Bank overdrafts Trade accowus payable Other payables Amounl~ due (0 related panles
201l Interest bearing loans and borrowings
Baok overdrafts Trade accounts payable Other payables Amounts due to related parties
On demand
QR
6836280
6836280
011 demand QR
2885090
2885090
Less than 3 months
QR
521324473
303638792
47406830
2530~480
898675575
Less thall 3
months
QR
469839033
10754JJIO 37543236
1964504 1
634568620
3 10 J2 mOlllh$
QR
239333328
16378865 20210580
2289~11l
298816884
3 to 12 monlhs
QR
365476972
159621 37 J 24745342
30092716
579936401
1to 5 years
QR
J 60092748
160092148
1 to 5 years
QR
248472226
248472226
gt 5 years
QR
25261598
25261 598
gt 5 years
QR
7648000
7648000
TOlaf
QR
947012147 6836280
320017657
67617410 48199591
1389681085
Tota
QR
109 1436231
1885090 267162681
622 88578
49737757
14735 10337
43
30
Aamal Company QSltc NOTES TO THE CONSOLIDATED FlANCIAL STATEMETS For the year ended 31 December 20 t3
21 F~ANClAL RlSK MAiAGEMElT (continued)
Capital management The Boards policy is to maintain a strong cepit1 base so as to rnainmin investor creditor and market ronfoonee and to SUSWlJ) fumre dcltclonnent Gf the buinest The Board of Directors rronitortl the tapital whkh tbe Group defines as wlal $parcloders equity excluding nonmiddotcornroliing imerests and the level of dividends to orrunury srarellOJdcfS
The Board also reeks to ITIaimain a balance between the higher (ctums (hat might be fA-~$ihle With higher leves of borrnwings end Lle edvnrJages and security named Sy it sOMd Cilpitai posi[ion The GfCup~ k1rget is to achievfl a return on slureholders equity (exclJding aonwurrolJiug iorcf(sts) greater lll(ll1 he wcighlcd average inres exxmse on mrerest bearing Ivens and oorrowing
The (lf0t-p nl)nDg-e ils cnpital structure and makes adjustneal lOll in light ofchang2s in economic nd bttincss cordjlons and shareholders expe1ationJo chmges veremiddot maCo HI Lleuro objecttves polilCS or proCCSSC3 during the years erded 31 D~mber 2013md 31 Dtccmlxr2Ql2
The Group monitors the capit2J using a gClting fatio which IS dep divided by caplla plus debL The GtOwgts policy is to keep ttJe ge-anng rmio bclew 40 Tbe Group iLdtdes withb debt imete-51 beagting loans ard ~OITORlngs less cash and cash equtVaknts Capltal includes eqmty attributable 10 the equity tolders oft~e parcrt
2013 QR
2(i2 QR
fmerest bearing loans and borrowings lcss- Cash and cas ltYJUvalcnts
9i4lJ05301 _~ (429JfJl4761
1004845296 (649)6201)
Net debt
Toa capital
Capita and net debt
699849045
~ringrttio
FAIR VALtES OF Fl~ANOAL f~STRUMETS
Finarcial iostrumenL~ cOlnprise tina~lctal assetS carl finailcialliabilities
Fmancial assets colJist of bank balance) short 1Cm bank dcposis amounL dve dom rc)ltted partilt)$ rekntion and other receivables and ttade accolmis rceivabe Finatlclll habiilics cgtmsist of banilt ovcrdratls jnerest bearing lOil1S and bOrowings amounts due (0 nliled partiG~ ane trade x-ounls payable
The- fair values of hese financial inStrumen1S except Jo-- imCfest bearing loam lHld bOlToving aproKimate lhdr cMryinJ vlhes due to the Slort temt mzrutiiles or these instrument
Tllc faiT value of iotcnst beating Nns and borrowin2s ae estimate( based on discoumed ltash flows twin int(s rale- cune-ntly nvailagtk fur tilt debt or sinuiar tetnlS an-a rell1lmng matunties
31
Aamal Company~Q=-ScC ______________~______
~OTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For fhe year ended 31 December 20 t3
SlGNIFICANT ASUMPTIONS ACCOUJTING JUDGElE1TS AND F8TIMATFS
impairment (If accoonts receivable n etrnwe of lhe collectible anoun of trade accounlgt reccvable is made when collection of the full lHl1OUt i~ nO looger probabk FOI nCividualty significitIl amounts this estimation is p~rformed on an indh-idllai a$[$ Amomts wHcb arc not indivldl11Uy significant but wluch are past due ZTe tsscssed collectively and an aJlQwaccc applied ucc()r~Jng to the length of lime past due based oc histnncal recovery nlJes
hnpalrment of inHntnries lavenoncs are held at tho lower of col and nol realisable value InIOn inventoncent$ becone old or 0-~amplete an estilTJte is mate of their net j alisable vulue For indiviolhlUy significant amountS this cstinaunrt is performec all aD lndividwl osis Amotlnts whieh are fl0t individually significan( btll which ltIre old at obsolete wx LltSessed wllecivdy md a provisior is applied sccnrding to the invenrory type and be dep)ee of ageing 0 cDsolescc1ce based on anticipUled selling prices
Classifigt1ltion of El Sew(gtdy Cable Qatar WLI ali a j(lint vwture pound1 Sovedy Cables Qatar is a limited hability company whose kgal fum confers SCprm11ior bernten tbe jXliiies 10 ~he jomi lfranpement Snd the Company Itself FurthenrlOre then IS no oontractua] arrmgelTeot or any oibe aus aod circumstriliCe$ that iocik41to tht he putic5 [0 the joint flJTIlrgernelit bave rights to the ssetl and obligrtdons fo~ the liabilities of the joint ilrrongement Acoordingly El Sewed- C[jbl~s Qamr WLL is dassifiecl 7S a joiut enrtrr of he GWtp
impairment of goodwill G0oovj)1 embedded in th~ cot 0 aquisitior of subsidiaries and eqmtj-iccounled iflV(stees ire teswt for irl1jXlirmnt aHuaily Tbe calculations of value [n use fO( cfish gecj~r)lilg units (loring to real nte projecg are rtost sensitive to tin IDHowing assumpti015
Grosgt i1wginmiddot Gross Ilmrgins arc lmsed on avrage values tuhje0d in (he [Xrioo preeedhli (e siaM of the budge xnod T1esC at( mcreased over the budgel period for mticipatltX efficiency Hnprovemots
DisC)unr r(es Discount rotes represent th cl1tent mark as~ssmetlt of the risks specific te ech cash geocroting unit regarding lhe time value of money ilnd mdividu)l risks of he tmtieriyilg assets whICh have not been inwrport1eti it the Citik flow estimates The dj~(OUrl flte tlkulation is based on the speclfte circurnsthLCes of lile Group and its opltllatJng segn)~nts (md derived (ff)rC it weighted avaage (XSt 0f apilaJ (WACC) Tb fACe (akw into uoount both deb and equity The 0$1 of equity is denved from dlC expected return 01 investmenl by the Groups investors TJc Gos10( deb is based on l1e borrvwings the Gmup IS obllsxl to service SC~lletllmiddotspecific r5k IS incorxt4too by applying individual bera facto The betn mctors ire evauatcentd annuaHy bhseci on pubJicly aVflllabe murked earn
Fair value ()fnHstmeni proputies The fuit laHe 0 nvestmel~ propertis is deltrrnlnzd b cxterrwl indepzfldell property valuers laving appr0priate recognised professional quabfiillions and recenl xperience H1 the localjl)n and G-tegory 0 the oroperty being valued
Useful hes of PfQPcrly plmr (llld zqulpment The Groups management detennints th estiunted useful jives Df It~ property plan and equipmnl fix calnurjng depreciation Thi5 e~timJte is 6lermind after cinsidring 1b expeelcd usage (1f the a5sclt [hysical l101t and (eas tedmiltal Dr com~ercia obsolesccnce
Gotlg Qncen
ibe Groups mangerncnt UiS made aJ assessmeot cf the 011115 ability (0 COllllOUC liS a going conct11l Imd is satsl1ed hat me Group ms the resources to contmue in business for he foreseeable fu1urc he1hennort he management is no aware oC lny material Hncertainties that lray CH~t signinchnt doubt tlPDfl the Groups ability 10 continue as a going umcem Therefore titpound lotlsolidatcd finilllcij stftemeols comirme to be prepltd on li g0ing concern basis
Aamal Company QSc
NOTES TO THE CONSOLIDATED FlNANC[AL STATEMENTS For the year ended 3 1 December 20 13
32 INCOME TAX
Certa in subsidiaries of the Group which have non-GCe ownership are subject to income tax under Qatar Income Tax Law No 2 1 of2009 The iocome tax is charged on the share of profits attributable to non-GCe shareholders For the purpose of these conso lidated fi nancial statements the income tax liability oftbe foreign shareholders has been excluded given that the non-GCe shareholders have agreed under the shareholder agreements signed with the Group to bear the fh lliiability and make necessary payments
33 COMPARATIVE INFORMATION
Certain comparative figw-es of the previous year have been reclassified 0 coofonn to the current years presentation However such reclassifications are oat materia and do not have an impact on tbe previously reported net profit other comprehensive income or the total equity for the comparative year
The impact from the resta tement of comparative infonnalion as a resuh of adoption of IFRS I I - Joint arrangements is detailed in Note 32 Changes in aCCQu(lting policies
46
Aamal Compall-yQSC________________
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For lthe year ended 31 December 20 11
2G OTHER NeOiI
2013 20J3 QR QR
Interest mcume 2824216 2)314392 Profiv( loss) 00 disposal of property plant aoe eqUlpmem 737647 (l7362G) Eargain ptmnJse gain (Kote t) 8360793 MIsceJlaneous income 5723356
2013 2012 QR QR
ManllgetnUI hrQ empl(yees ws 55170302 55lt035middot1 Rent 23596799 2594915 Allowance for impaimlcot oUrsue aCQl1ot$ rc(Xjvalle (Nole 6) 129459(i 11613120 flBumcce ane profcampiitmJI fees 2IU9263 209J902 Corununication OOtHS 1935123 1649155 Trllining tid ouSfjt$s developmccl 950476 L095764 Re]X1in and mainle-nilnce 21)11SflS 2)2 I Poslag-c prjnting acri stationery 610299 541159shyvllsltdlancous expenses _~~~664 1lt2
-~~~ 125162812
22 fIN~lCE COSTS
2013 2amp2 QR QR
Inleres epen~ 42866312 5773U4B Am(vtisJliorgt ofdefcentrred financiog coStS __ 2l)tl26~~ gt3661
44930877----=
58063009
23 BASIC A~n nHUfED EARilNGS PER SHARi~
Basic trdTJogs per hue is caculatid 0y llividing the pwfill0( Ihc year attriouiabk (0- equity roldc-5 of the parent by lhi w~iglwxi avrage number of ordinary shares 0JstandirJg dulting tht_ year During Ihe year lil~ Conpmy i-sued and CBpii3lzed bonus shares lnd awmJingl) me previously ~eportod earnings per shac have blOM restatc(i
20i3 2012
Profit feT the year auributable to Cluity holderlt of the- paren (QR)
Weighted aVCTage number ofshares outstanding during the year (i)
Basic Jd diluted earnings per share (QR) 085
59985U413 shy
~~--~~~~- ~------J 1
23
Aamal Company QSc
NOTES TO THE CONSO LIDATED FfNANC[AL STATEMENTS For tbe year ended 3 l December 2013
BASIC AND DILUTED poundARNINCS PER SHARE (continued)
NOles (i) Th wigh d m nlg urnb of hres foc h P of lruling ~migs pee share h bee kulated
as follows 2013 20J2
QU3lifying shrues allhe begi ll1ling of the year 544500000 544500000 Effect of bonus shares issued and capitalised 55500000 55500000
600000000 600000000
Less T reasury shares (149587) (i357SI)
Weighted average number of shares at the end of the year 599850413 599864249
(ii) There were no potentia lly dilutiw shares outstanding at any time during tbe year and hence the diluted earnings per share is equal to the basic earnings per share
24 COItIMITMENTS
20 1] 2012 QR QR
Estimated capital expenditure approved and contracted for at the year eod but not provided for
Investment properties 2964000 8 139063 Property plant and equipment 16386500 63759762
19350500 71 898825
Operating lease commiIOlenlS under noncancellable lease agreemenlS
Payable wilhin one year 990806 702000
990806 702000
25 CONTINGENT UABILITlES
The Group had the following contingent liabi lities from which it is anticipated thai no malerial liabilities will arise
2013 2012 QR QR
Letters of guaramee 474551239 394255203
Letters of credit 7678499 194299384
NQles
(i) leHlaquogt of gu indud penonmnlaquo tend nd bid bonds d pymenlt g gi to suppliers and contractors by the Group in the ordina ry course of bus iness which will matme within twelve months fro m the reporting da te
(i i) Letters o f credit are provided by lodging documents to the bank tor purchase of trading goods fro m foreign suppliers wruch will maMC within thJee to six months from the date or tile Iransaclion
J2
26
Aamal Company QSc
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year eoded 31 December 2013
RELATED PARTY DISCLOSURES
Related party transactions Related parties represent major shareholders directors and key management persortOei of the Group and entities controlled joimly controlled or signjficamly innueoced by such parties Pricing policies md tenns of these tnlOSaclions are approved by the Group s management
Transactions with related parties induded in the consolidated financial stalemenls were as follows
20lJ 2012 QR QR
Sale o f goods and SClVices 419034048 415225221
Rental income 1980473 2069386
Purchase of goods and services 1591 38018 300835596
Rental expense 21 780G78 23397334
Bargain purchase gain 8360793
Net assets acquired 78803585
Relat ed party bal nnces AmountS due from and due to re lated parties are disclosed in Notes 7 and 13 respectively These balances do oot carry interest and are repayable OIl mulUlUy agreed dates generally within one year
The Group did not record any impairment of receivables reJatiog to amounts due from related pat1ies in either year This assessment is undertaken each fina ncial year through examining the ftnanc ial position of the related party and the market in which the related patty operates
Parent The Groups ultimate parent is Al Faisal Ho lding Company WLL
Compensa tion or key management personn el The remuneration of key management dming the year was as fullows
2013 2012 QR QR
Short-term benefi ts 7904794 1079595 Employees end of service benefits 408934 439776
8313 728 11235727
33
AamaJ Company QSC
NOTES TO THE CONSOLIDATED FINANCIAL 5T ATEMENTS For the year ended t Decernber 2013
Dilling the year 1he Group issued a XHlUS share of 10 928 of the paid tiP share capilal hdd ilS at 31 DiX2mber 2(JJ 2 mnmuning to OR 555000000 using retamed earnings as of3 December 2012 (20l2 Doe share for every ten shues held as of 31 Dcember Oll amuunting 10 QR 495OO()OOO ling reta1ned earmrgs 28 or 31 Decencer 2D II Jshy
18 SEGMENT INFORMATION
For J)iloogement PUIpltJM rhe Group i organised into business unit bused On LlJeir nature of Acttvitics lud nas fonY reportable segments and the Head Oftklt as bllow$
Propert Tbe segntn cOlists of City C~nler Qlta~ Brunch and Aamal Rea Esmte Branch whicb ll[c invoived in lampIiiog the faJ1ities of retail outlet conpex red e5ttlte nve(mltn$ and property remal buines~s
Trading mld distrib-wion The segmeul Involves wholesalB andlor rBtail distribution of phamlaceutlcai and consunable i1ems hume Epplianccs medica equimenl t-Tes ill1d lubricmtlaquo and II1UllitnEl printing The scgn(rtt includes 6c following entities
Eotl Sina Medical Branch
Aaen Medical Braudt
Amcill Troding and DistoolltlqO Branch bull Foot Care (erier HRnd) Good llre Pbannacy Bf4Uch bull Al FllfJdaq COllpafY wJ~L
InduSNol manuacturing TIle s0groent IOvolves Ulahuactrumg whole~we aliaor rewi dimibUlioti of dccnc cables lid tools ggregJ1es_ ready-IUx connole and cement bI0C~ lI1d provi$ion of servlCcent$ in rdation to iODllltroa Itvestment repair aJ-d Gonstruction of power plwts liiiding of LED ilgluitlg products und management of industnl enterpnses The segment ircludes be folloVting centntitis
bull Aam1 Cemert Industries LL AuraJ Redy1Yl(A BrQTlch
bull Doha Cables Qawf lLL Senyaf IoolJic1es Qatar Holding W LL Advanced Pipes ard Casfs CompQTly WJ L bull GuJfRoch Coroany WLL Ci~San Trading Company WLL hmovafive Lighting Compary WLL
Managed services le segment inyolvc~ provisloH of hOllseiltecpmg mi cleaning services fucditics n-anagemerJ services C1egy s(tvices ttl centfe sltrvicf)s buildiqg lnaintemHlelt aml acting as travel gens The 5cgnltnt includes the foUowing cnti(lcents
An13 ServJce Branch
amli TnlVeJa l5tmh
f-eco Gulf Co W LL
Jolinson Controls Qattl WJL
28
Aamal Company QSc
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended ) L December 20 13
SEGMENT INFORMATION (Co ntinued)
Head Office It provides corporate services to the branches and subsidiaries of the Group
The managiog d irector of the Group monitors the operating results o f its business units separately for the purpose of making decisions about resource allocation and perfonnance assessment Segment perfonnance is evaluated based Oil operating profit or loss of these segments Transfer pricing between operating segments are on anns length basis in a manoec similar to Iraosactions with third parties
Aamal Company QSC
NOTES TO THE CONSOLIDATED FINAN CIAL STATEMENTS For the year ended 3 1 December 20 13
28 SEGMENT INFORl1ATlON (continued)
Operating segments The operat ing segment after elimination or ioter-bra nch and inter-co mpany lrnnsaclioos is presented as follows
Trading (nd Industrial Managed For fh e year elided 31 December 2013 Properly disirjblli ioll manujocljlring services
QR QR QR QR Revenues
- h lemal parties 260360172 578909983 1231522768 S l802210 - Inter segments 1253914 6843 11 8 29639873 3445052 1
Heat Office QR
Eliminoions QR
(n187426) II
Tolal
QR
2J22595133
261614086 585753 lOI 126116264 1 8625273 1 (721 87426) 2122595133
Opera ti ng results Fair vallie gains
Profit I (loss) ror the year
Depreciotion
200811944
245051 107
445863051
2066290
86492834
86492834
4345438
22636250
22636250
33049 089
5157436
5157436
1760305
(47864882)
(47864882)
1334382
267233582
245051107
512 284689
42555504
36
Aamal Company QS
NOTES TO Tl CONSOLIDATED FfNANClAL STATEMENTS For the yeM ended 31 December 20 13
28 SEGMENf INFORMAnON (c)tltioucd)
FOf the yearrnrkti J f DccemOer 2(J12 QR
Revellues - ExlcmlJ partiel 2331 17 509 bull Inter segmcI11S 1168935
-- 234236434 --~- -~--
Openning results 18S2367t Fmt value gains J8S79-4~G
pront LOllS) for the rear 570616154
gt3659
No(
lnlermiddotgment revenues are eliminated on tQHs)idntiOH_
Tadiug ftfid disl d)Ntion
QR
S2S3l7661
324 j
5335493114 ~ -~-----
51384831
54384338
4J9R71(i
Indus idi mamfmturing
QR
1255694537
129U25lS4
56727059
56727059
32752742
slnltic(s QR
55216665 2939H31
S46lOJ96
7427414
7437
[908067
ilfild ()jice QR
(64(41976
Elimination QR
(74tHi2oJ Iii
Totul QR
206936372
2069336372
235721
(64641
131 f613
6245
42541)861
Amnal Company Q$l
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Por tnt yeartndeJ 31 De~embcr 2013
28 SEGMENT JNFORMATlON (contiutlld
Assc-ts and labilities
Tng alld lndtrstfw At31 December 2(113 distnbllrior manufacturIng senices HeadOJJicc EliminatioilS lola1
QR QR QR QR QR
Cumnl 3tS 227552338 620807979 61349 j 415 S()6)86922 (301636995) 1477366090 Noolucrcnt DSeIS 6411868160 12604763 622386238 4348876 (i624548 __p2438051 780
fotal asstl$ 6639420498 1194 1243194217 65698291 513Ql1470 ==-lt03H8l~O()) 853295-870 -~----~ ~---~ -
CUIT)llliabilitics 280995335 1(3511J60 6344(12777 2l0708lJ2 496261185 (3CH636995) 1249603264 Non-current iiatJlitics 7l70L5V2 8008485 HlDi16~43_ 3181668 t433799 ____ ilj534_~57 __ --Totul liahililics 353696897 ___~4159~4~ 734419720 ~4976~~~~~ 1434945711
---~~--~ -~-~~ - _2~~~4~~ (~~~~9~
C1pild expcndimn HI) WO743OOj 1397742_~471l2~--~50 ~51 ~1~623821~~1~_ -~----~------ -~
3amp
28
Aamal Company Q SC
NOTES TO THE CONSOLIDATED FfNANClAL STATEMENTS For the year ended 31 December 20 13
SEGMFNT INFORMATION (continued)
Assets and liabilities (continued)
AI 31 December 2012 Properly QR
Trading and d iSfriblllion
QR
Indusrial manufacfuring
QR
Managed senices QR
Currenl assels
Non-current assets
146491 186
6121 864484
2964425 12 903 7264
73468 1258
549267235
51387098 471 1439
Tolal assets 6268355670 305479776 1283948493 56098537
Head Office QR
468325024
6713643
475038667
Currentliabil iies
Non-current liabiLities 273444 748 1 J10 15024
86054583 7434286
669214261 1288 14977
2 1938953
287 1199
480393637 1253084
Totil lliabiliti cs 390459772 93488869 798029238 248 10 152 48J64672 1
Capila expendirure (ltII L 72865 878 1281254 6647 J356 7169 13 149045
Notes
(i)
(Ii)
Inter-segmeot balances are e limioafed 00 consolidatio n
Capi tal expendiTU res consist of additions 10 propeny plant and equip ment and iovestmenl properties
Eliminations QR
To wl QR
(273735776) (i )
(20308351(i)
1423591302
6689563230
(27576661 1) 8 113154532
(273135777) (i) 12573 10405
257388570
(273735177) 15 14698975
24 1484446
39
29
Aamal Company QSC
NOTES TO THE CONSOLIDATED FrNANCIAL STATEMENTS For the year ended 31 Dcltmber 1013
Fr-A]~ClAL RISK MANAGpoundMamp1H
Objccthes and policies fe Groups principal )uaucill liabilities comprise imltresl bctmllg loons and IxmowHgs baRlt ovetda1s amounts due to fclaled par1ies and tracte accounts payable The main pUlJXSi of thesc financial liabilities is 4J mise firmne or 610 Grmps operations The G0JP bas various fimmcial assets such as ttadc accounts receivable lInlOlmts due from related parties bark balances tltCntion receivable and other receivables which arisgt directly fran its cperuoonamp
The maiH ri~ks an3ing Joru (be Groups UnariCJlll illslrumenls jle market risk cretiJt nsk and hmdity risk Til BoarD ofDtrcctO$ reviews end agrees policies for mzrAgbg Caltt f hespound ri~k ihkh arc summariscd beloW
VIarktt risk yenfatket risk is the risk Um changes in market prices $Uch as intfcst rates and hreig lttmeocy ect14nge rilles Vltl1 affect the Groups profit eqwty Dr value tf its hoJdiI15 of financial instrl[Thnls rile objecivpoundj of marke1 risk mUnllgcrlcnt is to manage uld 1~ontr(ll tho tr))rket risk expo-sure vithir acceptable parfI-etcJ$ while optimising rerUID
Equit) price risk ampjuity prtce risk is the risk hilt the Group ampearnings will be affected as a rcmt (If luctttltions in fm vdue of ~qui-gt
mstwnents Eqlliry price risk arises from availabtetor~sale inv2strnems However the Groups exposure to eqmty price risk IS minima as II doesn hold sitl)iftrmt ailableAor-511le inYestrmmrs
[merest rate risk The Groups fimiruial poundS5ot ampId liaojlilies (at Rl $uJject to int~~ rate mk compnse brmk depoils interst bearing loans and bOITQwjags and bank overdr-afts At the reponwg dalt tbe [merest rale pronle of Ill Goups intexst bearing fbi4rdd instruments as fliows
11113 20i3 QR QR
Fued liIeryS refc insfrvrnellts
Fmmcial assets 113035962 111913394 FrOltwial liabilities --1~203712l) 1252t43~1
9)OI~ (13350972)
Fhlllting inireSI rate ns1lmlttrs Fanctl~ Isseis 127024345 ID43848o Fllllocial liabilities _-(i~9347~ (94))48926)
(836)64116)
The Groups exposure to t~ ris of changes in marXet interest fltltes relztes primariiy to the Groups financial assets and lizbitdic$ with t1Oltttirg interest mte~
lhe loEowing able demonstrates the ampmitivity nf the eonsolidattXI statemen1 of income 1) caonaly possible chonges in in1jfgtst rmes by 25 basis points with all othe vari)ble3 hdc umstant The sensitivity of the CooiK~ljclatid statement of inc(me $ the eft(ct of tb assumed changes in lnterdt rales for one year bf1sec on the floating rate financial assets and fimmcial hablhw$ held at 31 f~r The effect of deae-ascs in interest ral~ is cXp0Ctct to be equal and opposite to the effect oHlle increases sllQvro
Changes it Eftx OIl
00513 [oms profit QR
2013 Floating mterest Hlte instruments ----2$ bp (1649776)
2012 Flv-ating irkfiSt rale instrumenls +25 bp (209[9(1))
~--------- -~~ 40-middot------ _ _ shy
29
Aamal Company QSC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 3 1 December 2013
FINANCIAL RISK MANAGEMENT (continued)
Foreign currency risk Foreign currency risk is the risk lhilt the value of lhe fi nancial instruments will fluctuate due 10 changes in fore ign exchange rates
T rade aCcOlmts payable and accrued expenses include amounts due in foreign currencies mliniy US Dollars UAB Dirhams Great Britain Pounds (GB P) and Euros of which the Group has a currency risk primruily on the baJmces payable in Euros and GBP amoWlting 10 QR 14400634 (2012 QR 17214046)
The Group does not hedge its foreign currency exposure As both Qatari Riyal and UAE Dirhams are pegged to the US Dollar balances in US Dollars and UAE Dirhams are not considered to represent significant currency ris k to the Group
The table below indicates the Group s fore ign c urrency exposure on its monetary assets a nd liabilities The analysis calculates the effect o f a reasonably poss ib le move ment of the QR curre nc y rale against the Euro and GBP with all other variables held constant on the consolidated slate menl o f income (due to the fa ir va lue of currency sensitive monetary asse ts a nd liabilities) The e ffect o f decreases in fo reign c urre ncy exchange rates is expected to he equal and opposile 10 the e ffect of the increases shown
Incramp1se ill
f oreign cUlrency rate
0
the QR
Ellecl on profil
QR
2013 +5 (720032)
20 12 +5 (860 702)
C redit Tisk Credit risk is the risk that one party to a financial instrume nt wi ll fa il to discharge an obligation and cause the other party to incur a financial loss TIle Groups exposure to credit risk is indica ted by the carrying amoWlt o f its financia l asse ts whic h consist principally oftmde accollilts receivable retention receivable amounts due from related parties othe r receivables and bank baLances
The Group sells its products and prov ides services to vario us panies It is the G ro ups policy that all customers who wish to obtain on credit lerms are subject to credit verificalion procedures to ensure c redit Ilonhiness Each new customer is analysed individually for creditworthiness before the de livery o f products Of services Custo mm tbat fai l to met t the credi tworthiness may transact with the Group only o n prepayme nt basis Property rentals are mostl y received in ad vtnce or conlrlCled wi th post dated cheques 10 additio n receivable balances are monitored on an ongoing basis a nd the purchase limils are established for each c redit custoroer which are reviewed reguJarly based on the level o f past transactions and senlement The Groups max im wn exposure with regard to trade aCCOWlts receivab le net ofa llowance re nected allhe reporting date was ilS fo llows
2013 2012
Business SJgmelll QR QR
Property 15478832 19386326 Trading and distributio n 194343 597 179748274 Industrial ma nufac turing 183119753 131578668 Managed services 18069385 14547389
411 011 567 345260657
41
29
Aamal Company QSc
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For tbe year eoded 3 J December 20 13
FlNAJICIAL RISK MANAG EMENT (c-o Dtinued)
Credit risk (continued) With respect to credit risk arising from the other financi31 assets of the Group the Groups exposure to credit risk arises from default of the counterparty with a maximum exposure equal 10 the canying amount of these instruments as follows
2013 QR
202
QR
Bank balances Amounts due from related parties Retention and other receivables
436136756 214439950 48290351
36788129 t 171525363 74082203
698867057 613488857
The group reduces the expoSltre of credit risk arising from other financial assets by maintaining bank accounts in reputed banks and providing services only to creditworthy re lated parties
The management cons iders the bank balances and a mQUIIIS due from related parties as high grade fi nancial assets and lfade accounls receivable and other receivables as sundard grade financial assets When a finltmcial asset is identified 10 be impaired the managemoot downgrades such assets to impaired category and provides adequate allowances
Liquidity risk Liquidity risk is the risk that the Group will not be able to meet its fmancial obligations as they fu ll due The Groups 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 nonnal and stressed conditiom without incurring unacceptable losses or risking damage to the Groups reputa tion and is to maintain a balance belWeen continuity of fuoding and f1eilibility through the use of bank overdrafts and bank loans and borrowings
The Group monitors its risk to a shortage o f funds using a recuning liquidity plaOfling 1001 TIllS tool considers the manuiry o f financial assets (eg accounts receivable) and projected cash flows from operations The Groups teons ofsales or services require arooUIlts to be paid within 30-90 days from the invoiced dale
42
29
Aamal Company QSc
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For tbe year ended 3 1 December 2013
FrNANClAL ruSK MANAGEMENT (contiQued)
Uqujdity risk (continued) The table below summarises the ruaruriJy profile of the Groups financial 1iabililies a t 31 December based on contractual undiscountcd paymeots
2013 Interest bearing loans and borrowings Bank overdrafts Trade accowus payable Other payables Amounl~ due (0 related panles
201l Interest bearing loans and borrowings
Baok overdrafts Trade accounts payable Other payables Amounts due to related parties
On demand
QR
6836280
6836280
011 demand QR
2885090
2885090
Less than 3 months
QR
521324473
303638792
47406830
2530~480
898675575
Less thall 3
months
QR
469839033
10754JJIO 37543236
1964504 1
634568620
3 10 J2 mOlllh$
QR
239333328
16378865 20210580
2289~11l
298816884
3 to 12 monlhs
QR
365476972
159621 37 J 24745342
30092716
579936401
1to 5 years
QR
J 60092748
160092148
1 to 5 years
QR
248472226
248472226
gt 5 years
QR
25261598
25261 598
gt 5 years
QR
7648000
7648000
TOlaf
QR
947012147 6836280
320017657
67617410 48199591
1389681085
Tota
QR
109 1436231
1885090 267162681
622 88578
49737757
14735 10337
43
30
Aamal Company QSltc NOTES TO THE CONSOLIDATED FlANCIAL STATEMETS For the year ended 31 December 20 t3
21 F~ANClAL RlSK MAiAGEMElT (continued)
Capital management The Boards policy is to maintain a strong cepit1 base so as to rnainmin investor creditor and market ronfoonee and to SUSWlJ) fumre dcltclonnent Gf the buinest The Board of Directors rronitortl the tapital whkh tbe Group defines as wlal $parcloders equity excluding nonmiddotcornroliing imerests and the level of dividends to orrunury srarellOJdcfS
The Board also reeks to ITIaimain a balance between the higher (ctums (hat might be fA-~$ihle With higher leves of borrnwings end Lle edvnrJages and security named Sy it sOMd Cilpitai posi[ion The GfCup~ k1rget is to achievfl a return on slureholders equity (exclJding aonwurrolJiug iorcf(sts) greater lll(ll1 he wcighlcd average inres exxmse on mrerest bearing Ivens and oorrowing
The (lf0t-p nl)nDg-e ils cnpital structure and makes adjustneal lOll in light ofchang2s in economic nd bttincss cordjlons and shareholders expe1ationJo chmges veremiddot maCo HI Lleuro objecttves polilCS or proCCSSC3 during the years erded 31 D~mber 2013md 31 Dtccmlxr2Ql2
The Group monitors the capit2J using a gClting fatio which IS dep divided by caplla plus debL The GtOwgts policy is to keep ttJe ge-anng rmio bclew 40 Tbe Group iLdtdes withb debt imete-51 beagting loans ard ~OITORlngs less cash and cash equtVaknts Capltal includes eqmty attributable 10 the equity tolders oft~e parcrt
2013 QR
2(i2 QR
fmerest bearing loans and borrowings lcss- Cash and cas ltYJUvalcnts
9i4lJ05301 _~ (429JfJl4761
1004845296 (649)6201)
Net debt
Toa capital
Capita and net debt
699849045
~ringrttio
FAIR VALtES OF Fl~ANOAL f~STRUMETS
Finarcial iostrumenL~ cOlnprise tina~lctal assetS carl finailcialliabilities
Fmancial assets colJist of bank balance) short 1Cm bank dcposis amounL dve dom rc)ltted partilt)$ rekntion and other receivables and ttade accolmis rceivabe Finatlclll habiilics cgtmsist of banilt ovcrdratls jnerest bearing lOil1S and bOrowings amounts due (0 nliled partiG~ ane trade x-ounls payable
The- fair values of hese financial inStrumen1S except Jo-- imCfest bearing loam lHld bOlToving aproKimate lhdr cMryinJ vlhes due to the Slort temt mzrutiiles or these instrument
Tllc faiT value of iotcnst beating Nns and borrowin2s ae estimate( based on discoumed ltash flows twin int(s rale- cune-ntly nvailagtk fur tilt debt or sinuiar tetnlS an-a rell1lmng matunties
31
Aamal Company~Q=-ScC ______________~______
~OTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For fhe year ended 31 December 20 t3
SlGNIFICANT ASUMPTIONS ACCOUJTING JUDGElE1TS AND F8TIMATFS
impairment (If accoonts receivable n etrnwe of lhe collectible anoun of trade accounlgt reccvable is made when collection of the full lHl1OUt i~ nO looger probabk FOI nCividualty significitIl amounts this estimation is p~rformed on an indh-idllai a$[$ Amomts wHcb arc not indivldl11Uy significant but wluch are past due ZTe tsscssed collectively and an aJlQwaccc applied ucc()r~Jng to the length of lime past due based oc histnncal recovery nlJes
hnpalrment of inHntnries lavenoncs are held at tho lower of col and nol realisable value InIOn inventoncent$ becone old or 0-~amplete an estilTJte is mate of their net j alisable vulue For indiviolhlUy significant amountS this cstinaunrt is performec all aD lndividwl osis Amotlnts whieh are fl0t individually significan( btll which ltIre old at obsolete wx LltSessed wllecivdy md a provisior is applied sccnrding to the invenrory type and be dep)ee of ageing 0 cDsolescc1ce based on anticipUled selling prices
Classifigt1ltion of El Sew(gtdy Cable Qatar WLI ali a j(lint vwture pound1 Sovedy Cables Qatar is a limited hability company whose kgal fum confers SCprm11ior bernten tbe jXliiies 10 ~he jomi lfranpement Snd the Company Itself FurthenrlOre then IS no oontractua] arrmgelTeot or any oibe aus aod circumstriliCe$ that iocik41to tht he putic5 [0 the joint flJTIlrgernelit bave rights to the ssetl and obligrtdons fo~ the liabilities of the joint ilrrongement Acoordingly El Sewed- C[jbl~s Qamr WLL is dassifiecl 7S a joiut enrtrr of he GWtp
impairment of goodwill G0oovj)1 embedded in th~ cot 0 aquisitior of subsidiaries and eqmtj-iccounled iflV(stees ire teswt for irl1jXlirmnt aHuaily Tbe calculations of value [n use fO( cfish gecj~r)lilg units (loring to real nte projecg are rtost sensitive to tin IDHowing assumpti015
Grosgt i1wginmiddot Gross Ilmrgins arc lmsed on avrage values tuhje0d in (he [Xrioo preeedhli (e siaM of the budge xnod T1esC at( mcreased over the budgel period for mticipatltX efficiency Hnprovemots
DisC)unr r(es Discount rotes represent th cl1tent mark as~ssmetlt of the risks specific te ech cash geocroting unit regarding lhe time value of money ilnd mdividu)l risks of he tmtieriyilg assets whICh have not been inwrport1eti it the Citik flow estimates The dj~(OUrl flte tlkulation is based on the speclfte circurnsthLCes of lile Group and its opltllatJng segn)~nts (md derived (ff)rC it weighted avaage (XSt 0f apilaJ (WACC) Tb fACe (akw into uoount both deb and equity The 0$1 of equity is denved from dlC expected return 01 investmenl by the Groups investors TJc Gos10( deb is based on l1e borrvwings the Gmup IS obllsxl to service SC~lletllmiddotspecific r5k IS incorxt4too by applying individual bera facto The betn mctors ire evauatcentd annuaHy bhseci on pubJicly aVflllabe murked earn
Fair value ()fnHstmeni proputies The fuit laHe 0 nvestmel~ propertis is deltrrnlnzd b cxterrwl indepzfldell property valuers laving appr0priate recognised professional quabfiillions and recenl xperience H1 the localjl)n and G-tegory 0 the oroperty being valued
Useful hes of PfQPcrly plmr (llld zqulpment The Groups management detennints th estiunted useful jives Df It~ property plan and equipmnl fix calnurjng depreciation Thi5 e~timJte is 6lermind after cinsidring 1b expeelcd usage (1f the a5sclt [hysical l101t and (eas tedmiltal Dr com~ercia obsolesccnce
Gotlg Qncen
ibe Groups mangerncnt UiS made aJ assessmeot cf the 011115 ability (0 COllllOUC liS a going conct11l Imd is satsl1ed hat me Group ms the resources to contmue in business for he foreseeable fu1urc he1hennort he management is no aware oC lny material Hncertainties that lray CH~t signinchnt doubt tlPDfl the Groups ability 10 continue as a going umcem Therefore titpound lotlsolidatcd finilllcij stftemeols comirme to be prepltd on li g0ing concern basis
Aamal Company QSc
NOTES TO THE CONSOLIDATED FlNANC[AL STATEMENTS For the year ended 3 1 December 20 13
32 INCOME TAX
Certa in subsidiaries of the Group which have non-GCe ownership are subject to income tax under Qatar Income Tax Law No 2 1 of2009 The iocome tax is charged on the share of profits attributable to non-GCe shareholders For the purpose of these conso lidated fi nancial statements the income tax liability oftbe foreign shareholders has been excluded given that the non-GCe shareholders have agreed under the shareholder agreements signed with the Group to bear the fh lliiability and make necessary payments
33 COMPARATIVE INFORMATION
Certain comparative figw-es of the previous year have been reclassified 0 coofonn to the current years presentation However such reclassifications are oat materia and do not have an impact on tbe previously reported net profit other comprehensive income or the total equity for the comparative year
The impact from the resta tement of comparative infonnalion as a resuh of adoption of IFRS I I - Joint arrangements is detailed in Note 32 Changes in aCCQu(lting policies
46
23
Aamal Company QSc
NOTES TO THE CONSO LIDATED FfNANC[AL STATEMENTS For tbe year ended 3 l December 2013
BASIC AND DILUTED poundARNINCS PER SHARE (continued)
NOles (i) Th wigh d m nlg urnb of hres foc h P of lruling ~migs pee share h bee kulated
as follows 2013 20J2
QU3lifying shrues allhe begi ll1ling of the year 544500000 544500000 Effect of bonus shares issued and capitalised 55500000 55500000
600000000 600000000
Less T reasury shares (149587) (i357SI)
Weighted average number of shares at the end of the year 599850413 599864249
(ii) There were no potentia lly dilutiw shares outstanding at any time during tbe year and hence the diluted earnings per share is equal to the basic earnings per share
24 COItIMITMENTS
20 1] 2012 QR QR
Estimated capital expenditure approved and contracted for at the year eod but not provided for
Investment properties 2964000 8 139063 Property plant and equipment 16386500 63759762
19350500 71 898825
Operating lease commiIOlenlS under noncancellable lease agreemenlS
Payable wilhin one year 990806 702000
990806 702000
25 CONTINGENT UABILITlES
The Group had the following contingent liabi lities from which it is anticipated thai no malerial liabilities will arise
2013 2012 QR QR
Letters of guaramee 474551239 394255203
Letters of credit 7678499 194299384
NQles
(i) leHlaquogt of gu indud penonmnlaquo tend nd bid bonds d pymenlt g gi to suppliers and contractors by the Group in the ordina ry course of bus iness which will matme within twelve months fro m the reporting da te
(i i) Letters o f credit are provided by lodging documents to the bank tor purchase of trading goods fro m foreign suppliers wruch will maMC within thJee to six months from the date or tile Iransaclion
J2
26
Aamal Company QSc
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year eoded 31 December 2013
RELATED PARTY DISCLOSURES
Related party transactions Related parties represent major shareholders directors and key management persortOei of the Group and entities controlled joimly controlled or signjficamly innueoced by such parties Pricing policies md tenns of these tnlOSaclions are approved by the Group s management
Transactions with related parties induded in the consolidated financial stalemenls were as follows
20lJ 2012 QR QR
Sale o f goods and SClVices 419034048 415225221
Rental income 1980473 2069386
Purchase of goods and services 1591 38018 300835596
Rental expense 21 780G78 23397334
Bargain purchase gain 8360793
Net assets acquired 78803585
Relat ed party bal nnces AmountS due from and due to re lated parties are disclosed in Notes 7 and 13 respectively These balances do oot carry interest and are repayable OIl mulUlUy agreed dates generally within one year
The Group did not record any impairment of receivables reJatiog to amounts due from related pat1ies in either year This assessment is undertaken each fina ncial year through examining the ftnanc ial position of the related party and the market in which the related patty operates
Parent The Groups ultimate parent is Al Faisal Ho lding Company WLL
Compensa tion or key management personn el The remuneration of key management dming the year was as fullows
2013 2012 QR QR
Short-term benefi ts 7904794 1079595 Employees end of service benefits 408934 439776
8313 728 11235727
33
AamaJ Company QSC
NOTES TO THE CONSOLIDATED FINANCIAL 5T ATEMENTS For the year ended t Decernber 2013
Dilling the year 1he Group issued a XHlUS share of 10 928 of the paid tiP share capilal hdd ilS at 31 DiX2mber 2(JJ 2 mnmuning to OR 555000000 using retamed earnings as of3 December 2012 (20l2 Doe share for every ten shues held as of 31 Dcember Oll amuunting 10 QR 495OO()OOO ling reta1ned earmrgs 28 or 31 Decencer 2D II Jshy
18 SEGMENT INFORMATION
For J)iloogement PUIpltJM rhe Group i organised into business unit bused On LlJeir nature of Acttvitics lud nas fonY reportable segments and the Head Oftklt as bllow$
Propert Tbe segntn cOlists of City C~nler Qlta~ Brunch and Aamal Rea Esmte Branch whicb ll[c invoived in lampIiiog the faJ1ities of retail outlet conpex red e5ttlte nve(mltn$ and property remal buines~s
Trading mld distrib-wion The segmeul Involves wholesalB andlor rBtail distribution of phamlaceutlcai and consunable i1ems hume Epplianccs medica equimenl t-Tes ill1d lubricmtlaquo and II1UllitnEl printing The scgn(rtt includes 6c following entities
Eotl Sina Medical Branch
Aaen Medical Braudt
Amcill Troding and DistoolltlqO Branch bull Foot Care (erier HRnd) Good llre Pbannacy Bf4Uch bull Al FllfJdaq COllpafY wJ~L
InduSNol manuacturing TIle s0groent IOvolves Ulahuactrumg whole~we aliaor rewi dimibUlioti of dccnc cables lid tools ggregJ1es_ ready-IUx connole and cement bI0C~ lI1d provi$ion of servlCcent$ in rdation to iODllltroa Itvestment repair aJ-d Gonstruction of power plwts liiiding of LED ilgluitlg products und management of industnl enterpnses The segment ircludes be folloVting centntitis
bull Aam1 Cemert Industries LL AuraJ Redy1Yl(A BrQTlch
bull Doha Cables Qawf lLL Senyaf IoolJic1es Qatar Holding W LL Advanced Pipes ard Casfs CompQTly WJ L bull GuJfRoch Coroany WLL Ci~San Trading Company WLL hmovafive Lighting Compary WLL
Managed services le segment inyolvc~ provisloH of hOllseiltecpmg mi cleaning services fucditics n-anagemerJ services C1egy s(tvices ttl centfe sltrvicf)s buildiqg lnaintemHlelt aml acting as travel gens The 5cgnltnt includes the foUowing cnti(lcents
An13 ServJce Branch
amli TnlVeJa l5tmh
f-eco Gulf Co W LL
Jolinson Controls Qattl WJL
28
Aamal Company QSc
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended ) L December 20 13
SEGMENT INFORMATION (Co ntinued)
Head Office It provides corporate services to the branches and subsidiaries of the Group
The managiog d irector of the Group monitors the operating results o f its business units separately for the purpose of making decisions about resource allocation and perfonnance assessment Segment perfonnance is evaluated based Oil operating profit or loss of these segments Transfer pricing between operating segments are on anns length basis in a manoec similar to Iraosactions with third parties
Aamal Company QSC
NOTES TO THE CONSOLIDATED FINAN CIAL STATEMENTS For the year ended 3 1 December 20 13
28 SEGMENT INFORl1ATlON (continued)
Operating segments The operat ing segment after elimination or ioter-bra nch and inter-co mpany lrnnsaclioos is presented as follows
Trading (nd Industrial Managed For fh e year elided 31 December 2013 Properly disirjblli ioll manujocljlring services
QR QR QR QR Revenues
- h lemal parties 260360172 578909983 1231522768 S l802210 - Inter segments 1253914 6843 11 8 29639873 3445052 1
Heat Office QR
Eliminoions QR
(n187426) II
Tolal
QR
2J22595133
261614086 585753 lOI 126116264 1 8625273 1 (721 87426) 2122595133
Opera ti ng results Fair vallie gains
Profit I (loss) ror the year
Depreciotion
200811944
245051 107
445863051
2066290
86492834
86492834
4345438
22636250
22636250
33049 089
5157436
5157436
1760305
(47864882)
(47864882)
1334382
267233582
245051107
512 284689
42555504
36
Aamal Company QS
NOTES TO Tl CONSOLIDATED FfNANClAL STATEMENTS For the yeM ended 31 December 20 13
28 SEGMENf INFORMAnON (c)tltioucd)
FOf the yearrnrkti J f DccemOer 2(J12 QR
Revellues - ExlcmlJ partiel 2331 17 509 bull Inter segmcI11S 1168935
-- 234236434 --~- -~--
Openning results 18S2367t Fmt value gains J8S79-4~G
pront LOllS) for the rear 570616154
gt3659
No(
lnlermiddotgment revenues are eliminated on tQHs)idntiOH_
Tadiug ftfid disl d)Ntion
QR
S2S3l7661
324 j
5335493114 ~ -~-----
51384831
54384338
4J9R71(i
Indus idi mamfmturing
QR
1255694537
129U25lS4
56727059
56727059
32752742
slnltic(s QR
55216665 2939H31
S46lOJ96
7427414
7437
[908067
ilfild ()jice QR
(64(41976
Elimination QR
(74tHi2oJ Iii
Totul QR
206936372
2069336372
235721
(64641
131 f613
6245
42541)861
Amnal Company Q$l
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Por tnt yeartndeJ 31 De~embcr 2013
28 SEGMENT JNFORMATlON (contiutlld
Assc-ts and labilities
Tng alld lndtrstfw At31 December 2(113 distnbllrior manufacturIng senices HeadOJJicc EliminatioilS lola1
QR QR QR QR QR
Cumnl 3tS 227552338 620807979 61349 j 415 S()6)86922 (301636995) 1477366090 Noolucrcnt DSeIS 6411868160 12604763 622386238 4348876 (i624548 __p2438051 780
fotal asstl$ 6639420498 1194 1243194217 65698291 513Ql1470 ==-lt03H8l~O()) 853295-870 -~----~ ~---~ -
CUIT)llliabilitics 280995335 1(3511J60 6344(12777 2l0708lJ2 496261185 (3CH636995) 1249603264 Non-current iiatJlitics 7l70L5V2 8008485 HlDi16~43_ 3181668 t433799 ____ ilj534_~57 __ --Totul liahililics 353696897 ___~4159~4~ 734419720 ~4976~~~~~ 1434945711
---~~--~ -~-~~ - _2~~~4~~ (~~~~9~
C1pild expcndimn HI) WO743OOj 1397742_~471l2~--~50 ~51 ~1~623821~~1~_ -~----~------ -~
3amp
28
Aamal Company Q SC
NOTES TO THE CONSOLIDATED FfNANClAL STATEMENTS For the year ended 31 December 20 13
SEGMFNT INFORMATION (continued)
Assets and liabilities (continued)
AI 31 December 2012 Properly QR
Trading and d iSfriblllion
QR
Indusrial manufacfuring
QR
Managed senices QR
Currenl assels
Non-current assets
146491 186
6121 864484
2964425 12 903 7264
73468 1258
549267235
51387098 471 1439
Tolal assets 6268355670 305479776 1283948493 56098537
Head Office QR
468325024
6713643
475038667
Currentliabil iies
Non-current liabiLities 273444 748 1 J10 15024
86054583 7434286
669214261 1288 14977
2 1938953
287 1199
480393637 1253084
Totil lliabiliti cs 390459772 93488869 798029238 248 10 152 48J64672 1
Capila expendirure (ltII L 72865 878 1281254 6647 J356 7169 13 149045
Notes
(i)
(Ii)
Inter-segmeot balances are e limioafed 00 consolidatio n
Capi tal expendiTU res consist of additions 10 propeny plant and equip ment and iovestmenl properties
Eliminations QR
To wl QR
(273735776) (i )
(20308351(i)
1423591302
6689563230
(27576661 1) 8 113154532
(273135777) (i) 12573 10405
257388570
(273735177) 15 14698975
24 1484446
39
29
Aamal Company QSC
NOTES TO THE CONSOLIDATED FrNANCIAL STATEMENTS For the year ended 31 Dcltmber 1013
Fr-A]~ClAL RISK MANAGpoundMamp1H
Objccthes and policies fe Groups principal )uaucill liabilities comprise imltresl bctmllg loons and IxmowHgs baRlt ovetda1s amounts due to fclaled par1ies and tracte accounts payable The main pUlJXSi of thesc financial liabilities is 4J mise firmne or 610 Grmps operations The G0JP bas various fimmcial assets such as ttadc accounts receivable lInlOlmts due from related parties bark balances tltCntion receivable and other receivables which arisgt directly fran its cperuoonamp
The maiH ri~ks an3ing Joru (be Groups UnariCJlll illslrumenls jle market risk cretiJt nsk and hmdity risk Til BoarD ofDtrcctO$ reviews end agrees policies for mzrAgbg Caltt f hespound ri~k ihkh arc summariscd beloW
VIarktt risk yenfatket risk is the risk Um changes in market prices $Uch as intfcst rates and hreig lttmeocy ect14nge rilles Vltl1 affect the Groups profit eqwty Dr value tf its hoJdiI15 of financial instrl[Thnls rile objecivpoundj of marke1 risk mUnllgcrlcnt is to manage uld 1~ontr(ll tho tr))rket risk expo-sure vithir acceptable parfI-etcJ$ while optimising rerUID
Equit) price risk ampjuity prtce risk is the risk hilt the Group ampearnings will be affected as a rcmt (If luctttltions in fm vdue of ~qui-gt
mstwnents Eqlliry price risk arises from availabtetor~sale inv2strnems However the Groups exposure to eqmty price risk IS minima as II doesn hold sitl)iftrmt ailableAor-511le inYestrmmrs
[merest rate risk The Groups fimiruial poundS5ot ampId liaojlilies (at Rl $uJject to int~~ rate mk compnse brmk depoils interst bearing loans and bOITQwjags and bank overdr-afts At the reponwg dalt tbe [merest rale pronle of Ill Goups intexst bearing fbi4rdd instruments as fliows
11113 20i3 QR QR
Fued liIeryS refc insfrvrnellts
Fmmcial assets 113035962 111913394 FrOltwial liabilities --1~203712l) 1252t43~1
9)OI~ (13350972)
Fhlllting inireSI rate ns1lmlttrs Fanctl~ Isseis 127024345 ID43848o Fllllocial liabilities _-(i~9347~ (94))48926)
(836)64116)
The Groups exposure to t~ ris of changes in marXet interest fltltes relztes primariiy to the Groups financial assets and lizbitdic$ with t1Oltttirg interest mte~
lhe loEowing able demonstrates the ampmitivity nf the eonsolidattXI statemen1 of income 1) caonaly possible chonges in in1jfgtst rmes by 25 basis points with all othe vari)ble3 hdc umstant The sensitivity of the CooiK~ljclatid statement of inc(me $ the eft(ct of tb assumed changes in lnterdt rales for one year bf1sec on the floating rate financial assets and fimmcial hablhw$ held at 31 f~r The effect of deae-ascs in interest ral~ is cXp0Ctct to be equal and opposite to the effect oHlle increases sllQvro
Changes it Eftx OIl
00513 [oms profit QR
2013 Floating mterest Hlte instruments ----2$ bp (1649776)
2012 Flv-ating irkfiSt rale instrumenls +25 bp (209[9(1))
~--------- -~~ 40-middot------ _ _ shy
29
Aamal Company QSC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 3 1 December 2013
FINANCIAL RISK MANAGEMENT (continued)
Foreign currency risk Foreign currency risk is the risk lhilt the value of lhe fi nancial instruments will fluctuate due 10 changes in fore ign exchange rates
T rade aCcOlmts payable and accrued expenses include amounts due in foreign currencies mliniy US Dollars UAB Dirhams Great Britain Pounds (GB P) and Euros of which the Group has a currency risk primruily on the baJmces payable in Euros and GBP amoWlting 10 QR 14400634 (2012 QR 17214046)
The Group does not hedge its foreign currency exposure As both Qatari Riyal and UAE Dirhams are pegged to the US Dollar balances in US Dollars and UAE Dirhams are not considered to represent significant currency ris k to the Group
The table below indicates the Group s fore ign c urrency exposure on its monetary assets a nd liabilities The analysis calculates the effect o f a reasonably poss ib le move ment of the QR curre nc y rale against the Euro and GBP with all other variables held constant on the consolidated slate menl o f income (due to the fa ir va lue of currency sensitive monetary asse ts a nd liabilities) The e ffect o f decreases in fo reign c urre ncy exchange rates is expected to he equal and opposile 10 the e ffect of the increases shown
Incramp1se ill
f oreign cUlrency rate
0
the QR
Ellecl on profil
QR
2013 +5 (720032)
20 12 +5 (860 702)
C redit Tisk Credit risk is the risk that one party to a financial instrume nt wi ll fa il to discharge an obligation and cause the other party to incur a financial loss TIle Groups exposure to credit risk is indica ted by the carrying amoWlt o f its financia l asse ts whic h consist principally oftmde accollilts receivable retention receivable amounts due from related parties othe r receivables and bank baLances
The Group sells its products and prov ides services to vario us panies It is the G ro ups policy that all customers who wish to obtain on credit lerms are subject to credit verificalion procedures to ensure c redit Ilonhiness Each new customer is analysed individually for creditworthiness before the de livery o f products Of services Custo mm tbat fai l to met t the credi tworthiness may transact with the Group only o n prepayme nt basis Property rentals are mostl y received in ad vtnce or conlrlCled wi th post dated cheques 10 additio n receivable balances are monitored on an ongoing basis a nd the purchase limils are established for each c redit custoroer which are reviewed reguJarly based on the level o f past transactions and senlement The Groups max im wn exposure with regard to trade aCCOWlts receivab le net ofa llowance re nected allhe reporting date was ilS fo llows
2013 2012
Business SJgmelll QR QR
Property 15478832 19386326 Trading and distributio n 194343 597 179748274 Industrial ma nufac turing 183119753 131578668 Managed services 18069385 14547389
411 011 567 345260657
41
29
Aamal Company QSc
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For tbe year eoded 3 J December 20 13
FlNAJICIAL RISK MANAG EMENT (c-o Dtinued)
Credit risk (continued) With respect to credit risk arising from the other financi31 assets of the Group the Groups exposure to credit risk arises from default of the counterparty with a maximum exposure equal 10 the canying amount of these instruments as follows
2013 QR
202
QR
Bank balances Amounts due from related parties Retention and other receivables
436136756 214439950 48290351
36788129 t 171525363 74082203
698867057 613488857
The group reduces the expoSltre of credit risk arising from other financial assets by maintaining bank accounts in reputed banks and providing services only to creditworthy re lated parties
The management cons iders the bank balances and a mQUIIIS due from related parties as high grade fi nancial assets and lfade accounls receivable and other receivables as sundard grade financial assets When a finltmcial asset is identified 10 be impaired the managemoot downgrades such assets to impaired category and provides adequate allowances
Liquidity risk Liquidity risk is the risk that the Group will not be able to meet its fmancial obligations as they fu ll due The Groups 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 nonnal and stressed conditiom without incurring unacceptable losses or risking damage to the Groups reputa tion and is to maintain a balance belWeen continuity of fuoding and f1eilibility through the use of bank overdrafts and bank loans and borrowings
The Group monitors its risk to a shortage o f funds using a recuning liquidity plaOfling 1001 TIllS tool considers the manuiry o f financial assets (eg accounts receivable) and projected cash flows from operations The Groups teons ofsales or services require arooUIlts to be paid within 30-90 days from the invoiced dale
42
29
Aamal Company QSc
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For tbe year ended 3 1 December 2013
FrNANClAL ruSK MANAGEMENT (contiQued)
Uqujdity risk (continued) The table below summarises the ruaruriJy profile of the Groups financial 1iabililies a t 31 December based on contractual undiscountcd paymeots
2013 Interest bearing loans and borrowings Bank overdrafts Trade accowus payable Other payables Amounl~ due (0 related panles
201l Interest bearing loans and borrowings
Baok overdrafts Trade accounts payable Other payables Amounts due to related parties
On demand
QR
6836280
6836280
011 demand QR
2885090
2885090
Less than 3 months
QR
521324473
303638792
47406830
2530~480
898675575
Less thall 3
months
QR
469839033
10754JJIO 37543236
1964504 1
634568620
3 10 J2 mOlllh$
QR
239333328
16378865 20210580
2289~11l
298816884
3 to 12 monlhs
QR
365476972
159621 37 J 24745342
30092716
579936401
1to 5 years
QR
J 60092748
160092148
1 to 5 years
QR
248472226
248472226
gt 5 years
QR
25261598
25261 598
gt 5 years
QR
7648000
7648000
TOlaf
QR
947012147 6836280
320017657
67617410 48199591
1389681085
Tota
QR
109 1436231
1885090 267162681
622 88578
49737757
14735 10337
43
30
Aamal Company QSltc NOTES TO THE CONSOLIDATED FlANCIAL STATEMETS For the year ended 31 December 20 t3
21 F~ANClAL RlSK MAiAGEMElT (continued)
Capital management The Boards policy is to maintain a strong cepit1 base so as to rnainmin investor creditor and market ronfoonee and to SUSWlJ) fumre dcltclonnent Gf the buinest The Board of Directors rronitortl the tapital whkh tbe Group defines as wlal $parcloders equity excluding nonmiddotcornroliing imerests and the level of dividends to orrunury srarellOJdcfS
The Board also reeks to ITIaimain a balance between the higher (ctums (hat might be fA-~$ihle With higher leves of borrnwings end Lle edvnrJages and security named Sy it sOMd Cilpitai posi[ion The GfCup~ k1rget is to achievfl a return on slureholders equity (exclJding aonwurrolJiug iorcf(sts) greater lll(ll1 he wcighlcd average inres exxmse on mrerest bearing Ivens and oorrowing
The (lf0t-p nl)nDg-e ils cnpital structure and makes adjustneal lOll in light ofchang2s in economic nd bttincss cordjlons and shareholders expe1ationJo chmges veremiddot maCo HI Lleuro objecttves polilCS or proCCSSC3 during the years erded 31 D~mber 2013md 31 Dtccmlxr2Ql2
The Group monitors the capit2J using a gClting fatio which IS dep divided by caplla plus debL The GtOwgts policy is to keep ttJe ge-anng rmio bclew 40 Tbe Group iLdtdes withb debt imete-51 beagting loans ard ~OITORlngs less cash and cash equtVaknts Capltal includes eqmty attributable 10 the equity tolders oft~e parcrt
2013 QR
2(i2 QR
fmerest bearing loans and borrowings lcss- Cash and cas ltYJUvalcnts
9i4lJ05301 _~ (429JfJl4761
1004845296 (649)6201)
Net debt
Toa capital
Capita and net debt
699849045
~ringrttio
FAIR VALtES OF Fl~ANOAL f~STRUMETS
Finarcial iostrumenL~ cOlnprise tina~lctal assetS carl finailcialliabilities
Fmancial assets colJist of bank balance) short 1Cm bank dcposis amounL dve dom rc)ltted partilt)$ rekntion and other receivables and ttade accolmis rceivabe Finatlclll habiilics cgtmsist of banilt ovcrdratls jnerest bearing lOil1S and bOrowings amounts due (0 nliled partiG~ ane trade x-ounls payable
The- fair values of hese financial inStrumen1S except Jo-- imCfest bearing loam lHld bOlToving aproKimate lhdr cMryinJ vlhes due to the Slort temt mzrutiiles or these instrument
Tllc faiT value of iotcnst beating Nns and borrowin2s ae estimate( based on discoumed ltash flows twin int(s rale- cune-ntly nvailagtk fur tilt debt or sinuiar tetnlS an-a rell1lmng matunties
31
Aamal Company~Q=-ScC ______________~______
~OTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For fhe year ended 31 December 20 t3
SlGNIFICANT ASUMPTIONS ACCOUJTING JUDGElE1TS AND F8TIMATFS
impairment (If accoonts receivable n etrnwe of lhe collectible anoun of trade accounlgt reccvable is made when collection of the full lHl1OUt i~ nO looger probabk FOI nCividualty significitIl amounts this estimation is p~rformed on an indh-idllai a$[$ Amomts wHcb arc not indivldl11Uy significant but wluch are past due ZTe tsscssed collectively and an aJlQwaccc applied ucc()r~Jng to the length of lime past due based oc histnncal recovery nlJes
hnpalrment of inHntnries lavenoncs are held at tho lower of col and nol realisable value InIOn inventoncent$ becone old or 0-~amplete an estilTJte is mate of their net j alisable vulue For indiviolhlUy significant amountS this cstinaunrt is performec all aD lndividwl osis Amotlnts whieh are fl0t individually significan( btll which ltIre old at obsolete wx LltSessed wllecivdy md a provisior is applied sccnrding to the invenrory type and be dep)ee of ageing 0 cDsolescc1ce based on anticipUled selling prices
Classifigt1ltion of El Sew(gtdy Cable Qatar WLI ali a j(lint vwture pound1 Sovedy Cables Qatar is a limited hability company whose kgal fum confers SCprm11ior bernten tbe jXliiies 10 ~he jomi lfranpement Snd the Company Itself FurthenrlOre then IS no oontractua] arrmgelTeot or any oibe aus aod circumstriliCe$ that iocik41to tht he putic5 [0 the joint flJTIlrgernelit bave rights to the ssetl and obligrtdons fo~ the liabilities of the joint ilrrongement Acoordingly El Sewed- C[jbl~s Qamr WLL is dassifiecl 7S a joiut enrtrr of he GWtp
impairment of goodwill G0oovj)1 embedded in th~ cot 0 aquisitior of subsidiaries and eqmtj-iccounled iflV(stees ire teswt for irl1jXlirmnt aHuaily Tbe calculations of value [n use fO( cfish gecj~r)lilg units (loring to real nte projecg are rtost sensitive to tin IDHowing assumpti015
Grosgt i1wginmiddot Gross Ilmrgins arc lmsed on avrage values tuhje0d in (he [Xrioo preeedhli (e siaM of the budge xnod T1esC at( mcreased over the budgel period for mticipatltX efficiency Hnprovemots
DisC)unr r(es Discount rotes represent th cl1tent mark as~ssmetlt of the risks specific te ech cash geocroting unit regarding lhe time value of money ilnd mdividu)l risks of he tmtieriyilg assets whICh have not been inwrport1eti it the Citik flow estimates The dj~(OUrl flte tlkulation is based on the speclfte circurnsthLCes of lile Group and its opltllatJng segn)~nts (md derived (ff)rC it weighted avaage (XSt 0f apilaJ (WACC) Tb fACe (akw into uoount both deb and equity The 0$1 of equity is denved from dlC expected return 01 investmenl by the Groups investors TJc Gos10( deb is based on l1e borrvwings the Gmup IS obllsxl to service SC~lletllmiddotspecific r5k IS incorxt4too by applying individual bera facto The betn mctors ire evauatcentd annuaHy bhseci on pubJicly aVflllabe murked earn
Fair value ()fnHstmeni proputies The fuit laHe 0 nvestmel~ propertis is deltrrnlnzd b cxterrwl indepzfldell property valuers laving appr0priate recognised professional quabfiillions and recenl xperience H1 the localjl)n and G-tegory 0 the oroperty being valued
Useful hes of PfQPcrly plmr (llld zqulpment The Groups management detennints th estiunted useful jives Df It~ property plan and equipmnl fix calnurjng depreciation Thi5 e~timJte is 6lermind after cinsidring 1b expeelcd usage (1f the a5sclt [hysical l101t and (eas tedmiltal Dr com~ercia obsolesccnce
Gotlg Qncen
ibe Groups mangerncnt UiS made aJ assessmeot cf the 011115 ability (0 COllllOUC liS a going conct11l Imd is satsl1ed hat me Group ms the resources to contmue in business for he foreseeable fu1urc he1hennort he management is no aware oC lny material Hncertainties that lray CH~t signinchnt doubt tlPDfl the Groups ability 10 continue as a going umcem Therefore titpound lotlsolidatcd finilllcij stftemeols comirme to be prepltd on li g0ing concern basis
Aamal Company QSc
NOTES TO THE CONSOLIDATED FlNANC[AL STATEMENTS For the year ended 3 1 December 20 13
32 INCOME TAX
Certa in subsidiaries of the Group which have non-GCe ownership are subject to income tax under Qatar Income Tax Law No 2 1 of2009 The iocome tax is charged on the share of profits attributable to non-GCe shareholders For the purpose of these conso lidated fi nancial statements the income tax liability oftbe foreign shareholders has been excluded given that the non-GCe shareholders have agreed under the shareholder agreements signed with the Group to bear the fh lliiability and make necessary payments
33 COMPARATIVE INFORMATION
Certain comparative figw-es of the previous year have been reclassified 0 coofonn to the current years presentation However such reclassifications are oat materia and do not have an impact on tbe previously reported net profit other comprehensive income or the total equity for the comparative year
The impact from the resta tement of comparative infonnalion as a resuh of adoption of IFRS I I - Joint arrangements is detailed in Note 32 Changes in aCCQu(lting policies
46
26
Aamal Company QSc
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year eoded 31 December 2013
RELATED PARTY DISCLOSURES
Related party transactions Related parties represent major shareholders directors and key management persortOei of the Group and entities controlled joimly controlled or signjficamly innueoced by such parties Pricing policies md tenns of these tnlOSaclions are approved by the Group s management
Transactions with related parties induded in the consolidated financial stalemenls were as follows
20lJ 2012 QR QR
Sale o f goods and SClVices 419034048 415225221
Rental income 1980473 2069386
Purchase of goods and services 1591 38018 300835596
Rental expense 21 780G78 23397334
Bargain purchase gain 8360793
Net assets acquired 78803585
Relat ed party bal nnces AmountS due from and due to re lated parties are disclosed in Notes 7 and 13 respectively These balances do oot carry interest and are repayable OIl mulUlUy agreed dates generally within one year
The Group did not record any impairment of receivables reJatiog to amounts due from related pat1ies in either year This assessment is undertaken each fina ncial year through examining the ftnanc ial position of the related party and the market in which the related patty operates
Parent The Groups ultimate parent is Al Faisal Ho lding Company WLL
Compensa tion or key management personn el The remuneration of key management dming the year was as fullows
2013 2012 QR QR
Short-term benefi ts 7904794 1079595 Employees end of service benefits 408934 439776
8313 728 11235727
33
AamaJ Company QSC
NOTES TO THE CONSOLIDATED FINANCIAL 5T ATEMENTS For the year ended t Decernber 2013
Dilling the year 1he Group issued a XHlUS share of 10 928 of the paid tiP share capilal hdd ilS at 31 DiX2mber 2(JJ 2 mnmuning to OR 555000000 using retamed earnings as of3 December 2012 (20l2 Doe share for every ten shues held as of 31 Dcember Oll amuunting 10 QR 495OO()OOO ling reta1ned earmrgs 28 or 31 Decencer 2D II Jshy
18 SEGMENT INFORMATION
For J)iloogement PUIpltJM rhe Group i organised into business unit bused On LlJeir nature of Acttvitics lud nas fonY reportable segments and the Head Oftklt as bllow$
Propert Tbe segntn cOlists of City C~nler Qlta~ Brunch and Aamal Rea Esmte Branch whicb ll[c invoived in lampIiiog the faJ1ities of retail outlet conpex red e5ttlte nve(mltn$ and property remal buines~s
Trading mld distrib-wion The segmeul Involves wholesalB andlor rBtail distribution of phamlaceutlcai and consunable i1ems hume Epplianccs medica equimenl t-Tes ill1d lubricmtlaquo and II1UllitnEl printing The scgn(rtt includes 6c following entities
Eotl Sina Medical Branch
Aaen Medical Braudt
Amcill Troding and DistoolltlqO Branch bull Foot Care (erier HRnd) Good llre Pbannacy Bf4Uch bull Al FllfJdaq COllpafY wJ~L
InduSNol manuacturing TIle s0groent IOvolves Ulahuactrumg whole~we aliaor rewi dimibUlioti of dccnc cables lid tools ggregJ1es_ ready-IUx connole and cement bI0C~ lI1d provi$ion of servlCcent$ in rdation to iODllltroa Itvestment repair aJ-d Gonstruction of power plwts liiiding of LED ilgluitlg products und management of industnl enterpnses The segment ircludes be folloVting centntitis
bull Aam1 Cemert Industries LL AuraJ Redy1Yl(A BrQTlch
bull Doha Cables Qawf lLL Senyaf IoolJic1es Qatar Holding W LL Advanced Pipes ard Casfs CompQTly WJ L bull GuJfRoch Coroany WLL Ci~San Trading Company WLL hmovafive Lighting Compary WLL
Managed services le segment inyolvc~ provisloH of hOllseiltecpmg mi cleaning services fucditics n-anagemerJ services C1egy s(tvices ttl centfe sltrvicf)s buildiqg lnaintemHlelt aml acting as travel gens The 5cgnltnt includes the foUowing cnti(lcents
An13 ServJce Branch
amli TnlVeJa l5tmh
f-eco Gulf Co W LL
Jolinson Controls Qattl WJL
28
Aamal Company QSc
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended ) L December 20 13
SEGMENT INFORMATION (Co ntinued)
Head Office It provides corporate services to the branches and subsidiaries of the Group
The managiog d irector of the Group monitors the operating results o f its business units separately for the purpose of making decisions about resource allocation and perfonnance assessment Segment perfonnance is evaluated based Oil operating profit or loss of these segments Transfer pricing between operating segments are on anns length basis in a manoec similar to Iraosactions with third parties
Aamal Company QSC
NOTES TO THE CONSOLIDATED FINAN CIAL STATEMENTS For the year ended 3 1 December 20 13
28 SEGMENT INFORl1ATlON (continued)
Operating segments The operat ing segment after elimination or ioter-bra nch and inter-co mpany lrnnsaclioos is presented as follows
Trading (nd Industrial Managed For fh e year elided 31 December 2013 Properly disirjblli ioll manujocljlring services
QR QR QR QR Revenues
- h lemal parties 260360172 578909983 1231522768 S l802210 - Inter segments 1253914 6843 11 8 29639873 3445052 1
Heat Office QR
Eliminoions QR
(n187426) II
Tolal
QR
2J22595133
261614086 585753 lOI 126116264 1 8625273 1 (721 87426) 2122595133
Opera ti ng results Fair vallie gains
Profit I (loss) ror the year
Depreciotion
200811944
245051 107
445863051
2066290
86492834
86492834
4345438
22636250
22636250
33049 089
5157436
5157436
1760305
(47864882)
(47864882)
1334382
267233582
245051107
512 284689
42555504
36
Aamal Company QS
NOTES TO Tl CONSOLIDATED FfNANClAL STATEMENTS For the yeM ended 31 December 20 13
28 SEGMENf INFORMAnON (c)tltioucd)
FOf the yearrnrkti J f DccemOer 2(J12 QR
Revellues - ExlcmlJ partiel 2331 17 509 bull Inter segmcI11S 1168935
-- 234236434 --~- -~--
Openning results 18S2367t Fmt value gains J8S79-4~G
pront LOllS) for the rear 570616154
gt3659
No(
lnlermiddotgment revenues are eliminated on tQHs)idntiOH_
Tadiug ftfid disl d)Ntion
QR
S2S3l7661
324 j
5335493114 ~ -~-----
51384831
54384338
4J9R71(i
Indus idi mamfmturing
QR
1255694537
129U25lS4
56727059
56727059
32752742
slnltic(s QR
55216665 2939H31
S46lOJ96
7427414
7437
[908067
ilfild ()jice QR
(64(41976
Elimination QR
(74tHi2oJ Iii
Totul QR
206936372
2069336372
235721
(64641
131 f613
6245
42541)861
Amnal Company Q$l
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Por tnt yeartndeJ 31 De~embcr 2013
28 SEGMENT JNFORMATlON (contiutlld
Assc-ts and labilities
Tng alld lndtrstfw At31 December 2(113 distnbllrior manufacturIng senices HeadOJJicc EliminatioilS lola1
QR QR QR QR QR
Cumnl 3tS 227552338 620807979 61349 j 415 S()6)86922 (301636995) 1477366090 Noolucrcnt DSeIS 6411868160 12604763 622386238 4348876 (i624548 __p2438051 780
fotal asstl$ 6639420498 1194 1243194217 65698291 513Ql1470 ==-lt03H8l~O()) 853295-870 -~----~ ~---~ -
CUIT)llliabilitics 280995335 1(3511J60 6344(12777 2l0708lJ2 496261185 (3CH636995) 1249603264 Non-current iiatJlitics 7l70L5V2 8008485 HlDi16~43_ 3181668 t433799 ____ ilj534_~57 __ --Totul liahililics 353696897 ___~4159~4~ 734419720 ~4976~~~~~ 1434945711
---~~--~ -~-~~ - _2~~~4~~ (~~~~9~
C1pild expcndimn HI) WO743OOj 1397742_~471l2~--~50 ~51 ~1~623821~~1~_ -~----~------ -~
3amp
28
Aamal Company Q SC
NOTES TO THE CONSOLIDATED FfNANClAL STATEMENTS For the year ended 31 December 20 13
SEGMFNT INFORMATION (continued)
Assets and liabilities (continued)
AI 31 December 2012 Properly QR
Trading and d iSfriblllion
QR
Indusrial manufacfuring
QR
Managed senices QR
Currenl assels
Non-current assets
146491 186
6121 864484
2964425 12 903 7264
73468 1258
549267235
51387098 471 1439
Tolal assets 6268355670 305479776 1283948493 56098537
Head Office QR
468325024
6713643
475038667
Currentliabil iies
Non-current liabiLities 273444 748 1 J10 15024
86054583 7434286
669214261 1288 14977
2 1938953
287 1199
480393637 1253084
Totil lliabiliti cs 390459772 93488869 798029238 248 10 152 48J64672 1
Capila expendirure (ltII L 72865 878 1281254 6647 J356 7169 13 149045
Notes
(i)
(Ii)
Inter-segmeot balances are e limioafed 00 consolidatio n
Capi tal expendiTU res consist of additions 10 propeny plant and equip ment and iovestmenl properties
Eliminations QR
To wl QR
(273735776) (i )
(20308351(i)
1423591302
6689563230
(27576661 1) 8 113154532
(273135777) (i) 12573 10405
257388570
(273735177) 15 14698975
24 1484446
39
29
Aamal Company QSC
NOTES TO THE CONSOLIDATED FrNANCIAL STATEMENTS For the year ended 31 Dcltmber 1013
Fr-A]~ClAL RISK MANAGpoundMamp1H
Objccthes and policies fe Groups principal )uaucill liabilities comprise imltresl bctmllg loons and IxmowHgs baRlt ovetda1s amounts due to fclaled par1ies and tracte accounts payable The main pUlJXSi of thesc financial liabilities is 4J mise firmne or 610 Grmps operations The G0JP bas various fimmcial assets such as ttadc accounts receivable lInlOlmts due from related parties bark balances tltCntion receivable and other receivables which arisgt directly fran its cperuoonamp
The maiH ri~ks an3ing Joru (be Groups UnariCJlll illslrumenls jle market risk cretiJt nsk and hmdity risk Til BoarD ofDtrcctO$ reviews end agrees policies for mzrAgbg Caltt f hespound ri~k ihkh arc summariscd beloW
VIarktt risk yenfatket risk is the risk Um changes in market prices $Uch as intfcst rates and hreig lttmeocy ect14nge rilles Vltl1 affect the Groups profit eqwty Dr value tf its hoJdiI15 of financial instrl[Thnls rile objecivpoundj of marke1 risk mUnllgcrlcnt is to manage uld 1~ontr(ll tho tr))rket risk expo-sure vithir acceptable parfI-etcJ$ while optimising rerUID
Equit) price risk ampjuity prtce risk is the risk hilt the Group ampearnings will be affected as a rcmt (If luctttltions in fm vdue of ~qui-gt
mstwnents Eqlliry price risk arises from availabtetor~sale inv2strnems However the Groups exposure to eqmty price risk IS minima as II doesn hold sitl)iftrmt ailableAor-511le inYestrmmrs
[merest rate risk The Groups fimiruial poundS5ot ampId liaojlilies (at Rl $uJject to int~~ rate mk compnse brmk depoils interst bearing loans and bOITQwjags and bank overdr-afts At the reponwg dalt tbe [merest rale pronle of Ill Goups intexst bearing fbi4rdd instruments as fliows
11113 20i3 QR QR
Fued liIeryS refc insfrvrnellts
Fmmcial assets 113035962 111913394 FrOltwial liabilities --1~203712l) 1252t43~1
9)OI~ (13350972)
Fhlllting inireSI rate ns1lmlttrs Fanctl~ Isseis 127024345 ID43848o Fllllocial liabilities _-(i~9347~ (94))48926)
(836)64116)
The Groups exposure to t~ ris of changes in marXet interest fltltes relztes primariiy to the Groups financial assets and lizbitdic$ with t1Oltttirg interest mte~
lhe loEowing able demonstrates the ampmitivity nf the eonsolidattXI statemen1 of income 1) caonaly possible chonges in in1jfgtst rmes by 25 basis points with all othe vari)ble3 hdc umstant The sensitivity of the CooiK~ljclatid statement of inc(me $ the eft(ct of tb assumed changes in lnterdt rales for one year bf1sec on the floating rate financial assets and fimmcial hablhw$ held at 31 f~r The effect of deae-ascs in interest ral~ is cXp0Ctct to be equal and opposite to the effect oHlle increases sllQvro
Changes it Eftx OIl
00513 [oms profit QR
2013 Floating mterest Hlte instruments ----2$ bp (1649776)
2012 Flv-ating irkfiSt rale instrumenls +25 bp (209[9(1))
~--------- -~~ 40-middot------ _ _ shy
29
Aamal Company QSC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 3 1 December 2013
FINANCIAL RISK MANAGEMENT (continued)
Foreign currency risk Foreign currency risk is the risk lhilt the value of lhe fi nancial instruments will fluctuate due 10 changes in fore ign exchange rates
T rade aCcOlmts payable and accrued expenses include amounts due in foreign currencies mliniy US Dollars UAB Dirhams Great Britain Pounds (GB P) and Euros of which the Group has a currency risk primruily on the baJmces payable in Euros and GBP amoWlting 10 QR 14400634 (2012 QR 17214046)
The Group does not hedge its foreign currency exposure As both Qatari Riyal and UAE Dirhams are pegged to the US Dollar balances in US Dollars and UAE Dirhams are not considered to represent significant currency ris k to the Group
The table below indicates the Group s fore ign c urrency exposure on its monetary assets a nd liabilities The analysis calculates the effect o f a reasonably poss ib le move ment of the QR curre nc y rale against the Euro and GBP with all other variables held constant on the consolidated slate menl o f income (due to the fa ir va lue of currency sensitive monetary asse ts a nd liabilities) The e ffect o f decreases in fo reign c urre ncy exchange rates is expected to he equal and opposile 10 the e ffect of the increases shown
Incramp1se ill
f oreign cUlrency rate
0
the QR
Ellecl on profil
QR
2013 +5 (720032)
20 12 +5 (860 702)
C redit Tisk Credit risk is the risk that one party to a financial instrume nt wi ll fa il to discharge an obligation and cause the other party to incur a financial loss TIle Groups exposure to credit risk is indica ted by the carrying amoWlt o f its financia l asse ts whic h consist principally oftmde accollilts receivable retention receivable amounts due from related parties othe r receivables and bank baLances
The Group sells its products and prov ides services to vario us panies It is the G ro ups policy that all customers who wish to obtain on credit lerms are subject to credit verificalion procedures to ensure c redit Ilonhiness Each new customer is analysed individually for creditworthiness before the de livery o f products Of services Custo mm tbat fai l to met t the credi tworthiness may transact with the Group only o n prepayme nt basis Property rentals are mostl y received in ad vtnce or conlrlCled wi th post dated cheques 10 additio n receivable balances are monitored on an ongoing basis a nd the purchase limils are established for each c redit custoroer which are reviewed reguJarly based on the level o f past transactions and senlement The Groups max im wn exposure with regard to trade aCCOWlts receivab le net ofa llowance re nected allhe reporting date was ilS fo llows
2013 2012
Business SJgmelll QR QR
Property 15478832 19386326 Trading and distributio n 194343 597 179748274 Industrial ma nufac turing 183119753 131578668 Managed services 18069385 14547389
411 011 567 345260657
41
29
Aamal Company QSc
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For tbe year eoded 3 J December 20 13
FlNAJICIAL RISK MANAG EMENT (c-o Dtinued)
Credit risk (continued) With respect to credit risk arising from the other financi31 assets of the Group the Groups exposure to credit risk arises from default of the counterparty with a maximum exposure equal 10 the canying amount of these instruments as follows
2013 QR
202
QR
Bank balances Amounts due from related parties Retention and other receivables
436136756 214439950 48290351
36788129 t 171525363 74082203
698867057 613488857
The group reduces the expoSltre of credit risk arising from other financial assets by maintaining bank accounts in reputed banks and providing services only to creditworthy re lated parties
The management cons iders the bank balances and a mQUIIIS due from related parties as high grade fi nancial assets and lfade accounls receivable and other receivables as sundard grade financial assets When a finltmcial asset is identified 10 be impaired the managemoot downgrades such assets to impaired category and provides adequate allowances
Liquidity risk Liquidity risk is the risk that the Group will not be able to meet its fmancial obligations as they fu ll due The Groups 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 nonnal and stressed conditiom without incurring unacceptable losses or risking damage to the Groups reputa tion and is to maintain a balance belWeen continuity of fuoding and f1eilibility through the use of bank overdrafts and bank loans and borrowings
The Group monitors its risk to a shortage o f funds using a recuning liquidity plaOfling 1001 TIllS tool considers the manuiry o f financial assets (eg accounts receivable) and projected cash flows from operations The Groups teons ofsales or services require arooUIlts to be paid within 30-90 days from the invoiced dale
42
29
Aamal Company QSc
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For tbe year ended 3 1 December 2013
FrNANClAL ruSK MANAGEMENT (contiQued)
Uqujdity risk (continued) The table below summarises the ruaruriJy profile of the Groups financial 1iabililies a t 31 December based on contractual undiscountcd paymeots
2013 Interest bearing loans and borrowings Bank overdrafts Trade accowus payable Other payables Amounl~ due (0 related panles
201l Interest bearing loans and borrowings
Baok overdrafts Trade accounts payable Other payables Amounts due to related parties
On demand
QR
6836280
6836280
011 demand QR
2885090
2885090
Less than 3 months
QR
521324473
303638792
47406830
2530~480
898675575
Less thall 3
months
QR
469839033
10754JJIO 37543236
1964504 1
634568620
3 10 J2 mOlllh$
QR
239333328
16378865 20210580
2289~11l
298816884
3 to 12 monlhs
QR
365476972
159621 37 J 24745342
30092716
579936401
1to 5 years
QR
J 60092748
160092148
1 to 5 years
QR
248472226
248472226
gt 5 years
QR
25261598
25261 598
gt 5 years
QR
7648000
7648000
TOlaf
QR
947012147 6836280
320017657
67617410 48199591
1389681085
Tota
QR
109 1436231
1885090 267162681
622 88578
49737757
14735 10337
43
30
Aamal Company QSltc NOTES TO THE CONSOLIDATED FlANCIAL STATEMETS For the year ended 31 December 20 t3
21 F~ANClAL RlSK MAiAGEMElT (continued)
Capital management The Boards policy is to maintain a strong cepit1 base so as to rnainmin investor creditor and market ronfoonee and to SUSWlJ) fumre dcltclonnent Gf the buinest The Board of Directors rronitortl the tapital whkh tbe Group defines as wlal $parcloders equity excluding nonmiddotcornroliing imerests and the level of dividends to orrunury srarellOJdcfS
The Board also reeks to ITIaimain a balance between the higher (ctums (hat might be fA-~$ihle With higher leves of borrnwings end Lle edvnrJages and security named Sy it sOMd Cilpitai posi[ion The GfCup~ k1rget is to achievfl a return on slureholders equity (exclJding aonwurrolJiug iorcf(sts) greater lll(ll1 he wcighlcd average inres exxmse on mrerest bearing Ivens and oorrowing
The (lf0t-p nl)nDg-e ils cnpital structure and makes adjustneal lOll in light ofchang2s in economic nd bttincss cordjlons and shareholders expe1ationJo chmges veremiddot maCo HI Lleuro objecttves polilCS or proCCSSC3 during the years erded 31 D~mber 2013md 31 Dtccmlxr2Ql2
The Group monitors the capit2J using a gClting fatio which IS dep divided by caplla plus debL The GtOwgts policy is to keep ttJe ge-anng rmio bclew 40 Tbe Group iLdtdes withb debt imete-51 beagting loans ard ~OITORlngs less cash and cash equtVaknts Capltal includes eqmty attributable 10 the equity tolders oft~e parcrt
2013 QR
2(i2 QR
fmerest bearing loans and borrowings lcss- Cash and cas ltYJUvalcnts
9i4lJ05301 _~ (429JfJl4761
1004845296 (649)6201)
Net debt
Toa capital
Capita and net debt
699849045
~ringrttio
FAIR VALtES OF Fl~ANOAL f~STRUMETS
Finarcial iostrumenL~ cOlnprise tina~lctal assetS carl finailcialliabilities
Fmancial assets colJist of bank balance) short 1Cm bank dcposis amounL dve dom rc)ltted partilt)$ rekntion and other receivables and ttade accolmis rceivabe Finatlclll habiilics cgtmsist of banilt ovcrdratls jnerest bearing lOil1S and bOrowings amounts due (0 nliled partiG~ ane trade x-ounls payable
The- fair values of hese financial inStrumen1S except Jo-- imCfest bearing loam lHld bOlToving aproKimate lhdr cMryinJ vlhes due to the Slort temt mzrutiiles or these instrument
Tllc faiT value of iotcnst beating Nns and borrowin2s ae estimate( based on discoumed ltash flows twin int(s rale- cune-ntly nvailagtk fur tilt debt or sinuiar tetnlS an-a rell1lmng matunties
31
Aamal Company~Q=-ScC ______________~______
~OTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For fhe year ended 31 December 20 t3
SlGNIFICANT ASUMPTIONS ACCOUJTING JUDGElE1TS AND F8TIMATFS
impairment (If accoonts receivable n etrnwe of lhe collectible anoun of trade accounlgt reccvable is made when collection of the full lHl1OUt i~ nO looger probabk FOI nCividualty significitIl amounts this estimation is p~rformed on an indh-idllai a$[$ Amomts wHcb arc not indivldl11Uy significant but wluch are past due ZTe tsscssed collectively and an aJlQwaccc applied ucc()r~Jng to the length of lime past due based oc histnncal recovery nlJes
hnpalrment of inHntnries lavenoncs are held at tho lower of col and nol realisable value InIOn inventoncent$ becone old or 0-~amplete an estilTJte is mate of their net j alisable vulue For indiviolhlUy significant amountS this cstinaunrt is performec all aD lndividwl osis Amotlnts whieh are fl0t individually significan( btll which ltIre old at obsolete wx LltSessed wllecivdy md a provisior is applied sccnrding to the invenrory type and be dep)ee of ageing 0 cDsolescc1ce based on anticipUled selling prices
Classifigt1ltion of El Sew(gtdy Cable Qatar WLI ali a j(lint vwture pound1 Sovedy Cables Qatar is a limited hability company whose kgal fum confers SCprm11ior bernten tbe jXliiies 10 ~he jomi lfranpement Snd the Company Itself FurthenrlOre then IS no oontractua] arrmgelTeot or any oibe aus aod circumstriliCe$ that iocik41to tht he putic5 [0 the joint flJTIlrgernelit bave rights to the ssetl and obligrtdons fo~ the liabilities of the joint ilrrongement Acoordingly El Sewed- C[jbl~s Qamr WLL is dassifiecl 7S a joiut enrtrr of he GWtp
impairment of goodwill G0oovj)1 embedded in th~ cot 0 aquisitior of subsidiaries and eqmtj-iccounled iflV(stees ire teswt for irl1jXlirmnt aHuaily Tbe calculations of value [n use fO( cfish gecj~r)lilg units (loring to real nte projecg are rtost sensitive to tin IDHowing assumpti015
Grosgt i1wginmiddot Gross Ilmrgins arc lmsed on avrage values tuhje0d in (he [Xrioo preeedhli (e siaM of the budge xnod T1esC at( mcreased over the budgel period for mticipatltX efficiency Hnprovemots
DisC)unr r(es Discount rotes represent th cl1tent mark as~ssmetlt of the risks specific te ech cash geocroting unit regarding lhe time value of money ilnd mdividu)l risks of he tmtieriyilg assets whICh have not been inwrport1eti it the Citik flow estimates The dj~(OUrl flte tlkulation is based on the speclfte circurnsthLCes of lile Group and its opltllatJng segn)~nts (md derived (ff)rC it weighted avaage (XSt 0f apilaJ (WACC) Tb fACe (akw into uoount both deb and equity The 0$1 of equity is denved from dlC expected return 01 investmenl by the Groups investors TJc Gos10( deb is based on l1e borrvwings the Gmup IS obllsxl to service SC~lletllmiddotspecific r5k IS incorxt4too by applying individual bera facto The betn mctors ire evauatcentd annuaHy bhseci on pubJicly aVflllabe murked earn
Fair value ()fnHstmeni proputies The fuit laHe 0 nvestmel~ propertis is deltrrnlnzd b cxterrwl indepzfldell property valuers laving appr0priate recognised professional quabfiillions and recenl xperience H1 the localjl)n and G-tegory 0 the oroperty being valued
Useful hes of PfQPcrly plmr (llld zqulpment The Groups management detennints th estiunted useful jives Df It~ property plan and equipmnl fix calnurjng depreciation Thi5 e~timJte is 6lermind after cinsidring 1b expeelcd usage (1f the a5sclt [hysical l101t and (eas tedmiltal Dr com~ercia obsolesccnce
Gotlg Qncen
ibe Groups mangerncnt UiS made aJ assessmeot cf the 011115 ability (0 COllllOUC liS a going conct11l Imd is satsl1ed hat me Group ms the resources to contmue in business for he foreseeable fu1urc he1hennort he management is no aware oC lny material Hncertainties that lray CH~t signinchnt doubt tlPDfl the Groups ability 10 continue as a going umcem Therefore titpound lotlsolidatcd finilllcij stftemeols comirme to be prepltd on li g0ing concern basis
Aamal Company QSc
NOTES TO THE CONSOLIDATED FlNANC[AL STATEMENTS For the year ended 3 1 December 20 13
32 INCOME TAX
Certa in subsidiaries of the Group which have non-GCe ownership are subject to income tax under Qatar Income Tax Law No 2 1 of2009 The iocome tax is charged on the share of profits attributable to non-GCe shareholders For the purpose of these conso lidated fi nancial statements the income tax liability oftbe foreign shareholders has been excluded given that the non-GCe shareholders have agreed under the shareholder agreements signed with the Group to bear the fh lliiability and make necessary payments
33 COMPARATIVE INFORMATION
Certain comparative figw-es of the previous year have been reclassified 0 coofonn to the current years presentation However such reclassifications are oat materia and do not have an impact on tbe previously reported net profit other comprehensive income or the total equity for the comparative year
The impact from the resta tement of comparative infonnalion as a resuh of adoption of IFRS I I - Joint arrangements is detailed in Note 32 Changes in aCCQu(lting policies
46
AamaJ Company QSC
NOTES TO THE CONSOLIDATED FINANCIAL 5T ATEMENTS For the year ended t Decernber 2013
Dilling the year 1he Group issued a XHlUS share of 10 928 of the paid tiP share capilal hdd ilS at 31 DiX2mber 2(JJ 2 mnmuning to OR 555000000 using retamed earnings as of3 December 2012 (20l2 Doe share for every ten shues held as of 31 Dcember Oll amuunting 10 QR 495OO()OOO ling reta1ned earmrgs 28 or 31 Decencer 2D II Jshy
18 SEGMENT INFORMATION
For J)iloogement PUIpltJM rhe Group i organised into business unit bused On LlJeir nature of Acttvitics lud nas fonY reportable segments and the Head Oftklt as bllow$
Propert Tbe segntn cOlists of City C~nler Qlta~ Brunch and Aamal Rea Esmte Branch whicb ll[c invoived in lampIiiog the faJ1ities of retail outlet conpex red e5ttlte nve(mltn$ and property remal buines~s
Trading mld distrib-wion The segmeul Involves wholesalB andlor rBtail distribution of phamlaceutlcai and consunable i1ems hume Epplianccs medica equimenl t-Tes ill1d lubricmtlaquo and II1UllitnEl printing The scgn(rtt includes 6c following entities
Eotl Sina Medical Branch
Aaen Medical Braudt
Amcill Troding and DistoolltlqO Branch bull Foot Care (erier HRnd) Good llre Pbannacy Bf4Uch bull Al FllfJdaq COllpafY wJ~L
InduSNol manuacturing TIle s0groent IOvolves Ulahuactrumg whole~we aliaor rewi dimibUlioti of dccnc cables lid tools ggregJ1es_ ready-IUx connole and cement bI0C~ lI1d provi$ion of servlCcent$ in rdation to iODllltroa Itvestment repair aJ-d Gonstruction of power plwts liiiding of LED ilgluitlg products und management of industnl enterpnses The segment ircludes be folloVting centntitis
bull Aam1 Cemert Industries LL AuraJ Redy1Yl(A BrQTlch
bull Doha Cables Qawf lLL Senyaf IoolJic1es Qatar Holding W LL Advanced Pipes ard Casfs CompQTly WJ L bull GuJfRoch Coroany WLL Ci~San Trading Company WLL hmovafive Lighting Compary WLL
Managed services le segment inyolvc~ provisloH of hOllseiltecpmg mi cleaning services fucditics n-anagemerJ services C1egy s(tvices ttl centfe sltrvicf)s buildiqg lnaintemHlelt aml acting as travel gens The 5cgnltnt includes the foUowing cnti(lcents
An13 ServJce Branch
amli TnlVeJa l5tmh
f-eco Gulf Co W LL
Jolinson Controls Qattl WJL
28
Aamal Company QSc
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended ) L December 20 13
SEGMENT INFORMATION (Co ntinued)
Head Office It provides corporate services to the branches and subsidiaries of the Group
The managiog d irector of the Group monitors the operating results o f its business units separately for the purpose of making decisions about resource allocation and perfonnance assessment Segment perfonnance is evaluated based Oil operating profit or loss of these segments Transfer pricing between operating segments are on anns length basis in a manoec similar to Iraosactions with third parties
Aamal Company QSC
NOTES TO THE CONSOLIDATED FINAN CIAL STATEMENTS For the year ended 3 1 December 20 13
28 SEGMENT INFORl1ATlON (continued)
Operating segments The operat ing segment after elimination or ioter-bra nch and inter-co mpany lrnnsaclioos is presented as follows
Trading (nd Industrial Managed For fh e year elided 31 December 2013 Properly disirjblli ioll manujocljlring services
QR QR QR QR Revenues
- h lemal parties 260360172 578909983 1231522768 S l802210 - Inter segments 1253914 6843 11 8 29639873 3445052 1
Heat Office QR
Eliminoions QR
(n187426) II
Tolal
QR
2J22595133
261614086 585753 lOI 126116264 1 8625273 1 (721 87426) 2122595133
Opera ti ng results Fair vallie gains
Profit I (loss) ror the year
Depreciotion
200811944
245051 107
445863051
2066290
86492834
86492834
4345438
22636250
22636250
33049 089
5157436
5157436
1760305
(47864882)
(47864882)
1334382
267233582
245051107
512 284689
42555504
36
Aamal Company QS
NOTES TO Tl CONSOLIDATED FfNANClAL STATEMENTS For the yeM ended 31 December 20 13
28 SEGMENf INFORMAnON (c)tltioucd)
FOf the yearrnrkti J f DccemOer 2(J12 QR
Revellues - ExlcmlJ partiel 2331 17 509 bull Inter segmcI11S 1168935
-- 234236434 --~- -~--
Openning results 18S2367t Fmt value gains J8S79-4~G
pront LOllS) for the rear 570616154
gt3659
No(
lnlermiddotgment revenues are eliminated on tQHs)idntiOH_
Tadiug ftfid disl d)Ntion
QR
S2S3l7661
324 j
5335493114 ~ -~-----
51384831
54384338
4J9R71(i
Indus idi mamfmturing
QR
1255694537
129U25lS4
56727059
56727059
32752742
slnltic(s QR
55216665 2939H31
S46lOJ96
7427414
7437
[908067
ilfild ()jice QR
(64(41976
Elimination QR
(74tHi2oJ Iii
Totul QR
206936372
2069336372
235721
(64641
131 f613
6245
42541)861
Amnal Company Q$l
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Por tnt yeartndeJ 31 De~embcr 2013
28 SEGMENT JNFORMATlON (contiutlld
Assc-ts and labilities
Tng alld lndtrstfw At31 December 2(113 distnbllrior manufacturIng senices HeadOJJicc EliminatioilS lola1
QR QR QR QR QR
Cumnl 3tS 227552338 620807979 61349 j 415 S()6)86922 (301636995) 1477366090 Noolucrcnt DSeIS 6411868160 12604763 622386238 4348876 (i624548 __p2438051 780
fotal asstl$ 6639420498 1194 1243194217 65698291 513Ql1470 ==-lt03H8l~O()) 853295-870 -~----~ ~---~ -
CUIT)llliabilitics 280995335 1(3511J60 6344(12777 2l0708lJ2 496261185 (3CH636995) 1249603264 Non-current iiatJlitics 7l70L5V2 8008485 HlDi16~43_ 3181668 t433799 ____ ilj534_~57 __ --Totul liahililics 353696897 ___~4159~4~ 734419720 ~4976~~~~~ 1434945711
---~~--~ -~-~~ - _2~~~4~~ (~~~~9~
C1pild expcndimn HI) WO743OOj 1397742_~471l2~--~50 ~51 ~1~623821~~1~_ -~----~------ -~
3amp
28
Aamal Company Q SC
NOTES TO THE CONSOLIDATED FfNANClAL STATEMENTS For the year ended 31 December 20 13
SEGMFNT INFORMATION (continued)
Assets and liabilities (continued)
AI 31 December 2012 Properly QR
Trading and d iSfriblllion
QR
Indusrial manufacfuring
QR
Managed senices QR
Currenl assels
Non-current assets
146491 186
6121 864484
2964425 12 903 7264
73468 1258
549267235
51387098 471 1439
Tolal assets 6268355670 305479776 1283948493 56098537
Head Office QR
468325024
6713643
475038667
Currentliabil iies
Non-current liabiLities 273444 748 1 J10 15024
86054583 7434286
669214261 1288 14977
2 1938953
287 1199
480393637 1253084
Totil lliabiliti cs 390459772 93488869 798029238 248 10 152 48J64672 1
Capila expendirure (ltII L 72865 878 1281254 6647 J356 7169 13 149045
Notes
(i)
(Ii)
Inter-segmeot balances are e limioafed 00 consolidatio n
Capi tal expendiTU res consist of additions 10 propeny plant and equip ment and iovestmenl properties
Eliminations QR
To wl QR
(273735776) (i )
(20308351(i)
1423591302
6689563230
(27576661 1) 8 113154532
(273135777) (i) 12573 10405
257388570
(273735177) 15 14698975
24 1484446
39
29
Aamal Company QSC
NOTES TO THE CONSOLIDATED FrNANCIAL STATEMENTS For the year ended 31 Dcltmber 1013
Fr-A]~ClAL RISK MANAGpoundMamp1H
Objccthes and policies fe Groups principal )uaucill liabilities comprise imltresl bctmllg loons and IxmowHgs baRlt ovetda1s amounts due to fclaled par1ies and tracte accounts payable The main pUlJXSi of thesc financial liabilities is 4J mise firmne or 610 Grmps operations The G0JP bas various fimmcial assets such as ttadc accounts receivable lInlOlmts due from related parties bark balances tltCntion receivable and other receivables which arisgt directly fran its cperuoonamp
The maiH ri~ks an3ing Joru (be Groups UnariCJlll illslrumenls jle market risk cretiJt nsk and hmdity risk Til BoarD ofDtrcctO$ reviews end agrees policies for mzrAgbg Caltt f hespound ri~k ihkh arc summariscd beloW
VIarktt risk yenfatket risk is the risk Um changes in market prices $Uch as intfcst rates and hreig lttmeocy ect14nge rilles Vltl1 affect the Groups profit eqwty Dr value tf its hoJdiI15 of financial instrl[Thnls rile objecivpoundj of marke1 risk mUnllgcrlcnt is to manage uld 1~ontr(ll tho tr))rket risk expo-sure vithir acceptable parfI-etcJ$ while optimising rerUID
Equit) price risk ampjuity prtce risk is the risk hilt the Group ampearnings will be affected as a rcmt (If luctttltions in fm vdue of ~qui-gt
mstwnents Eqlliry price risk arises from availabtetor~sale inv2strnems However the Groups exposure to eqmty price risk IS minima as II doesn hold sitl)iftrmt ailableAor-511le inYestrmmrs
[merest rate risk The Groups fimiruial poundS5ot ampId liaojlilies (at Rl $uJject to int~~ rate mk compnse brmk depoils interst bearing loans and bOITQwjags and bank overdr-afts At the reponwg dalt tbe [merest rale pronle of Ill Goups intexst bearing fbi4rdd instruments as fliows
11113 20i3 QR QR
Fued liIeryS refc insfrvrnellts
Fmmcial assets 113035962 111913394 FrOltwial liabilities --1~203712l) 1252t43~1
9)OI~ (13350972)
Fhlllting inireSI rate ns1lmlttrs Fanctl~ Isseis 127024345 ID43848o Fllllocial liabilities _-(i~9347~ (94))48926)
(836)64116)
The Groups exposure to t~ ris of changes in marXet interest fltltes relztes primariiy to the Groups financial assets and lizbitdic$ with t1Oltttirg interest mte~
lhe loEowing able demonstrates the ampmitivity nf the eonsolidattXI statemen1 of income 1) caonaly possible chonges in in1jfgtst rmes by 25 basis points with all othe vari)ble3 hdc umstant The sensitivity of the CooiK~ljclatid statement of inc(me $ the eft(ct of tb assumed changes in lnterdt rales for one year bf1sec on the floating rate financial assets and fimmcial hablhw$ held at 31 f~r The effect of deae-ascs in interest ral~ is cXp0Ctct to be equal and opposite to the effect oHlle increases sllQvro
Changes it Eftx OIl
00513 [oms profit QR
2013 Floating mterest Hlte instruments ----2$ bp (1649776)
2012 Flv-ating irkfiSt rale instrumenls +25 bp (209[9(1))
~--------- -~~ 40-middot------ _ _ shy
29
Aamal Company QSC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 3 1 December 2013
FINANCIAL RISK MANAGEMENT (continued)
Foreign currency risk Foreign currency risk is the risk lhilt the value of lhe fi nancial instruments will fluctuate due 10 changes in fore ign exchange rates
T rade aCcOlmts payable and accrued expenses include amounts due in foreign currencies mliniy US Dollars UAB Dirhams Great Britain Pounds (GB P) and Euros of which the Group has a currency risk primruily on the baJmces payable in Euros and GBP amoWlting 10 QR 14400634 (2012 QR 17214046)
The Group does not hedge its foreign currency exposure As both Qatari Riyal and UAE Dirhams are pegged to the US Dollar balances in US Dollars and UAE Dirhams are not considered to represent significant currency ris k to the Group
The table below indicates the Group s fore ign c urrency exposure on its monetary assets a nd liabilities The analysis calculates the effect o f a reasonably poss ib le move ment of the QR curre nc y rale against the Euro and GBP with all other variables held constant on the consolidated slate menl o f income (due to the fa ir va lue of currency sensitive monetary asse ts a nd liabilities) The e ffect o f decreases in fo reign c urre ncy exchange rates is expected to he equal and opposile 10 the e ffect of the increases shown
Incramp1se ill
f oreign cUlrency rate
0
the QR
Ellecl on profil
QR
2013 +5 (720032)
20 12 +5 (860 702)
C redit Tisk Credit risk is the risk that one party to a financial instrume nt wi ll fa il to discharge an obligation and cause the other party to incur a financial loss TIle Groups exposure to credit risk is indica ted by the carrying amoWlt o f its financia l asse ts whic h consist principally oftmde accollilts receivable retention receivable amounts due from related parties othe r receivables and bank baLances
The Group sells its products and prov ides services to vario us panies It is the G ro ups policy that all customers who wish to obtain on credit lerms are subject to credit verificalion procedures to ensure c redit Ilonhiness Each new customer is analysed individually for creditworthiness before the de livery o f products Of services Custo mm tbat fai l to met t the credi tworthiness may transact with the Group only o n prepayme nt basis Property rentals are mostl y received in ad vtnce or conlrlCled wi th post dated cheques 10 additio n receivable balances are monitored on an ongoing basis a nd the purchase limils are established for each c redit custoroer which are reviewed reguJarly based on the level o f past transactions and senlement The Groups max im wn exposure with regard to trade aCCOWlts receivab le net ofa llowance re nected allhe reporting date was ilS fo llows
2013 2012
Business SJgmelll QR QR
Property 15478832 19386326 Trading and distributio n 194343 597 179748274 Industrial ma nufac turing 183119753 131578668 Managed services 18069385 14547389
411 011 567 345260657
41
29
Aamal Company QSc
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For tbe year eoded 3 J December 20 13
FlNAJICIAL RISK MANAG EMENT (c-o Dtinued)
Credit risk (continued) With respect to credit risk arising from the other financi31 assets of the Group the Groups exposure to credit risk arises from default of the counterparty with a maximum exposure equal 10 the canying amount of these instruments as follows
2013 QR
202
QR
Bank balances Amounts due from related parties Retention and other receivables
436136756 214439950 48290351
36788129 t 171525363 74082203
698867057 613488857
The group reduces the expoSltre of credit risk arising from other financial assets by maintaining bank accounts in reputed banks and providing services only to creditworthy re lated parties
The management cons iders the bank balances and a mQUIIIS due from related parties as high grade fi nancial assets and lfade accounls receivable and other receivables as sundard grade financial assets When a finltmcial asset is identified 10 be impaired the managemoot downgrades such assets to impaired category and provides adequate allowances
Liquidity risk Liquidity risk is the risk that the Group will not be able to meet its fmancial obligations as they fu ll due The Groups 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 nonnal and stressed conditiom without incurring unacceptable losses or risking damage to the Groups reputa tion and is to maintain a balance belWeen continuity of fuoding and f1eilibility through the use of bank overdrafts and bank loans and borrowings
The Group monitors its risk to a shortage o f funds using a recuning liquidity plaOfling 1001 TIllS tool considers the manuiry o f financial assets (eg accounts receivable) and projected cash flows from operations The Groups teons ofsales or services require arooUIlts to be paid within 30-90 days from the invoiced dale
42
29
Aamal Company QSc
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For tbe year ended 3 1 December 2013
FrNANClAL ruSK MANAGEMENT (contiQued)
Uqujdity risk (continued) The table below summarises the ruaruriJy profile of the Groups financial 1iabililies a t 31 December based on contractual undiscountcd paymeots
2013 Interest bearing loans and borrowings Bank overdrafts Trade accowus payable Other payables Amounl~ due (0 related panles
201l Interest bearing loans and borrowings
Baok overdrafts Trade accounts payable Other payables Amounts due to related parties
On demand
QR
6836280
6836280
011 demand QR
2885090
2885090
Less than 3 months
QR
521324473
303638792
47406830
2530~480
898675575
Less thall 3
months
QR
469839033
10754JJIO 37543236
1964504 1
634568620
3 10 J2 mOlllh$
QR
239333328
16378865 20210580
2289~11l
298816884
3 to 12 monlhs
QR
365476972
159621 37 J 24745342
30092716
579936401
1to 5 years
QR
J 60092748
160092148
1 to 5 years
QR
248472226
248472226
gt 5 years
QR
25261598
25261 598
gt 5 years
QR
7648000
7648000
TOlaf
QR
947012147 6836280
320017657
67617410 48199591
1389681085
Tota
QR
109 1436231
1885090 267162681
622 88578
49737757
14735 10337
43
30
Aamal Company QSltc NOTES TO THE CONSOLIDATED FlANCIAL STATEMETS For the year ended 31 December 20 t3
21 F~ANClAL RlSK MAiAGEMElT (continued)
Capital management The Boards policy is to maintain a strong cepit1 base so as to rnainmin investor creditor and market ronfoonee and to SUSWlJ) fumre dcltclonnent Gf the buinest The Board of Directors rronitortl the tapital whkh tbe Group defines as wlal $parcloders equity excluding nonmiddotcornroliing imerests and the level of dividends to orrunury srarellOJdcfS
The Board also reeks to ITIaimain a balance between the higher (ctums (hat might be fA-~$ihle With higher leves of borrnwings end Lle edvnrJages and security named Sy it sOMd Cilpitai posi[ion The GfCup~ k1rget is to achievfl a return on slureholders equity (exclJding aonwurrolJiug iorcf(sts) greater lll(ll1 he wcighlcd average inres exxmse on mrerest bearing Ivens and oorrowing
The (lf0t-p nl)nDg-e ils cnpital structure and makes adjustneal lOll in light ofchang2s in economic nd bttincss cordjlons and shareholders expe1ationJo chmges veremiddot maCo HI Lleuro objecttves polilCS or proCCSSC3 during the years erded 31 D~mber 2013md 31 Dtccmlxr2Ql2
The Group monitors the capit2J using a gClting fatio which IS dep divided by caplla plus debL The GtOwgts policy is to keep ttJe ge-anng rmio bclew 40 Tbe Group iLdtdes withb debt imete-51 beagting loans ard ~OITORlngs less cash and cash equtVaknts Capltal includes eqmty attributable 10 the equity tolders oft~e parcrt
2013 QR
2(i2 QR
fmerest bearing loans and borrowings lcss- Cash and cas ltYJUvalcnts
9i4lJ05301 _~ (429JfJl4761
1004845296 (649)6201)
Net debt
Toa capital
Capita and net debt
699849045
~ringrttio
FAIR VALtES OF Fl~ANOAL f~STRUMETS
Finarcial iostrumenL~ cOlnprise tina~lctal assetS carl finailcialliabilities
Fmancial assets colJist of bank balance) short 1Cm bank dcposis amounL dve dom rc)ltted partilt)$ rekntion and other receivables and ttade accolmis rceivabe Finatlclll habiilics cgtmsist of banilt ovcrdratls jnerest bearing lOil1S and bOrowings amounts due (0 nliled partiG~ ane trade x-ounls payable
The- fair values of hese financial inStrumen1S except Jo-- imCfest bearing loam lHld bOlToving aproKimate lhdr cMryinJ vlhes due to the Slort temt mzrutiiles or these instrument
Tllc faiT value of iotcnst beating Nns and borrowin2s ae estimate( based on discoumed ltash flows twin int(s rale- cune-ntly nvailagtk fur tilt debt or sinuiar tetnlS an-a rell1lmng matunties
31
Aamal Company~Q=-ScC ______________~______
~OTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For fhe year ended 31 December 20 t3
SlGNIFICANT ASUMPTIONS ACCOUJTING JUDGElE1TS AND F8TIMATFS
impairment (If accoonts receivable n etrnwe of lhe collectible anoun of trade accounlgt reccvable is made when collection of the full lHl1OUt i~ nO looger probabk FOI nCividualty significitIl amounts this estimation is p~rformed on an indh-idllai a$[$ Amomts wHcb arc not indivldl11Uy significant but wluch are past due ZTe tsscssed collectively and an aJlQwaccc applied ucc()r~Jng to the length of lime past due based oc histnncal recovery nlJes
hnpalrment of inHntnries lavenoncs are held at tho lower of col and nol realisable value InIOn inventoncent$ becone old or 0-~amplete an estilTJte is mate of their net j alisable vulue For indiviolhlUy significant amountS this cstinaunrt is performec all aD lndividwl osis Amotlnts whieh are fl0t individually significan( btll which ltIre old at obsolete wx LltSessed wllecivdy md a provisior is applied sccnrding to the invenrory type and be dep)ee of ageing 0 cDsolescc1ce based on anticipUled selling prices
Classifigt1ltion of El Sew(gtdy Cable Qatar WLI ali a j(lint vwture pound1 Sovedy Cables Qatar is a limited hability company whose kgal fum confers SCprm11ior bernten tbe jXliiies 10 ~he jomi lfranpement Snd the Company Itself FurthenrlOre then IS no oontractua] arrmgelTeot or any oibe aus aod circumstriliCe$ that iocik41to tht he putic5 [0 the joint flJTIlrgernelit bave rights to the ssetl and obligrtdons fo~ the liabilities of the joint ilrrongement Acoordingly El Sewed- C[jbl~s Qamr WLL is dassifiecl 7S a joiut enrtrr of he GWtp
impairment of goodwill G0oovj)1 embedded in th~ cot 0 aquisitior of subsidiaries and eqmtj-iccounled iflV(stees ire teswt for irl1jXlirmnt aHuaily Tbe calculations of value [n use fO( cfish gecj~r)lilg units (loring to real nte projecg are rtost sensitive to tin IDHowing assumpti015
Grosgt i1wginmiddot Gross Ilmrgins arc lmsed on avrage values tuhje0d in (he [Xrioo preeedhli (e siaM of the budge xnod T1esC at( mcreased over the budgel period for mticipatltX efficiency Hnprovemots
DisC)unr r(es Discount rotes represent th cl1tent mark as~ssmetlt of the risks specific te ech cash geocroting unit regarding lhe time value of money ilnd mdividu)l risks of he tmtieriyilg assets whICh have not been inwrport1eti it the Citik flow estimates The dj~(OUrl flte tlkulation is based on the speclfte circurnsthLCes of lile Group and its opltllatJng segn)~nts (md derived (ff)rC it weighted avaage (XSt 0f apilaJ (WACC) Tb fACe (akw into uoount both deb and equity The 0$1 of equity is denved from dlC expected return 01 investmenl by the Groups investors TJc Gos10( deb is based on l1e borrvwings the Gmup IS obllsxl to service SC~lletllmiddotspecific r5k IS incorxt4too by applying individual bera facto The betn mctors ire evauatcentd annuaHy bhseci on pubJicly aVflllabe murked earn
Fair value ()fnHstmeni proputies The fuit laHe 0 nvestmel~ propertis is deltrrnlnzd b cxterrwl indepzfldell property valuers laving appr0priate recognised professional quabfiillions and recenl xperience H1 the localjl)n and G-tegory 0 the oroperty being valued
Useful hes of PfQPcrly plmr (llld zqulpment The Groups management detennints th estiunted useful jives Df It~ property plan and equipmnl fix calnurjng depreciation Thi5 e~timJte is 6lermind after cinsidring 1b expeelcd usage (1f the a5sclt [hysical l101t and (eas tedmiltal Dr com~ercia obsolesccnce
Gotlg Qncen
ibe Groups mangerncnt UiS made aJ assessmeot cf the 011115 ability (0 COllllOUC liS a going conct11l Imd is satsl1ed hat me Group ms the resources to contmue in business for he foreseeable fu1urc he1hennort he management is no aware oC lny material Hncertainties that lray CH~t signinchnt doubt tlPDfl the Groups ability 10 continue as a going umcem Therefore titpound lotlsolidatcd finilllcij stftemeols comirme to be prepltd on li g0ing concern basis
Aamal Company QSc
NOTES TO THE CONSOLIDATED FlNANC[AL STATEMENTS For the year ended 3 1 December 20 13
32 INCOME TAX
Certa in subsidiaries of the Group which have non-GCe ownership are subject to income tax under Qatar Income Tax Law No 2 1 of2009 The iocome tax is charged on the share of profits attributable to non-GCe shareholders For the purpose of these conso lidated fi nancial statements the income tax liability oftbe foreign shareholders has been excluded given that the non-GCe shareholders have agreed under the shareholder agreements signed with the Group to bear the fh lliiability and make necessary payments
33 COMPARATIVE INFORMATION
Certain comparative figw-es of the previous year have been reclassified 0 coofonn to the current years presentation However such reclassifications are oat materia and do not have an impact on tbe previously reported net profit other comprehensive income or the total equity for the comparative year
The impact from the resta tement of comparative infonnalion as a resuh of adoption of IFRS I I - Joint arrangements is detailed in Note 32 Changes in aCCQu(lting policies
46
28
Aamal Company QSc
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended ) L December 20 13
SEGMENT INFORMATION (Co ntinued)
Head Office It provides corporate services to the branches and subsidiaries of the Group
The managiog d irector of the Group monitors the operating results o f its business units separately for the purpose of making decisions about resource allocation and perfonnance assessment Segment perfonnance is evaluated based Oil operating profit or loss of these segments Transfer pricing between operating segments are on anns length basis in a manoec similar to Iraosactions with third parties
Aamal Company QSC
NOTES TO THE CONSOLIDATED FINAN CIAL STATEMENTS For the year ended 3 1 December 20 13
28 SEGMENT INFORl1ATlON (continued)
Operating segments The operat ing segment after elimination or ioter-bra nch and inter-co mpany lrnnsaclioos is presented as follows
Trading (nd Industrial Managed For fh e year elided 31 December 2013 Properly disirjblli ioll manujocljlring services
QR QR QR QR Revenues
- h lemal parties 260360172 578909983 1231522768 S l802210 - Inter segments 1253914 6843 11 8 29639873 3445052 1
Heat Office QR
Eliminoions QR
(n187426) II
Tolal
QR
2J22595133
261614086 585753 lOI 126116264 1 8625273 1 (721 87426) 2122595133
Opera ti ng results Fair vallie gains
Profit I (loss) ror the year
Depreciotion
200811944
245051 107
445863051
2066290
86492834
86492834
4345438
22636250
22636250
33049 089
5157436
5157436
1760305
(47864882)
(47864882)
1334382
267233582
245051107
512 284689
42555504
36
Aamal Company QS
NOTES TO Tl CONSOLIDATED FfNANClAL STATEMENTS For the yeM ended 31 December 20 13
28 SEGMENf INFORMAnON (c)tltioucd)
FOf the yearrnrkti J f DccemOer 2(J12 QR
Revellues - ExlcmlJ partiel 2331 17 509 bull Inter segmcI11S 1168935
-- 234236434 --~- -~--
Openning results 18S2367t Fmt value gains J8S79-4~G
pront LOllS) for the rear 570616154
gt3659
No(
lnlermiddotgment revenues are eliminated on tQHs)idntiOH_
Tadiug ftfid disl d)Ntion
QR
S2S3l7661
324 j
5335493114 ~ -~-----
51384831
54384338
4J9R71(i
Indus idi mamfmturing
QR
1255694537
129U25lS4
56727059
56727059
32752742
slnltic(s QR
55216665 2939H31
S46lOJ96
7427414
7437
[908067
ilfild ()jice QR
(64(41976
Elimination QR
(74tHi2oJ Iii
Totul QR
206936372
2069336372
235721
(64641
131 f613
6245
42541)861
Amnal Company Q$l
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Por tnt yeartndeJ 31 De~embcr 2013
28 SEGMENT JNFORMATlON (contiutlld
Assc-ts and labilities
Tng alld lndtrstfw At31 December 2(113 distnbllrior manufacturIng senices HeadOJJicc EliminatioilS lola1
QR QR QR QR QR
Cumnl 3tS 227552338 620807979 61349 j 415 S()6)86922 (301636995) 1477366090 Noolucrcnt DSeIS 6411868160 12604763 622386238 4348876 (i624548 __p2438051 780
fotal asstl$ 6639420498 1194 1243194217 65698291 513Ql1470 ==-lt03H8l~O()) 853295-870 -~----~ ~---~ -
CUIT)llliabilitics 280995335 1(3511J60 6344(12777 2l0708lJ2 496261185 (3CH636995) 1249603264 Non-current iiatJlitics 7l70L5V2 8008485 HlDi16~43_ 3181668 t433799 ____ ilj534_~57 __ --Totul liahililics 353696897 ___~4159~4~ 734419720 ~4976~~~~~ 1434945711
---~~--~ -~-~~ - _2~~~4~~ (~~~~9~
C1pild expcndimn HI) WO743OOj 1397742_~471l2~--~50 ~51 ~1~623821~~1~_ -~----~------ -~
3amp
28
Aamal Company Q SC
NOTES TO THE CONSOLIDATED FfNANClAL STATEMENTS For the year ended 31 December 20 13
SEGMFNT INFORMATION (continued)
Assets and liabilities (continued)
AI 31 December 2012 Properly QR
Trading and d iSfriblllion
QR
Indusrial manufacfuring
QR
Managed senices QR
Currenl assels
Non-current assets
146491 186
6121 864484
2964425 12 903 7264
73468 1258
549267235
51387098 471 1439
Tolal assets 6268355670 305479776 1283948493 56098537
Head Office QR
468325024
6713643
475038667
Currentliabil iies
Non-current liabiLities 273444 748 1 J10 15024
86054583 7434286
669214261 1288 14977
2 1938953
287 1199
480393637 1253084
Totil lliabiliti cs 390459772 93488869 798029238 248 10 152 48J64672 1
Capila expendirure (ltII L 72865 878 1281254 6647 J356 7169 13 149045
Notes
(i)
(Ii)
Inter-segmeot balances are e limioafed 00 consolidatio n
Capi tal expendiTU res consist of additions 10 propeny plant and equip ment and iovestmenl properties
Eliminations QR
To wl QR
(273735776) (i )
(20308351(i)
1423591302
6689563230
(27576661 1) 8 113154532
(273135777) (i) 12573 10405
257388570
(273735177) 15 14698975
24 1484446
39
29
Aamal Company QSC
NOTES TO THE CONSOLIDATED FrNANCIAL STATEMENTS For the year ended 31 Dcltmber 1013
Fr-A]~ClAL RISK MANAGpoundMamp1H
Objccthes and policies fe Groups principal )uaucill liabilities comprise imltresl bctmllg loons and IxmowHgs baRlt ovetda1s amounts due to fclaled par1ies and tracte accounts payable The main pUlJXSi of thesc financial liabilities is 4J mise firmne or 610 Grmps operations The G0JP bas various fimmcial assets such as ttadc accounts receivable lInlOlmts due from related parties bark balances tltCntion receivable and other receivables which arisgt directly fran its cperuoonamp
The maiH ri~ks an3ing Joru (be Groups UnariCJlll illslrumenls jle market risk cretiJt nsk and hmdity risk Til BoarD ofDtrcctO$ reviews end agrees policies for mzrAgbg Caltt f hespound ri~k ihkh arc summariscd beloW
VIarktt risk yenfatket risk is the risk Um changes in market prices $Uch as intfcst rates and hreig lttmeocy ect14nge rilles Vltl1 affect the Groups profit eqwty Dr value tf its hoJdiI15 of financial instrl[Thnls rile objecivpoundj of marke1 risk mUnllgcrlcnt is to manage uld 1~ontr(ll tho tr))rket risk expo-sure vithir acceptable parfI-etcJ$ while optimising rerUID
Equit) price risk ampjuity prtce risk is the risk hilt the Group ampearnings will be affected as a rcmt (If luctttltions in fm vdue of ~qui-gt
mstwnents Eqlliry price risk arises from availabtetor~sale inv2strnems However the Groups exposure to eqmty price risk IS minima as II doesn hold sitl)iftrmt ailableAor-511le inYestrmmrs
[merest rate risk The Groups fimiruial poundS5ot ampId liaojlilies (at Rl $uJject to int~~ rate mk compnse brmk depoils interst bearing loans and bOITQwjags and bank overdr-afts At the reponwg dalt tbe [merest rale pronle of Ill Goups intexst bearing fbi4rdd instruments as fliows
11113 20i3 QR QR
Fued liIeryS refc insfrvrnellts
Fmmcial assets 113035962 111913394 FrOltwial liabilities --1~203712l) 1252t43~1
9)OI~ (13350972)
Fhlllting inireSI rate ns1lmlttrs Fanctl~ Isseis 127024345 ID43848o Fllllocial liabilities _-(i~9347~ (94))48926)
(836)64116)
The Groups exposure to t~ ris of changes in marXet interest fltltes relztes primariiy to the Groups financial assets and lizbitdic$ with t1Oltttirg interest mte~
lhe loEowing able demonstrates the ampmitivity nf the eonsolidattXI statemen1 of income 1) caonaly possible chonges in in1jfgtst rmes by 25 basis points with all othe vari)ble3 hdc umstant The sensitivity of the CooiK~ljclatid statement of inc(me $ the eft(ct of tb assumed changes in lnterdt rales for one year bf1sec on the floating rate financial assets and fimmcial hablhw$ held at 31 f~r The effect of deae-ascs in interest ral~ is cXp0Ctct to be equal and opposite to the effect oHlle increases sllQvro
Changes it Eftx OIl
00513 [oms profit QR
2013 Floating mterest Hlte instruments ----2$ bp (1649776)
2012 Flv-ating irkfiSt rale instrumenls +25 bp (209[9(1))
~--------- -~~ 40-middot------ _ _ shy
29
Aamal Company QSC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 3 1 December 2013
FINANCIAL RISK MANAGEMENT (continued)
Foreign currency risk Foreign currency risk is the risk lhilt the value of lhe fi nancial instruments will fluctuate due 10 changes in fore ign exchange rates
T rade aCcOlmts payable and accrued expenses include amounts due in foreign currencies mliniy US Dollars UAB Dirhams Great Britain Pounds (GB P) and Euros of which the Group has a currency risk primruily on the baJmces payable in Euros and GBP amoWlting 10 QR 14400634 (2012 QR 17214046)
The Group does not hedge its foreign currency exposure As both Qatari Riyal and UAE Dirhams are pegged to the US Dollar balances in US Dollars and UAE Dirhams are not considered to represent significant currency ris k to the Group
The table below indicates the Group s fore ign c urrency exposure on its monetary assets a nd liabilities The analysis calculates the effect o f a reasonably poss ib le move ment of the QR curre nc y rale against the Euro and GBP with all other variables held constant on the consolidated slate menl o f income (due to the fa ir va lue of currency sensitive monetary asse ts a nd liabilities) The e ffect o f decreases in fo reign c urre ncy exchange rates is expected to he equal and opposile 10 the e ffect of the increases shown
Incramp1se ill
f oreign cUlrency rate
0
the QR
Ellecl on profil
QR
2013 +5 (720032)
20 12 +5 (860 702)
C redit Tisk Credit risk is the risk that one party to a financial instrume nt wi ll fa il to discharge an obligation and cause the other party to incur a financial loss TIle Groups exposure to credit risk is indica ted by the carrying amoWlt o f its financia l asse ts whic h consist principally oftmde accollilts receivable retention receivable amounts due from related parties othe r receivables and bank baLances
The Group sells its products and prov ides services to vario us panies It is the G ro ups policy that all customers who wish to obtain on credit lerms are subject to credit verificalion procedures to ensure c redit Ilonhiness Each new customer is analysed individually for creditworthiness before the de livery o f products Of services Custo mm tbat fai l to met t the credi tworthiness may transact with the Group only o n prepayme nt basis Property rentals are mostl y received in ad vtnce or conlrlCled wi th post dated cheques 10 additio n receivable balances are monitored on an ongoing basis a nd the purchase limils are established for each c redit custoroer which are reviewed reguJarly based on the level o f past transactions and senlement The Groups max im wn exposure with regard to trade aCCOWlts receivab le net ofa llowance re nected allhe reporting date was ilS fo llows
2013 2012
Business SJgmelll QR QR
Property 15478832 19386326 Trading and distributio n 194343 597 179748274 Industrial ma nufac turing 183119753 131578668 Managed services 18069385 14547389
411 011 567 345260657
41
29
Aamal Company QSc
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For tbe year eoded 3 J December 20 13
FlNAJICIAL RISK MANAG EMENT (c-o Dtinued)
Credit risk (continued) With respect to credit risk arising from the other financi31 assets of the Group the Groups exposure to credit risk arises from default of the counterparty with a maximum exposure equal 10 the canying amount of these instruments as follows
2013 QR
202
QR
Bank balances Amounts due from related parties Retention and other receivables
436136756 214439950 48290351
36788129 t 171525363 74082203
698867057 613488857
The group reduces the expoSltre of credit risk arising from other financial assets by maintaining bank accounts in reputed banks and providing services only to creditworthy re lated parties
The management cons iders the bank balances and a mQUIIIS due from related parties as high grade fi nancial assets and lfade accounls receivable and other receivables as sundard grade financial assets When a finltmcial asset is identified 10 be impaired the managemoot downgrades such assets to impaired category and provides adequate allowances
Liquidity risk Liquidity risk is the risk that the Group will not be able to meet its fmancial obligations as they fu ll due The Groups 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 nonnal and stressed conditiom without incurring unacceptable losses or risking damage to the Groups reputa tion and is to maintain a balance belWeen continuity of fuoding and f1eilibility through the use of bank overdrafts and bank loans and borrowings
The Group monitors its risk to a shortage o f funds using a recuning liquidity plaOfling 1001 TIllS tool considers the manuiry o f financial assets (eg accounts receivable) and projected cash flows from operations The Groups teons ofsales or services require arooUIlts to be paid within 30-90 days from the invoiced dale
42
29
Aamal Company QSc
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For tbe year ended 3 1 December 2013
FrNANClAL ruSK MANAGEMENT (contiQued)
Uqujdity risk (continued) The table below summarises the ruaruriJy profile of the Groups financial 1iabililies a t 31 December based on contractual undiscountcd paymeots
2013 Interest bearing loans and borrowings Bank overdrafts Trade accowus payable Other payables Amounl~ due (0 related panles
201l Interest bearing loans and borrowings
Baok overdrafts Trade accounts payable Other payables Amounts due to related parties
On demand
QR
6836280
6836280
011 demand QR
2885090
2885090
Less than 3 months
QR
521324473
303638792
47406830
2530~480
898675575
Less thall 3
months
QR
469839033
10754JJIO 37543236
1964504 1
634568620
3 10 J2 mOlllh$
QR
239333328
16378865 20210580
2289~11l
298816884
3 to 12 monlhs
QR
365476972
159621 37 J 24745342
30092716
579936401
1to 5 years
QR
J 60092748
160092148
1 to 5 years
QR
248472226
248472226
gt 5 years
QR
25261598
25261 598
gt 5 years
QR
7648000
7648000
TOlaf
QR
947012147 6836280
320017657
67617410 48199591
1389681085
Tota
QR
109 1436231
1885090 267162681
622 88578
49737757
14735 10337
43
30
Aamal Company QSltc NOTES TO THE CONSOLIDATED FlANCIAL STATEMETS For the year ended 31 December 20 t3
21 F~ANClAL RlSK MAiAGEMElT (continued)
Capital management The Boards policy is to maintain a strong cepit1 base so as to rnainmin investor creditor and market ronfoonee and to SUSWlJ) fumre dcltclonnent Gf the buinest The Board of Directors rronitortl the tapital whkh tbe Group defines as wlal $parcloders equity excluding nonmiddotcornroliing imerests and the level of dividends to orrunury srarellOJdcfS
The Board also reeks to ITIaimain a balance between the higher (ctums (hat might be fA-~$ihle With higher leves of borrnwings end Lle edvnrJages and security named Sy it sOMd Cilpitai posi[ion The GfCup~ k1rget is to achievfl a return on slureholders equity (exclJding aonwurrolJiug iorcf(sts) greater lll(ll1 he wcighlcd average inres exxmse on mrerest bearing Ivens and oorrowing
The (lf0t-p nl)nDg-e ils cnpital structure and makes adjustneal lOll in light ofchang2s in economic nd bttincss cordjlons and shareholders expe1ationJo chmges veremiddot maCo HI Lleuro objecttves polilCS or proCCSSC3 during the years erded 31 D~mber 2013md 31 Dtccmlxr2Ql2
The Group monitors the capit2J using a gClting fatio which IS dep divided by caplla plus debL The GtOwgts policy is to keep ttJe ge-anng rmio bclew 40 Tbe Group iLdtdes withb debt imete-51 beagting loans ard ~OITORlngs less cash and cash equtVaknts Capltal includes eqmty attributable 10 the equity tolders oft~e parcrt
2013 QR
2(i2 QR
fmerest bearing loans and borrowings lcss- Cash and cas ltYJUvalcnts
9i4lJ05301 _~ (429JfJl4761
1004845296 (649)6201)
Net debt
Toa capital
Capita and net debt
699849045
~ringrttio
FAIR VALtES OF Fl~ANOAL f~STRUMETS
Finarcial iostrumenL~ cOlnprise tina~lctal assetS carl finailcialliabilities
Fmancial assets colJist of bank balance) short 1Cm bank dcposis amounL dve dom rc)ltted partilt)$ rekntion and other receivables and ttade accolmis rceivabe Finatlclll habiilics cgtmsist of banilt ovcrdratls jnerest bearing lOil1S and bOrowings amounts due (0 nliled partiG~ ane trade x-ounls payable
The- fair values of hese financial inStrumen1S except Jo-- imCfest bearing loam lHld bOlToving aproKimate lhdr cMryinJ vlhes due to the Slort temt mzrutiiles or these instrument
Tllc faiT value of iotcnst beating Nns and borrowin2s ae estimate( based on discoumed ltash flows twin int(s rale- cune-ntly nvailagtk fur tilt debt or sinuiar tetnlS an-a rell1lmng matunties
31
Aamal Company~Q=-ScC ______________~______
~OTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For fhe year ended 31 December 20 t3
SlGNIFICANT ASUMPTIONS ACCOUJTING JUDGElE1TS AND F8TIMATFS
impairment (If accoonts receivable n etrnwe of lhe collectible anoun of trade accounlgt reccvable is made when collection of the full lHl1OUt i~ nO looger probabk FOI nCividualty significitIl amounts this estimation is p~rformed on an indh-idllai a$[$ Amomts wHcb arc not indivldl11Uy significant but wluch are past due ZTe tsscssed collectively and an aJlQwaccc applied ucc()r~Jng to the length of lime past due based oc histnncal recovery nlJes
hnpalrment of inHntnries lavenoncs are held at tho lower of col and nol realisable value InIOn inventoncent$ becone old or 0-~amplete an estilTJte is mate of their net j alisable vulue For indiviolhlUy significant amountS this cstinaunrt is performec all aD lndividwl osis Amotlnts whieh are fl0t individually significan( btll which ltIre old at obsolete wx LltSessed wllecivdy md a provisior is applied sccnrding to the invenrory type and be dep)ee of ageing 0 cDsolescc1ce based on anticipUled selling prices
Classifigt1ltion of El Sew(gtdy Cable Qatar WLI ali a j(lint vwture pound1 Sovedy Cables Qatar is a limited hability company whose kgal fum confers SCprm11ior bernten tbe jXliiies 10 ~he jomi lfranpement Snd the Company Itself FurthenrlOre then IS no oontractua] arrmgelTeot or any oibe aus aod circumstriliCe$ that iocik41to tht he putic5 [0 the joint flJTIlrgernelit bave rights to the ssetl and obligrtdons fo~ the liabilities of the joint ilrrongement Acoordingly El Sewed- C[jbl~s Qamr WLL is dassifiecl 7S a joiut enrtrr of he GWtp
impairment of goodwill G0oovj)1 embedded in th~ cot 0 aquisitior of subsidiaries and eqmtj-iccounled iflV(stees ire teswt for irl1jXlirmnt aHuaily Tbe calculations of value [n use fO( cfish gecj~r)lilg units (loring to real nte projecg are rtost sensitive to tin IDHowing assumpti015
Grosgt i1wginmiddot Gross Ilmrgins arc lmsed on avrage values tuhje0d in (he [Xrioo preeedhli (e siaM of the budge xnod T1esC at( mcreased over the budgel period for mticipatltX efficiency Hnprovemots
DisC)unr r(es Discount rotes represent th cl1tent mark as~ssmetlt of the risks specific te ech cash geocroting unit regarding lhe time value of money ilnd mdividu)l risks of he tmtieriyilg assets whICh have not been inwrport1eti it the Citik flow estimates The dj~(OUrl flte tlkulation is based on the speclfte circurnsthLCes of lile Group and its opltllatJng segn)~nts (md derived (ff)rC it weighted avaage (XSt 0f apilaJ (WACC) Tb fACe (akw into uoount both deb and equity The 0$1 of equity is denved from dlC expected return 01 investmenl by the Groups investors TJc Gos10( deb is based on l1e borrvwings the Gmup IS obllsxl to service SC~lletllmiddotspecific r5k IS incorxt4too by applying individual bera facto The betn mctors ire evauatcentd annuaHy bhseci on pubJicly aVflllabe murked earn
Fair value ()fnHstmeni proputies The fuit laHe 0 nvestmel~ propertis is deltrrnlnzd b cxterrwl indepzfldell property valuers laving appr0priate recognised professional quabfiillions and recenl xperience H1 the localjl)n and G-tegory 0 the oroperty being valued
Useful hes of PfQPcrly plmr (llld zqulpment The Groups management detennints th estiunted useful jives Df It~ property plan and equipmnl fix calnurjng depreciation Thi5 e~timJte is 6lermind after cinsidring 1b expeelcd usage (1f the a5sclt [hysical l101t and (eas tedmiltal Dr com~ercia obsolesccnce
Gotlg Qncen
ibe Groups mangerncnt UiS made aJ assessmeot cf the 011115 ability (0 COllllOUC liS a going conct11l Imd is satsl1ed hat me Group ms the resources to contmue in business for he foreseeable fu1urc he1hennort he management is no aware oC lny material Hncertainties that lray CH~t signinchnt doubt tlPDfl the Groups ability 10 continue as a going umcem Therefore titpound lotlsolidatcd finilllcij stftemeols comirme to be prepltd on li g0ing concern basis
Aamal Company QSc
NOTES TO THE CONSOLIDATED FlNANC[AL STATEMENTS For the year ended 3 1 December 20 13
32 INCOME TAX
Certa in subsidiaries of the Group which have non-GCe ownership are subject to income tax under Qatar Income Tax Law No 2 1 of2009 The iocome tax is charged on the share of profits attributable to non-GCe shareholders For the purpose of these conso lidated fi nancial statements the income tax liability oftbe foreign shareholders has been excluded given that the non-GCe shareholders have agreed under the shareholder agreements signed with the Group to bear the fh lliiability and make necessary payments
33 COMPARATIVE INFORMATION
Certain comparative figw-es of the previous year have been reclassified 0 coofonn to the current years presentation However such reclassifications are oat materia and do not have an impact on tbe previously reported net profit other comprehensive income or the total equity for the comparative year
The impact from the resta tement of comparative infonnalion as a resuh of adoption of IFRS I I - Joint arrangements is detailed in Note 32 Changes in aCCQu(lting policies
46
Aamal Company QSC
NOTES TO THE CONSOLIDATED FINAN CIAL STATEMENTS For the year ended 3 1 December 20 13
28 SEGMENT INFORl1ATlON (continued)
Operating segments The operat ing segment after elimination or ioter-bra nch and inter-co mpany lrnnsaclioos is presented as follows
Trading (nd Industrial Managed For fh e year elided 31 December 2013 Properly disirjblli ioll manujocljlring services
QR QR QR QR Revenues
- h lemal parties 260360172 578909983 1231522768 S l802210 - Inter segments 1253914 6843 11 8 29639873 3445052 1
Heat Office QR
Eliminoions QR
(n187426) II
Tolal
QR
2J22595133
261614086 585753 lOI 126116264 1 8625273 1 (721 87426) 2122595133
Opera ti ng results Fair vallie gains
Profit I (loss) ror the year
Depreciotion
200811944
245051 107
445863051
2066290
86492834
86492834
4345438
22636250
22636250
33049 089
5157436
5157436
1760305
(47864882)
(47864882)
1334382
267233582
245051107
512 284689
42555504
36
Aamal Company QS
NOTES TO Tl CONSOLIDATED FfNANClAL STATEMENTS For the yeM ended 31 December 20 13
28 SEGMENf INFORMAnON (c)tltioucd)
FOf the yearrnrkti J f DccemOer 2(J12 QR
Revellues - ExlcmlJ partiel 2331 17 509 bull Inter segmcI11S 1168935
-- 234236434 --~- -~--
Openning results 18S2367t Fmt value gains J8S79-4~G
pront LOllS) for the rear 570616154
gt3659
No(
lnlermiddotgment revenues are eliminated on tQHs)idntiOH_
Tadiug ftfid disl d)Ntion
QR
S2S3l7661
324 j
5335493114 ~ -~-----
51384831
54384338
4J9R71(i
Indus idi mamfmturing
QR
1255694537
129U25lS4
56727059
56727059
32752742
slnltic(s QR
55216665 2939H31
S46lOJ96
7427414
7437
[908067
ilfild ()jice QR
(64(41976
Elimination QR
(74tHi2oJ Iii
Totul QR
206936372
2069336372
235721
(64641
131 f613
6245
42541)861
Amnal Company Q$l
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Por tnt yeartndeJ 31 De~embcr 2013
28 SEGMENT JNFORMATlON (contiutlld
Assc-ts and labilities
Tng alld lndtrstfw At31 December 2(113 distnbllrior manufacturIng senices HeadOJJicc EliminatioilS lola1
QR QR QR QR QR
Cumnl 3tS 227552338 620807979 61349 j 415 S()6)86922 (301636995) 1477366090 Noolucrcnt DSeIS 6411868160 12604763 622386238 4348876 (i624548 __p2438051 780
fotal asstl$ 6639420498 1194 1243194217 65698291 513Ql1470 ==-lt03H8l~O()) 853295-870 -~----~ ~---~ -
CUIT)llliabilitics 280995335 1(3511J60 6344(12777 2l0708lJ2 496261185 (3CH636995) 1249603264 Non-current iiatJlitics 7l70L5V2 8008485 HlDi16~43_ 3181668 t433799 ____ ilj534_~57 __ --Totul liahililics 353696897 ___~4159~4~ 734419720 ~4976~~~~~ 1434945711
---~~--~ -~-~~ - _2~~~4~~ (~~~~9~
C1pild expcndimn HI) WO743OOj 1397742_~471l2~--~50 ~51 ~1~623821~~1~_ -~----~------ -~
3amp
28
Aamal Company Q SC
NOTES TO THE CONSOLIDATED FfNANClAL STATEMENTS For the year ended 31 December 20 13
SEGMFNT INFORMATION (continued)
Assets and liabilities (continued)
AI 31 December 2012 Properly QR
Trading and d iSfriblllion
QR
Indusrial manufacfuring
QR
Managed senices QR
Currenl assels
Non-current assets
146491 186
6121 864484
2964425 12 903 7264
73468 1258
549267235
51387098 471 1439
Tolal assets 6268355670 305479776 1283948493 56098537
Head Office QR
468325024
6713643
475038667
Currentliabil iies
Non-current liabiLities 273444 748 1 J10 15024
86054583 7434286
669214261 1288 14977
2 1938953
287 1199
480393637 1253084
Totil lliabiliti cs 390459772 93488869 798029238 248 10 152 48J64672 1
Capila expendirure (ltII L 72865 878 1281254 6647 J356 7169 13 149045
Notes
(i)
(Ii)
Inter-segmeot balances are e limioafed 00 consolidatio n
Capi tal expendiTU res consist of additions 10 propeny plant and equip ment and iovestmenl properties
Eliminations QR
To wl QR
(273735776) (i )
(20308351(i)
1423591302
6689563230
(27576661 1) 8 113154532
(273135777) (i) 12573 10405
257388570
(273735177) 15 14698975
24 1484446
39
29
Aamal Company QSC
NOTES TO THE CONSOLIDATED FrNANCIAL STATEMENTS For the year ended 31 Dcltmber 1013
Fr-A]~ClAL RISK MANAGpoundMamp1H
Objccthes and policies fe Groups principal )uaucill liabilities comprise imltresl bctmllg loons and IxmowHgs baRlt ovetda1s amounts due to fclaled par1ies and tracte accounts payable The main pUlJXSi of thesc financial liabilities is 4J mise firmne or 610 Grmps operations The G0JP bas various fimmcial assets such as ttadc accounts receivable lInlOlmts due from related parties bark balances tltCntion receivable and other receivables which arisgt directly fran its cperuoonamp
The maiH ri~ks an3ing Joru (be Groups UnariCJlll illslrumenls jle market risk cretiJt nsk and hmdity risk Til BoarD ofDtrcctO$ reviews end agrees policies for mzrAgbg Caltt f hespound ri~k ihkh arc summariscd beloW
VIarktt risk yenfatket risk is the risk Um changes in market prices $Uch as intfcst rates and hreig lttmeocy ect14nge rilles Vltl1 affect the Groups profit eqwty Dr value tf its hoJdiI15 of financial instrl[Thnls rile objecivpoundj of marke1 risk mUnllgcrlcnt is to manage uld 1~ontr(ll tho tr))rket risk expo-sure vithir acceptable parfI-etcJ$ while optimising rerUID
Equit) price risk ampjuity prtce risk is the risk hilt the Group ampearnings will be affected as a rcmt (If luctttltions in fm vdue of ~qui-gt
mstwnents Eqlliry price risk arises from availabtetor~sale inv2strnems However the Groups exposure to eqmty price risk IS minima as II doesn hold sitl)iftrmt ailableAor-511le inYestrmmrs
[merest rate risk The Groups fimiruial poundS5ot ampId liaojlilies (at Rl $uJject to int~~ rate mk compnse brmk depoils interst bearing loans and bOITQwjags and bank overdr-afts At the reponwg dalt tbe [merest rale pronle of Ill Goups intexst bearing fbi4rdd instruments as fliows
11113 20i3 QR QR
Fued liIeryS refc insfrvrnellts
Fmmcial assets 113035962 111913394 FrOltwial liabilities --1~203712l) 1252t43~1
9)OI~ (13350972)
Fhlllting inireSI rate ns1lmlttrs Fanctl~ Isseis 127024345 ID43848o Fllllocial liabilities _-(i~9347~ (94))48926)
(836)64116)
The Groups exposure to t~ ris of changes in marXet interest fltltes relztes primariiy to the Groups financial assets and lizbitdic$ with t1Oltttirg interest mte~
lhe loEowing able demonstrates the ampmitivity nf the eonsolidattXI statemen1 of income 1) caonaly possible chonges in in1jfgtst rmes by 25 basis points with all othe vari)ble3 hdc umstant The sensitivity of the CooiK~ljclatid statement of inc(me $ the eft(ct of tb assumed changes in lnterdt rales for one year bf1sec on the floating rate financial assets and fimmcial hablhw$ held at 31 f~r The effect of deae-ascs in interest ral~ is cXp0Ctct to be equal and opposite to the effect oHlle increases sllQvro
Changes it Eftx OIl
00513 [oms profit QR
2013 Floating mterest Hlte instruments ----2$ bp (1649776)
2012 Flv-ating irkfiSt rale instrumenls +25 bp (209[9(1))
~--------- -~~ 40-middot------ _ _ shy
29
Aamal Company QSC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 3 1 December 2013
FINANCIAL RISK MANAGEMENT (continued)
Foreign currency risk Foreign currency risk is the risk lhilt the value of lhe fi nancial instruments will fluctuate due 10 changes in fore ign exchange rates
T rade aCcOlmts payable and accrued expenses include amounts due in foreign currencies mliniy US Dollars UAB Dirhams Great Britain Pounds (GB P) and Euros of which the Group has a currency risk primruily on the baJmces payable in Euros and GBP amoWlting 10 QR 14400634 (2012 QR 17214046)
The Group does not hedge its foreign currency exposure As both Qatari Riyal and UAE Dirhams are pegged to the US Dollar balances in US Dollars and UAE Dirhams are not considered to represent significant currency ris k to the Group
The table below indicates the Group s fore ign c urrency exposure on its monetary assets a nd liabilities The analysis calculates the effect o f a reasonably poss ib le move ment of the QR curre nc y rale against the Euro and GBP with all other variables held constant on the consolidated slate menl o f income (due to the fa ir va lue of currency sensitive monetary asse ts a nd liabilities) The e ffect o f decreases in fo reign c urre ncy exchange rates is expected to he equal and opposile 10 the e ffect of the increases shown
Incramp1se ill
f oreign cUlrency rate
0
the QR
Ellecl on profil
QR
2013 +5 (720032)
20 12 +5 (860 702)
C redit Tisk Credit risk is the risk that one party to a financial instrume nt wi ll fa il to discharge an obligation and cause the other party to incur a financial loss TIle Groups exposure to credit risk is indica ted by the carrying amoWlt o f its financia l asse ts whic h consist principally oftmde accollilts receivable retention receivable amounts due from related parties othe r receivables and bank baLances
The Group sells its products and prov ides services to vario us panies It is the G ro ups policy that all customers who wish to obtain on credit lerms are subject to credit verificalion procedures to ensure c redit Ilonhiness Each new customer is analysed individually for creditworthiness before the de livery o f products Of services Custo mm tbat fai l to met t the credi tworthiness may transact with the Group only o n prepayme nt basis Property rentals are mostl y received in ad vtnce or conlrlCled wi th post dated cheques 10 additio n receivable balances are monitored on an ongoing basis a nd the purchase limils are established for each c redit custoroer which are reviewed reguJarly based on the level o f past transactions and senlement The Groups max im wn exposure with regard to trade aCCOWlts receivab le net ofa llowance re nected allhe reporting date was ilS fo llows
2013 2012
Business SJgmelll QR QR
Property 15478832 19386326 Trading and distributio n 194343 597 179748274 Industrial ma nufac turing 183119753 131578668 Managed services 18069385 14547389
411 011 567 345260657
41
29
Aamal Company QSc
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For tbe year eoded 3 J December 20 13
FlNAJICIAL RISK MANAG EMENT (c-o Dtinued)
Credit risk (continued) With respect to credit risk arising from the other financi31 assets of the Group the Groups exposure to credit risk arises from default of the counterparty with a maximum exposure equal 10 the canying amount of these instruments as follows
2013 QR
202
QR
Bank balances Amounts due from related parties Retention and other receivables
436136756 214439950 48290351
36788129 t 171525363 74082203
698867057 613488857
The group reduces the expoSltre of credit risk arising from other financial assets by maintaining bank accounts in reputed banks and providing services only to creditworthy re lated parties
The management cons iders the bank balances and a mQUIIIS due from related parties as high grade fi nancial assets and lfade accounls receivable and other receivables as sundard grade financial assets When a finltmcial asset is identified 10 be impaired the managemoot downgrades such assets to impaired category and provides adequate allowances
Liquidity risk Liquidity risk is the risk that the Group will not be able to meet its fmancial obligations as they fu ll due The Groups 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 nonnal and stressed conditiom without incurring unacceptable losses or risking damage to the Groups reputa tion and is to maintain a balance belWeen continuity of fuoding and f1eilibility through the use of bank overdrafts and bank loans and borrowings
The Group monitors its risk to a shortage o f funds using a recuning liquidity plaOfling 1001 TIllS tool considers the manuiry o f financial assets (eg accounts receivable) and projected cash flows from operations The Groups teons ofsales or services require arooUIlts to be paid within 30-90 days from the invoiced dale
42
29
Aamal Company QSc
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For tbe year ended 3 1 December 2013
FrNANClAL ruSK MANAGEMENT (contiQued)
Uqujdity risk (continued) The table below summarises the ruaruriJy profile of the Groups financial 1iabililies a t 31 December based on contractual undiscountcd paymeots
2013 Interest bearing loans and borrowings Bank overdrafts Trade accowus payable Other payables Amounl~ due (0 related panles
201l Interest bearing loans and borrowings
Baok overdrafts Trade accounts payable Other payables Amounts due to related parties
On demand
QR
6836280
6836280
011 demand QR
2885090
2885090
Less than 3 months
QR
521324473
303638792
47406830
2530~480
898675575
Less thall 3
months
QR
469839033
10754JJIO 37543236
1964504 1
634568620
3 10 J2 mOlllh$
QR
239333328
16378865 20210580
2289~11l
298816884
3 to 12 monlhs
QR
365476972
159621 37 J 24745342
30092716
579936401
1to 5 years
QR
J 60092748
160092148
1 to 5 years
QR
248472226
248472226
gt 5 years
QR
25261598
25261 598
gt 5 years
QR
7648000
7648000
TOlaf
QR
947012147 6836280
320017657
67617410 48199591
1389681085
Tota
QR
109 1436231
1885090 267162681
622 88578
49737757
14735 10337
43
30
Aamal Company QSltc NOTES TO THE CONSOLIDATED FlANCIAL STATEMETS For the year ended 31 December 20 t3
21 F~ANClAL RlSK MAiAGEMElT (continued)
Capital management The Boards policy is to maintain a strong cepit1 base so as to rnainmin investor creditor and market ronfoonee and to SUSWlJ) fumre dcltclonnent Gf the buinest The Board of Directors rronitortl the tapital whkh tbe Group defines as wlal $parcloders equity excluding nonmiddotcornroliing imerests and the level of dividends to orrunury srarellOJdcfS
The Board also reeks to ITIaimain a balance between the higher (ctums (hat might be fA-~$ihle With higher leves of borrnwings end Lle edvnrJages and security named Sy it sOMd Cilpitai posi[ion The GfCup~ k1rget is to achievfl a return on slureholders equity (exclJding aonwurrolJiug iorcf(sts) greater lll(ll1 he wcighlcd average inres exxmse on mrerest bearing Ivens and oorrowing
The (lf0t-p nl)nDg-e ils cnpital structure and makes adjustneal lOll in light ofchang2s in economic nd bttincss cordjlons and shareholders expe1ationJo chmges veremiddot maCo HI Lleuro objecttves polilCS or proCCSSC3 during the years erded 31 D~mber 2013md 31 Dtccmlxr2Ql2
The Group monitors the capit2J using a gClting fatio which IS dep divided by caplla plus debL The GtOwgts policy is to keep ttJe ge-anng rmio bclew 40 Tbe Group iLdtdes withb debt imete-51 beagting loans ard ~OITORlngs less cash and cash equtVaknts Capltal includes eqmty attributable 10 the equity tolders oft~e parcrt
2013 QR
2(i2 QR
fmerest bearing loans and borrowings lcss- Cash and cas ltYJUvalcnts
9i4lJ05301 _~ (429JfJl4761
1004845296 (649)6201)
Net debt
Toa capital
Capita and net debt
699849045
~ringrttio
FAIR VALtES OF Fl~ANOAL f~STRUMETS
Finarcial iostrumenL~ cOlnprise tina~lctal assetS carl finailcialliabilities
Fmancial assets colJist of bank balance) short 1Cm bank dcposis amounL dve dom rc)ltted partilt)$ rekntion and other receivables and ttade accolmis rceivabe Finatlclll habiilics cgtmsist of banilt ovcrdratls jnerest bearing lOil1S and bOrowings amounts due (0 nliled partiG~ ane trade x-ounls payable
The- fair values of hese financial inStrumen1S except Jo-- imCfest bearing loam lHld bOlToving aproKimate lhdr cMryinJ vlhes due to the Slort temt mzrutiiles or these instrument
Tllc faiT value of iotcnst beating Nns and borrowin2s ae estimate( based on discoumed ltash flows twin int(s rale- cune-ntly nvailagtk fur tilt debt or sinuiar tetnlS an-a rell1lmng matunties
31
Aamal Company~Q=-ScC ______________~______
~OTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For fhe year ended 31 December 20 t3
SlGNIFICANT ASUMPTIONS ACCOUJTING JUDGElE1TS AND F8TIMATFS
impairment (If accoonts receivable n etrnwe of lhe collectible anoun of trade accounlgt reccvable is made when collection of the full lHl1OUt i~ nO looger probabk FOI nCividualty significitIl amounts this estimation is p~rformed on an indh-idllai a$[$ Amomts wHcb arc not indivldl11Uy significant but wluch are past due ZTe tsscssed collectively and an aJlQwaccc applied ucc()r~Jng to the length of lime past due based oc histnncal recovery nlJes
hnpalrment of inHntnries lavenoncs are held at tho lower of col and nol realisable value InIOn inventoncent$ becone old or 0-~amplete an estilTJte is mate of their net j alisable vulue For indiviolhlUy significant amountS this cstinaunrt is performec all aD lndividwl osis Amotlnts whieh are fl0t individually significan( btll which ltIre old at obsolete wx LltSessed wllecivdy md a provisior is applied sccnrding to the invenrory type and be dep)ee of ageing 0 cDsolescc1ce based on anticipUled selling prices
Classifigt1ltion of El Sew(gtdy Cable Qatar WLI ali a j(lint vwture pound1 Sovedy Cables Qatar is a limited hability company whose kgal fum confers SCprm11ior bernten tbe jXliiies 10 ~he jomi lfranpement Snd the Company Itself FurthenrlOre then IS no oontractua] arrmgelTeot or any oibe aus aod circumstriliCe$ that iocik41to tht he putic5 [0 the joint flJTIlrgernelit bave rights to the ssetl and obligrtdons fo~ the liabilities of the joint ilrrongement Acoordingly El Sewed- C[jbl~s Qamr WLL is dassifiecl 7S a joiut enrtrr of he GWtp
impairment of goodwill G0oovj)1 embedded in th~ cot 0 aquisitior of subsidiaries and eqmtj-iccounled iflV(stees ire teswt for irl1jXlirmnt aHuaily Tbe calculations of value [n use fO( cfish gecj~r)lilg units (loring to real nte projecg are rtost sensitive to tin IDHowing assumpti015
Grosgt i1wginmiddot Gross Ilmrgins arc lmsed on avrage values tuhje0d in (he [Xrioo preeedhli (e siaM of the budge xnod T1esC at( mcreased over the budgel period for mticipatltX efficiency Hnprovemots
DisC)unr r(es Discount rotes represent th cl1tent mark as~ssmetlt of the risks specific te ech cash geocroting unit regarding lhe time value of money ilnd mdividu)l risks of he tmtieriyilg assets whICh have not been inwrport1eti it the Citik flow estimates The dj~(OUrl flte tlkulation is based on the speclfte circurnsthLCes of lile Group and its opltllatJng segn)~nts (md derived (ff)rC it weighted avaage (XSt 0f apilaJ (WACC) Tb fACe (akw into uoount both deb and equity The 0$1 of equity is denved from dlC expected return 01 investmenl by the Groups investors TJc Gos10( deb is based on l1e borrvwings the Gmup IS obllsxl to service SC~lletllmiddotspecific r5k IS incorxt4too by applying individual bera facto The betn mctors ire evauatcentd annuaHy bhseci on pubJicly aVflllabe murked earn
Fair value ()fnHstmeni proputies The fuit laHe 0 nvestmel~ propertis is deltrrnlnzd b cxterrwl indepzfldell property valuers laving appr0priate recognised professional quabfiillions and recenl xperience H1 the localjl)n and G-tegory 0 the oroperty being valued
Useful hes of PfQPcrly plmr (llld zqulpment The Groups management detennints th estiunted useful jives Df It~ property plan and equipmnl fix calnurjng depreciation Thi5 e~timJte is 6lermind after cinsidring 1b expeelcd usage (1f the a5sclt [hysical l101t and (eas tedmiltal Dr com~ercia obsolesccnce
Gotlg Qncen
ibe Groups mangerncnt UiS made aJ assessmeot cf the 011115 ability (0 COllllOUC liS a going conct11l Imd is satsl1ed hat me Group ms the resources to contmue in business for he foreseeable fu1urc he1hennort he management is no aware oC lny material Hncertainties that lray CH~t signinchnt doubt tlPDfl the Groups ability 10 continue as a going umcem Therefore titpound lotlsolidatcd finilllcij stftemeols comirme to be prepltd on li g0ing concern basis
Aamal Company QSc
NOTES TO THE CONSOLIDATED FlNANC[AL STATEMENTS For the year ended 3 1 December 20 13
32 INCOME TAX
Certa in subsidiaries of the Group which have non-GCe ownership are subject to income tax under Qatar Income Tax Law No 2 1 of2009 The iocome tax is charged on the share of profits attributable to non-GCe shareholders For the purpose of these conso lidated fi nancial statements the income tax liability oftbe foreign shareholders has been excluded given that the non-GCe shareholders have agreed under the shareholder agreements signed with the Group to bear the fh lliiability and make necessary payments
33 COMPARATIVE INFORMATION
Certain comparative figw-es of the previous year have been reclassified 0 coofonn to the current years presentation However such reclassifications are oat materia and do not have an impact on tbe previously reported net profit other comprehensive income or the total equity for the comparative year
The impact from the resta tement of comparative infonnalion as a resuh of adoption of IFRS I I - Joint arrangements is detailed in Note 32 Changes in aCCQu(lting policies
46
Aamal Company QS
NOTES TO Tl CONSOLIDATED FfNANClAL STATEMENTS For the yeM ended 31 December 20 13
28 SEGMENf INFORMAnON (c)tltioucd)
FOf the yearrnrkti J f DccemOer 2(J12 QR
Revellues - ExlcmlJ partiel 2331 17 509 bull Inter segmcI11S 1168935
-- 234236434 --~- -~--
Openning results 18S2367t Fmt value gains J8S79-4~G
pront LOllS) for the rear 570616154
gt3659
No(
lnlermiddotgment revenues are eliminated on tQHs)idntiOH_
Tadiug ftfid disl d)Ntion
QR
S2S3l7661
324 j
5335493114 ~ -~-----
51384831
54384338
4J9R71(i
Indus idi mamfmturing
QR
1255694537
129U25lS4
56727059
56727059
32752742
slnltic(s QR
55216665 2939H31
S46lOJ96
7427414
7437
[908067
ilfild ()jice QR
(64(41976
Elimination QR
(74tHi2oJ Iii
Totul QR
206936372
2069336372
235721
(64641
131 f613
6245
42541)861
Amnal Company Q$l
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Por tnt yeartndeJ 31 De~embcr 2013
28 SEGMENT JNFORMATlON (contiutlld
Assc-ts and labilities
Tng alld lndtrstfw At31 December 2(113 distnbllrior manufacturIng senices HeadOJJicc EliminatioilS lola1
QR QR QR QR QR
Cumnl 3tS 227552338 620807979 61349 j 415 S()6)86922 (301636995) 1477366090 Noolucrcnt DSeIS 6411868160 12604763 622386238 4348876 (i624548 __p2438051 780
fotal asstl$ 6639420498 1194 1243194217 65698291 513Ql1470 ==-lt03H8l~O()) 853295-870 -~----~ ~---~ -
CUIT)llliabilitics 280995335 1(3511J60 6344(12777 2l0708lJ2 496261185 (3CH636995) 1249603264 Non-current iiatJlitics 7l70L5V2 8008485 HlDi16~43_ 3181668 t433799 ____ ilj534_~57 __ --Totul liahililics 353696897 ___~4159~4~ 734419720 ~4976~~~~~ 1434945711
---~~--~ -~-~~ - _2~~~4~~ (~~~~9~
C1pild expcndimn HI) WO743OOj 1397742_~471l2~--~50 ~51 ~1~623821~~1~_ -~----~------ -~
3amp
28
Aamal Company Q SC
NOTES TO THE CONSOLIDATED FfNANClAL STATEMENTS For the year ended 31 December 20 13
SEGMFNT INFORMATION (continued)
Assets and liabilities (continued)
AI 31 December 2012 Properly QR
Trading and d iSfriblllion
QR
Indusrial manufacfuring
QR
Managed senices QR
Currenl assels
Non-current assets
146491 186
6121 864484
2964425 12 903 7264
73468 1258
549267235
51387098 471 1439
Tolal assets 6268355670 305479776 1283948493 56098537
Head Office QR
468325024
6713643
475038667
Currentliabil iies
Non-current liabiLities 273444 748 1 J10 15024
86054583 7434286
669214261 1288 14977
2 1938953
287 1199
480393637 1253084
Totil lliabiliti cs 390459772 93488869 798029238 248 10 152 48J64672 1
Capila expendirure (ltII L 72865 878 1281254 6647 J356 7169 13 149045
Notes
(i)
(Ii)
Inter-segmeot balances are e limioafed 00 consolidatio n
Capi tal expendiTU res consist of additions 10 propeny plant and equip ment and iovestmenl properties
Eliminations QR
To wl QR
(273735776) (i )
(20308351(i)
1423591302
6689563230
(27576661 1) 8 113154532
(273135777) (i) 12573 10405
257388570
(273735177) 15 14698975
24 1484446
39
29
Aamal Company QSC
NOTES TO THE CONSOLIDATED FrNANCIAL STATEMENTS For the year ended 31 Dcltmber 1013
Fr-A]~ClAL RISK MANAGpoundMamp1H
Objccthes and policies fe Groups principal )uaucill liabilities comprise imltresl bctmllg loons and IxmowHgs baRlt ovetda1s amounts due to fclaled par1ies and tracte accounts payable The main pUlJXSi of thesc financial liabilities is 4J mise firmne or 610 Grmps operations The G0JP bas various fimmcial assets such as ttadc accounts receivable lInlOlmts due from related parties bark balances tltCntion receivable and other receivables which arisgt directly fran its cperuoonamp
The maiH ri~ks an3ing Joru (be Groups UnariCJlll illslrumenls jle market risk cretiJt nsk and hmdity risk Til BoarD ofDtrcctO$ reviews end agrees policies for mzrAgbg Caltt f hespound ri~k ihkh arc summariscd beloW
VIarktt risk yenfatket risk is the risk Um changes in market prices $Uch as intfcst rates and hreig lttmeocy ect14nge rilles Vltl1 affect the Groups profit eqwty Dr value tf its hoJdiI15 of financial instrl[Thnls rile objecivpoundj of marke1 risk mUnllgcrlcnt is to manage uld 1~ontr(ll tho tr))rket risk expo-sure vithir acceptable parfI-etcJ$ while optimising rerUID
Equit) price risk ampjuity prtce risk is the risk hilt the Group ampearnings will be affected as a rcmt (If luctttltions in fm vdue of ~qui-gt
mstwnents Eqlliry price risk arises from availabtetor~sale inv2strnems However the Groups exposure to eqmty price risk IS minima as II doesn hold sitl)iftrmt ailableAor-511le inYestrmmrs
[merest rate risk The Groups fimiruial poundS5ot ampId liaojlilies (at Rl $uJject to int~~ rate mk compnse brmk depoils interst bearing loans and bOITQwjags and bank overdr-afts At the reponwg dalt tbe [merest rale pronle of Ill Goups intexst bearing fbi4rdd instruments as fliows
11113 20i3 QR QR
Fued liIeryS refc insfrvrnellts
Fmmcial assets 113035962 111913394 FrOltwial liabilities --1~203712l) 1252t43~1
9)OI~ (13350972)
Fhlllting inireSI rate ns1lmlttrs Fanctl~ Isseis 127024345 ID43848o Fllllocial liabilities _-(i~9347~ (94))48926)
(836)64116)
The Groups exposure to t~ ris of changes in marXet interest fltltes relztes primariiy to the Groups financial assets and lizbitdic$ with t1Oltttirg interest mte~
lhe loEowing able demonstrates the ampmitivity nf the eonsolidattXI statemen1 of income 1) caonaly possible chonges in in1jfgtst rmes by 25 basis points with all othe vari)ble3 hdc umstant The sensitivity of the CooiK~ljclatid statement of inc(me $ the eft(ct of tb assumed changes in lnterdt rales for one year bf1sec on the floating rate financial assets and fimmcial hablhw$ held at 31 f~r The effect of deae-ascs in interest ral~ is cXp0Ctct to be equal and opposite to the effect oHlle increases sllQvro
Changes it Eftx OIl
00513 [oms profit QR
2013 Floating mterest Hlte instruments ----2$ bp (1649776)
2012 Flv-ating irkfiSt rale instrumenls +25 bp (209[9(1))
~--------- -~~ 40-middot------ _ _ shy
29
Aamal Company QSC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 3 1 December 2013
FINANCIAL RISK MANAGEMENT (continued)
Foreign currency risk Foreign currency risk is the risk lhilt the value of lhe fi nancial instruments will fluctuate due 10 changes in fore ign exchange rates
T rade aCcOlmts payable and accrued expenses include amounts due in foreign currencies mliniy US Dollars UAB Dirhams Great Britain Pounds (GB P) and Euros of which the Group has a currency risk primruily on the baJmces payable in Euros and GBP amoWlting 10 QR 14400634 (2012 QR 17214046)
The Group does not hedge its foreign currency exposure As both Qatari Riyal and UAE Dirhams are pegged to the US Dollar balances in US Dollars and UAE Dirhams are not considered to represent significant currency ris k to the Group
The table below indicates the Group s fore ign c urrency exposure on its monetary assets a nd liabilities The analysis calculates the effect o f a reasonably poss ib le move ment of the QR curre nc y rale against the Euro and GBP with all other variables held constant on the consolidated slate menl o f income (due to the fa ir va lue of currency sensitive monetary asse ts a nd liabilities) The e ffect o f decreases in fo reign c urre ncy exchange rates is expected to he equal and opposile 10 the e ffect of the increases shown
Incramp1se ill
f oreign cUlrency rate
0
the QR
Ellecl on profil
QR
2013 +5 (720032)
20 12 +5 (860 702)
C redit Tisk Credit risk is the risk that one party to a financial instrume nt wi ll fa il to discharge an obligation and cause the other party to incur a financial loss TIle Groups exposure to credit risk is indica ted by the carrying amoWlt o f its financia l asse ts whic h consist principally oftmde accollilts receivable retention receivable amounts due from related parties othe r receivables and bank baLances
The Group sells its products and prov ides services to vario us panies It is the G ro ups policy that all customers who wish to obtain on credit lerms are subject to credit verificalion procedures to ensure c redit Ilonhiness Each new customer is analysed individually for creditworthiness before the de livery o f products Of services Custo mm tbat fai l to met t the credi tworthiness may transact with the Group only o n prepayme nt basis Property rentals are mostl y received in ad vtnce or conlrlCled wi th post dated cheques 10 additio n receivable balances are monitored on an ongoing basis a nd the purchase limils are established for each c redit custoroer which are reviewed reguJarly based on the level o f past transactions and senlement The Groups max im wn exposure with regard to trade aCCOWlts receivab le net ofa llowance re nected allhe reporting date was ilS fo llows
2013 2012
Business SJgmelll QR QR
Property 15478832 19386326 Trading and distributio n 194343 597 179748274 Industrial ma nufac turing 183119753 131578668 Managed services 18069385 14547389
411 011 567 345260657
41
29
Aamal Company QSc
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For tbe year eoded 3 J December 20 13
FlNAJICIAL RISK MANAG EMENT (c-o Dtinued)
Credit risk (continued) With respect to credit risk arising from the other financi31 assets of the Group the Groups exposure to credit risk arises from default of the counterparty with a maximum exposure equal 10 the canying amount of these instruments as follows
2013 QR
202
QR
Bank balances Amounts due from related parties Retention and other receivables
436136756 214439950 48290351
36788129 t 171525363 74082203
698867057 613488857
The group reduces the expoSltre of credit risk arising from other financial assets by maintaining bank accounts in reputed banks and providing services only to creditworthy re lated parties
The management cons iders the bank balances and a mQUIIIS due from related parties as high grade fi nancial assets and lfade accounls receivable and other receivables as sundard grade financial assets When a finltmcial asset is identified 10 be impaired the managemoot downgrades such assets to impaired category and provides adequate allowances
Liquidity risk Liquidity risk is the risk that the Group will not be able to meet its fmancial obligations as they fu ll due The Groups 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 nonnal and stressed conditiom without incurring unacceptable losses or risking damage to the Groups reputa tion and is to maintain a balance belWeen continuity of fuoding and f1eilibility through the use of bank overdrafts and bank loans and borrowings
The Group monitors its risk to a shortage o f funds using a recuning liquidity plaOfling 1001 TIllS tool considers the manuiry o f financial assets (eg accounts receivable) and projected cash flows from operations The Groups teons ofsales or services require arooUIlts to be paid within 30-90 days from the invoiced dale
42
29
Aamal Company QSc
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For tbe year ended 3 1 December 2013
FrNANClAL ruSK MANAGEMENT (contiQued)
Uqujdity risk (continued) The table below summarises the ruaruriJy profile of the Groups financial 1iabililies a t 31 December based on contractual undiscountcd paymeots
2013 Interest bearing loans and borrowings Bank overdrafts Trade accowus payable Other payables Amounl~ due (0 related panles
201l Interest bearing loans and borrowings
Baok overdrafts Trade accounts payable Other payables Amounts due to related parties
On demand
QR
6836280
6836280
011 demand QR
2885090
2885090
Less than 3 months
QR
521324473
303638792
47406830
2530~480
898675575
Less thall 3
months
QR
469839033
10754JJIO 37543236
1964504 1
634568620
3 10 J2 mOlllh$
QR
239333328
16378865 20210580
2289~11l
298816884
3 to 12 monlhs
QR
365476972
159621 37 J 24745342
30092716
579936401
1to 5 years
QR
J 60092748
160092148
1 to 5 years
QR
248472226
248472226
gt 5 years
QR
25261598
25261 598
gt 5 years
QR
7648000
7648000
TOlaf
QR
947012147 6836280
320017657
67617410 48199591
1389681085
Tota
QR
109 1436231
1885090 267162681
622 88578
49737757
14735 10337
43
30
Aamal Company QSltc NOTES TO THE CONSOLIDATED FlANCIAL STATEMETS For the year ended 31 December 20 t3
21 F~ANClAL RlSK MAiAGEMElT (continued)
Capital management The Boards policy is to maintain a strong cepit1 base so as to rnainmin investor creditor and market ronfoonee and to SUSWlJ) fumre dcltclonnent Gf the buinest The Board of Directors rronitortl the tapital whkh tbe Group defines as wlal $parcloders equity excluding nonmiddotcornroliing imerests and the level of dividends to orrunury srarellOJdcfS
The Board also reeks to ITIaimain a balance between the higher (ctums (hat might be fA-~$ihle With higher leves of borrnwings end Lle edvnrJages and security named Sy it sOMd Cilpitai posi[ion The GfCup~ k1rget is to achievfl a return on slureholders equity (exclJding aonwurrolJiug iorcf(sts) greater lll(ll1 he wcighlcd average inres exxmse on mrerest bearing Ivens and oorrowing
The (lf0t-p nl)nDg-e ils cnpital structure and makes adjustneal lOll in light ofchang2s in economic nd bttincss cordjlons and shareholders expe1ationJo chmges veremiddot maCo HI Lleuro objecttves polilCS or proCCSSC3 during the years erded 31 D~mber 2013md 31 Dtccmlxr2Ql2
The Group monitors the capit2J using a gClting fatio which IS dep divided by caplla plus debL The GtOwgts policy is to keep ttJe ge-anng rmio bclew 40 Tbe Group iLdtdes withb debt imete-51 beagting loans ard ~OITORlngs less cash and cash equtVaknts Capltal includes eqmty attributable 10 the equity tolders oft~e parcrt
2013 QR
2(i2 QR
fmerest bearing loans and borrowings lcss- Cash and cas ltYJUvalcnts
9i4lJ05301 _~ (429JfJl4761
1004845296 (649)6201)
Net debt
Toa capital
Capita and net debt
699849045
~ringrttio
FAIR VALtES OF Fl~ANOAL f~STRUMETS
Finarcial iostrumenL~ cOlnprise tina~lctal assetS carl finailcialliabilities
Fmancial assets colJist of bank balance) short 1Cm bank dcposis amounL dve dom rc)ltted partilt)$ rekntion and other receivables and ttade accolmis rceivabe Finatlclll habiilics cgtmsist of banilt ovcrdratls jnerest bearing lOil1S and bOrowings amounts due (0 nliled partiG~ ane trade x-ounls payable
The- fair values of hese financial inStrumen1S except Jo-- imCfest bearing loam lHld bOlToving aproKimate lhdr cMryinJ vlhes due to the Slort temt mzrutiiles or these instrument
Tllc faiT value of iotcnst beating Nns and borrowin2s ae estimate( based on discoumed ltash flows twin int(s rale- cune-ntly nvailagtk fur tilt debt or sinuiar tetnlS an-a rell1lmng matunties
31
Aamal Company~Q=-ScC ______________~______
~OTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For fhe year ended 31 December 20 t3
SlGNIFICANT ASUMPTIONS ACCOUJTING JUDGElE1TS AND F8TIMATFS
impairment (If accoonts receivable n etrnwe of lhe collectible anoun of trade accounlgt reccvable is made when collection of the full lHl1OUt i~ nO looger probabk FOI nCividualty significitIl amounts this estimation is p~rformed on an indh-idllai a$[$ Amomts wHcb arc not indivldl11Uy significant but wluch are past due ZTe tsscssed collectively and an aJlQwaccc applied ucc()r~Jng to the length of lime past due based oc histnncal recovery nlJes
hnpalrment of inHntnries lavenoncs are held at tho lower of col and nol realisable value InIOn inventoncent$ becone old or 0-~amplete an estilTJte is mate of their net j alisable vulue For indiviolhlUy significant amountS this cstinaunrt is performec all aD lndividwl osis Amotlnts whieh are fl0t individually significan( btll which ltIre old at obsolete wx LltSessed wllecivdy md a provisior is applied sccnrding to the invenrory type and be dep)ee of ageing 0 cDsolescc1ce based on anticipUled selling prices
Classifigt1ltion of El Sew(gtdy Cable Qatar WLI ali a j(lint vwture pound1 Sovedy Cables Qatar is a limited hability company whose kgal fum confers SCprm11ior bernten tbe jXliiies 10 ~he jomi lfranpement Snd the Company Itself FurthenrlOre then IS no oontractua] arrmgelTeot or any oibe aus aod circumstriliCe$ that iocik41to tht he putic5 [0 the joint flJTIlrgernelit bave rights to the ssetl and obligrtdons fo~ the liabilities of the joint ilrrongement Acoordingly El Sewed- C[jbl~s Qamr WLL is dassifiecl 7S a joiut enrtrr of he GWtp
impairment of goodwill G0oovj)1 embedded in th~ cot 0 aquisitior of subsidiaries and eqmtj-iccounled iflV(stees ire teswt for irl1jXlirmnt aHuaily Tbe calculations of value [n use fO( cfish gecj~r)lilg units (loring to real nte projecg are rtost sensitive to tin IDHowing assumpti015
Grosgt i1wginmiddot Gross Ilmrgins arc lmsed on avrage values tuhje0d in (he [Xrioo preeedhli (e siaM of the budge xnod T1esC at( mcreased over the budgel period for mticipatltX efficiency Hnprovemots
DisC)unr r(es Discount rotes represent th cl1tent mark as~ssmetlt of the risks specific te ech cash geocroting unit regarding lhe time value of money ilnd mdividu)l risks of he tmtieriyilg assets whICh have not been inwrport1eti it the Citik flow estimates The dj~(OUrl flte tlkulation is based on the speclfte circurnsthLCes of lile Group and its opltllatJng segn)~nts (md derived (ff)rC it weighted avaage (XSt 0f apilaJ (WACC) Tb fACe (akw into uoount both deb and equity The 0$1 of equity is denved from dlC expected return 01 investmenl by the Groups investors TJc Gos10( deb is based on l1e borrvwings the Gmup IS obllsxl to service SC~lletllmiddotspecific r5k IS incorxt4too by applying individual bera facto The betn mctors ire evauatcentd annuaHy bhseci on pubJicly aVflllabe murked earn
Fair value ()fnHstmeni proputies The fuit laHe 0 nvestmel~ propertis is deltrrnlnzd b cxterrwl indepzfldell property valuers laving appr0priate recognised professional quabfiillions and recenl xperience H1 the localjl)n and G-tegory 0 the oroperty being valued
Useful hes of PfQPcrly plmr (llld zqulpment The Groups management detennints th estiunted useful jives Df It~ property plan and equipmnl fix calnurjng depreciation Thi5 e~timJte is 6lermind after cinsidring 1b expeelcd usage (1f the a5sclt [hysical l101t and (eas tedmiltal Dr com~ercia obsolesccnce
Gotlg Qncen
ibe Groups mangerncnt UiS made aJ assessmeot cf the 011115 ability (0 COllllOUC liS a going conct11l Imd is satsl1ed hat me Group ms the resources to contmue in business for he foreseeable fu1urc he1hennort he management is no aware oC lny material Hncertainties that lray CH~t signinchnt doubt tlPDfl the Groups ability 10 continue as a going umcem Therefore titpound lotlsolidatcd finilllcij stftemeols comirme to be prepltd on li g0ing concern basis
Aamal Company QSc
NOTES TO THE CONSOLIDATED FlNANC[AL STATEMENTS For the year ended 3 1 December 20 13
32 INCOME TAX
Certa in subsidiaries of the Group which have non-GCe ownership are subject to income tax under Qatar Income Tax Law No 2 1 of2009 The iocome tax is charged on the share of profits attributable to non-GCe shareholders For the purpose of these conso lidated fi nancial statements the income tax liability oftbe foreign shareholders has been excluded given that the non-GCe shareholders have agreed under the shareholder agreements signed with the Group to bear the fh lliiability and make necessary payments
33 COMPARATIVE INFORMATION
Certain comparative figw-es of the previous year have been reclassified 0 coofonn to the current years presentation However such reclassifications are oat materia and do not have an impact on tbe previously reported net profit other comprehensive income or the total equity for the comparative year
The impact from the resta tement of comparative infonnalion as a resuh of adoption of IFRS I I - Joint arrangements is detailed in Note 32 Changes in aCCQu(lting policies
46
Amnal Company Q$l
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Por tnt yeartndeJ 31 De~embcr 2013
28 SEGMENT JNFORMATlON (contiutlld
Assc-ts and labilities
Tng alld lndtrstfw At31 December 2(113 distnbllrior manufacturIng senices HeadOJJicc EliminatioilS lola1
QR QR QR QR QR
Cumnl 3tS 227552338 620807979 61349 j 415 S()6)86922 (301636995) 1477366090 Noolucrcnt DSeIS 6411868160 12604763 622386238 4348876 (i624548 __p2438051 780
fotal asstl$ 6639420498 1194 1243194217 65698291 513Ql1470 ==-lt03H8l~O()) 853295-870 -~----~ ~---~ -
CUIT)llliabilitics 280995335 1(3511J60 6344(12777 2l0708lJ2 496261185 (3CH636995) 1249603264 Non-current iiatJlitics 7l70L5V2 8008485 HlDi16~43_ 3181668 t433799 ____ ilj534_~57 __ --Totul liahililics 353696897 ___~4159~4~ 734419720 ~4976~~~~~ 1434945711
---~~--~ -~-~~ - _2~~~4~~ (~~~~9~
C1pild expcndimn HI) WO743OOj 1397742_~471l2~--~50 ~51 ~1~623821~~1~_ -~----~------ -~
3amp
28
Aamal Company Q SC
NOTES TO THE CONSOLIDATED FfNANClAL STATEMENTS For the year ended 31 December 20 13
SEGMFNT INFORMATION (continued)
Assets and liabilities (continued)
AI 31 December 2012 Properly QR
Trading and d iSfriblllion
QR
Indusrial manufacfuring
QR
Managed senices QR
Currenl assels
Non-current assets
146491 186
6121 864484
2964425 12 903 7264
73468 1258
549267235
51387098 471 1439
Tolal assets 6268355670 305479776 1283948493 56098537
Head Office QR
468325024
6713643
475038667
Currentliabil iies
Non-current liabiLities 273444 748 1 J10 15024
86054583 7434286
669214261 1288 14977
2 1938953
287 1199
480393637 1253084
Totil lliabiliti cs 390459772 93488869 798029238 248 10 152 48J64672 1
Capila expendirure (ltII L 72865 878 1281254 6647 J356 7169 13 149045
Notes
(i)
(Ii)
Inter-segmeot balances are e limioafed 00 consolidatio n
Capi tal expendiTU res consist of additions 10 propeny plant and equip ment and iovestmenl properties
Eliminations QR
To wl QR
(273735776) (i )
(20308351(i)
1423591302
6689563230
(27576661 1) 8 113154532
(273135777) (i) 12573 10405
257388570
(273735177) 15 14698975
24 1484446
39
29
Aamal Company QSC
NOTES TO THE CONSOLIDATED FrNANCIAL STATEMENTS For the year ended 31 Dcltmber 1013
Fr-A]~ClAL RISK MANAGpoundMamp1H
Objccthes and policies fe Groups principal )uaucill liabilities comprise imltresl bctmllg loons and IxmowHgs baRlt ovetda1s amounts due to fclaled par1ies and tracte accounts payable The main pUlJXSi of thesc financial liabilities is 4J mise firmne or 610 Grmps operations The G0JP bas various fimmcial assets such as ttadc accounts receivable lInlOlmts due from related parties bark balances tltCntion receivable and other receivables which arisgt directly fran its cperuoonamp
The maiH ri~ks an3ing Joru (be Groups UnariCJlll illslrumenls jle market risk cretiJt nsk and hmdity risk Til BoarD ofDtrcctO$ reviews end agrees policies for mzrAgbg Caltt f hespound ri~k ihkh arc summariscd beloW
VIarktt risk yenfatket risk is the risk Um changes in market prices $Uch as intfcst rates and hreig lttmeocy ect14nge rilles Vltl1 affect the Groups profit eqwty Dr value tf its hoJdiI15 of financial instrl[Thnls rile objecivpoundj of marke1 risk mUnllgcrlcnt is to manage uld 1~ontr(ll tho tr))rket risk expo-sure vithir acceptable parfI-etcJ$ while optimising rerUID
Equit) price risk ampjuity prtce risk is the risk hilt the Group ampearnings will be affected as a rcmt (If luctttltions in fm vdue of ~qui-gt
mstwnents Eqlliry price risk arises from availabtetor~sale inv2strnems However the Groups exposure to eqmty price risk IS minima as II doesn hold sitl)iftrmt ailableAor-511le inYestrmmrs
[merest rate risk The Groups fimiruial poundS5ot ampId liaojlilies (at Rl $uJject to int~~ rate mk compnse brmk depoils interst bearing loans and bOITQwjags and bank overdr-afts At the reponwg dalt tbe [merest rale pronle of Ill Goups intexst bearing fbi4rdd instruments as fliows
11113 20i3 QR QR
Fued liIeryS refc insfrvrnellts
Fmmcial assets 113035962 111913394 FrOltwial liabilities --1~203712l) 1252t43~1
9)OI~ (13350972)
Fhlllting inireSI rate ns1lmlttrs Fanctl~ Isseis 127024345 ID43848o Fllllocial liabilities _-(i~9347~ (94))48926)
(836)64116)
The Groups exposure to t~ ris of changes in marXet interest fltltes relztes primariiy to the Groups financial assets and lizbitdic$ with t1Oltttirg interest mte~
lhe loEowing able demonstrates the ampmitivity nf the eonsolidattXI statemen1 of income 1) caonaly possible chonges in in1jfgtst rmes by 25 basis points with all othe vari)ble3 hdc umstant The sensitivity of the CooiK~ljclatid statement of inc(me $ the eft(ct of tb assumed changes in lnterdt rales for one year bf1sec on the floating rate financial assets and fimmcial hablhw$ held at 31 f~r The effect of deae-ascs in interest ral~ is cXp0Ctct to be equal and opposite to the effect oHlle increases sllQvro
Changes it Eftx OIl
00513 [oms profit QR
2013 Floating mterest Hlte instruments ----2$ bp (1649776)
2012 Flv-ating irkfiSt rale instrumenls +25 bp (209[9(1))
~--------- -~~ 40-middot------ _ _ shy
29
Aamal Company QSC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 3 1 December 2013
FINANCIAL RISK MANAGEMENT (continued)
Foreign currency risk Foreign currency risk is the risk lhilt the value of lhe fi nancial instruments will fluctuate due 10 changes in fore ign exchange rates
T rade aCcOlmts payable and accrued expenses include amounts due in foreign currencies mliniy US Dollars UAB Dirhams Great Britain Pounds (GB P) and Euros of which the Group has a currency risk primruily on the baJmces payable in Euros and GBP amoWlting 10 QR 14400634 (2012 QR 17214046)
The Group does not hedge its foreign currency exposure As both Qatari Riyal and UAE Dirhams are pegged to the US Dollar balances in US Dollars and UAE Dirhams are not considered to represent significant currency ris k to the Group
The table below indicates the Group s fore ign c urrency exposure on its monetary assets a nd liabilities The analysis calculates the effect o f a reasonably poss ib le move ment of the QR curre nc y rale against the Euro and GBP with all other variables held constant on the consolidated slate menl o f income (due to the fa ir va lue of currency sensitive monetary asse ts a nd liabilities) The e ffect o f decreases in fo reign c urre ncy exchange rates is expected to he equal and opposile 10 the e ffect of the increases shown
Incramp1se ill
f oreign cUlrency rate
0
the QR
Ellecl on profil
QR
2013 +5 (720032)
20 12 +5 (860 702)
C redit Tisk Credit risk is the risk that one party to a financial instrume nt wi ll fa il to discharge an obligation and cause the other party to incur a financial loss TIle Groups exposure to credit risk is indica ted by the carrying amoWlt o f its financia l asse ts whic h consist principally oftmde accollilts receivable retention receivable amounts due from related parties othe r receivables and bank baLances
The Group sells its products and prov ides services to vario us panies It is the G ro ups policy that all customers who wish to obtain on credit lerms are subject to credit verificalion procedures to ensure c redit Ilonhiness Each new customer is analysed individually for creditworthiness before the de livery o f products Of services Custo mm tbat fai l to met t the credi tworthiness may transact with the Group only o n prepayme nt basis Property rentals are mostl y received in ad vtnce or conlrlCled wi th post dated cheques 10 additio n receivable balances are monitored on an ongoing basis a nd the purchase limils are established for each c redit custoroer which are reviewed reguJarly based on the level o f past transactions and senlement The Groups max im wn exposure with regard to trade aCCOWlts receivab le net ofa llowance re nected allhe reporting date was ilS fo llows
2013 2012
Business SJgmelll QR QR
Property 15478832 19386326 Trading and distributio n 194343 597 179748274 Industrial ma nufac turing 183119753 131578668 Managed services 18069385 14547389
411 011 567 345260657
41
29
Aamal Company QSc
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For tbe year eoded 3 J December 20 13
FlNAJICIAL RISK MANAG EMENT (c-o Dtinued)
Credit risk (continued) With respect to credit risk arising from the other financi31 assets of the Group the Groups exposure to credit risk arises from default of the counterparty with a maximum exposure equal 10 the canying amount of these instruments as follows
2013 QR
202
QR
Bank balances Amounts due from related parties Retention and other receivables
436136756 214439950 48290351
36788129 t 171525363 74082203
698867057 613488857
The group reduces the expoSltre of credit risk arising from other financial assets by maintaining bank accounts in reputed banks and providing services only to creditworthy re lated parties
The management cons iders the bank balances and a mQUIIIS due from related parties as high grade fi nancial assets and lfade accounls receivable and other receivables as sundard grade financial assets When a finltmcial asset is identified 10 be impaired the managemoot downgrades such assets to impaired category and provides adequate allowances
Liquidity risk Liquidity risk is the risk that the Group will not be able to meet its fmancial obligations as they fu ll due The Groups 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 nonnal and stressed conditiom without incurring unacceptable losses or risking damage to the Groups reputa tion and is to maintain a balance belWeen continuity of fuoding and f1eilibility through the use of bank overdrafts and bank loans and borrowings
The Group monitors its risk to a shortage o f funds using a recuning liquidity plaOfling 1001 TIllS tool considers the manuiry o f financial assets (eg accounts receivable) and projected cash flows from operations The Groups teons ofsales or services require arooUIlts to be paid within 30-90 days from the invoiced dale
42
29
Aamal Company QSc
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For tbe year ended 3 1 December 2013
FrNANClAL ruSK MANAGEMENT (contiQued)
Uqujdity risk (continued) The table below summarises the ruaruriJy profile of the Groups financial 1iabililies a t 31 December based on contractual undiscountcd paymeots
2013 Interest bearing loans and borrowings Bank overdrafts Trade accowus payable Other payables Amounl~ due (0 related panles
201l Interest bearing loans and borrowings
Baok overdrafts Trade accounts payable Other payables Amounts due to related parties
On demand
QR
6836280
6836280
011 demand QR
2885090
2885090
Less than 3 months
QR
521324473
303638792
47406830
2530~480
898675575
Less thall 3
months
QR
469839033
10754JJIO 37543236
1964504 1
634568620
3 10 J2 mOlllh$
QR
239333328
16378865 20210580
2289~11l
298816884
3 to 12 monlhs
QR
365476972
159621 37 J 24745342
30092716
579936401
1to 5 years
QR
J 60092748
160092148
1 to 5 years
QR
248472226
248472226
gt 5 years
QR
25261598
25261 598
gt 5 years
QR
7648000
7648000
TOlaf
QR
947012147 6836280
320017657
67617410 48199591
1389681085
Tota
QR
109 1436231
1885090 267162681
622 88578
49737757
14735 10337
43
30
Aamal Company QSltc NOTES TO THE CONSOLIDATED FlANCIAL STATEMETS For the year ended 31 December 20 t3
21 F~ANClAL RlSK MAiAGEMElT (continued)
Capital management The Boards policy is to maintain a strong cepit1 base so as to rnainmin investor creditor and market ronfoonee and to SUSWlJ) fumre dcltclonnent Gf the buinest The Board of Directors rronitortl the tapital whkh tbe Group defines as wlal $parcloders equity excluding nonmiddotcornroliing imerests and the level of dividends to orrunury srarellOJdcfS
The Board also reeks to ITIaimain a balance between the higher (ctums (hat might be fA-~$ihle With higher leves of borrnwings end Lle edvnrJages and security named Sy it sOMd Cilpitai posi[ion The GfCup~ k1rget is to achievfl a return on slureholders equity (exclJding aonwurrolJiug iorcf(sts) greater lll(ll1 he wcighlcd average inres exxmse on mrerest bearing Ivens and oorrowing
The (lf0t-p nl)nDg-e ils cnpital structure and makes adjustneal lOll in light ofchang2s in economic nd bttincss cordjlons and shareholders expe1ationJo chmges veremiddot maCo HI Lleuro objecttves polilCS or proCCSSC3 during the years erded 31 D~mber 2013md 31 Dtccmlxr2Ql2
The Group monitors the capit2J using a gClting fatio which IS dep divided by caplla plus debL The GtOwgts policy is to keep ttJe ge-anng rmio bclew 40 Tbe Group iLdtdes withb debt imete-51 beagting loans ard ~OITORlngs less cash and cash equtVaknts Capltal includes eqmty attributable 10 the equity tolders oft~e parcrt
2013 QR
2(i2 QR
fmerest bearing loans and borrowings lcss- Cash and cas ltYJUvalcnts
9i4lJ05301 _~ (429JfJl4761
1004845296 (649)6201)
Net debt
Toa capital
Capita and net debt
699849045
~ringrttio
FAIR VALtES OF Fl~ANOAL f~STRUMETS
Finarcial iostrumenL~ cOlnprise tina~lctal assetS carl finailcialliabilities
Fmancial assets colJist of bank balance) short 1Cm bank dcposis amounL dve dom rc)ltted partilt)$ rekntion and other receivables and ttade accolmis rceivabe Finatlclll habiilics cgtmsist of banilt ovcrdratls jnerest bearing lOil1S and bOrowings amounts due (0 nliled partiG~ ane trade x-ounls payable
The- fair values of hese financial inStrumen1S except Jo-- imCfest bearing loam lHld bOlToving aproKimate lhdr cMryinJ vlhes due to the Slort temt mzrutiiles or these instrument
Tllc faiT value of iotcnst beating Nns and borrowin2s ae estimate( based on discoumed ltash flows twin int(s rale- cune-ntly nvailagtk fur tilt debt or sinuiar tetnlS an-a rell1lmng matunties
31
Aamal Company~Q=-ScC ______________~______
~OTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For fhe year ended 31 December 20 t3
SlGNIFICANT ASUMPTIONS ACCOUJTING JUDGElE1TS AND F8TIMATFS
impairment (If accoonts receivable n etrnwe of lhe collectible anoun of trade accounlgt reccvable is made when collection of the full lHl1OUt i~ nO looger probabk FOI nCividualty significitIl amounts this estimation is p~rformed on an indh-idllai a$[$ Amomts wHcb arc not indivldl11Uy significant but wluch are past due ZTe tsscssed collectively and an aJlQwaccc applied ucc()r~Jng to the length of lime past due based oc histnncal recovery nlJes
hnpalrment of inHntnries lavenoncs are held at tho lower of col and nol realisable value InIOn inventoncent$ becone old or 0-~amplete an estilTJte is mate of their net j alisable vulue For indiviolhlUy significant amountS this cstinaunrt is performec all aD lndividwl osis Amotlnts whieh are fl0t individually significan( btll which ltIre old at obsolete wx LltSessed wllecivdy md a provisior is applied sccnrding to the invenrory type and be dep)ee of ageing 0 cDsolescc1ce based on anticipUled selling prices
Classifigt1ltion of El Sew(gtdy Cable Qatar WLI ali a j(lint vwture pound1 Sovedy Cables Qatar is a limited hability company whose kgal fum confers SCprm11ior bernten tbe jXliiies 10 ~he jomi lfranpement Snd the Company Itself FurthenrlOre then IS no oontractua] arrmgelTeot or any oibe aus aod circumstriliCe$ that iocik41to tht he putic5 [0 the joint flJTIlrgernelit bave rights to the ssetl and obligrtdons fo~ the liabilities of the joint ilrrongement Acoordingly El Sewed- C[jbl~s Qamr WLL is dassifiecl 7S a joiut enrtrr of he GWtp
impairment of goodwill G0oovj)1 embedded in th~ cot 0 aquisitior of subsidiaries and eqmtj-iccounled iflV(stees ire teswt for irl1jXlirmnt aHuaily Tbe calculations of value [n use fO( cfish gecj~r)lilg units (loring to real nte projecg are rtost sensitive to tin IDHowing assumpti015
Grosgt i1wginmiddot Gross Ilmrgins arc lmsed on avrage values tuhje0d in (he [Xrioo preeedhli (e siaM of the budge xnod T1esC at( mcreased over the budgel period for mticipatltX efficiency Hnprovemots
DisC)unr r(es Discount rotes represent th cl1tent mark as~ssmetlt of the risks specific te ech cash geocroting unit regarding lhe time value of money ilnd mdividu)l risks of he tmtieriyilg assets whICh have not been inwrport1eti it the Citik flow estimates The dj~(OUrl flte tlkulation is based on the speclfte circurnsthLCes of lile Group and its opltllatJng segn)~nts (md derived (ff)rC it weighted avaage (XSt 0f apilaJ (WACC) Tb fACe (akw into uoount both deb and equity The 0$1 of equity is denved from dlC expected return 01 investmenl by the Groups investors TJc Gos10( deb is based on l1e borrvwings the Gmup IS obllsxl to service SC~lletllmiddotspecific r5k IS incorxt4too by applying individual bera facto The betn mctors ire evauatcentd annuaHy bhseci on pubJicly aVflllabe murked earn
Fair value ()fnHstmeni proputies The fuit laHe 0 nvestmel~ propertis is deltrrnlnzd b cxterrwl indepzfldell property valuers laving appr0priate recognised professional quabfiillions and recenl xperience H1 the localjl)n and G-tegory 0 the oroperty being valued
Useful hes of PfQPcrly plmr (llld zqulpment The Groups management detennints th estiunted useful jives Df It~ property plan and equipmnl fix calnurjng depreciation Thi5 e~timJte is 6lermind after cinsidring 1b expeelcd usage (1f the a5sclt [hysical l101t and (eas tedmiltal Dr com~ercia obsolesccnce
Gotlg Qncen
ibe Groups mangerncnt UiS made aJ assessmeot cf the 011115 ability (0 COllllOUC liS a going conct11l Imd is satsl1ed hat me Group ms the resources to contmue in business for he foreseeable fu1urc he1hennort he management is no aware oC lny material Hncertainties that lray CH~t signinchnt doubt tlPDfl the Groups ability 10 continue as a going umcem Therefore titpound lotlsolidatcd finilllcij stftemeols comirme to be prepltd on li g0ing concern basis
Aamal Company QSc
NOTES TO THE CONSOLIDATED FlNANC[AL STATEMENTS For the year ended 3 1 December 20 13
32 INCOME TAX
Certa in subsidiaries of the Group which have non-GCe ownership are subject to income tax under Qatar Income Tax Law No 2 1 of2009 The iocome tax is charged on the share of profits attributable to non-GCe shareholders For the purpose of these conso lidated fi nancial statements the income tax liability oftbe foreign shareholders has been excluded given that the non-GCe shareholders have agreed under the shareholder agreements signed with the Group to bear the fh lliiability and make necessary payments
33 COMPARATIVE INFORMATION
Certain comparative figw-es of the previous year have been reclassified 0 coofonn to the current years presentation However such reclassifications are oat materia and do not have an impact on tbe previously reported net profit other comprehensive income or the total equity for the comparative year
The impact from the resta tement of comparative infonnalion as a resuh of adoption of IFRS I I - Joint arrangements is detailed in Note 32 Changes in aCCQu(lting policies
46
28
Aamal Company Q SC
NOTES TO THE CONSOLIDATED FfNANClAL STATEMENTS For the year ended 31 December 20 13
SEGMFNT INFORMATION (continued)
Assets and liabilities (continued)
AI 31 December 2012 Properly QR
Trading and d iSfriblllion
QR
Indusrial manufacfuring
QR
Managed senices QR
Currenl assels
Non-current assets
146491 186
6121 864484
2964425 12 903 7264
73468 1258
549267235
51387098 471 1439
Tolal assets 6268355670 305479776 1283948493 56098537
Head Office QR
468325024
6713643
475038667
Currentliabil iies
Non-current liabiLities 273444 748 1 J10 15024
86054583 7434286
669214261 1288 14977
2 1938953
287 1199
480393637 1253084
Totil lliabiliti cs 390459772 93488869 798029238 248 10 152 48J64672 1
Capila expendirure (ltII L 72865 878 1281254 6647 J356 7169 13 149045
Notes
(i)
(Ii)
Inter-segmeot balances are e limioafed 00 consolidatio n
Capi tal expendiTU res consist of additions 10 propeny plant and equip ment and iovestmenl properties
Eliminations QR
To wl QR
(273735776) (i )
(20308351(i)
1423591302
6689563230
(27576661 1) 8 113154532
(273135777) (i) 12573 10405
257388570
(273735177) 15 14698975
24 1484446
39
29
Aamal Company QSC
NOTES TO THE CONSOLIDATED FrNANCIAL STATEMENTS For the year ended 31 Dcltmber 1013
Fr-A]~ClAL RISK MANAGpoundMamp1H
Objccthes and policies fe Groups principal )uaucill liabilities comprise imltresl bctmllg loons and IxmowHgs baRlt ovetda1s amounts due to fclaled par1ies and tracte accounts payable The main pUlJXSi of thesc financial liabilities is 4J mise firmne or 610 Grmps operations The G0JP bas various fimmcial assets such as ttadc accounts receivable lInlOlmts due from related parties bark balances tltCntion receivable and other receivables which arisgt directly fran its cperuoonamp
The maiH ri~ks an3ing Joru (be Groups UnariCJlll illslrumenls jle market risk cretiJt nsk and hmdity risk Til BoarD ofDtrcctO$ reviews end agrees policies for mzrAgbg Caltt f hespound ri~k ihkh arc summariscd beloW
VIarktt risk yenfatket risk is the risk Um changes in market prices $Uch as intfcst rates and hreig lttmeocy ect14nge rilles Vltl1 affect the Groups profit eqwty Dr value tf its hoJdiI15 of financial instrl[Thnls rile objecivpoundj of marke1 risk mUnllgcrlcnt is to manage uld 1~ontr(ll tho tr))rket risk expo-sure vithir acceptable parfI-etcJ$ while optimising rerUID
Equit) price risk ampjuity prtce risk is the risk hilt the Group ampearnings will be affected as a rcmt (If luctttltions in fm vdue of ~qui-gt
mstwnents Eqlliry price risk arises from availabtetor~sale inv2strnems However the Groups exposure to eqmty price risk IS minima as II doesn hold sitl)iftrmt ailableAor-511le inYestrmmrs
[merest rate risk The Groups fimiruial poundS5ot ampId liaojlilies (at Rl $uJject to int~~ rate mk compnse brmk depoils interst bearing loans and bOITQwjags and bank overdr-afts At the reponwg dalt tbe [merest rale pronle of Ill Goups intexst bearing fbi4rdd instruments as fliows
11113 20i3 QR QR
Fued liIeryS refc insfrvrnellts
Fmmcial assets 113035962 111913394 FrOltwial liabilities --1~203712l) 1252t43~1
9)OI~ (13350972)
Fhlllting inireSI rate ns1lmlttrs Fanctl~ Isseis 127024345 ID43848o Fllllocial liabilities _-(i~9347~ (94))48926)
(836)64116)
The Groups exposure to t~ ris of changes in marXet interest fltltes relztes primariiy to the Groups financial assets and lizbitdic$ with t1Oltttirg interest mte~
lhe loEowing able demonstrates the ampmitivity nf the eonsolidattXI statemen1 of income 1) caonaly possible chonges in in1jfgtst rmes by 25 basis points with all othe vari)ble3 hdc umstant The sensitivity of the CooiK~ljclatid statement of inc(me $ the eft(ct of tb assumed changes in lnterdt rales for one year bf1sec on the floating rate financial assets and fimmcial hablhw$ held at 31 f~r The effect of deae-ascs in interest ral~ is cXp0Ctct to be equal and opposite to the effect oHlle increases sllQvro
Changes it Eftx OIl
00513 [oms profit QR
2013 Floating mterest Hlte instruments ----2$ bp (1649776)
2012 Flv-ating irkfiSt rale instrumenls +25 bp (209[9(1))
~--------- -~~ 40-middot------ _ _ shy
29
Aamal Company QSC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 3 1 December 2013
FINANCIAL RISK MANAGEMENT (continued)
Foreign currency risk Foreign currency risk is the risk lhilt the value of lhe fi nancial instruments will fluctuate due 10 changes in fore ign exchange rates
T rade aCcOlmts payable and accrued expenses include amounts due in foreign currencies mliniy US Dollars UAB Dirhams Great Britain Pounds (GB P) and Euros of which the Group has a currency risk primruily on the baJmces payable in Euros and GBP amoWlting 10 QR 14400634 (2012 QR 17214046)
The Group does not hedge its foreign currency exposure As both Qatari Riyal and UAE Dirhams are pegged to the US Dollar balances in US Dollars and UAE Dirhams are not considered to represent significant currency ris k to the Group
The table below indicates the Group s fore ign c urrency exposure on its monetary assets a nd liabilities The analysis calculates the effect o f a reasonably poss ib le move ment of the QR curre nc y rale against the Euro and GBP with all other variables held constant on the consolidated slate menl o f income (due to the fa ir va lue of currency sensitive monetary asse ts a nd liabilities) The e ffect o f decreases in fo reign c urre ncy exchange rates is expected to he equal and opposile 10 the e ffect of the increases shown
Incramp1se ill
f oreign cUlrency rate
0
the QR
Ellecl on profil
QR
2013 +5 (720032)
20 12 +5 (860 702)
C redit Tisk Credit risk is the risk that one party to a financial instrume nt wi ll fa il to discharge an obligation and cause the other party to incur a financial loss TIle Groups exposure to credit risk is indica ted by the carrying amoWlt o f its financia l asse ts whic h consist principally oftmde accollilts receivable retention receivable amounts due from related parties othe r receivables and bank baLances
The Group sells its products and prov ides services to vario us panies It is the G ro ups policy that all customers who wish to obtain on credit lerms are subject to credit verificalion procedures to ensure c redit Ilonhiness Each new customer is analysed individually for creditworthiness before the de livery o f products Of services Custo mm tbat fai l to met t the credi tworthiness may transact with the Group only o n prepayme nt basis Property rentals are mostl y received in ad vtnce or conlrlCled wi th post dated cheques 10 additio n receivable balances are monitored on an ongoing basis a nd the purchase limils are established for each c redit custoroer which are reviewed reguJarly based on the level o f past transactions and senlement The Groups max im wn exposure with regard to trade aCCOWlts receivab le net ofa llowance re nected allhe reporting date was ilS fo llows
2013 2012
Business SJgmelll QR QR
Property 15478832 19386326 Trading and distributio n 194343 597 179748274 Industrial ma nufac turing 183119753 131578668 Managed services 18069385 14547389
411 011 567 345260657
41
29
Aamal Company QSc
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For tbe year eoded 3 J December 20 13
FlNAJICIAL RISK MANAG EMENT (c-o Dtinued)
Credit risk (continued) With respect to credit risk arising from the other financi31 assets of the Group the Groups exposure to credit risk arises from default of the counterparty with a maximum exposure equal 10 the canying amount of these instruments as follows
2013 QR
202
QR
Bank balances Amounts due from related parties Retention and other receivables
436136756 214439950 48290351
36788129 t 171525363 74082203
698867057 613488857
The group reduces the expoSltre of credit risk arising from other financial assets by maintaining bank accounts in reputed banks and providing services only to creditworthy re lated parties
The management cons iders the bank balances and a mQUIIIS due from related parties as high grade fi nancial assets and lfade accounls receivable and other receivables as sundard grade financial assets When a finltmcial asset is identified 10 be impaired the managemoot downgrades such assets to impaired category and provides adequate allowances
Liquidity risk Liquidity risk is the risk that the Group will not be able to meet its fmancial obligations as they fu ll due The Groups 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 nonnal and stressed conditiom without incurring unacceptable losses or risking damage to the Groups reputa tion and is to maintain a balance belWeen continuity of fuoding and f1eilibility through the use of bank overdrafts and bank loans and borrowings
The Group monitors its risk to a shortage o f funds using a recuning liquidity plaOfling 1001 TIllS tool considers the manuiry o f financial assets (eg accounts receivable) and projected cash flows from operations The Groups teons ofsales or services require arooUIlts to be paid within 30-90 days from the invoiced dale
42
29
Aamal Company QSc
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For tbe year ended 3 1 December 2013
FrNANClAL ruSK MANAGEMENT (contiQued)
Uqujdity risk (continued) The table below summarises the ruaruriJy profile of the Groups financial 1iabililies a t 31 December based on contractual undiscountcd paymeots
2013 Interest bearing loans and borrowings Bank overdrafts Trade accowus payable Other payables Amounl~ due (0 related panles
201l Interest bearing loans and borrowings
Baok overdrafts Trade accounts payable Other payables Amounts due to related parties
On demand
QR
6836280
6836280
011 demand QR
2885090
2885090
Less than 3 months
QR
521324473
303638792
47406830
2530~480
898675575
Less thall 3
months
QR
469839033
10754JJIO 37543236
1964504 1
634568620
3 10 J2 mOlllh$
QR
239333328
16378865 20210580
2289~11l
298816884
3 to 12 monlhs
QR
365476972
159621 37 J 24745342
30092716
579936401
1to 5 years
QR
J 60092748
160092148
1 to 5 years
QR
248472226
248472226
gt 5 years
QR
25261598
25261 598
gt 5 years
QR
7648000
7648000
TOlaf
QR
947012147 6836280
320017657
67617410 48199591
1389681085
Tota
QR
109 1436231
1885090 267162681
622 88578
49737757
14735 10337
43
30
Aamal Company QSltc NOTES TO THE CONSOLIDATED FlANCIAL STATEMETS For the year ended 31 December 20 t3
21 F~ANClAL RlSK MAiAGEMElT (continued)
Capital management The Boards policy is to maintain a strong cepit1 base so as to rnainmin investor creditor and market ronfoonee and to SUSWlJ) fumre dcltclonnent Gf the buinest The Board of Directors rronitortl the tapital whkh tbe Group defines as wlal $parcloders equity excluding nonmiddotcornroliing imerests and the level of dividends to orrunury srarellOJdcfS
The Board also reeks to ITIaimain a balance between the higher (ctums (hat might be fA-~$ihle With higher leves of borrnwings end Lle edvnrJages and security named Sy it sOMd Cilpitai posi[ion The GfCup~ k1rget is to achievfl a return on slureholders equity (exclJding aonwurrolJiug iorcf(sts) greater lll(ll1 he wcighlcd average inres exxmse on mrerest bearing Ivens and oorrowing
The (lf0t-p nl)nDg-e ils cnpital structure and makes adjustneal lOll in light ofchang2s in economic nd bttincss cordjlons and shareholders expe1ationJo chmges veremiddot maCo HI Lleuro objecttves polilCS or proCCSSC3 during the years erded 31 D~mber 2013md 31 Dtccmlxr2Ql2
The Group monitors the capit2J using a gClting fatio which IS dep divided by caplla plus debL The GtOwgts policy is to keep ttJe ge-anng rmio bclew 40 Tbe Group iLdtdes withb debt imete-51 beagting loans ard ~OITORlngs less cash and cash equtVaknts Capltal includes eqmty attributable 10 the equity tolders oft~e parcrt
2013 QR
2(i2 QR
fmerest bearing loans and borrowings lcss- Cash and cas ltYJUvalcnts
9i4lJ05301 _~ (429JfJl4761
1004845296 (649)6201)
Net debt
Toa capital
Capita and net debt
699849045
~ringrttio
FAIR VALtES OF Fl~ANOAL f~STRUMETS
Finarcial iostrumenL~ cOlnprise tina~lctal assetS carl finailcialliabilities
Fmancial assets colJist of bank balance) short 1Cm bank dcposis amounL dve dom rc)ltted partilt)$ rekntion and other receivables and ttade accolmis rceivabe Finatlclll habiilics cgtmsist of banilt ovcrdratls jnerest bearing lOil1S and bOrowings amounts due (0 nliled partiG~ ane trade x-ounls payable
The- fair values of hese financial inStrumen1S except Jo-- imCfest bearing loam lHld bOlToving aproKimate lhdr cMryinJ vlhes due to the Slort temt mzrutiiles or these instrument
Tllc faiT value of iotcnst beating Nns and borrowin2s ae estimate( based on discoumed ltash flows twin int(s rale- cune-ntly nvailagtk fur tilt debt or sinuiar tetnlS an-a rell1lmng matunties
31
Aamal Company~Q=-ScC ______________~______
~OTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For fhe year ended 31 December 20 t3
SlGNIFICANT ASUMPTIONS ACCOUJTING JUDGElE1TS AND F8TIMATFS
impairment (If accoonts receivable n etrnwe of lhe collectible anoun of trade accounlgt reccvable is made when collection of the full lHl1OUt i~ nO looger probabk FOI nCividualty significitIl amounts this estimation is p~rformed on an indh-idllai a$[$ Amomts wHcb arc not indivldl11Uy significant but wluch are past due ZTe tsscssed collectively and an aJlQwaccc applied ucc()r~Jng to the length of lime past due based oc histnncal recovery nlJes
hnpalrment of inHntnries lavenoncs are held at tho lower of col and nol realisable value InIOn inventoncent$ becone old or 0-~amplete an estilTJte is mate of their net j alisable vulue For indiviolhlUy significant amountS this cstinaunrt is performec all aD lndividwl osis Amotlnts whieh are fl0t individually significan( btll which ltIre old at obsolete wx LltSessed wllecivdy md a provisior is applied sccnrding to the invenrory type and be dep)ee of ageing 0 cDsolescc1ce based on anticipUled selling prices
Classifigt1ltion of El Sew(gtdy Cable Qatar WLI ali a j(lint vwture pound1 Sovedy Cables Qatar is a limited hability company whose kgal fum confers SCprm11ior bernten tbe jXliiies 10 ~he jomi lfranpement Snd the Company Itself FurthenrlOre then IS no oontractua] arrmgelTeot or any oibe aus aod circumstriliCe$ that iocik41to tht he putic5 [0 the joint flJTIlrgernelit bave rights to the ssetl and obligrtdons fo~ the liabilities of the joint ilrrongement Acoordingly El Sewed- C[jbl~s Qamr WLL is dassifiecl 7S a joiut enrtrr of he GWtp
impairment of goodwill G0oovj)1 embedded in th~ cot 0 aquisitior of subsidiaries and eqmtj-iccounled iflV(stees ire teswt for irl1jXlirmnt aHuaily Tbe calculations of value [n use fO( cfish gecj~r)lilg units (loring to real nte projecg are rtost sensitive to tin IDHowing assumpti015
Grosgt i1wginmiddot Gross Ilmrgins arc lmsed on avrage values tuhje0d in (he [Xrioo preeedhli (e siaM of the budge xnod T1esC at( mcreased over the budgel period for mticipatltX efficiency Hnprovemots
DisC)unr r(es Discount rotes represent th cl1tent mark as~ssmetlt of the risks specific te ech cash geocroting unit regarding lhe time value of money ilnd mdividu)l risks of he tmtieriyilg assets whICh have not been inwrport1eti it the Citik flow estimates The dj~(OUrl flte tlkulation is based on the speclfte circurnsthLCes of lile Group and its opltllatJng segn)~nts (md derived (ff)rC it weighted avaage (XSt 0f apilaJ (WACC) Tb fACe (akw into uoount both deb and equity The 0$1 of equity is denved from dlC expected return 01 investmenl by the Groups investors TJc Gos10( deb is based on l1e borrvwings the Gmup IS obllsxl to service SC~lletllmiddotspecific r5k IS incorxt4too by applying individual bera facto The betn mctors ire evauatcentd annuaHy bhseci on pubJicly aVflllabe murked earn
Fair value ()fnHstmeni proputies The fuit laHe 0 nvestmel~ propertis is deltrrnlnzd b cxterrwl indepzfldell property valuers laving appr0priate recognised professional quabfiillions and recenl xperience H1 the localjl)n and G-tegory 0 the oroperty being valued
Useful hes of PfQPcrly plmr (llld zqulpment The Groups management detennints th estiunted useful jives Df It~ property plan and equipmnl fix calnurjng depreciation Thi5 e~timJte is 6lermind after cinsidring 1b expeelcd usage (1f the a5sclt [hysical l101t and (eas tedmiltal Dr com~ercia obsolesccnce
Gotlg Qncen
ibe Groups mangerncnt UiS made aJ assessmeot cf the 011115 ability (0 COllllOUC liS a going conct11l Imd is satsl1ed hat me Group ms the resources to contmue in business for he foreseeable fu1urc he1hennort he management is no aware oC lny material Hncertainties that lray CH~t signinchnt doubt tlPDfl the Groups ability 10 continue as a going umcem Therefore titpound lotlsolidatcd finilllcij stftemeols comirme to be prepltd on li g0ing concern basis
Aamal Company QSc
NOTES TO THE CONSOLIDATED FlNANC[AL STATEMENTS For the year ended 3 1 December 20 13
32 INCOME TAX
Certa in subsidiaries of the Group which have non-GCe ownership are subject to income tax under Qatar Income Tax Law No 2 1 of2009 The iocome tax is charged on the share of profits attributable to non-GCe shareholders For the purpose of these conso lidated fi nancial statements the income tax liability oftbe foreign shareholders has been excluded given that the non-GCe shareholders have agreed under the shareholder agreements signed with the Group to bear the fh lliiability and make necessary payments
33 COMPARATIVE INFORMATION
Certain comparative figw-es of the previous year have been reclassified 0 coofonn to the current years presentation However such reclassifications are oat materia and do not have an impact on tbe previously reported net profit other comprehensive income or the total equity for the comparative year
The impact from the resta tement of comparative infonnalion as a resuh of adoption of IFRS I I - Joint arrangements is detailed in Note 32 Changes in aCCQu(lting policies
46
29
Aamal Company QSC
NOTES TO THE CONSOLIDATED FrNANCIAL STATEMENTS For the year ended 31 Dcltmber 1013
Fr-A]~ClAL RISK MANAGpoundMamp1H
Objccthes and policies fe Groups principal )uaucill liabilities comprise imltresl bctmllg loons and IxmowHgs baRlt ovetda1s amounts due to fclaled par1ies and tracte accounts payable The main pUlJXSi of thesc financial liabilities is 4J mise firmne or 610 Grmps operations The G0JP bas various fimmcial assets such as ttadc accounts receivable lInlOlmts due from related parties bark balances tltCntion receivable and other receivables which arisgt directly fran its cperuoonamp
The maiH ri~ks an3ing Joru (be Groups UnariCJlll illslrumenls jle market risk cretiJt nsk and hmdity risk Til BoarD ofDtrcctO$ reviews end agrees policies for mzrAgbg Caltt f hespound ri~k ihkh arc summariscd beloW
VIarktt risk yenfatket risk is the risk Um changes in market prices $Uch as intfcst rates and hreig lttmeocy ect14nge rilles Vltl1 affect the Groups profit eqwty Dr value tf its hoJdiI15 of financial instrl[Thnls rile objecivpoundj of marke1 risk mUnllgcrlcnt is to manage uld 1~ontr(ll tho tr))rket risk expo-sure vithir acceptable parfI-etcJ$ while optimising rerUID
Equit) price risk ampjuity prtce risk is the risk hilt the Group ampearnings will be affected as a rcmt (If luctttltions in fm vdue of ~qui-gt
mstwnents Eqlliry price risk arises from availabtetor~sale inv2strnems However the Groups exposure to eqmty price risk IS minima as II doesn hold sitl)iftrmt ailableAor-511le inYestrmmrs
[merest rate risk The Groups fimiruial poundS5ot ampId liaojlilies (at Rl $uJject to int~~ rate mk compnse brmk depoils interst bearing loans and bOITQwjags and bank overdr-afts At the reponwg dalt tbe [merest rale pronle of Ill Goups intexst bearing fbi4rdd instruments as fliows
11113 20i3 QR QR
Fued liIeryS refc insfrvrnellts
Fmmcial assets 113035962 111913394 FrOltwial liabilities --1~203712l) 1252t43~1
9)OI~ (13350972)
Fhlllting inireSI rate ns1lmlttrs Fanctl~ Isseis 127024345 ID43848o Fllllocial liabilities _-(i~9347~ (94))48926)
(836)64116)
The Groups exposure to t~ ris of changes in marXet interest fltltes relztes primariiy to the Groups financial assets and lizbitdic$ with t1Oltttirg interest mte~
lhe loEowing able demonstrates the ampmitivity nf the eonsolidattXI statemen1 of income 1) caonaly possible chonges in in1jfgtst rmes by 25 basis points with all othe vari)ble3 hdc umstant The sensitivity of the CooiK~ljclatid statement of inc(me $ the eft(ct of tb assumed changes in lnterdt rales for one year bf1sec on the floating rate financial assets and fimmcial hablhw$ held at 31 f~r The effect of deae-ascs in interest ral~ is cXp0Ctct to be equal and opposite to the effect oHlle increases sllQvro
Changes it Eftx OIl
00513 [oms profit QR
2013 Floating mterest Hlte instruments ----2$ bp (1649776)
2012 Flv-ating irkfiSt rale instrumenls +25 bp (209[9(1))
~--------- -~~ 40-middot------ _ _ shy
29
Aamal Company QSC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 3 1 December 2013
FINANCIAL RISK MANAGEMENT (continued)
Foreign currency risk Foreign currency risk is the risk lhilt the value of lhe fi nancial instruments will fluctuate due 10 changes in fore ign exchange rates
T rade aCcOlmts payable and accrued expenses include amounts due in foreign currencies mliniy US Dollars UAB Dirhams Great Britain Pounds (GB P) and Euros of which the Group has a currency risk primruily on the baJmces payable in Euros and GBP amoWlting 10 QR 14400634 (2012 QR 17214046)
The Group does not hedge its foreign currency exposure As both Qatari Riyal and UAE Dirhams are pegged to the US Dollar balances in US Dollars and UAE Dirhams are not considered to represent significant currency ris k to the Group
The table below indicates the Group s fore ign c urrency exposure on its monetary assets a nd liabilities The analysis calculates the effect o f a reasonably poss ib le move ment of the QR curre nc y rale against the Euro and GBP with all other variables held constant on the consolidated slate menl o f income (due to the fa ir va lue of currency sensitive monetary asse ts a nd liabilities) The e ffect o f decreases in fo reign c urre ncy exchange rates is expected to he equal and opposile 10 the e ffect of the increases shown
Incramp1se ill
f oreign cUlrency rate
0
the QR
Ellecl on profil
QR
2013 +5 (720032)
20 12 +5 (860 702)
C redit Tisk Credit risk is the risk that one party to a financial instrume nt wi ll fa il to discharge an obligation and cause the other party to incur a financial loss TIle Groups exposure to credit risk is indica ted by the carrying amoWlt o f its financia l asse ts whic h consist principally oftmde accollilts receivable retention receivable amounts due from related parties othe r receivables and bank baLances
The Group sells its products and prov ides services to vario us panies It is the G ro ups policy that all customers who wish to obtain on credit lerms are subject to credit verificalion procedures to ensure c redit Ilonhiness Each new customer is analysed individually for creditworthiness before the de livery o f products Of services Custo mm tbat fai l to met t the credi tworthiness may transact with the Group only o n prepayme nt basis Property rentals are mostl y received in ad vtnce or conlrlCled wi th post dated cheques 10 additio n receivable balances are monitored on an ongoing basis a nd the purchase limils are established for each c redit custoroer which are reviewed reguJarly based on the level o f past transactions and senlement The Groups max im wn exposure with regard to trade aCCOWlts receivab le net ofa llowance re nected allhe reporting date was ilS fo llows
2013 2012
Business SJgmelll QR QR
Property 15478832 19386326 Trading and distributio n 194343 597 179748274 Industrial ma nufac turing 183119753 131578668 Managed services 18069385 14547389
411 011 567 345260657
41
29
Aamal Company QSc
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For tbe year eoded 3 J December 20 13
FlNAJICIAL RISK MANAG EMENT (c-o Dtinued)
Credit risk (continued) With respect to credit risk arising from the other financi31 assets of the Group the Groups exposure to credit risk arises from default of the counterparty with a maximum exposure equal 10 the canying amount of these instruments as follows
2013 QR
202
QR
Bank balances Amounts due from related parties Retention and other receivables
436136756 214439950 48290351
36788129 t 171525363 74082203
698867057 613488857
The group reduces the expoSltre of credit risk arising from other financial assets by maintaining bank accounts in reputed banks and providing services only to creditworthy re lated parties
The management cons iders the bank balances and a mQUIIIS due from related parties as high grade fi nancial assets and lfade accounls receivable and other receivables as sundard grade financial assets When a finltmcial asset is identified 10 be impaired the managemoot downgrades such assets to impaired category and provides adequate allowances
Liquidity risk Liquidity risk is the risk that the Group will not be able to meet its fmancial obligations as they fu ll due The Groups 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 nonnal and stressed conditiom without incurring unacceptable losses or risking damage to the Groups reputa tion and is to maintain a balance belWeen continuity of fuoding and f1eilibility through the use of bank overdrafts and bank loans and borrowings
The Group monitors its risk to a shortage o f funds using a recuning liquidity plaOfling 1001 TIllS tool considers the manuiry o f financial assets (eg accounts receivable) and projected cash flows from operations The Groups teons ofsales or services require arooUIlts to be paid within 30-90 days from the invoiced dale
42
29
Aamal Company QSc
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For tbe year ended 3 1 December 2013
FrNANClAL ruSK MANAGEMENT (contiQued)
Uqujdity risk (continued) The table below summarises the ruaruriJy profile of the Groups financial 1iabililies a t 31 December based on contractual undiscountcd paymeots
2013 Interest bearing loans and borrowings Bank overdrafts Trade accowus payable Other payables Amounl~ due (0 related panles
201l Interest bearing loans and borrowings
Baok overdrafts Trade accounts payable Other payables Amounts due to related parties
On demand
QR
6836280
6836280
011 demand QR
2885090
2885090
Less than 3 months
QR
521324473
303638792
47406830
2530~480
898675575
Less thall 3
months
QR
469839033
10754JJIO 37543236
1964504 1
634568620
3 10 J2 mOlllh$
QR
239333328
16378865 20210580
2289~11l
298816884
3 to 12 monlhs
QR
365476972
159621 37 J 24745342
30092716
579936401
1to 5 years
QR
J 60092748
160092148
1 to 5 years
QR
248472226
248472226
gt 5 years
QR
25261598
25261 598
gt 5 years
QR
7648000
7648000
TOlaf
QR
947012147 6836280
320017657
67617410 48199591
1389681085
Tota
QR
109 1436231
1885090 267162681
622 88578
49737757
14735 10337
43
30
Aamal Company QSltc NOTES TO THE CONSOLIDATED FlANCIAL STATEMETS For the year ended 31 December 20 t3
21 F~ANClAL RlSK MAiAGEMElT (continued)
Capital management The Boards policy is to maintain a strong cepit1 base so as to rnainmin investor creditor and market ronfoonee and to SUSWlJ) fumre dcltclonnent Gf the buinest The Board of Directors rronitortl the tapital whkh tbe Group defines as wlal $parcloders equity excluding nonmiddotcornroliing imerests and the level of dividends to orrunury srarellOJdcfS
The Board also reeks to ITIaimain a balance between the higher (ctums (hat might be fA-~$ihle With higher leves of borrnwings end Lle edvnrJages and security named Sy it sOMd Cilpitai posi[ion The GfCup~ k1rget is to achievfl a return on slureholders equity (exclJding aonwurrolJiug iorcf(sts) greater lll(ll1 he wcighlcd average inres exxmse on mrerest bearing Ivens and oorrowing
The (lf0t-p nl)nDg-e ils cnpital structure and makes adjustneal lOll in light ofchang2s in economic nd bttincss cordjlons and shareholders expe1ationJo chmges veremiddot maCo HI Lleuro objecttves polilCS or proCCSSC3 during the years erded 31 D~mber 2013md 31 Dtccmlxr2Ql2
The Group monitors the capit2J using a gClting fatio which IS dep divided by caplla plus debL The GtOwgts policy is to keep ttJe ge-anng rmio bclew 40 Tbe Group iLdtdes withb debt imete-51 beagting loans ard ~OITORlngs less cash and cash equtVaknts Capltal includes eqmty attributable 10 the equity tolders oft~e parcrt
2013 QR
2(i2 QR
fmerest bearing loans and borrowings lcss- Cash and cas ltYJUvalcnts
9i4lJ05301 _~ (429JfJl4761
1004845296 (649)6201)
Net debt
Toa capital
Capita and net debt
699849045
~ringrttio
FAIR VALtES OF Fl~ANOAL f~STRUMETS
Finarcial iostrumenL~ cOlnprise tina~lctal assetS carl finailcialliabilities
Fmancial assets colJist of bank balance) short 1Cm bank dcposis amounL dve dom rc)ltted partilt)$ rekntion and other receivables and ttade accolmis rceivabe Finatlclll habiilics cgtmsist of banilt ovcrdratls jnerest bearing lOil1S and bOrowings amounts due (0 nliled partiG~ ane trade x-ounls payable
The- fair values of hese financial inStrumen1S except Jo-- imCfest bearing loam lHld bOlToving aproKimate lhdr cMryinJ vlhes due to the Slort temt mzrutiiles or these instrument
Tllc faiT value of iotcnst beating Nns and borrowin2s ae estimate( based on discoumed ltash flows twin int(s rale- cune-ntly nvailagtk fur tilt debt or sinuiar tetnlS an-a rell1lmng matunties
31
Aamal Company~Q=-ScC ______________~______
~OTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For fhe year ended 31 December 20 t3
SlGNIFICANT ASUMPTIONS ACCOUJTING JUDGElE1TS AND F8TIMATFS
impairment (If accoonts receivable n etrnwe of lhe collectible anoun of trade accounlgt reccvable is made when collection of the full lHl1OUt i~ nO looger probabk FOI nCividualty significitIl amounts this estimation is p~rformed on an indh-idllai a$[$ Amomts wHcb arc not indivldl11Uy significant but wluch are past due ZTe tsscssed collectively and an aJlQwaccc applied ucc()r~Jng to the length of lime past due based oc histnncal recovery nlJes
hnpalrment of inHntnries lavenoncs are held at tho lower of col and nol realisable value InIOn inventoncent$ becone old or 0-~amplete an estilTJte is mate of their net j alisable vulue For indiviolhlUy significant amountS this cstinaunrt is performec all aD lndividwl osis Amotlnts whieh are fl0t individually significan( btll which ltIre old at obsolete wx LltSessed wllecivdy md a provisior is applied sccnrding to the invenrory type and be dep)ee of ageing 0 cDsolescc1ce based on anticipUled selling prices
Classifigt1ltion of El Sew(gtdy Cable Qatar WLI ali a j(lint vwture pound1 Sovedy Cables Qatar is a limited hability company whose kgal fum confers SCprm11ior bernten tbe jXliiies 10 ~he jomi lfranpement Snd the Company Itself FurthenrlOre then IS no oontractua] arrmgelTeot or any oibe aus aod circumstriliCe$ that iocik41to tht he putic5 [0 the joint flJTIlrgernelit bave rights to the ssetl and obligrtdons fo~ the liabilities of the joint ilrrongement Acoordingly El Sewed- C[jbl~s Qamr WLL is dassifiecl 7S a joiut enrtrr of he GWtp
impairment of goodwill G0oovj)1 embedded in th~ cot 0 aquisitior of subsidiaries and eqmtj-iccounled iflV(stees ire teswt for irl1jXlirmnt aHuaily Tbe calculations of value [n use fO( cfish gecj~r)lilg units (loring to real nte projecg are rtost sensitive to tin IDHowing assumpti015
Grosgt i1wginmiddot Gross Ilmrgins arc lmsed on avrage values tuhje0d in (he [Xrioo preeedhli (e siaM of the budge xnod T1esC at( mcreased over the budgel period for mticipatltX efficiency Hnprovemots
DisC)unr r(es Discount rotes represent th cl1tent mark as~ssmetlt of the risks specific te ech cash geocroting unit regarding lhe time value of money ilnd mdividu)l risks of he tmtieriyilg assets whICh have not been inwrport1eti it the Citik flow estimates The dj~(OUrl flte tlkulation is based on the speclfte circurnsthLCes of lile Group and its opltllatJng segn)~nts (md derived (ff)rC it weighted avaage (XSt 0f apilaJ (WACC) Tb fACe (akw into uoount both deb and equity The 0$1 of equity is denved from dlC expected return 01 investmenl by the Groups investors TJc Gos10( deb is based on l1e borrvwings the Gmup IS obllsxl to service SC~lletllmiddotspecific r5k IS incorxt4too by applying individual bera facto The betn mctors ire evauatcentd annuaHy bhseci on pubJicly aVflllabe murked earn
Fair value ()fnHstmeni proputies The fuit laHe 0 nvestmel~ propertis is deltrrnlnzd b cxterrwl indepzfldell property valuers laving appr0priate recognised professional quabfiillions and recenl xperience H1 the localjl)n and G-tegory 0 the oroperty being valued
Useful hes of PfQPcrly plmr (llld zqulpment The Groups management detennints th estiunted useful jives Df It~ property plan and equipmnl fix calnurjng depreciation Thi5 e~timJte is 6lermind after cinsidring 1b expeelcd usage (1f the a5sclt [hysical l101t and (eas tedmiltal Dr com~ercia obsolesccnce
Gotlg Qncen
ibe Groups mangerncnt UiS made aJ assessmeot cf the 011115 ability (0 COllllOUC liS a going conct11l Imd is satsl1ed hat me Group ms the resources to contmue in business for he foreseeable fu1urc he1hennort he management is no aware oC lny material Hncertainties that lray CH~t signinchnt doubt tlPDfl the Groups ability 10 continue as a going umcem Therefore titpound lotlsolidatcd finilllcij stftemeols comirme to be prepltd on li g0ing concern basis
Aamal Company QSc
NOTES TO THE CONSOLIDATED FlNANC[AL STATEMENTS For the year ended 3 1 December 20 13
32 INCOME TAX
Certa in subsidiaries of the Group which have non-GCe ownership are subject to income tax under Qatar Income Tax Law No 2 1 of2009 The iocome tax is charged on the share of profits attributable to non-GCe shareholders For the purpose of these conso lidated fi nancial statements the income tax liability oftbe foreign shareholders has been excluded given that the non-GCe shareholders have agreed under the shareholder agreements signed with the Group to bear the fh lliiability and make necessary payments
33 COMPARATIVE INFORMATION
Certain comparative figw-es of the previous year have been reclassified 0 coofonn to the current years presentation However such reclassifications are oat materia and do not have an impact on tbe previously reported net profit other comprehensive income or the total equity for the comparative year
The impact from the resta tement of comparative infonnalion as a resuh of adoption of IFRS I I - Joint arrangements is detailed in Note 32 Changes in aCCQu(lting policies
46
29
Aamal Company QSC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 3 1 December 2013
FINANCIAL RISK MANAGEMENT (continued)
Foreign currency risk Foreign currency risk is the risk lhilt the value of lhe fi nancial instruments will fluctuate due 10 changes in fore ign exchange rates
T rade aCcOlmts payable and accrued expenses include amounts due in foreign currencies mliniy US Dollars UAB Dirhams Great Britain Pounds (GB P) and Euros of which the Group has a currency risk primruily on the baJmces payable in Euros and GBP amoWlting 10 QR 14400634 (2012 QR 17214046)
The Group does not hedge its foreign currency exposure As both Qatari Riyal and UAE Dirhams are pegged to the US Dollar balances in US Dollars and UAE Dirhams are not considered to represent significant currency ris k to the Group
The table below indicates the Group s fore ign c urrency exposure on its monetary assets a nd liabilities The analysis calculates the effect o f a reasonably poss ib le move ment of the QR curre nc y rale against the Euro and GBP with all other variables held constant on the consolidated slate menl o f income (due to the fa ir va lue of currency sensitive monetary asse ts a nd liabilities) The e ffect o f decreases in fo reign c urre ncy exchange rates is expected to he equal and opposile 10 the e ffect of the increases shown
Incramp1se ill
f oreign cUlrency rate
0
the QR
Ellecl on profil
QR
2013 +5 (720032)
20 12 +5 (860 702)
C redit Tisk Credit risk is the risk that one party to a financial instrume nt wi ll fa il to discharge an obligation and cause the other party to incur a financial loss TIle Groups exposure to credit risk is indica ted by the carrying amoWlt o f its financia l asse ts whic h consist principally oftmde accollilts receivable retention receivable amounts due from related parties othe r receivables and bank baLances
The Group sells its products and prov ides services to vario us panies It is the G ro ups policy that all customers who wish to obtain on credit lerms are subject to credit verificalion procedures to ensure c redit Ilonhiness Each new customer is analysed individually for creditworthiness before the de livery o f products Of services Custo mm tbat fai l to met t the credi tworthiness may transact with the Group only o n prepayme nt basis Property rentals are mostl y received in ad vtnce or conlrlCled wi th post dated cheques 10 additio n receivable balances are monitored on an ongoing basis a nd the purchase limils are established for each c redit custoroer which are reviewed reguJarly based on the level o f past transactions and senlement The Groups max im wn exposure with regard to trade aCCOWlts receivab le net ofa llowance re nected allhe reporting date was ilS fo llows
2013 2012
Business SJgmelll QR QR
Property 15478832 19386326 Trading and distributio n 194343 597 179748274 Industrial ma nufac turing 183119753 131578668 Managed services 18069385 14547389
411 011 567 345260657
41
29
Aamal Company QSc
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For tbe year eoded 3 J December 20 13
FlNAJICIAL RISK MANAG EMENT (c-o Dtinued)
Credit risk (continued) With respect to credit risk arising from the other financi31 assets of the Group the Groups exposure to credit risk arises from default of the counterparty with a maximum exposure equal 10 the canying amount of these instruments as follows
2013 QR
202
QR
Bank balances Amounts due from related parties Retention and other receivables
436136756 214439950 48290351
36788129 t 171525363 74082203
698867057 613488857
The group reduces the expoSltre of credit risk arising from other financial assets by maintaining bank accounts in reputed banks and providing services only to creditworthy re lated parties
The management cons iders the bank balances and a mQUIIIS due from related parties as high grade fi nancial assets and lfade accounls receivable and other receivables as sundard grade financial assets When a finltmcial asset is identified 10 be impaired the managemoot downgrades such assets to impaired category and provides adequate allowances
Liquidity risk Liquidity risk is the risk that the Group will not be able to meet its fmancial obligations as they fu ll due The Groups 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 nonnal and stressed conditiom without incurring unacceptable losses or risking damage to the Groups reputa tion and is to maintain a balance belWeen continuity of fuoding and f1eilibility through the use of bank overdrafts and bank loans and borrowings
The Group monitors its risk to a shortage o f funds using a recuning liquidity plaOfling 1001 TIllS tool considers the manuiry o f financial assets (eg accounts receivable) and projected cash flows from operations The Groups teons ofsales or services require arooUIlts to be paid within 30-90 days from the invoiced dale
42
29
Aamal Company QSc
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For tbe year ended 3 1 December 2013
FrNANClAL ruSK MANAGEMENT (contiQued)
Uqujdity risk (continued) The table below summarises the ruaruriJy profile of the Groups financial 1iabililies a t 31 December based on contractual undiscountcd paymeots
2013 Interest bearing loans and borrowings Bank overdrafts Trade accowus payable Other payables Amounl~ due (0 related panles
201l Interest bearing loans and borrowings
Baok overdrafts Trade accounts payable Other payables Amounts due to related parties
On demand
QR
6836280
6836280
011 demand QR
2885090
2885090
Less than 3 months
QR
521324473
303638792
47406830
2530~480
898675575
Less thall 3
months
QR
469839033
10754JJIO 37543236
1964504 1
634568620
3 10 J2 mOlllh$
QR
239333328
16378865 20210580
2289~11l
298816884
3 to 12 monlhs
QR
365476972
159621 37 J 24745342
30092716
579936401
1to 5 years
QR
J 60092748
160092148
1 to 5 years
QR
248472226
248472226
gt 5 years
QR
25261598
25261 598
gt 5 years
QR
7648000
7648000
TOlaf
QR
947012147 6836280
320017657
67617410 48199591
1389681085
Tota
QR
109 1436231
1885090 267162681
622 88578
49737757
14735 10337
43
30
Aamal Company QSltc NOTES TO THE CONSOLIDATED FlANCIAL STATEMETS For the year ended 31 December 20 t3
21 F~ANClAL RlSK MAiAGEMElT (continued)
Capital management The Boards policy is to maintain a strong cepit1 base so as to rnainmin investor creditor and market ronfoonee and to SUSWlJ) fumre dcltclonnent Gf the buinest The Board of Directors rronitortl the tapital whkh tbe Group defines as wlal $parcloders equity excluding nonmiddotcornroliing imerests and the level of dividends to orrunury srarellOJdcfS
The Board also reeks to ITIaimain a balance between the higher (ctums (hat might be fA-~$ihle With higher leves of borrnwings end Lle edvnrJages and security named Sy it sOMd Cilpitai posi[ion The GfCup~ k1rget is to achievfl a return on slureholders equity (exclJding aonwurrolJiug iorcf(sts) greater lll(ll1 he wcighlcd average inres exxmse on mrerest bearing Ivens and oorrowing
The (lf0t-p nl)nDg-e ils cnpital structure and makes adjustneal lOll in light ofchang2s in economic nd bttincss cordjlons and shareholders expe1ationJo chmges veremiddot maCo HI Lleuro objecttves polilCS or proCCSSC3 during the years erded 31 D~mber 2013md 31 Dtccmlxr2Ql2
The Group monitors the capit2J using a gClting fatio which IS dep divided by caplla plus debL The GtOwgts policy is to keep ttJe ge-anng rmio bclew 40 Tbe Group iLdtdes withb debt imete-51 beagting loans ard ~OITORlngs less cash and cash equtVaknts Capltal includes eqmty attributable 10 the equity tolders oft~e parcrt
2013 QR
2(i2 QR
fmerest bearing loans and borrowings lcss- Cash and cas ltYJUvalcnts
9i4lJ05301 _~ (429JfJl4761
1004845296 (649)6201)
Net debt
Toa capital
Capita and net debt
699849045
~ringrttio
FAIR VALtES OF Fl~ANOAL f~STRUMETS
Finarcial iostrumenL~ cOlnprise tina~lctal assetS carl finailcialliabilities
Fmancial assets colJist of bank balance) short 1Cm bank dcposis amounL dve dom rc)ltted partilt)$ rekntion and other receivables and ttade accolmis rceivabe Finatlclll habiilics cgtmsist of banilt ovcrdratls jnerest bearing lOil1S and bOrowings amounts due (0 nliled partiG~ ane trade x-ounls payable
The- fair values of hese financial inStrumen1S except Jo-- imCfest bearing loam lHld bOlToving aproKimate lhdr cMryinJ vlhes due to the Slort temt mzrutiiles or these instrument
Tllc faiT value of iotcnst beating Nns and borrowin2s ae estimate( based on discoumed ltash flows twin int(s rale- cune-ntly nvailagtk fur tilt debt or sinuiar tetnlS an-a rell1lmng matunties
31
Aamal Company~Q=-ScC ______________~______
~OTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For fhe year ended 31 December 20 t3
SlGNIFICANT ASUMPTIONS ACCOUJTING JUDGElE1TS AND F8TIMATFS
impairment (If accoonts receivable n etrnwe of lhe collectible anoun of trade accounlgt reccvable is made when collection of the full lHl1OUt i~ nO looger probabk FOI nCividualty significitIl amounts this estimation is p~rformed on an indh-idllai a$[$ Amomts wHcb arc not indivldl11Uy significant but wluch are past due ZTe tsscssed collectively and an aJlQwaccc applied ucc()r~Jng to the length of lime past due based oc histnncal recovery nlJes
hnpalrment of inHntnries lavenoncs are held at tho lower of col and nol realisable value InIOn inventoncent$ becone old or 0-~amplete an estilTJte is mate of their net j alisable vulue For indiviolhlUy significant amountS this cstinaunrt is performec all aD lndividwl osis Amotlnts whieh are fl0t individually significan( btll which ltIre old at obsolete wx LltSessed wllecivdy md a provisior is applied sccnrding to the invenrory type and be dep)ee of ageing 0 cDsolescc1ce based on anticipUled selling prices
Classifigt1ltion of El Sew(gtdy Cable Qatar WLI ali a j(lint vwture pound1 Sovedy Cables Qatar is a limited hability company whose kgal fum confers SCprm11ior bernten tbe jXliiies 10 ~he jomi lfranpement Snd the Company Itself FurthenrlOre then IS no oontractua] arrmgelTeot or any oibe aus aod circumstriliCe$ that iocik41to tht he putic5 [0 the joint flJTIlrgernelit bave rights to the ssetl and obligrtdons fo~ the liabilities of the joint ilrrongement Acoordingly El Sewed- C[jbl~s Qamr WLL is dassifiecl 7S a joiut enrtrr of he GWtp
impairment of goodwill G0oovj)1 embedded in th~ cot 0 aquisitior of subsidiaries and eqmtj-iccounled iflV(stees ire teswt for irl1jXlirmnt aHuaily Tbe calculations of value [n use fO( cfish gecj~r)lilg units (loring to real nte projecg are rtost sensitive to tin IDHowing assumpti015
Grosgt i1wginmiddot Gross Ilmrgins arc lmsed on avrage values tuhje0d in (he [Xrioo preeedhli (e siaM of the budge xnod T1esC at( mcreased over the budgel period for mticipatltX efficiency Hnprovemots
DisC)unr r(es Discount rotes represent th cl1tent mark as~ssmetlt of the risks specific te ech cash geocroting unit regarding lhe time value of money ilnd mdividu)l risks of he tmtieriyilg assets whICh have not been inwrport1eti it the Citik flow estimates The dj~(OUrl flte tlkulation is based on the speclfte circurnsthLCes of lile Group and its opltllatJng segn)~nts (md derived (ff)rC it weighted avaage (XSt 0f apilaJ (WACC) Tb fACe (akw into uoount both deb and equity The 0$1 of equity is denved from dlC expected return 01 investmenl by the Groups investors TJc Gos10( deb is based on l1e borrvwings the Gmup IS obllsxl to service SC~lletllmiddotspecific r5k IS incorxt4too by applying individual bera facto The betn mctors ire evauatcentd annuaHy bhseci on pubJicly aVflllabe murked earn
Fair value ()fnHstmeni proputies The fuit laHe 0 nvestmel~ propertis is deltrrnlnzd b cxterrwl indepzfldell property valuers laving appr0priate recognised professional quabfiillions and recenl xperience H1 the localjl)n and G-tegory 0 the oroperty being valued
Useful hes of PfQPcrly plmr (llld zqulpment The Groups management detennints th estiunted useful jives Df It~ property plan and equipmnl fix calnurjng depreciation Thi5 e~timJte is 6lermind after cinsidring 1b expeelcd usage (1f the a5sclt [hysical l101t and (eas tedmiltal Dr com~ercia obsolesccnce
Gotlg Qncen
ibe Groups mangerncnt UiS made aJ assessmeot cf the 011115 ability (0 COllllOUC liS a going conct11l Imd is satsl1ed hat me Group ms the resources to contmue in business for he foreseeable fu1urc he1hennort he management is no aware oC lny material Hncertainties that lray CH~t signinchnt doubt tlPDfl the Groups ability 10 continue as a going umcem Therefore titpound lotlsolidatcd finilllcij stftemeols comirme to be prepltd on li g0ing concern basis
Aamal Company QSc
NOTES TO THE CONSOLIDATED FlNANC[AL STATEMENTS For the year ended 3 1 December 20 13
32 INCOME TAX
Certa in subsidiaries of the Group which have non-GCe ownership are subject to income tax under Qatar Income Tax Law No 2 1 of2009 The iocome tax is charged on the share of profits attributable to non-GCe shareholders For the purpose of these conso lidated fi nancial statements the income tax liability oftbe foreign shareholders has been excluded given that the non-GCe shareholders have agreed under the shareholder agreements signed with the Group to bear the fh lliiability and make necessary payments
33 COMPARATIVE INFORMATION
Certain comparative figw-es of the previous year have been reclassified 0 coofonn to the current years presentation However such reclassifications are oat materia and do not have an impact on tbe previously reported net profit other comprehensive income or the total equity for the comparative year
The impact from the resta tement of comparative infonnalion as a resuh of adoption of IFRS I I - Joint arrangements is detailed in Note 32 Changes in aCCQu(lting policies
46
29
Aamal Company QSc
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For tbe year eoded 3 J December 20 13
FlNAJICIAL RISK MANAG EMENT (c-o Dtinued)
Credit risk (continued) With respect to credit risk arising from the other financi31 assets of the Group the Groups exposure to credit risk arises from default of the counterparty with a maximum exposure equal 10 the canying amount of these instruments as follows
2013 QR
202
QR
Bank balances Amounts due from related parties Retention and other receivables
436136756 214439950 48290351
36788129 t 171525363 74082203
698867057 613488857
The group reduces the expoSltre of credit risk arising from other financial assets by maintaining bank accounts in reputed banks and providing services only to creditworthy re lated parties
The management cons iders the bank balances and a mQUIIIS due from related parties as high grade fi nancial assets and lfade accounls receivable and other receivables as sundard grade financial assets When a finltmcial asset is identified 10 be impaired the managemoot downgrades such assets to impaired category and provides adequate allowances
Liquidity risk Liquidity risk is the risk that the Group will not be able to meet its fmancial obligations as they fu ll due The Groups 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 nonnal and stressed conditiom without incurring unacceptable losses or risking damage to the Groups reputa tion and is to maintain a balance belWeen continuity of fuoding and f1eilibility through the use of bank overdrafts and bank loans and borrowings
The Group monitors its risk to a shortage o f funds using a recuning liquidity plaOfling 1001 TIllS tool considers the manuiry o f financial assets (eg accounts receivable) and projected cash flows from operations The Groups teons ofsales or services require arooUIlts to be paid within 30-90 days from the invoiced dale
42
29
Aamal Company QSc
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For tbe year ended 3 1 December 2013
FrNANClAL ruSK MANAGEMENT (contiQued)
Uqujdity risk (continued) The table below summarises the ruaruriJy profile of the Groups financial 1iabililies a t 31 December based on contractual undiscountcd paymeots
2013 Interest bearing loans and borrowings Bank overdrafts Trade accowus payable Other payables Amounl~ due (0 related panles
201l Interest bearing loans and borrowings
Baok overdrafts Trade accounts payable Other payables Amounts due to related parties
On demand
QR
6836280
6836280
011 demand QR
2885090
2885090
Less than 3 months
QR
521324473
303638792
47406830
2530~480
898675575
Less thall 3
months
QR
469839033
10754JJIO 37543236
1964504 1
634568620
3 10 J2 mOlllh$
QR
239333328
16378865 20210580
2289~11l
298816884
3 to 12 monlhs
QR
365476972
159621 37 J 24745342
30092716
579936401
1to 5 years
QR
J 60092748
160092148
1 to 5 years
QR
248472226
248472226
gt 5 years
QR
25261598
25261 598
gt 5 years
QR
7648000
7648000
TOlaf
QR
947012147 6836280
320017657
67617410 48199591
1389681085
Tota
QR
109 1436231
1885090 267162681
622 88578
49737757
14735 10337
43
30
Aamal Company QSltc NOTES TO THE CONSOLIDATED FlANCIAL STATEMETS For the year ended 31 December 20 t3
21 F~ANClAL RlSK MAiAGEMElT (continued)
Capital management The Boards policy is to maintain a strong cepit1 base so as to rnainmin investor creditor and market ronfoonee and to SUSWlJ) fumre dcltclonnent Gf the buinest The Board of Directors rronitortl the tapital whkh tbe Group defines as wlal $parcloders equity excluding nonmiddotcornroliing imerests and the level of dividends to orrunury srarellOJdcfS
The Board also reeks to ITIaimain a balance between the higher (ctums (hat might be fA-~$ihle With higher leves of borrnwings end Lle edvnrJages and security named Sy it sOMd Cilpitai posi[ion The GfCup~ k1rget is to achievfl a return on slureholders equity (exclJding aonwurrolJiug iorcf(sts) greater lll(ll1 he wcighlcd average inres exxmse on mrerest bearing Ivens and oorrowing
The (lf0t-p nl)nDg-e ils cnpital structure and makes adjustneal lOll in light ofchang2s in economic nd bttincss cordjlons and shareholders expe1ationJo chmges veremiddot maCo HI Lleuro objecttves polilCS or proCCSSC3 during the years erded 31 D~mber 2013md 31 Dtccmlxr2Ql2
The Group monitors the capit2J using a gClting fatio which IS dep divided by caplla plus debL The GtOwgts policy is to keep ttJe ge-anng rmio bclew 40 Tbe Group iLdtdes withb debt imete-51 beagting loans ard ~OITORlngs less cash and cash equtVaknts Capltal includes eqmty attributable 10 the equity tolders oft~e parcrt
2013 QR
2(i2 QR
fmerest bearing loans and borrowings lcss- Cash and cas ltYJUvalcnts
9i4lJ05301 _~ (429JfJl4761
1004845296 (649)6201)
Net debt
Toa capital
Capita and net debt
699849045
~ringrttio
FAIR VALtES OF Fl~ANOAL f~STRUMETS
Finarcial iostrumenL~ cOlnprise tina~lctal assetS carl finailcialliabilities
Fmancial assets colJist of bank balance) short 1Cm bank dcposis amounL dve dom rc)ltted partilt)$ rekntion and other receivables and ttade accolmis rceivabe Finatlclll habiilics cgtmsist of banilt ovcrdratls jnerest bearing lOil1S and bOrowings amounts due (0 nliled partiG~ ane trade x-ounls payable
The- fair values of hese financial inStrumen1S except Jo-- imCfest bearing loam lHld bOlToving aproKimate lhdr cMryinJ vlhes due to the Slort temt mzrutiiles or these instrument
Tllc faiT value of iotcnst beating Nns and borrowin2s ae estimate( based on discoumed ltash flows twin int(s rale- cune-ntly nvailagtk fur tilt debt or sinuiar tetnlS an-a rell1lmng matunties
31
Aamal Company~Q=-ScC ______________~______
~OTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For fhe year ended 31 December 20 t3
SlGNIFICANT ASUMPTIONS ACCOUJTING JUDGElE1TS AND F8TIMATFS
impairment (If accoonts receivable n etrnwe of lhe collectible anoun of trade accounlgt reccvable is made when collection of the full lHl1OUt i~ nO looger probabk FOI nCividualty significitIl amounts this estimation is p~rformed on an indh-idllai a$[$ Amomts wHcb arc not indivldl11Uy significant but wluch are past due ZTe tsscssed collectively and an aJlQwaccc applied ucc()r~Jng to the length of lime past due based oc histnncal recovery nlJes
hnpalrment of inHntnries lavenoncs are held at tho lower of col and nol realisable value InIOn inventoncent$ becone old or 0-~amplete an estilTJte is mate of their net j alisable vulue For indiviolhlUy significant amountS this cstinaunrt is performec all aD lndividwl osis Amotlnts whieh are fl0t individually significan( btll which ltIre old at obsolete wx LltSessed wllecivdy md a provisior is applied sccnrding to the invenrory type and be dep)ee of ageing 0 cDsolescc1ce based on anticipUled selling prices
Classifigt1ltion of El Sew(gtdy Cable Qatar WLI ali a j(lint vwture pound1 Sovedy Cables Qatar is a limited hability company whose kgal fum confers SCprm11ior bernten tbe jXliiies 10 ~he jomi lfranpement Snd the Company Itself FurthenrlOre then IS no oontractua] arrmgelTeot or any oibe aus aod circumstriliCe$ that iocik41to tht he putic5 [0 the joint flJTIlrgernelit bave rights to the ssetl and obligrtdons fo~ the liabilities of the joint ilrrongement Acoordingly El Sewed- C[jbl~s Qamr WLL is dassifiecl 7S a joiut enrtrr of he GWtp
impairment of goodwill G0oovj)1 embedded in th~ cot 0 aquisitior of subsidiaries and eqmtj-iccounled iflV(stees ire teswt for irl1jXlirmnt aHuaily Tbe calculations of value [n use fO( cfish gecj~r)lilg units (loring to real nte projecg are rtost sensitive to tin IDHowing assumpti015
Grosgt i1wginmiddot Gross Ilmrgins arc lmsed on avrage values tuhje0d in (he [Xrioo preeedhli (e siaM of the budge xnod T1esC at( mcreased over the budgel period for mticipatltX efficiency Hnprovemots
DisC)unr r(es Discount rotes represent th cl1tent mark as~ssmetlt of the risks specific te ech cash geocroting unit regarding lhe time value of money ilnd mdividu)l risks of he tmtieriyilg assets whICh have not been inwrport1eti it the Citik flow estimates The dj~(OUrl flte tlkulation is based on the speclfte circurnsthLCes of lile Group and its opltllatJng segn)~nts (md derived (ff)rC it weighted avaage (XSt 0f apilaJ (WACC) Tb fACe (akw into uoount both deb and equity The 0$1 of equity is denved from dlC expected return 01 investmenl by the Groups investors TJc Gos10( deb is based on l1e borrvwings the Gmup IS obllsxl to service SC~lletllmiddotspecific r5k IS incorxt4too by applying individual bera facto The betn mctors ire evauatcentd annuaHy bhseci on pubJicly aVflllabe murked earn
Fair value ()fnHstmeni proputies The fuit laHe 0 nvestmel~ propertis is deltrrnlnzd b cxterrwl indepzfldell property valuers laving appr0priate recognised professional quabfiillions and recenl xperience H1 the localjl)n and G-tegory 0 the oroperty being valued
Useful hes of PfQPcrly plmr (llld zqulpment The Groups management detennints th estiunted useful jives Df It~ property plan and equipmnl fix calnurjng depreciation Thi5 e~timJte is 6lermind after cinsidring 1b expeelcd usage (1f the a5sclt [hysical l101t and (eas tedmiltal Dr com~ercia obsolesccnce
Gotlg Qncen
ibe Groups mangerncnt UiS made aJ assessmeot cf the 011115 ability (0 COllllOUC liS a going conct11l Imd is satsl1ed hat me Group ms the resources to contmue in business for he foreseeable fu1urc he1hennort he management is no aware oC lny material Hncertainties that lray CH~t signinchnt doubt tlPDfl the Groups ability 10 continue as a going umcem Therefore titpound lotlsolidatcd finilllcij stftemeols comirme to be prepltd on li g0ing concern basis
Aamal Company QSc
NOTES TO THE CONSOLIDATED FlNANC[AL STATEMENTS For the year ended 3 1 December 20 13
32 INCOME TAX
Certa in subsidiaries of the Group which have non-GCe ownership are subject to income tax under Qatar Income Tax Law No 2 1 of2009 The iocome tax is charged on the share of profits attributable to non-GCe shareholders For the purpose of these conso lidated fi nancial statements the income tax liability oftbe foreign shareholders has been excluded given that the non-GCe shareholders have agreed under the shareholder agreements signed with the Group to bear the fh lliiability and make necessary payments
33 COMPARATIVE INFORMATION
Certain comparative figw-es of the previous year have been reclassified 0 coofonn to the current years presentation However such reclassifications are oat materia and do not have an impact on tbe previously reported net profit other comprehensive income or the total equity for the comparative year
The impact from the resta tement of comparative infonnalion as a resuh of adoption of IFRS I I - Joint arrangements is detailed in Note 32 Changes in aCCQu(lting policies
46
29
Aamal Company QSc
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For tbe year ended 3 1 December 2013
FrNANClAL ruSK MANAGEMENT (contiQued)
Uqujdity risk (continued) The table below summarises the ruaruriJy profile of the Groups financial 1iabililies a t 31 December based on contractual undiscountcd paymeots
2013 Interest bearing loans and borrowings Bank overdrafts Trade accowus payable Other payables Amounl~ due (0 related panles
201l Interest bearing loans and borrowings
Baok overdrafts Trade accounts payable Other payables Amounts due to related parties
On demand
QR
6836280
6836280
011 demand QR
2885090
2885090
Less than 3 months
QR
521324473
303638792
47406830
2530~480
898675575
Less thall 3
months
QR
469839033
10754JJIO 37543236
1964504 1
634568620
3 10 J2 mOlllh$
QR
239333328
16378865 20210580
2289~11l
298816884
3 to 12 monlhs
QR
365476972
159621 37 J 24745342
30092716
579936401
1to 5 years
QR
J 60092748
160092148
1 to 5 years
QR
248472226
248472226
gt 5 years
QR
25261598
25261 598
gt 5 years
QR
7648000
7648000
TOlaf
QR
947012147 6836280
320017657
67617410 48199591
1389681085
Tota
QR
109 1436231
1885090 267162681
622 88578
49737757
14735 10337
43
30
Aamal Company QSltc NOTES TO THE CONSOLIDATED FlANCIAL STATEMETS For the year ended 31 December 20 t3
21 F~ANClAL RlSK MAiAGEMElT (continued)
Capital management The Boards policy is to maintain a strong cepit1 base so as to rnainmin investor creditor and market ronfoonee and to SUSWlJ) fumre dcltclonnent Gf the buinest The Board of Directors rronitortl the tapital whkh tbe Group defines as wlal $parcloders equity excluding nonmiddotcornroliing imerests and the level of dividends to orrunury srarellOJdcfS
The Board also reeks to ITIaimain a balance between the higher (ctums (hat might be fA-~$ihle With higher leves of borrnwings end Lle edvnrJages and security named Sy it sOMd Cilpitai posi[ion The GfCup~ k1rget is to achievfl a return on slureholders equity (exclJding aonwurrolJiug iorcf(sts) greater lll(ll1 he wcighlcd average inres exxmse on mrerest bearing Ivens and oorrowing
The (lf0t-p nl)nDg-e ils cnpital structure and makes adjustneal lOll in light ofchang2s in economic nd bttincss cordjlons and shareholders expe1ationJo chmges veremiddot maCo HI Lleuro objecttves polilCS or proCCSSC3 during the years erded 31 D~mber 2013md 31 Dtccmlxr2Ql2
The Group monitors the capit2J using a gClting fatio which IS dep divided by caplla plus debL The GtOwgts policy is to keep ttJe ge-anng rmio bclew 40 Tbe Group iLdtdes withb debt imete-51 beagting loans ard ~OITORlngs less cash and cash equtVaknts Capltal includes eqmty attributable 10 the equity tolders oft~e parcrt
2013 QR
2(i2 QR
fmerest bearing loans and borrowings lcss- Cash and cas ltYJUvalcnts
9i4lJ05301 _~ (429JfJl4761
1004845296 (649)6201)
Net debt
Toa capital
Capita and net debt
699849045
~ringrttio
FAIR VALtES OF Fl~ANOAL f~STRUMETS
Finarcial iostrumenL~ cOlnprise tina~lctal assetS carl finailcialliabilities
Fmancial assets colJist of bank balance) short 1Cm bank dcposis amounL dve dom rc)ltted partilt)$ rekntion and other receivables and ttade accolmis rceivabe Finatlclll habiilics cgtmsist of banilt ovcrdratls jnerest bearing lOil1S and bOrowings amounts due (0 nliled partiG~ ane trade x-ounls payable
The- fair values of hese financial inStrumen1S except Jo-- imCfest bearing loam lHld bOlToving aproKimate lhdr cMryinJ vlhes due to the Slort temt mzrutiiles or these instrument
Tllc faiT value of iotcnst beating Nns and borrowin2s ae estimate( based on discoumed ltash flows twin int(s rale- cune-ntly nvailagtk fur tilt debt or sinuiar tetnlS an-a rell1lmng matunties
31
Aamal Company~Q=-ScC ______________~______
~OTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For fhe year ended 31 December 20 t3
SlGNIFICANT ASUMPTIONS ACCOUJTING JUDGElE1TS AND F8TIMATFS
impairment (If accoonts receivable n etrnwe of lhe collectible anoun of trade accounlgt reccvable is made when collection of the full lHl1OUt i~ nO looger probabk FOI nCividualty significitIl amounts this estimation is p~rformed on an indh-idllai a$[$ Amomts wHcb arc not indivldl11Uy significant but wluch are past due ZTe tsscssed collectively and an aJlQwaccc applied ucc()r~Jng to the length of lime past due based oc histnncal recovery nlJes
hnpalrment of inHntnries lavenoncs are held at tho lower of col and nol realisable value InIOn inventoncent$ becone old or 0-~amplete an estilTJte is mate of their net j alisable vulue For indiviolhlUy significant amountS this cstinaunrt is performec all aD lndividwl osis Amotlnts whieh are fl0t individually significan( btll which ltIre old at obsolete wx LltSessed wllecivdy md a provisior is applied sccnrding to the invenrory type and be dep)ee of ageing 0 cDsolescc1ce based on anticipUled selling prices
Classifigt1ltion of El Sew(gtdy Cable Qatar WLI ali a j(lint vwture pound1 Sovedy Cables Qatar is a limited hability company whose kgal fum confers SCprm11ior bernten tbe jXliiies 10 ~he jomi lfranpement Snd the Company Itself FurthenrlOre then IS no oontractua] arrmgelTeot or any oibe aus aod circumstriliCe$ that iocik41to tht he putic5 [0 the joint flJTIlrgernelit bave rights to the ssetl and obligrtdons fo~ the liabilities of the joint ilrrongement Acoordingly El Sewed- C[jbl~s Qamr WLL is dassifiecl 7S a joiut enrtrr of he GWtp
impairment of goodwill G0oovj)1 embedded in th~ cot 0 aquisitior of subsidiaries and eqmtj-iccounled iflV(stees ire teswt for irl1jXlirmnt aHuaily Tbe calculations of value [n use fO( cfish gecj~r)lilg units (loring to real nte projecg are rtost sensitive to tin IDHowing assumpti015
Grosgt i1wginmiddot Gross Ilmrgins arc lmsed on avrage values tuhje0d in (he [Xrioo preeedhli (e siaM of the budge xnod T1esC at( mcreased over the budgel period for mticipatltX efficiency Hnprovemots
DisC)unr r(es Discount rotes represent th cl1tent mark as~ssmetlt of the risks specific te ech cash geocroting unit regarding lhe time value of money ilnd mdividu)l risks of he tmtieriyilg assets whICh have not been inwrport1eti it the Citik flow estimates The dj~(OUrl flte tlkulation is based on the speclfte circurnsthLCes of lile Group and its opltllatJng segn)~nts (md derived (ff)rC it weighted avaage (XSt 0f apilaJ (WACC) Tb fACe (akw into uoount both deb and equity The 0$1 of equity is denved from dlC expected return 01 investmenl by the Groups investors TJc Gos10( deb is based on l1e borrvwings the Gmup IS obllsxl to service SC~lletllmiddotspecific r5k IS incorxt4too by applying individual bera facto The betn mctors ire evauatcentd annuaHy bhseci on pubJicly aVflllabe murked earn
Fair value ()fnHstmeni proputies The fuit laHe 0 nvestmel~ propertis is deltrrnlnzd b cxterrwl indepzfldell property valuers laving appr0priate recognised professional quabfiillions and recenl xperience H1 the localjl)n and G-tegory 0 the oroperty being valued
Useful hes of PfQPcrly plmr (llld zqulpment The Groups management detennints th estiunted useful jives Df It~ property plan and equipmnl fix calnurjng depreciation Thi5 e~timJte is 6lermind after cinsidring 1b expeelcd usage (1f the a5sclt [hysical l101t and (eas tedmiltal Dr com~ercia obsolesccnce
Gotlg Qncen
ibe Groups mangerncnt UiS made aJ assessmeot cf the 011115 ability (0 COllllOUC liS a going conct11l Imd is satsl1ed hat me Group ms the resources to contmue in business for he foreseeable fu1urc he1hennort he management is no aware oC lny material Hncertainties that lray CH~t signinchnt doubt tlPDfl the Groups ability 10 continue as a going umcem Therefore titpound lotlsolidatcd finilllcij stftemeols comirme to be prepltd on li g0ing concern basis
Aamal Company QSc
NOTES TO THE CONSOLIDATED FlNANC[AL STATEMENTS For the year ended 3 1 December 20 13
32 INCOME TAX
Certa in subsidiaries of the Group which have non-GCe ownership are subject to income tax under Qatar Income Tax Law No 2 1 of2009 The iocome tax is charged on the share of profits attributable to non-GCe shareholders For the purpose of these conso lidated fi nancial statements the income tax liability oftbe foreign shareholders has been excluded given that the non-GCe shareholders have agreed under the shareholder agreements signed with the Group to bear the fh lliiability and make necessary payments
33 COMPARATIVE INFORMATION
Certain comparative figw-es of the previous year have been reclassified 0 coofonn to the current years presentation However such reclassifications are oat materia and do not have an impact on tbe previously reported net profit other comprehensive income or the total equity for the comparative year
The impact from the resta tement of comparative infonnalion as a resuh of adoption of IFRS I I - Joint arrangements is detailed in Note 32 Changes in aCCQu(lting policies
46
30
Aamal Company QSltc NOTES TO THE CONSOLIDATED FlANCIAL STATEMETS For the year ended 31 December 20 t3
21 F~ANClAL RlSK MAiAGEMElT (continued)
Capital management The Boards policy is to maintain a strong cepit1 base so as to rnainmin investor creditor and market ronfoonee and to SUSWlJ) fumre dcltclonnent Gf the buinest The Board of Directors rronitortl the tapital whkh tbe Group defines as wlal $parcloders equity excluding nonmiddotcornroliing imerests and the level of dividends to orrunury srarellOJdcfS
The Board also reeks to ITIaimain a balance between the higher (ctums (hat might be fA-~$ihle With higher leves of borrnwings end Lle edvnrJages and security named Sy it sOMd Cilpitai posi[ion The GfCup~ k1rget is to achievfl a return on slureholders equity (exclJding aonwurrolJiug iorcf(sts) greater lll(ll1 he wcighlcd average inres exxmse on mrerest bearing Ivens and oorrowing
The (lf0t-p nl)nDg-e ils cnpital structure and makes adjustneal lOll in light ofchang2s in economic nd bttincss cordjlons and shareholders expe1ationJo chmges veremiddot maCo HI Lleuro objecttves polilCS or proCCSSC3 during the years erded 31 D~mber 2013md 31 Dtccmlxr2Ql2
The Group monitors the capit2J using a gClting fatio which IS dep divided by caplla plus debL The GtOwgts policy is to keep ttJe ge-anng rmio bclew 40 Tbe Group iLdtdes withb debt imete-51 beagting loans ard ~OITORlngs less cash and cash equtVaknts Capltal includes eqmty attributable 10 the equity tolders oft~e parcrt
2013 QR
2(i2 QR
fmerest bearing loans and borrowings lcss- Cash and cas ltYJUvalcnts
9i4lJ05301 _~ (429JfJl4761
1004845296 (649)6201)
Net debt
Toa capital
Capita and net debt
699849045
~ringrttio
FAIR VALtES OF Fl~ANOAL f~STRUMETS
Finarcial iostrumenL~ cOlnprise tina~lctal assetS carl finailcialliabilities
Fmancial assets colJist of bank balance) short 1Cm bank dcposis amounL dve dom rc)ltted partilt)$ rekntion and other receivables and ttade accolmis rceivabe Finatlclll habiilics cgtmsist of banilt ovcrdratls jnerest bearing lOil1S and bOrowings amounts due (0 nliled partiG~ ane trade x-ounls payable
The- fair values of hese financial inStrumen1S except Jo-- imCfest bearing loam lHld bOlToving aproKimate lhdr cMryinJ vlhes due to the Slort temt mzrutiiles or these instrument
Tllc faiT value of iotcnst beating Nns and borrowin2s ae estimate( based on discoumed ltash flows twin int(s rale- cune-ntly nvailagtk fur tilt debt or sinuiar tetnlS an-a rell1lmng matunties
31
Aamal Company~Q=-ScC ______________~______
~OTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For fhe year ended 31 December 20 t3
SlGNIFICANT ASUMPTIONS ACCOUJTING JUDGElE1TS AND F8TIMATFS
impairment (If accoonts receivable n etrnwe of lhe collectible anoun of trade accounlgt reccvable is made when collection of the full lHl1OUt i~ nO looger probabk FOI nCividualty significitIl amounts this estimation is p~rformed on an indh-idllai a$[$ Amomts wHcb arc not indivldl11Uy significant but wluch are past due ZTe tsscssed collectively and an aJlQwaccc applied ucc()r~Jng to the length of lime past due based oc histnncal recovery nlJes
hnpalrment of inHntnries lavenoncs are held at tho lower of col and nol realisable value InIOn inventoncent$ becone old or 0-~amplete an estilTJte is mate of their net j alisable vulue For indiviolhlUy significant amountS this cstinaunrt is performec all aD lndividwl osis Amotlnts whieh are fl0t individually significan( btll which ltIre old at obsolete wx LltSessed wllecivdy md a provisior is applied sccnrding to the invenrory type and be dep)ee of ageing 0 cDsolescc1ce based on anticipUled selling prices
Classifigt1ltion of El Sew(gtdy Cable Qatar WLI ali a j(lint vwture pound1 Sovedy Cables Qatar is a limited hability company whose kgal fum confers SCprm11ior bernten tbe jXliiies 10 ~he jomi lfranpement Snd the Company Itself FurthenrlOre then IS no oontractua] arrmgelTeot or any oibe aus aod circumstriliCe$ that iocik41to tht he putic5 [0 the joint flJTIlrgernelit bave rights to the ssetl and obligrtdons fo~ the liabilities of the joint ilrrongement Acoordingly El Sewed- C[jbl~s Qamr WLL is dassifiecl 7S a joiut enrtrr of he GWtp
impairment of goodwill G0oovj)1 embedded in th~ cot 0 aquisitior of subsidiaries and eqmtj-iccounled iflV(stees ire teswt for irl1jXlirmnt aHuaily Tbe calculations of value [n use fO( cfish gecj~r)lilg units (loring to real nte projecg are rtost sensitive to tin IDHowing assumpti015
Grosgt i1wginmiddot Gross Ilmrgins arc lmsed on avrage values tuhje0d in (he [Xrioo preeedhli (e siaM of the budge xnod T1esC at( mcreased over the budgel period for mticipatltX efficiency Hnprovemots
DisC)unr r(es Discount rotes represent th cl1tent mark as~ssmetlt of the risks specific te ech cash geocroting unit regarding lhe time value of money ilnd mdividu)l risks of he tmtieriyilg assets whICh have not been inwrport1eti it the Citik flow estimates The dj~(OUrl flte tlkulation is based on the speclfte circurnsthLCes of lile Group and its opltllatJng segn)~nts (md derived (ff)rC it weighted avaage (XSt 0f apilaJ (WACC) Tb fACe (akw into uoount both deb and equity The 0$1 of equity is denved from dlC expected return 01 investmenl by the Groups investors TJc Gos10( deb is based on l1e borrvwings the Gmup IS obllsxl to service SC~lletllmiddotspecific r5k IS incorxt4too by applying individual bera facto The betn mctors ire evauatcentd annuaHy bhseci on pubJicly aVflllabe murked earn
Fair value ()fnHstmeni proputies The fuit laHe 0 nvestmel~ propertis is deltrrnlnzd b cxterrwl indepzfldell property valuers laving appr0priate recognised professional quabfiillions and recenl xperience H1 the localjl)n and G-tegory 0 the oroperty being valued
Useful hes of PfQPcrly plmr (llld zqulpment The Groups management detennints th estiunted useful jives Df It~ property plan and equipmnl fix calnurjng depreciation Thi5 e~timJte is 6lermind after cinsidring 1b expeelcd usage (1f the a5sclt [hysical l101t and (eas tedmiltal Dr com~ercia obsolesccnce
Gotlg Qncen
ibe Groups mangerncnt UiS made aJ assessmeot cf the 011115 ability (0 COllllOUC liS a going conct11l Imd is satsl1ed hat me Group ms the resources to contmue in business for he foreseeable fu1urc he1hennort he management is no aware oC lny material Hncertainties that lray CH~t signinchnt doubt tlPDfl the Groups ability 10 continue as a going umcem Therefore titpound lotlsolidatcd finilllcij stftemeols comirme to be prepltd on li g0ing concern basis
Aamal Company QSc
NOTES TO THE CONSOLIDATED FlNANC[AL STATEMENTS For the year ended 3 1 December 20 13
32 INCOME TAX
Certa in subsidiaries of the Group which have non-GCe ownership are subject to income tax under Qatar Income Tax Law No 2 1 of2009 The iocome tax is charged on the share of profits attributable to non-GCe shareholders For the purpose of these conso lidated fi nancial statements the income tax liability oftbe foreign shareholders has been excluded given that the non-GCe shareholders have agreed under the shareholder agreements signed with the Group to bear the fh lliiability and make necessary payments
33 COMPARATIVE INFORMATION
Certain comparative figw-es of the previous year have been reclassified 0 coofonn to the current years presentation However such reclassifications are oat materia and do not have an impact on tbe previously reported net profit other comprehensive income or the total equity for the comparative year
The impact from the resta tement of comparative infonnalion as a resuh of adoption of IFRS I I - Joint arrangements is detailed in Note 32 Changes in aCCQu(lting policies
46
31
Aamal Company~Q=-ScC ______________~______
~OTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For fhe year ended 31 December 20 t3
SlGNIFICANT ASUMPTIONS ACCOUJTING JUDGElE1TS AND F8TIMATFS
impairment (If accoonts receivable n etrnwe of lhe collectible anoun of trade accounlgt reccvable is made when collection of the full lHl1OUt i~ nO looger probabk FOI nCividualty significitIl amounts this estimation is p~rformed on an indh-idllai a$[$ Amomts wHcb arc not indivldl11Uy significant but wluch are past due ZTe tsscssed collectively and an aJlQwaccc applied ucc()r~Jng to the length of lime past due based oc histnncal recovery nlJes
hnpalrment of inHntnries lavenoncs are held at tho lower of col and nol realisable value InIOn inventoncent$ becone old or 0-~amplete an estilTJte is mate of their net j alisable vulue For indiviolhlUy significant amountS this cstinaunrt is performec all aD lndividwl osis Amotlnts whieh are fl0t individually significan( btll which ltIre old at obsolete wx LltSessed wllecivdy md a provisior is applied sccnrding to the invenrory type and be dep)ee of ageing 0 cDsolescc1ce based on anticipUled selling prices
Classifigt1ltion of El Sew(gtdy Cable Qatar WLI ali a j(lint vwture pound1 Sovedy Cables Qatar is a limited hability company whose kgal fum confers SCprm11ior bernten tbe jXliiies 10 ~he jomi lfranpement Snd the Company Itself FurthenrlOre then IS no oontractua] arrmgelTeot or any oibe aus aod circumstriliCe$ that iocik41to tht he putic5 [0 the joint flJTIlrgernelit bave rights to the ssetl and obligrtdons fo~ the liabilities of the joint ilrrongement Acoordingly El Sewed- C[jbl~s Qamr WLL is dassifiecl 7S a joiut enrtrr of he GWtp
impairment of goodwill G0oovj)1 embedded in th~ cot 0 aquisitior of subsidiaries and eqmtj-iccounled iflV(stees ire teswt for irl1jXlirmnt aHuaily Tbe calculations of value [n use fO( cfish gecj~r)lilg units (loring to real nte projecg are rtost sensitive to tin IDHowing assumpti015
Grosgt i1wginmiddot Gross Ilmrgins arc lmsed on avrage values tuhje0d in (he [Xrioo preeedhli (e siaM of the budge xnod T1esC at( mcreased over the budgel period for mticipatltX efficiency Hnprovemots
DisC)unr r(es Discount rotes represent th cl1tent mark as~ssmetlt of the risks specific te ech cash geocroting unit regarding lhe time value of money ilnd mdividu)l risks of he tmtieriyilg assets whICh have not been inwrport1eti it the Citik flow estimates The dj~(OUrl flte tlkulation is based on the speclfte circurnsthLCes of lile Group and its opltllatJng segn)~nts (md derived (ff)rC it weighted avaage (XSt 0f apilaJ (WACC) Tb fACe (akw into uoount both deb and equity The 0$1 of equity is denved from dlC expected return 01 investmenl by the Groups investors TJc Gos10( deb is based on l1e borrvwings the Gmup IS obllsxl to service SC~lletllmiddotspecific r5k IS incorxt4too by applying individual bera facto The betn mctors ire evauatcentd annuaHy bhseci on pubJicly aVflllabe murked earn
Fair value ()fnHstmeni proputies The fuit laHe 0 nvestmel~ propertis is deltrrnlnzd b cxterrwl indepzfldell property valuers laving appr0priate recognised professional quabfiillions and recenl xperience H1 the localjl)n and G-tegory 0 the oroperty being valued
Useful hes of PfQPcrly plmr (llld zqulpment The Groups management detennints th estiunted useful jives Df It~ property plan and equipmnl fix calnurjng depreciation Thi5 e~timJte is 6lermind after cinsidring 1b expeelcd usage (1f the a5sclt [hysical l101t and (eas tedmiltal Dr com~ercia obsolesccnce
Gotlg Qncen
ibe Groups mangerncnt UiS made aJ assessmeot cf the 011115 ability (0 COllllOUC liS a going conct11l Imd is satsl1ed hat me Group ms the resources to contmue in business for he foreseeable fu1urc he1hennort he management is no aware oC lny material Hncertainties that lray CH~t signinchnt doubt tlPDfl the Groups ability 10 continue as a going umcem Therefore titpound lotlsolidatcd finilllcij stftemeols comirme to be prepltd on li g0ing concern basis
Aamal Company QSc
NOTES TO THE CONSOLIDATED FlNANC[AL STATEMENTS For the year ended 3 1 December 20 13
32 INCOME TAX
Certa in subsidiaries of the Group which have non-GCe ownership are subject to income tax under Qatar Income Tax Law No 2 1 of2009 The iocome tax is charged on the share of profits attributable to non-GCe shareholders For the purpose of these conso lidated fi nancial statements the income tax liability oftbe foreign shareholders has been excluded given that the non-GCe shareholders have agreed under the shareholder agreements signed with the Group to bear the fh lliiability and make necessary payments
33 COMPARATIVE INFORMATION
Certain comparative figw-es of the previous year have been reclassified 0 coofonn to the current years presentation However such reclassifications are oat materia and do not have an impact on tbe previously reported net profit other comprehensive income or the total equity for the comparative year
The impact from the resta tement of comparative infonnalion as a resuh of adoption of IFRS I I - Joint arrangements is detailed in Note 32 Changes in aCCQu(lting policies
46
Aamal Company QSc
NOTES TO THE CONSOLIDATED FlNANC[AL STATEMENTS For the year ended 3 1 December 20 13
32 INCOME TAX
Certa in subsidiaries of the Group which have non-GCe ownership are subject to income tax under Qatar Income Tax Law No 2 1 of2009 The iocome tax is charged on the share of profits attributable to non-GCe shareholders For the purpose of these conso lidated fi nancial statements the income tax liability oftbe foreign shareholders has been excluded given that the non-GCe shareholders have agreed under the shareholder agreements signed with the Group to bear the fh lliiability and make necessary payments
33 COMPARATIVE INFORMATION
Certain comparative figw-es of the previous year have been reclassified 0 coofonn to the current years presentation However such reclassifications are oat materia and do not have an impact on tbe previously reported net profit other comprehensive income or the total equity for the comparative year
The impact from the resta tement of comparative infonnalion as a resuh of adoption of IFRS I I - Joint arrangements is detailed in Note 32 Changes in aCCQu(lting policies
46
Related Documents
