Confidence - Qatar General Insurance

Annual Report

2017

Confidence In Tomorrow

Confidence In Tomorrow

His Highness Sheikh Tamim bin Hamad Al-ThaniEmir of the State of Qatar

Strategic report

Financial highlights

Key Indicators

Credit rating

The Board of Director ’s report

Chairman’s Statement

Group Chied Executive Officer

8

9

10

11

15

17

Performance review

Our Group

Qatar General Insurance & Reinsurance Company Q.P.S.C.

General Takaful Company P.Q.S.C.

Qatar General Holding Company W.L.L.

Project Management and Contracts Department

General Real Estate Company W.L.L.

Real Estate Projects in the Pipeline

General Company for Water and Beverages W.L.L.

World Trade Center – Qatar W.L.L.

Orientals Enterprises W.L.L.

Human Resources

Corporate Social Responsibility

20

21

24

27

29

30

32

34

36

38

40

42

Governance

Risk Management Report

Board of Directors

Corporate Governance

Fatwa and Shari ’a Supervisor y Board Report

44

48

50

61

Consolidated financial statements

Independent Auditor ’s report

Consolidated Statement of Financial Position

Consolidated Statement of Profit or Loss

Consolidated Statement of Comprehensive Income

Consolidated Statement of Changes in Equity

Consolidated Statement of Cash Flows

Notes to the Consolidated Financial Statements

64

71

73

74

75

77

79

Contents

Qatar General Insurance and Reinsurance Company Q.P.S .C. | Annual Repor t 20178 9www.qgirco.com

QR ‘000QR ‘000

20162017Consolidated Statement of Financial Position

Consolidated Statement of Profit or Loss

Liquid assets

Total investments

Total assets

Total gross technical reserves

Net technical reserves

Equity attributable to equity holders of the Parent

1,294,560

7,615,476

9,514,816

1,037,447

266,014

6,196,491

3,323,671

1,481,482

7,590,507

9,514,428

1,038,757

259,034

6,367,937

3,105,369Total liabilities

QR ‘000QR ‘000

20162017Consolidated Statement of Cash Flows

Net cash flows from operating activities

Net cash flows used in investing activities

Net cash flows used in financing activities

124,193

(236,533)

71,820

260,056

222,652

(78,909)

(72,417)

300,576Cash and cash equivalents at 31 December

QR ‘000QR ‘000

20162017

566,971Gross Written Premiums

179,689Net Written Premiums

183,274Net Earned Premiums

200,025Investment Income

260,913Profit for the year

629,949

214,770

203,661

236,534

258,254

Financial Highlights


Key Indicators

2.51

EARNINGS PER SHARE

20162017

3.51

1.50

DIVIDEND PER SHARE

20162017*

2.20

TOTAL LIABILITIES TO TOTAL EQUITY

20162017

48.45%

53.68%

LIQUID ASSETS TO NET TECHNICAL RESERVES

20162017

571.93%

486.65%

RETURN ON AVERAGE ASSETS

20162017

2.74% 2.72%

RETURN ON AVERAGE EQUITY

20162017

4.07%4.14%

NET COMBINED RATIO

20162017

88.67%

94.57%

NET LOSS RATIO

20162017

56.70%56.41%

*The proposed dividends are subject to the approval of the general assembly.


Credit Rating

For the fifth consecutive year, QGIRCO has

maintained its strength rating and issuer credit

rating. Product diversification, strong risk-

adjusted capitalisation, and enhanced risk

management capabilities have underpinned

the company ’s stable per formance.

Our Group maintains a ver y strong capital

position that continues to support our excellent

financial strength rating (A-, A.M. Best).

Our balance sheet strength remains at the

strongest level, supported by robust operating

per formance and appropriate enterprise risk

management. Our attention to risk exposure

and frequent analysis of our situation has been

enhanced with improved systems spanning

across the Group, ensuring we maintain

sufficient liquidity to meet our insurance and

non-insurance liabilities.

FINANCIAL STRENGTH RATING

A - (Excellent)

ISSUER CREDIT RATING

a -

OUTLOOK FOR BOTH RATINGS

STABLE

Capital Strength


The Board of Director’s Report

Our performance

While many companies are stil l suffering the

impact of the prevailing unfavourable market

conditions of the past year, 2017 year also

came burdened with its own challenges to many

companies in the State of Qatar. Nevertheless,

and despite of these exceptional times, we

have succeeded through our robust capital

base and diversified investments portfolio, to

support our Group in meeting its strategy and

consequently per forming well during such a

year. I am pleased to report that QGIRCO has

achieved a net profit of QR 261 million for the

year ended 31 December 2017 (compared

to QR 258 million for the year ended 31

December 2016).

We take pride in our ability to retain and

strengthen our notable and strong position in

the insurance industr y and marketplace in the

State of Qatar with gross written premiums of

QR 796 million (including Takaful businesses)

at the end of the year, (compared to QR 838

million for the year 2016), which is regarded

as a good achievement, given the severe

impact of the competitive international prices

on insurance premiums.

In terms of Investment returns, the Group has

achieved QR 200 million for the year ended 31

December 2017 (compared to QR 237 million

for the year 2016). As for the total assets it

amounted to QR 9.5 billion and a total equity

of QR 6.2 billion as at 31 December 2017.

The Board of Directors proposes distributing

cash dividends to the shareholders at the

rate of 22% of the nominal value of the share

(equivalent to QR 2.2 per share), and adopting

the Company ’s balance sheet and Profit &

Loss account for the financial year ended 31

December 2017.

We are honoured to reveal that the Company ’s

financial strength and credit rating remains

stable, as affirmed by A.M. Best Credit Rating

Agency by granting the Company a Financial

Strength Rating (FSR) of “A-“ (Excellent) and a

Long-Term Issuer Credit Rating (Long-Term ICR)

of “a-“, with stable outlook for both ratings.

Diversification towards Group’s prosperity

Within the Company ’s strategic approach of

business diversification, arrangements are in

place to enter the medical insurance industr y

Dear Esteemed Shareholders,

May peace, mercy and blessings Be Upon You

With great honour, we present to you our Company ’s Annual Report for the financial year

ended 31 December 2017. This Report sets out a general overview of the Group’s Companies

per formance, objectives and goals for the forthcoming year.


being a milestone of the insurance industr y, and

are currently engaged in finalising the related

platform and relevant procedures.

Resolutions promoting growth

Driven by the Company ’s best interests, the

Board of Directors has adopted many significant

resolutions designed to promote the aspired

vigorous growth and development of our Group

through developing the Company owned plots

of land while taking into consideration the

development priorities of these lands.

It is worth noting that the Company has acquired

a number of plots in the Manateq area, and

currently work is under way on its development in

the near future, God willing, to the benefit of the

Company, thereby emphasising the Company ’s

contribution in advancing the robust national

economy in the State of Qatar.

On the other hand, the Water and Beverages’

factor y construction has been completed and

is expected to start operation and production

by the month of April 2018.

Nurturing and developing our staff to sustain progress

Training and developing our staff has been

our investment throughout the year 2017,

whilst working on enhancing their professional

expertise aiming to offer them a better

professional career development prospects.

During 2017, our Program known as NEXTGEN

which is specifically designed for new graduates

has marked the appointment of a number of

young graduates to join our technical teams

across the various departments of the Company.

As to Qatarisation, we were keen to align our

strategy along with Qatar ’s National Vision

2030, and we dedicated considerable


efforts towards developing and creating

a distinctive and competent workforce. The

Company supports the career development of

Qatari youth by encouraging them to pursue

the completion of all levels of education

whether inside or outside the State of Qatar,

in addition to providing a vital internal training,

and training courses such as Business English

Language and Personal Skills Services for

insurance, Sales and Customer Services, and

training on the Information and Communication

Systems.

Besides, the Upper Management of the

Company is committed towards implementing

and monitoring its Qatarisation Strategy, and

increasing the Qatari cadres in the Company, in

order to be among the top ranked Companies

as to Qatarisation ratios across the State of

Qatar.

Focus remains on risks

Our team has been keen to implement the

requirements stipulated in the Executive

Instructions for Insurance and the Principles

of Corporate Governance issued by Qatar

Central Bank. As well, they ensured complying

with the national and international regulations.

Yet, we remain ready to comply with all

regulator y framework amendments, whilst our

team strives to take the lead in adopting

upcoming improvements to the best interest

of our client base. We pursue by our strong

Governance Framework to maintain an ongoing

per formance development, while keenly working

to meet all local and international regulator y

and statutor y requirements.

As a part of the solid Governance Framework,

we continue complying with the Group’s

adopted manual with respect to transacting

with related parties. Such a relation is built

upon the principles of transparency and full

disclosure for all transactions and partnerships

with the related parties, such as Al-Sari

Trading Company, Group of Nest Investments

(Holding) Limited, Group of Trust International

Companies, North Africa Energy Company and

Falcon Ready Mix Company. In this respect,

we would like to note that all such transactions

with related parties in the region that were

conducted under the Board’s guidance for

the ultimate benefit of the Company have

yielded rewarding proceeds to our Company.

The Company was able to establish a strong

presence in the region led by its investments in

Algeria that resulted in a productive outcome

to the Company ’s benefit.

Dear valued Shareholders

We extend our thanks and gratitude to the

valued Shareholders and to our loyal customers

for their great support and confidence. We

would like to specially express our appreciation

to the Group’s staff and to Senior Management

for their efforts and dedication towards the

prosperity and vision realising of the Group.

Finally, and on behalf of the Board of Directors I

am honoured to raise our sincere appreciation

and gratitude to His Highness the Emir Sheikh

Tamim Bin Hamad Bin Khalifa Al-Thani, may

God protect him, and his wise government for

the continuous support and patronage and

sincere endeavours towards building a solid

and robust economy for the State of Qatar.

Nasser Bin Ali Bin Saud Al-ThaniChairman of the Board


Chairman’s Statement

A year of new opportunities

We are a strong and confident nation. It is

this power ful strategic leadership that has

shown us, throughout our histor y, that with every

challenge comes an even stronger opportunity.

2017 presented our Group, like many others,

with challenges that needed to be assessed,

considered and consequently overcome; and

as a Group we certainly achieved this. However

it is pertinent to remind ourselves that it is our

years of strong governance, our confident

approach to investment, and our proven ability

to adapt and change to the growing needs of

our countr y, that has supported us once again

in delivering results that are strong and steady,

all things considered.

Made in Qatar

Throughout the year our Government continued

to initiate projects to support the realisation

of the Qatar National Vision 2030 including

the Single Window initiative for industrial

investment. This focus and development of

local products and services, along with a rising

trend of ‘Made in Qatar ’ products have seen

the domestic industr y grow, having an overall

positive effect on businesses such as ourselves.

As such, and as part of our overall long-term

strategy, we continue to develop our Group

of companies to produce their own ‘Made in

Qatar ’ products, such as our soon to launch,

Al Rawda water, from our General Company For

Water & Beverages.

We are proud to be an established Qatari

company, remaining steadfast and strong.

We continue to contribute to Qatar National

Vision 2030, remaining robust and relevant to

the growing needs of our countr y.

Nasser Bin Ali Bin Saud Al-Thani Chairman and Managing Director


Our people

Qatarisation remains an integral part of our

Group’s human resources strategy and we

continually look for opportunities to nurture

the distinctive talent of our Qatari colleagues

as they strive towards leadership positions

across our Group. We aim to support them

grow throughout our organisation and beyond,

becoming strong corporate figures within the

business community.

Outlook

We remain optimistic for the future. Our strategic

approach, which is translated into our ever yday

business, is aligned across the Group to support

overall strength and growth. Economic outlook

stil l indicates a strong economy and we are

committed to developing all areas of our

businesses to support the growth aspirations of

our Group and our Countr y.

I would like to express my gratitude and

appreciation to all of our stakeholders for their

continued support. We will remain true to our

strategy and strive to achieve our long-term

aspirations. To the Board of Directors, I thank you

for your commitment, stewardship and strategic

direction. To our loyal team, your commitment,

focus and energy is appreciated by all. Finally,

for our strong guidance and leadership I thank

Qatar Central Bank. Your unwavering support

for our Group within our Countr y is treasured.

Finally, and on behalf of the Board of Directors

I am honored to raise our sincere appreciation

and gratitude to His Highness the Emir Sheikh

Tamim Bin Hamad Bin Khalifa Al Thani, may God

protect him, and his wise government for the

continuous support and patronage and sincere

endeavors towards building a solid and robust

economy for the State of Qatar.


Group Chief Executive Officer

Review of the year

2017 saw a series of unprecedented events

that substantiates our attitude to risk and the

Group’s strategy to diversify products and

services while working in synergy with each

other.

Although a challenging year, our per formance

was stable. The cash dividend per share of

QR 2.2 for 2017 recommended by the Board

demonstrates our strong financial health.

Changing landscape

Large infrastructure projects continued, and as

a Group with strong insurance products (Qatar

General Insurance and Reinsurance and

General Takaful) and construction expertise

(Orientals Enterprises), we are blessed to

be able to contribute to these significant

developments at many levels. General Tower

is one such iconic development, which signifies

our commitment to Qatar ’s evolution, creating

modern, state-of-the-art offices for business

lease.

Additionally, we saw the completion of General

Takaful ’s new head office on C Ring Road by

Orientals Enterprises. An iconic building that

showcases our commitment to providing best

in class Takaful products and services to our

growing customer base.

This year proved challenging for many businesses

in Qatar. We overcame many extraordinary

circumstances, yet utilised our strength in the

marketplace to seek new opportunities for

sustainable growth

Ghazi Abu Nahl Group Chief Executive Officer


Greater efficiency for greater growth

During the year, we focused on improving

customer experiences which is vital to enabling

us to distinguish our services from our competitors.

Improving our communication and processes

enables our Group to grow customer loyalty,

increase positive referrals and enjoy a higher

success rate at cross-selling. We constantly

remind ourselves and all of our team that we

are one Group and it is our duty to provide an

excellent level of care and attention to details

to all our customers across all channels.

I am proud to share with you that A.M. Best has

reaffirmed to Qatar General Insurance and

Reinsurance Company (Q.P.S.C) its Financial

Strength Rating (FSR) of “A-” (Excellent) and

the Long-Term Issuer Credit Rating (Long-

Term ICR) of “a-” with stable outlook for both

ratings. These ratings reflect QGIRCO’s strong

risk-adjusted capitalisation, improving risk

management capabilities and track record of

solid operating per formance.

Outlook

We are a legacy in Qatar; a Group of

companies that has grown with the countr y

and its people. Despite a challenging year,

we are confident that we and our countr y are

at the beginning of a new journey of growth.

Our countr y and government have worked

incredibly hard to drive forward our nation’s

ability to become self-sufficient. Government

initiatives are promoting ‘Made in Qatar ’

products and services over imports and

supporting entrepreneurs to establish strong

and sustainable businesses at home.

We will continue to seek out new opportunities

across our Group, working hard to develop our

companies range of products.

positive achievements

2017


Our Group

QATAR GENERAL HOLDING

COMPANY W.L.L.

GENERAL TAKAFUL

COMPANY P.Q.S.C.

GENERAL REAL ESTATE

COMPANY W.L.L.

WORLD TRADE CENTER

QATAR W.L.L.

MOZOON INSURANCE

MARKETING SERVICES W.L.L.

GENERAL TOWER FOR REAL

ESTATE INVESTMENTS W.L.L.

ORIENTALS ENTERPRISES W.L.L.

GENERAL COMPANY FOR WATER

AND BEVERAGES W.L.L.

MOZOON REAL ESTATE

COMPANY W.L.L.



Proud of our long-standing reputation as a

trusted provider, Qatar General Insurance &

Reinsurance Company (QGIRCO) provides

individuals, families and businesses with

innovative insurance solutions.

Overview

2017’s growth strategy has been strong and

steady, as we continued to focus our efforts on

writing profitable business. We have sought to

achieve this through diversifying our channels

of distribution, enhancing our existing products,

and implementing strong processes targeted

at improving our business retention ratios which

is the main driver to the growth strategy.

Putting the customer first

Our customers are our priority and it is the

method through which we service them that

encourages them to remain true and loyal to

our company. We have worked hard to create

a stronger omni-channel experience for our

customers, ensuring that, whichever method

they choose to engage with us, they receive

the same level of care and dedication.

To support this customer-first approach, we

welcomed local graduates from our NEXTGEN

programme to be part of our dedicated

Customer Service Unit (CSU). Led by a team

of experienced managers, our newly-expanded

team enables us to improve communication

with our valued customers in order to be ready

for the upcoming changes, especially in the

medical insurance..

Our insurance strategy this year has been

focused on sustainable and profitable growth,

retaining loyal customers and at the same time

developing products that cater to the needs

of the growing local business community.

Jamal Abu Nahl Chief executive officer - Insurance


Furthermore, the new dedicated CSU supports

customer retention through better notification

and awareness of policy renewal dates. As well

as being contacted through SMS and email,

customers are now contacted by personal

phone call from our dedicated CSU team and

able to renew their policy instantly over the

phone. This marks a huge removal of a ‘barrier

to renewal ’ for our customers and provides

them with the additional, hands on service they

desire from a leading insurance provider. This

new service has had a significantly positive

effect on our retention rate – we want our

customers to come to us and stay with us, and

now we’re making that even easier.

In collaboration with our Human Resources

department, we have also invested in training

and development of our brokers and branch

staff, upskill ing them to be able to offer

knowledgeable and internationally qualified

support and guidance to our customers.

Boosting business through partnerships and rewards

This year, we launched our motor, travel,

personal accident and household insurance

through the Ahlibank branch network. These

products, now available in 16 branches across

Qatar vastly increases our reach.

Growing and promoting Personal and SME

The rise of factories and local SMEs due to

the single window initiatives supported by

ministries and government agencies has

opened a new window of opportunity for our

insurance business. Our products, services

and overarching knowledge help provide the

trusted financial protection these businesses

need in their early stage establishment and as

they move forward to operating safe, efficient

and productive businesses.

Enhancing efficiency and improving margins

Customers expect fast service, with enquiries

and claims to be dealt with swiftly. Internal

digital transformation has enabled us to

provide breakthrough per formance via

improved efficiency and back-office processes

to enhance the speed that claims are dealt

w i th .

Outlook

Despite unusual market conditions the near to

medium-term outlook remains positive. We will

continue to target profitable local business for

positive growth. Additionally, we remain focused

on further strengthening internal processes

to build on the strong claims handing and

customer retention success we have seen in

2017.

Above all, we will continue to develop and

grow with our countr y, concentrating our

efforts on the Qatar National Vision 2030

and supporting the realisation of a strong,

sustainable, diversified economy.

Qatar National Vision

2030


General Takaful Company P.Q.S.C.

Established in 2008, General Takaful Company

became one of the leading providers of Takaful

products and major player in Takaful market

in Qatar. Our mission is to enable individuals

and corporations to manage financial risk. We

provide Islamic insurance products and services

tailored to fit with the frequently changing risk

exposures faced by our customers. We build

value for our investors and partners through

the strength of cooperation based on Takaful

principles.

Overview

Keeping in mind our long-term strategy, we

continue to realign our products to suit

today ’s challenging markets and taking into

considerations the requirements of Shari ’a

principles. Overall business per formance has

shown improvement despite the challenging

geopolitical situation. We witnessed a 10%

increase in gross written premiums comparing

to last year - Gross Written Premium for year

ending 31 December 2017 was QR 229 million.

During 2017, we invested heavily in human

capital, expanding our team to ensure we are

fully equipped to grow non-motor business and

improve claim controls. We expect to see returns

on this investment throughout 2018 and beyond,

as well as achieve our objective of diversifying

our product portfolio and continuing to reduce

our exposure to Third Party Motor Insurance.

Bringing innovation into our services

An efficient claims management process delivers

happy customers as well as reducing overall

costs of settlement. During the year we worked

Service excellence is our specialty and concern

while achieving our targets of expansion and

diversification.

Majed AkelGeneral Manager


strategic location and sizeable development,

close to business and many residential areas

raises our profile and offers customers further

convenience.

Relocation to the new Head Office is planned

for early 2018. The new modern three-stor y

building provides the company with more room

for its expanded workforce while enabling

us to promote our ambitious and enhancing

convenience to our customers. General Takaful

Company will occupy around one third of

the building and the other two thirds will be

rented out which supports the diversification of

investment income of the Company.

This relocation will also enable us to expand

our branch network, with our vacated head

office set to be transformed into a new branch

occupied by our Family Takaful department. This

expansion allows us to focus on the mandatory

medical insurance that will be implemented

soon in Qatar.

Outlook

2017 brought positive achievements to the

company, and we will continue to build upon

this momentum and focus our efforts on growth.

The foundations that have been laid over the

past few years to diversify our portfolio have

enabled us to deepen our corporate customer

relationships across our product range.

Motor insurance remains a key part of our

business and we will continue to develop and

diversify these products and processes to fulfi l

the needs of our customers.

We expect 2018 to be a positive year for

General Takaful. Our aim is to continuously

be one of the preferred provider of Islamic

Insurance and the best Takaful risk carrier in

Qatar.

towards more effective use of technology to

manage claims through phone applications

and our website, as well as re-engineering the

back office process. We are currently working

to open a new payment gateway and obtain

online premiums for personal products which

will definitely boost our sales. This is in addition

to enhancement of current mobile application

and services through our website.

Additionally, the claims department was

restructured for swifter processing and better

control, with strong governance and oversight

at the centre of this initiative. Overall a tangible

difference has been recognised internally as

well as by our expanding customer base.

Enhanced product portfolio

General Takaful has experienced growth over

the past few years and is recognised as a key

player in the domestic market, with Motor as

the main driver. We have strived to develop

our motor products to better suit our customers ’

needs through improved add-on services for

individual and corporate customers.

Continuing from 2016, we have expedited our

sales diversification strategy, focusing more on

non-motor insurance. Our branch network now

offers non-motor products, with our employees

well training to manage individual and

corporate customer enquiries on our full range

of products, with a particular focus on life and

engineering business. As part of this direction

we have increased our engineering portfolio

due to the long-term relationships we have

forged with local construction and engineering

companies since our establishment.

Expanding our reach across Qatar

This year, work completed on the iconic

General Takaful Head Office located on the

C-Ring, in the heart of downtown Doha. This


Qatar General Holding Company W.L.L

As to what we do at Qatar General Holding

Company level, we manage the Group’s

investment portfolio, providing a strong and

stable financial foundation aiming to best serve

our client needs and meet our shareholders

expectations. The company holds major

participations in a number of key companies

which contribute significantly to Qatar ’s

economic growth and employment creation.

Qatar General Holding is proud of its role and

involvement in the development of a number of

land mark projects in Qatar.

The politically imposed crisis since June 2017

significantly impacted Qatar ’s economy at its

inception, as foreign capital panicked and

started exiting the domestic economy. Many

of the countr y ’s businesses were affected by

this uncertainty and drop of confidence and

capital outflow. However, the initial shock was

easily absorbed thanks to the smart moves

taken by the Government to step in and fil l this

created gap. Liquidity was quickly reinjected

in the economy, and Government incentives

introduced to encourage entrepreneurs to

set up new businesses to replace imports and

create a more or less self sufficient economy.

Following the embargo against the State of

Qatar, the Company embarked on a plan to

radically reduce its exposure to the governments

and private entities of the boycotting countries.

Also, additional actions were taken to increase:

(1) fixed deposits in Qatari Riyals and (2)

investments in USD fixed income securities within

the developing countries of South East Asia

due to the strong economic fundamentals of

such countries and the encouraging yields.

To the surprise of the whole world, The State

of Qatar was able (thanks to its Rational

Leadership) to bypass with high merits, the

negative impacts resulting from the unjust

blockade imposed since June 2017.

This was possible due to its enlightened

Leadership, the flexibility of applied policies,

and the steadfastness and readiness of its

economic structure. We remain confident

and trust our readiness to overcome these

extraordinary circumstances. We are optimistic

about the future being prosperous, both at our

company and the State of Qatar levels.

Abdallah BarrageDeputy Chief Executive Officer - investments


Furthermore, strategic investments in local

companies listed on the Qatar Stock Exchange

(QSE) were maintained, as the decline in the

QSE Index was considered to be a knee-

jerk reaction to the crisis. The fundamentals

of the economy in Qatar are solid , resilient

and capable to offset the short-term negative

implications of the crisis.

Finally, even though the reduction in rental

rates have affected the yield on our property

portfolio , real estate developments pertaining

to the construction of four hotels in Doha

were kept on track, to be ready for FIFA 2022.

Also, the aim of turning our other strategically

located land plots in and around Doha into

income producing properties remained intact.

Outlook

Our endeavors remain driven by Qatar

National Vision 2030, which aims at supporting

and diversifying the Local economic base while

contributing towards overall economic growth

and employment creation.

Our commitment to Qatar remains strong as this

is our base and the market that we know best,

with the most expected rewards in the medium

term without running any currency risks.


Project Management and Contracts Department

Great achievements are realised with proper

planning and good management, and this is

what the Project Management Department is

targeting.

Hani AkkawiGeneral Manager

The Group witnessed over recent years, major

diversification in its business activity by venturing

into the field of Real Estate Development. One

of the Group’s most prestigious projects is the

Mozoon Towers in the West Bay Area in Doha,

a hospitality project consisting of Marriott,

Oberoi and Retaj branded hotel rooms and

serviced apartments considered an added

landmark to the Countr y and coming on the

heels of an earlier development The World

Trade Center another landmark in the corniche

area.

To keep pace with the positive development

in Real Estate Market and recognising the

critical need to communicate and co-ordinate

work across departments and outsourced

consultancy and contracting services it was

decided to establish under the Qatar General

Holding a Project Management and Contracts

Department to manage the consultancy and

construction contracts of the Projects being

developed by the Group with a futuristic

vision to transform the PMC Department to an

engineering office specialised in engineering

contracts and project management.

At its core, Project Management focuses on the

planning and control of all activities involved

in delivering the desired end result of any

Project under development. It uses various

tools to measure accomplishments, cost and

time control, track project tasks, reduce risks

and increase the chances of success.

Often, a triangle, commonly called the “ triple

constraint ”, is used to summarize project

management. The three most important factors

are time, cost and scope. These form the

vertices with quality as the central theme.



Established in 2008 as a wholly-owned

subsidiar y of Qatar General Holding Company,

General Real Estate Company (GRECO)

includes a diversified mix of major projects,

residential, offices, commercial, leisure and

lifestyle and industrial developments. GRECO

provides a full-range of services for in-house

and third parties which include project, facilities,

property and hospitality management.

Overview

Our real estate portfolio is aligned to our

investment strategy with strong attention to our

local market: our market value is QR 5.638

million with a focus on real estate investment

within the State of Qatar.

Throughout 2017 our focus has been on

Mozoon Towers which will be followed by Salwa

road project in 2018 and Al Wakra project in

2019.

During the year, Lusail Water front project

successfully received building approval and

construction is expected to start in Q2 2018.

Development of Mozoon Towers is making good

progress, with skeleton construction underway

with our own sister company, Orientals Enterprises

W.L.L. We are pleased to report that that we

are set to reach our estimated completion

date, Q4 2020, which increases Qatar ’s ability

to accommodate the anticipated rise in visitor

numbers the countr y is expecting to see over

the next 5 years.

Infrastructure, master developments, property

and sports and leisure venues continue to be

a focus of our Countr y in line with the Qatar

National Vision 2030: this investment into our

countr y ’s future has been extremely beneficial

for our company.

Emad eldin Mousa Qenibi Acting General Manager


Managing these towers and welcoming

overseas guests to Qatar will be Oberoi (Tower

A, Hotel). Marriott (Tower B, Hotel and Tower

D, serviced apartments) and Retaj (Tower C,

serviced apartments.

Outlook

We are positive about our countr y ’s and our

company ’s long-term outlook and growth. Qatar

continues to seek new avenues to diversify

its economy, with tourism and sporting events

playing major roles in this overall strategy. As

such, there continues to be a strong demand for

property development throughout the countr y.

Our mission remain to convert more non-income

producing holdings to income-producing

property, when the opportunity arises for

a greater return of investment. We seek to

achieve a reasonable return on investment

while maintaining a diversified portfolio and

balanced capital investment.

2018 is also the year we seek to invest more

resources and capital into Facility Management,

which is growing in demand as new offices and

event spaces continue to open in Qatar. We

currently undertake this role for the World Trade

Centre and are eager to enhance our service

offering.


Real Estate Projects in the Pipeline

MOZOON TOWERS | WEST BAY

The project comprises of 4 Towers, with 5 basements floors,

podium on ground, 1st and 2nd floor (varies for each tower). All

carparks are in the ground and basements with a total of 2,252

carparks. This one of a kind building complex will showcase

terraces in the sky, with variable stepped-height 4-towers.

The four-tower complex includes boutiques, cafe, restaurants,

ballrooms, laundry, spa, club house and external pool. Mozoon

Towers is set to introduce an innovative contemporary concept

in high-rise residential developments. Good quality daylight, as

well as various views to the surroundings can be enjoyed from

the inside.

FOX HILLS ZONE -H DEVELOPMENT | LUSAIL

The Project will be located at 22 Plots at Fox Hills District in

Lusail. The 22 plots shall be designed as offices with retail

areas at the ground floor / residential units/ hotels as per the

usage regulations of Lusail with complete amenities, services,

parking spaces and landscape areas. With a Total Plot area

of 62,909 sq.m.

FOXHILLS –MU/C07 COMMERCIAL DEVELOPMENT | LUSAIL

The Project Development has a Plot Area of 2,939.42

sq.m. and total B.U.A of 14,551.91 M2 and is situated at

Foxhills District, Lusail Area and shall be built into RETAIL

(864m2)+RESIDENTIAL(1/14BR and 2/34BR), services, parking

spaces (93 Carparks) and landscape as per land use.


LUSAIL WATER FRONT RES -27 | W ATER FRONT DISTRICT, LUSAIL

The Project will be located at Water front District RES/27 in Lusail

and shall comprice Residential Tower of 148 luxur y apartments

of 8 different types, with relevant amenities for the residents like

private Gym, Spa and Recreation Areas, building services and

223. underground parking spaces at four (4) basement levels

and landscape. The Project will be built on a plot of 6,072

sq.m. area, with approximate total built-up area of 56,787 sq.m.

The total height is of 136.80m.

FOXHILLS –RES/A08 RESIDENTIAL DEVELOPMENT | LUSAIL

The Project Development has a Plot Area of 2,219.29 sq.m. and

total B.U.A of 9126.84 M2 and is situated at Foxhills District,

Lusail Area and shall be built into residential (1/8BR and 2/27

BR) with building services, parking spaces (53 Carparks) and

landscape as per land use.

TRUST REAL ESTATE -TRUST COMPLEX PROJECT | BAB EZZOUAR, CAPITAL OF ALGERIA

A Multi-disciplinar y property under development in the

capital of Algeria, fully owned by one of the subsidiaries of

our associate, Trust investment holding Algeria, comprises

of Marriott MIHR 5 Stars Hotel, Marriott Courtyard 4 Stars,

Marriott 5 Stars Executive Apartments and Marriott Residence

In 4 Stars Apartments, total of approx. 1212 keys, Business

Centers, Shopping Centers in the middle of the compound

and 3 basements floors integrated Carparking covering the

underside of the whole compound with a total enclosed area

of 100,000 sq.m.



Over the past three years, we endeavoured

to complete the build of our mineral water

factor y. We have managed to achieve this,

despite the blockade which began in June,

installing the latest machiner y equipped to

the highest technological level, and ensuring

that we have the best raw materials, bottling

and packaging materials to go to market. We

have also worked hard to meet the conditions

and specifications stipulated by the civil

defence and other government authorities. All

the necessar y licenses have been obtained to

launch production at the beginning of 2018.

During the second quarter of 2018, we shall

start the testing phase for 30 (thirty) days to

ensure we attain the laborator y results needed

to provide safe, great tasting water. Al Rawda

Water products will contain a balanced

combination of minerals and salts necessar y for

human body, and contain a low percentage of

Sodium of no more than 0.4%.

Alternatively, we have finalised our sales and

marketing plan in order to cover the whole

footprint of the countr y, where Al Rawda

Water will be made available through various

distribution channels

Our strategy is to succeed in the current

competitive economic environment and meet

local demand by utilising high quality materials

and the latest state-of-the-art technology.

Maher AkelGeneral Manager


World Trade Center - Qatar W.L.L.

The World Trade Center - Qatar W.L.L. (WTC

Qatar) is part of the World Trade Center

Association which consists of 332 centres in

116 countries around the world that promotes

and facilitates trade and investment between

Qatari and international companies. Our

mission is to introduce trading partners to the

Qatari market through events and exhibitions.

Overview

In 2017, our focus remained on reaching out

to other nations to create and build upon

trading and investment partnerships. Part of this

work included collaborating with 18 African

embassies to ensure that the African Fair will be

successful event for all parties involved.

WTC Qatar were also proud to attend the

48th World Trade Center Association General

Assembly 2017 held in Las Vegas, USA,

connecting and strengthening our relationships

with hundreds of people from around the globe.

During the year we worked in close collaboration

with Qatar ’s Chamber of Commerce and Industr y,

and Qatar Development Bank, participating

in events alongside local dignitaries and

ambassadors to actively promote Qatar ’s

strong economic position. We also attended

many business match-making events to meet

with overseas delegations who visited Qatar

to collaborate with businesses here.

Outlook

During 2017, WTC Qatar made seamless

efforts with the embassies of the Association

of Southeast Asian Nations (ASEAN) to action

We continue to work as a cooperative chain,

linking Qatari businesses to international

traders. 2017 saw us forging mutually beneficial

relationships with countries through their local

embassies, and attending events that raised

our countr y ’s profile around the world.

Eng. Sadallah Elsaid General Manager


our plans for a future ASEAN exhibition. This

work is gathering pace and we look forward to

sharing more news of this event. We also actively

participated in events and activities that

demonstrated the solutions and opportunities

we can offer to new partners.

In April 2018 WTC Qatar will be attending the

49th WTCA General Assembly at Leeuwarden,

Netherlands, to build business opportunities

and strengthen the WTCA network enables us

to enhance relationship and demonstrate the

progressive nature of our countr y ’s initiatives.

We look forward to bringing another array of

busines-link opportunties to Qatar throughout

the coming year that will further support the

mission of the World Trade Centers Association,

WTC Qatar and the Qatar National Vision

2030.



Established in 1999, Oriental Enterprises has

become a leading construction company. From

providing a wide range of products including

rebar and insulation materials to construction

management services, deploying a big team of

more than 600 professionals across residential,

commercial and industrial medium-to-large

scale projects.

Overview

Orientals Enterprises has proved to be an

added value to the Group. Since its acquisition

in 2015, it has enabled the Group to gain

substantial savings via reduced construction

materials and local transportation costs. These

reduced overheads, enabled the Group to

improve the cost of projects, and compete

within the local and regional markets while

increasing future profit margins.

Stability and continuous development was the

principle adopted by the Company during

2017. During the year, we saw completion

of the new General Takaful Headquarters, a

three-stor y office building that will be utilized

for growth and reach across Qatar. We also

managed to expedite the execution of the

construction concrete works contract in Mozoon

Towers located in West Bay, and completed

the expansion of National Rebar Fabrication

Factor y.

We have also heavily invested in human

capital, increasing our talent pool by 20% to

improve the quality of our services and enables

the Group to engage in larger projects. This

expansion allows us to reach our goals of

raising brand awareness and improve our

experience and expertise.

We have faith in a bright future. We have

actively contributed to the Group’s success,

developing major projects that enable our

company to gain recognition and build a

positive reputation in the region and around

the world while driving the realization of Qatar

National Vision.

Eng. Raghib Jalabi General Manager


Outlook

Buoyed by government ’s commitment

and investment in major infrastructure and

landmark projects, we look forward to the

future development of Qatar ’s architectural

landscape, which provides favorable

conditions for us to grow.

Our long-term vision remains focused on

contributing in Qatar National Vision,

contributing to medium-to-large scale

developments that enable our countr y to

diversify its economy and improve the prosperity

of our society.


Human Resources

Driving our success

Our staff are our most valuable resource, helping

us to achieve our goals and growth aspirations

as well as gain a competitive advantage

through strong customer interactions. We

strive to be an employer of choice, providing

a collaborative and cooperative environment

that nurtures future leaders.

Throughout 2017 we invested in training and

development, working to enhance our in-house

expertise and enabling our employees to enjoy

career development and progression.

Promoting Qatarisation

We have aligned our strategies with Qatar

National Vision 2030 and we are dedicated

to the development and creation of a strong

Qatari workforce. We work closely with the

Ministr y of Labor to find suitable Qatari

recruits and nurture their education for career

progression. We provide vital in-house training,

providing courses such as English language for

business, insurance, sales and customer service

soft skil ls and ICT training.

Succession planning

We have a robust HR vision and structure in

place to ensure that we provide vital coaching

leardership and teambuilding training to

managers and future leaders. Our succession

planning enables us to identify managers and

leaders and help them acquire the technical

skills to progress.

We’re only as strong as our people. Investment

in our talent pool drives our business forward

and enables us to remain an employer of

cho ice.

Jassim Mohamed Yousef Al KawariGroup Admin and H.R. Manager


The NEXTGEN Programme

This year, our graduate NEXTGEN Programme

saw the recruitment of many young professionals

into our company where they have joined our

team. This customised training programme

enables us to find and develop our leaders of

the future. We give bright ambitious graduates

a structured training plan that helps them to

learn specialist insurance skills.

Career fairs

During 2017 we participated in career fairs

across Qatar, promoting our company to

graduates while raising awareness of the

insurance industr y ’s key contribution to the

financial services sector and the overall

economic growth of our countr y.

Promoting women and equal opportunities in the workplace

We recognise the valuable skills and importance

of women in the workplace and implement

strategies to bring more female employees

onboard. The current percentage of women

employees is 31%, which is continuously growing.

We are extremely proud of Deepa

Chandrashekar QGIRCO’s acting Chief

Financial Officer who achieved second place

at the MENA CFO Excellence Awards 2017

in the category of Woman in Finance Qatar.

Developed in partnership with ACCA, this

award was given in recognition of Deepa’s

career achievements, success and leadership.

In March 2013, Deepa founded an informal

forum in Qatar in association with the Associate

of Chartered Certified Accountants, UK. Under

her leadership, the forum conducted two

successful events during 2014 and 2016. The

forum represents of over 120 women in Qatar

working in the finance sector and has received

support from the Big 4 and other professional

associations such as ACCA, CMA and IIA.

Professional exams and qualifications

We offer our employees the chance to further

their skil l set and gain professional recognition

for their expertise.

Chartered Insurance Institute (CII) exams

We continue to promote and encourage our

employees to gain these highly acclaimed

internationally-recognised qualifications, which

enable them to gain in depth financial services

knowledge. Investing in these qualifications

enable us to build competencies and trust in

services.

Recognised as an approved employer

We are an ACCA approved employer and

listed on the professional accounting body ’s

website. This recognition and enables us

to boost our reputation as an employer of

choice and showcases our commitment to high

standards. The listing is viewed by people

seeking employment opportunities and helps us

to attract the ver y best talent from around the

world.

Deepa ChandrashekarActing Chief Financial Officer


Corporate Social Responsibility

Committed to our country and community

We are proud of the progress we have achieved

in Qatar thus far, forming strong foundations

for a bright future that will boost society, our

architectural landscape and our community.

The Qatar National Vision 2030 drives our CSR

strategy which seeks to have a positive social,

cultural, environmental and economic impact.

As a leading organisation, we are aware of our

role in encouraging and promoting corporate

social responsibility throughout our countr y. We

are keen to participate in sports and social

activities and inspire staff to take part in sports

and awareness initiatives that bring people

together and support making healthy lifestyle

changes.

In 2017, QGIRCO organised and hosted

the fifth local insurance companies Futsal

Tournament. This event was a chance for

colleagues across the industr y to socialise and

compete in a fun atmosphere. This competition

received high participation and its organisation

was applauded by both the media and the

participating delegations. QGIRCO also

participated in the National Sports Day by

holding sports activities for the staff and their

families at Al Arabi Sports Club- a healthy and

social day enjoyed by all.

Recognition for our contribution

QGIRCO was honoured to receive the CSR

Leadership Award 2017, in recognition of

the contribution Qatar General Insurance

and Reinsurance Company has made to its

community. The Ceremony, hosted by Qatar

University, also marked the launch of the CSR

We are aware of the important role that we play

as a leading corporation in Qatar in setting a

good example for others to follow and adding

value to our society.

Marwan Azar Group Head of Marketing and Corporate Communication Department


Report, ‘The National Book ’ – Qatar 2016. This

award was presented by Dr. Hasan Al Derham,

President of Qatar University and received

by Group Head of Marketing and Corporate

Communication Department, Marwan Azar. This

award highlighted how large companies are

playing an effective role in promoting social

awareness.


Risk Management Report

Actuarial and Risk Management

(a) The Governance Framework

QGIRCO has implemented, and continues

to strengthen a formalised enterprise risk

management (ERM). Among the key elements

of the ERM framework is the adoption of

detailed risk management procedures, and the

implementation of a risk-based asset liability

matching framework as well as the development

of an economic capital model that is used as a

tool for strategic decision-making.

The Group’s risk management policies are

approved by the Board of Directors and they

define the Group’s identification of risk and

its interpretation. Within its risk management

framework, the Group maintains a varied limit

structure to ensure the appropriate quality

and diversification of assets, and to align

underwriting and reinsurance strategy to the

corporate goals in a manner consistent with its

risk appetite. The following illustrate the Group’s

commitment to enhancing and improving risk

management:

— The Risk Management and Actuarial

Department oversees the ongoing process

of identifying, documenting and managing

the key risks the organization is facing. The

department, in coordination with the various

group entities and functions, per forms

regular risk reviews across the group, in

order to maintain an up to date picture of

the group’s exposure to risk.

— To manage the business continuity risks

arising from the group’s key operations, the

risk management department is responsible

for maintaining an up to date Business

Continuity Plan. The department launched

a Business Continuity Plan update project

in Q4 2017 which is expected to be

completed during Q1 2018.

— The Group utilizes a modern risk management

platform (GRC) from leading business

solutions provider SAP. The platform serves

as a repositor y and reporting tool for the

group’s risk database.

— The Group has an active Board Risk

Management Committee which oversees

the risk management activities of the Group.

The committee consists of three board

members, abides by the board approved

charter, meets regularly and takes an active

role in the implementation and embedding

of risk management across the organization.

Following the company ’s Annual General

Assembly held in March 2017, the Board

of Directors appointed new directors and

chairman for the Board Risk Management

Committee. In addition, the Board of

Directors approved the amended committee

charter to comply with all applicable laws

and regulations, providing additional

duties and responsibilities to the committee.

The committee held four meetings during

2017 and provided the Board with key

information regarding the group’s exposure

to risk.

— With the implementation of a Business

Intelligence Platform across the insurance

operations including its subsidiar y General

Takaful, the company has enhanced access

to critical information related to its exposure

to insurance risk.


— The recently introduced (2016) regulator y

framework (QCB Executive Instructions) by

the Qatar Central Bank introduced risk-

based capital requirements for all insurance

companies operating in Qatar. Qatar

General Insurance & Reinsurance Company

continues to maintain a ver y high solvency

ratio at 240% as of Q3 2017 as per QCB’s risk

capital model (minimum 150%). In addition,

the company has established a committee

at the senior management level to manage

the compliance and regulator y risks arising

from the QCB Executive Instructions related

to corporate governance.

— The Group is committed to maintaining

full compliance with all applicable Anti

Money Laundering laws and regulations.

To strengthen its AML framework, the group

plans to implement an AML software within

2018.

— Following the events of June 6, 2017 and

the blockade imposed on the state of

Qatar by U.A.E., Saudi Arabia, Bahrain

and Egypt, the group has taken immediate

actions to control its risk exposure to these

four countries.

The Group went through the rating review

process with the rating agency A.M. Best, which

reaffirmed its financial strength rating of A-

(Excellent) with a stable outlook, reflecting the

Group’s ver y strong risk adjusted capitalisation,

operating per formance and enhanced

enterprise risk management (ERM) capabilities.

(b) Capital management objectives, policies and approach

The Group’s approach to managing capital

involves managing assets, liabilities and risks

in a coordinated way, assessing shortfalls

between available and required capital levels

(by each regulated entity) on a regular basis

and taking appropriate actions to enhance

the capital position of the Group in the light

of changes in economic conditions and risk

characteristics.

In managing the risks that affect the Group’s

capital position we have established several

capital management objectives, policies and

approaches, including the following:

— Setting target risk-adjusted rates of return,

which are aligned to per formance objectives

and ensure that the Group is focused on

the creation of value for shareholders

— To maintain the required level of stability of

the Group thereby providing a degree of

security to policyholders

— To retain financial flexibility by maintaining

strong liquidity and access to a range of

capital markets

— To align the profile of assets and liabilities

taking account of risks inherent in the

business

— To maintain financial strength to support

new business growth and to satisfy the

requirements of the policyholders, regulators

and stakeholders

(c) Regulatory Framework

Regulators are primarily interested in protecting

the rights of policyholders and monitor them

closely to ensure that the Group is satisfactorily

managing affairs for their benefit. At the same

time, regulators are also interested in ensuring

that the Group maintains an appropriate

solvency position to meet unforeseen liabilities

arising from economic shocks or natural

disasters.


The operations of the Group are subject to

regulator y requirements within the jurisdictions

in which it operates and such regulations

prescribe approval and monitoring of activities

and impose certain restrictive provisions to

minimise the risk of default and insolvency of

insurance companies. All regulated entities

within the Group act in accordance with their

regulator y requirements.

(d) Asset Liability Management (ALM) Framework

Financial risks arise from open positions in

interest rate, currency and equity products, all

of which are exposed to general and specific

market movements. We have been following a

few simple premises under our practicing ALM:

— Match assets to the liabilities arising from

insurance contracts by reference to the

type of benefits payable to policyholders

— Ensure in each period sufficient cash flow

is available to meet liabilities arising from

insurance contracts and any other sources


STRONG


Board of Directors

Sheikh Nasser Bin Ali Bin Saud Al-Thani

Chairman of the Board and Managing Director

Sheikh Mohammed Bin Ali Bin Saud Al-Thani

Deputy Chairman

Sheikh Ali Bin Jassim Al-Thani

Board Member

Sheikh Faisal Bin Jassim Al-Thani

Board Member representative of Middle East Business Development Company


Mr. Abdulla Al-Kaabi

Board Member representative of North Africa Energy Company

Mr. Khalifa Al-Kaabi

Board Member representative of Ali Bin Saad Al-Kaabi Trading & Contracting Company

Mr. Rashid Faisal Al-Naimi

Board Member representative of Al-Faisal Trading and Contracting Establishment

Mr. Abdulaziz Mohammed Al-Mana

Board Member

Mr. Hamad Mohammed Al-Mana

Board Member



Company Profile:

Qatar General Insurance and Reinsurance

Company Q.P.S.C. (the “Company ”) is a public

joint-stock company, founded in 1979 under

the provisions of the Joint-Stock Companies

Regulation Law of 1961 as amended by

Commercial Companies Law No. (5) of 2002

which in turn was amended by the Commercial

Companies Law No.11 of 2015, to conduct all

types of insurance and reinsurance business

(except life insurance) and for capital and

property investment. The Company ’s paid up

capital is QR 875,067,030 (Qatari Riyals

Eight Hundred Seventy Five Million Sixty Seven

Thousand Thirty) divided into 87,506,703

shares (Eighty-Seven Million Five Hundred Six

Thousand Seven Hundred and Three shares).

Board of Directors:

The Company is managed by a Board of

Directors composed of nine members, who

possess the necessar y expertise for the

Company ’s business. Under the Company ’s

Memorandum and Articles of Association, the

Board of Directors (the “Board”) is collectively

responsible for the Company ’s management

and per formance, for developing the overall

comprehensive strategy of the Company and

the required policies and procedures, including

credit and investment policies, whether directly

or through the Board Committees to implement

the key business plans and provide the required

administrative and supervisor y guidance and

the effective control of the Company.

The members of the Board are elected

through the General Assembly of Shareholders

in accordance with the provisions of the

Company ’s Memorandum and Articles of

Association, Qatar ’s Commercial Companies

Law, QFMA’s regulations and as per the

provisions of the law of Qatar Central Bank,

in addition to fulfi l l ing any other requirements

stipulated in the applicable laws and

regulations. It is noteworthy that it is observed

to have one third of the Board members as

independent and experienced members.

The Board of Directors is composed of nine

members, serving for a three-year renewable

term. The current Board was elected by the

Shareholders for a period of three years (2017-

2019) at the Ordinary and Extraordinary

General Assembly held on 21 March 2017,

in which it was resolved that the number of

the Board members to be increased from 8

to 9 members and to amend the Company ’s

Articles of Association accordingly. The Board

members have the required experience and

knowledge to per form their duties particularly

in the financial and economic sectors.

The Board’s Charter:

The Board per forms its duties and responsibilities

in accordance with the Charter of the Board of

Directors, developed as per the form annexed

to the Corporate Governance Code, defining

the Board’s tasks, duties and responsibilities,

the duties of its members, the composition of

the Board and its Committees. The Charter

also defines the voting and decision-making

mechanism and generally the Board’s role in

leading the Company in accordance with the

requirements of the Company ’s Memorandum

and Articles of Association, QFMA’s regulations,

the Commercial Companies Law, Qatar Central


Bank Law and the Executive Instructions issued

pursuant to it. The Board Charter is made

available to the public through the Company ’s

website, which is one of the key requirements

of Corporate Governance principles aimed to

develop Corporate functioning. This Charter is

in the process of being amended to comply

with the provisions of the new Commercial

Companies Law No.11 of 2015, the Insurance

Executive Instructions and the Governance

Principles for Insurance Companies issued by

Qatar Central Bank and the new Governance

Code.

The Board’s Tasks and Responsibilities:

1. The Board is responsible for the management

of the Company, and the development

and supervision of implementation by the

Company ’s Executive Management of

the key business plans, comprehensive

strategies and main objectives. Subject to

the competence of the General Assembly,

the Board shall assume all the authorities

and powers necessar y for the management

of the Company and shall discharge its

duties as set out in all the applicable laws

and regulations and the Company ’s Articles

of Association and by-laws. The Board

shall remain responsible for all the Board

Committees.

2. The Board shall carr y out and per form its

duties prudently, in good faith with a view

to the best interests of the Company and its

resolutions shall be based upon adequate

information from the Executive Management

or any other reliable source.

3. The Board shall ensure providing its

members with a full and prompt access to

Company related information, documents

and records via the Board Committees. The

Company ’s Executive Management shall

provide the Board and its Committees with

all requested documents and information.

4. Among Board’s functions is to develop

and adopt the Company ’s management

and organisational structuring, the policies

(financial, accounting, internal audit, etc.),

strategies and systems especially the Risk

Management system and the Internal

Administrative system; the definition of

tasks, functions, duties and responsibilities;

the formation of the Committees and the

definition of their functions; the nomination

of the Company ’s External Auditor based

on competency and efficiency; and

determining the Auditor ’s fees for the

Company ’s General Assembly.

5. The Board members shall ensure the

attendance of the Nomination and

Remuneration Committee members, the Audit

Committee members, the Internal Auditors

and representatives of the External Auditors

the Company ’s General Assembly Meeting.

6. The Board shall design a training programme

for newly appointed Board members to

ensure that, members upon election shall

have an adequate understanding of the

Company ’s functions and operations and

that they are fully aware of their respective

responsibilities.

7. The Board members shall assume

responsibility for having an appropriate

understanding of their functions and duties,

and for educating themselves in financial,

business and industr y practices as well as

the Company ’s operations and functions.

In this respect, the Board shall adopt an

appropriate formal training to enhance

Board members’ skil ls and knowledge.

8. The Board shall at all times keep its members

aware of the latest developments in the

area of Governance and best practices

relating thereto. The Board may delegate

the same to the Audit Committee or the


Governance Committee or any other body

as it deems appropriate.

9. The Company ’s Articles of Association shall

include clear procedures for the tasks,

authorities and powers of the Board, the

terms and conditions of membership and

isolation terms in the event of failing to attend

the Board meetings, and other Company

provisions related to the Board. The Board

shall also assume all the other functions,

duties and responsibilities prescribed in the

relevant laws and regulations.

10. The Board shall prepare an Annual Report

that includes a comprehensive assessment

of the Company ’s per formance and results

of its activities during the year.

The Board shall have the broadest powers to

manage the Company ’s affairs; set, develop

and adopt future plans and strategic objectives

and policies; approve, supervise and regularly

review the Internal Control systems. The Board

shall approve the appointment, determine

the remuneration and review the per formance

of Executive Managers; and shall review the

overall per formance of the Company based on

the recommendations of the Nomination and

Remuneration Committee.

The Board shall also bear the overall

responsibility for the Company ’s compliance

with the applicable related laws, the Company ’s

Memorandum and Articles of Association. It

shall be also responsible for protecting the

Company from illegal business or practices,

ensuring the Company ’s adherence to the

provisions of the Corporate Governance code

and the provisions of Qatar Central Bank ’s

Law, and reviewing all applicable legislations

as well as updating the adopted Governance

applications regularly.

Duties and responsibilities of Non-Executive members:

1. Non-Executive members shall regularly

participate in all Board meetings, providing

an independent opinion and engaging

in decision-making with respect to the

Company ’s strategic matters and policy,

evaluating the per formance of the Executive

Management and the overall management

of the Company.

2. Non-Executive members shall also

assume responsibility for monitoring and

developing the Company ’s Internal Control

and Risk Management systems, following-

up the Internal Audit and Risk Management

Departments ’ activities, investigating any

irregularities or violations of the Company ’s

applicable regulations and policies

through their active membership in the

Audit Committee and Risk Management

Committee.

3. The Nomination and Remuneration

Committee shall comprise Non-Executive

members to evaluate the per formance of

the Chairman, members of the Board of

Directors and the Executive Management

of the Company, selecting the nominees

for such positions and determining their

remunerations, through their membership

in the Nomination and Remuneration

Committee to ensure impartial and objective

decision-making in this regard.

The Tasks and Functions of the Chairman of the Board:

1. The Chairman of the Board of Directors

shall be responsible for calling, chairing

and supervising the proper functioning of

Board meetings;


2. Overseeing and approving the Board’s

agenda; providing the Board and

Committee members with all relevant and

accurate information in a timely manner;

3. Ensuring that all listed issues on the agenda

are discussed effectively, including the

issues raised by the Board Members. The

Chairman shall be responsible for proper

and effective discharging of the Board’s

duties;

4. The Chairman of the Board shall maintain

constant communication with the

Shareholders and ensure communicating

their opinions to the Board and relevant

official and regulator y authorities;

5. The Chairman of the Board shall also chair

the Ordinary and Extraordinary General

Assembly Meetings of the Company;

presenting the Board’s Annual Report to

the General Assembly; following up on

the implementation of General Assembly

resolutions and the decisions of the Board;

and overseeing the annual per formance

assessment of the Board;

6. The Chairman, in his capacity as the

Managing Director, does not per form any

executive functions, but rather acts as the

focal point between the Company ’s Board

and the Company ’s Executive Management

Committee, for coordinating among them

to fully achieve the objectives set by the

Board.

7. The Chairman shall not be a member of any

of the Board’s Committees.

Board Meetings:

Based on the provisions of the applicable

laws in force and the Company ’s Articles of

Association, the Board must convene a minimum

of six (6) meetings per year. The Board held

seven (7) Board meetings during 2017.

Board Committees:

Pursuant to its relevant resolution, the Board

formed three Committees to assist in fulfi l l ing

its duties and responsibilities in accordance

with the provisions of the Corporate

Governance Code for Companies and Legal

Entities Listed on the Main Market regulated

by the Qatar Financial Markets Authority

(QFMA), the Insurance Executive Instructions

and Governance Principles for Insurance

Companies issued by Qatar Central Bank

(QCB). The Committees have been formed to

support the Board in carr ying out its duties and

discharging its responsibilities in management

of the Company.

1. Nomination and Remuneration Committee:

The Nomination and Remuneration Committee

has been formed following a Board’s resolution to

assist the Board in per forming its responsibilities

and fulfi l l ing its commitments in relevance to

the Corporate Governance and overseeing

the Company ’s Nomination and Remuneration

policies and procedures, enabling the Board

to attract high calibre Senior Management.

The Board has ensured that the Committee has

access to all the Company ’s documents, records

and operations, meeting with the Company ’s

employees, etc. Also, it has been observed

that the members of the Committee are Non-

executive and Independent. The Committee

has developed its charter which was adopted

by the Board, that defines the Committee’s

authorities and responsibilities. In addition, the

Committee shall remain accountable for all the

obligations governed by relevant Laws and

regulations.


Duties and Responsibilities:

1. To nominate and re-nominate the

members of the Board for election by the

General Assembly, assessing the nominees

for Board membership, and ensuring

the implementation of all nomination

requirements in accordance with the

regulator y laws and the approved policies

and standards.

2. To assess the per formance of the Board, its

Committees and the Senior Management.

3. To adopt the Company ’s organisation

structure, and define its general policy

for wages and remuneration, determining

the basis for granting such allowances

and incentives, and recommending the

remunerations and incentives of the

Chairman, members of the Board, the Senior

Executive Management and the employees

in the Company.

4. To develop the Succession Planning

scheme of the Company ’s Management to

ensure a prompt and smooth replacement

is appointed to fil l the vacant position.

5. Review the Per formance Assessment criteria

of the Board members and the Senior

Executive Management for the purposes of

determining their annual remunerations.

6. To submit reports to the Board covering its

activities and recommendations.

7. The Committee’s Framework shall be

determined by a General Assembly ’s

resolution based on the Board’s proposal.

The Committee held two (2) meetings during

2017.

2. The Audit Committee:

The Audit Committee was formed by a Board

resolution to assist the Board in carr ying out its

responsibilities and duties related to Corporate

Governance and overseeing the Company ’s

Financial Reporting, Internal Control systems,

the Audit process, the External Audit, and the

Company ’s procedures to ensure compliance

with the statutor y requirements, regulations

and Laws. One of the key responsibilities of

the Committee is to ensure implementation

of the Company ’s Accounting, Financial and

Audit systems in accordance with the best

practices and procedures. The Committee has

been assigned the power to initiate or allow

the initiation of conducting investigations

in relevance to any matter falling within its

respective scope of responsibility. The pre-

requisites for the Committee’s members have

been observed, provided that the majority

of the members are independent and that

its Chairman is not a member of any other

Committee. The Committee has developed

its charter which was adopted by the Board

that defines the Committee’s authorities and

responsibilities. In addition, the Committee shall

remain accountable for all the obligations

governed by relevant Laws and regulations.

Duties and responsibilities:

1. To set the related criteria and standards for

appointing the External Auditors, issuing the

necessar y recommendation to the Board

concerning such appointment.

2. To ooversee and ensure the independence

of the External Auditors functions, discuss

their reports, and submit the necessar y

recommendations to the Board with respect to

assessing the External Auditors and their fees;

3. To ensure the accuracy of the financial

statements and the quarterly, semi-annual


and Annual Reports, while preparing the

same in accordance with the International

Accounting and Disclosure standards and

principles prior to presenting it to the Board;

4. To review, consider and develop the

effectiveness of the Company ’s Internal

and Financial Control systems Reports

and procedures, business systems and

conflicts of interest, and to discuss the

relevant reports and provide the necessar y

decisions to that effect;

5. To consider and deliberate with the

Company ’s Executive Management any

observations made by the Internal Audit

Department and the External Auditor, and

investigate to identify those involved in any

violations of the Internal Control Systems;

6. To define the tasks, authorities, and action

plans of the Company ’s Internal Control

Department;

7. To ensure the accuracy of the information

presented in the Annual General Assembly

Meeting;

8. To oversee all the tasks and functions of

the Internal Audit Department;

9. To regularly report the Committee’s activities

to the Board;

10. To comply with the State’s applicable laws;

and

11. To consider any matters referred to it by

the Board.

3. Risk Management Committee:

The Risk Management Committee was formed

by a Board resolution in accordance with the

Insurance Companies Governance principles

and the Executive Instructions issued by Qatar

Central Bank to assist the Board in per forming

its responsibilities and obligations in identifying,

evaluating, managing and following up all the

risks faced by the Company.

Duties and Responsibilities:

1. Review deliberate and approve the

Company ’s Financial and Operational

Risk Management Policies and Procedures,

ensuring that policies are in place to

manage all sorts of risks facing the Company,

in accordance with the applicable

statutor y requirements and ascertaining

the efficacy of the Internal Control and Risk

Management.

2. Assess and develop the Company ’s Risk

Management practices, in line with business

requirements, ensuring that the Company

takes the necessar y measures to achieve

balance in matching between risks and

returns in the operational processes.

3. Consider and make recommendations

to the Board for proper decision-making

regarding the identified business risks and

its potential impact on the Company ’s

reputation and financial position.

4. Oversee the functions of the Risk

Management Department in the Company.

5. Review the work of the Independent

Actuary with respect to the Financial

Position Report, submitted to Qatar Central

Bank, that includes Actuary ’s opinion with

respect to the financial per formance of the

Company, risk assessment policy, technical

reserves, and insurance premiums. Since

the Independent Actuary is an expert

approved by Qatar Central Bank to

submit such a detailed report annually,

the appointment of Mr. Christos Patsallides


was approved by Qatar Central Bank

as the Company ’s Independent Actuary.

6. Promote the risk awareness culture across

the Group.

7. Notify the Board of any matters, within its

scope of responsibility, that may require an

action or improvement.

8. The committee shall report to, and make

recommendations to the Board on any risk

related issues periodically or when deemed

necessar y for areas that an action or

improvement is needed. In addition, the

Committee submits to the Board a report

about its activities at least once a year.

The committee held four (4) meetings during

2017.

Executive Management Committee:

Tasks and responsibilities of the Executive Management Committee:

1. Monitor the Company ’s overall

per formance across the various divisions

and departments, execute business plans

and strategies, implement the Board’s

resolutions in collaboration with the

respective Departments ’ Managers and

present pertinent reports to the Board.

2. Discuss and make decisions on matters

related to its competency, within its scope

of financial and administrative authorities

that are adopted by the Board.

3. Assist the Board in the development and

evaluation of the Company ’s strategy and

business plans.

4. Assist the Board in the preparation

and adoption of the Estimated Budget

for the Company and its subsidiaries.

5. Assist the Board of Directors in managing

the Company ’s Investment Portfolio.

This Committee discharges its duties in

accordance with its approved Charter.

The Organisational Structure of the Company:

The Company ’s organisational structure has

been adopted by the Board which includes

all the departments, divisions and subsidiaries

aiming at achieving an ongoing per formance

development and ensuring that all strategies

and future action plans are implemented. The

Company ’s amended organisational structure,

under which the Company ’s Management

structure has been reorganised, has been

adopted by the Board to include four main

sectors:

1. Insurance businesses;

2. Real estate investment sector;

3. Investment businesses;

4. Support services.

Internal Control:

As the Board is fully aware of the substantial

importance of the Internal Control systems

across all the Company ’s operational areas,

it has adopted the Internal Control system

that includes the Internal Regulator y Policies

and Procedures covering all the Company ’s

operations within the Company ’s applicable

Corporate Governance framework.

The Internal Control system provides the

necessar y supervisor y and regulator y

environment for effective management and

per formance monitoring of the Company in

accordance with the policies and controls

established by the Board. It also sets clear

and distinctive boundaries as to the functional

responsibilities and authorities within the


Company at all levels, as well as accountability

in case of any irregularity, vulnerability or

default.

During 2017, no violations or failures in the

implementation of the Internal Control system

within the Company were recorded, that would

have a significant impact on the Company ’s

financial and management per formance.

Internal Audit:

As the Company is fully aware of the significance

of the Internal Control systems throughout all the

Company ’s operational areas, and in order to

have in place a robust system in accordance

with the international best practices in the area

of detecting flaws in the procedures and in

the implementation of the Internal Policies and

Procedures, the Company has engaged the

services of the prominent international financial

Audit Firm (M/S Ernst & Young) to handle the

Internal Control process as Internal Auditors,

developing the Internal Audit Department

to a high level of competency. M/S Ernst &

Young handles the Internal Control functions in

coordination and liaison with Acting Head of

Internal Audit in the Company.

Since the outsourcing of the Internal Control

function is considered as ‘outsourcing’,

accordingly, this has been observed upon

entering into the contract with M/S Ernst &

Young to per form the job in accordance with

Qatar Central Bank ’s instructions applicable

to outsourcing. The outsourcing process and

related agreement has been approved by

Qatar Central Bank.

The Internal Control process is progressing and

reporting to the Company ’s Audit Committee.

The Board is confident that this addition will

lead to enhancing the quality of the Company ’s

operations and businesses.

External Auditor:

In accordance with the applicable laws and

regulations, the Company ’s General Assembly

shall appoint an External Auditor for one

financial year pursuant to a recommendation

submitted by the Board’s Audit Committee. The

External Auditor shall carr y out an independent

audit on an annual basis and per form a review

on a quarterly basis of the financial statements.

He shall submit his report on the financial

position and per formance of the Company,

and his opinion on the consolidated financial

statements of the Group prepared by the Board

of Directors, and present it to the Ordinary

General Shareholders Assembly at their Annual

Meeting. He shall also respond to any enquiries

by Shareholders.

M/s Rodl & Partner was appointed as the

Company ’s External Auditor for the financial

year 2017 at the Ordinary General Assembly

Meeting of Shareholders held on 21st March

2017. This is Rodl ’s first year with the Company

as an External Auditor. The Company shall

comply with the relevant rules and regulations

stipulating that the External Auditor shall be

changed within a maximum of five years.

During the year, the Company didn’t engage

the services of External Auditor in any

professional advice or any related services

apart from carr ying out the External Audit of

the Company ’s accounts.

Risk Management:

The main objective of the Risk Management

Department in the Company is to safeguard

the Company ’s Shareholders from events that

could impede the Company from achieving its

objectives. The Senior Management is aware of

the utmost importance of sustaining an effective

Risk Management system. Within this context, the

Board’s Risk Management Committee is formed

to assist the Board in identifying, following up,


assessing and managing risks faced by the

Company ’s business and to take the necessar y

actions to mitigate them.

Accepting and managing risk is an integral

part of the Company ’s business in the insurance

industr y. However, risk management in this

context indicates the financial and operational

risks inherent in the Company ’s business which

are generally faced by companies as a result

of carr ying out their businesses and investment

activities.

In this regard, the Company has created a

separate Risk Management Unit in addition to

engaging an External Consultant to undertake

Risk Management evaluation.

Rating:

In 2017, the Company has maintained an “A-”

(Excellent) rating and a credit issuance strength

rating of “a-” by international Credit Rating

Agency, A.M. Best Global specialised in the

Credit Rating of Insurance Companies. Once

more, these ratings reflect the strength of the risk-

weighted capital base, the outstanding record

of operational per formance and the Group’s

risk management distinguished capabilities. It

also reflects the Company ’s strong financial,

technical and credit position and its local and

regional solid and competitive position.

Compliance:

As the Board is aware of the significant

role played by the Compliance Officer in

completing the components of the Company ’s

Internal Control system and Money Laundering

and Financing of Terrorism risks, the Company

has established an independent Compliance

Unit, under the direct supervision of the

Board, to be responsible for the Company ’s

compliance with all the official legal and

regulator y requirements governing the

Company, in addition to developing Policies

and Procedures to combat Money Laundering

and and Financing of Terrorism, ensuring strict

adherence to the applicable laws, regulations

and standards. The Company was one of the

first local Insurance Companies in Qatar to

establish a Compliance unit.

A dedicated Compliance Officer, who is

independent of the Executive Management,

oversees this responsibility, supervising the

implementation of the general legal and

regulator y compliance framework within the

Company as well as the Corporate Governance

Code for Joint-Stock Companies Listed on

the Markets regulated by QFMA and QCB,

semestrial reporting in detail the Company ’s

compliance with all the relevant laws and

regulations, Code of Conduct, the Code and

any irregularities if found.

Conflict of Interest and Transactions With the Related Parties:

Pursuant to the Company ’s approved Policy

and Procedures governing dealing with Related

Parties, the Company applies such a Policy and

Procedure in all its dealings and transactions

to secure full transparency and disclosure.

Such transactions are regularly reviewed by the

Audit Committee to ensure compliance with the

Company ’s Policy in dealing and transacting

with Related Parties.

It ’s the Company ’s Policy that such dealings

and transactions with Related Parties are

conducted only on a commercial basis and

in accordance with the market-price, offering

equal chances between the Related Party and

other competitors under the same terms and

conditions in order to achieve the interest of

the Company in the first place. This Policy is

based on transparency principles in dealing

with Related Parties, where the Company must

disclose dealings and transactions in the


Company ’s Annual Report and to put them

at the disposal of the Shareholders at their

General Assembly Meeting.

The Internal Audit Department and the Board

Audit Committee undertake to give utmost

importance and care to oversee the Related

Parties’ transactions and its compliance in this

respect with the Company ’s Policy and that

they are disclosed in a proper manner and

reviewed by the External Auditor.

All transactions with Related Parties in Qatar

such as AlSari Trading Company, North Africa

for Energy Company and Falcon Readymix

Company to supply the building materials

for the Group Real estate projects, as well

as transactions with Related Parties outside

Qatar such as Nest Investment (Holding)

Limited Company, Group of Trust International

Companies, which provides technical

assistance to the Company in the field of

Insurance and Reinsurance, in particular in the

field of Reinsurance Bouquet Administration

and Information Technology are conducted

in full transparency to achieve the Company ’s

interest. All these transactions with Related

Parties are reported in the Company ’s Financial

Statements and presented to the Board and

the General Assembly for approval. It is to be

noted that with effect from June 30th 2017, the

Company has ended all its contracts with Trust

Re-Bahrain.

Disclosure:

The Company is fully committed to all the

disclosure requirements set forth in the

Corporate Governance Code for Companies

and Legal Entities Listed on the Main Market

regulated by the Qatar Financial Markets

Authority (QFMA) and by implementing QCB’s

Executive Instructions. The Board is responsible

for disclosing the required disclosures in a

complete and accurate manner. The information

included in such disclosures shall be true and

sufficient ensuring fairness by providing the

information on a timely basis.

Shareholders’ Equity:

The Company ’s issued and paid up share

capital is (QR 875,067,030) divided into

87,506,703 ordinary shares, with a nominal

value of QR 10 for each share. The Company

has not issued any preference shares, bonds or

other securities other than the ordinary shares

issued to the Company ’s Ordinary Shareholders.

The details of the capital structure are clearly

disclosed in the Annual Report of the Company.

The Rights of Other Stakeholders:

The Company ’s general policy adopted by the

Board, to respect and safeguard the rights of

the Company ’s other Stakeholders, including

employees, creditors, clients, suppliers, strategic

partners and investors, in accordance with the

Corporate Governance Code and Professional

Code of Conduct. The Company also ensures

that the Stakeholders have an access to the

relevant information in a transparent manner

enabling them to make their decisions based

on accurate and sound information.

The Company maintains an open and

transparent communication channels with the

Shareholders, investors and other stakeholders,

where it regularly communicates information

relating to the Company ’s financial position

and per formance and future business plans and

investment projects in the Official Newspapers,

Press Conferences and also on its website.

Distribution of Profits:

The profit distribution ratios from cash dividends

and/or bonus shares shall be proposed by

the Board based on the Company ’s financial

position and per formance at the end of its


financial year and the Company ’s future

business plan. This shall be discussed, approved

and adopted by the General Assembly in their

Ordinary and Extra-Ordinary Annual Meeting,

in the event of the distribution of bonus shares.

www.qgirco.com

QGIRCO


Fatwa and Shari’a SupervisoryBoard Report

To the Shareholders

Peace and blessings of Allah be upon you,

As per the appointment letter, we have drafted

the contracts, agreements and policies of

General Takaful Company (the “Company ”) and

reviewed its system and articles of associations,

and we have reviewed the used principles

and contracts related to transactions and

application executed during the period.

We conducted our review to form an opinion

as to whether the Company has complied with

Shari ’a rules and principles as well as specific

fatwa, rulings and guidelines issued by us.

The Company ’s management is responsible

for ensuring that the Company conducts its

business in accordance with Shari ’a rules and

principles. It is our responsibilities to form an

independent opinion based on our review

of the operations of the Company, guide the

management to comply with Shari ’a rules and

to prepare a report to Shareholders.

We planned and per formed our review to

obtain all the information and explanations

which we considered necessar y in order to

provide us with sufficient evidence to give

reasonable assurance that the Company has

not violated Shari ’a rules and principles. Our

review through Internal Shari ’a Audit includes

examining contracts, applied models and

followed procedures.

In the Name of Allah, the Most Beneficent, the

Most Merciful

All praise to Allah, the Lord of all the Worlds,

and peace be upon the last messenger and

prophet, sent as a mercy to all mankind, and

his family, companions and followers til l the Day

of Judgement.

Prof. Dr. Ali M. Al QuradaghiChairman of Fatwa and Shari ’a Supervisory Board


In our opinion

1. The contracts and transactions entered

into by the Company during the year ended

31 December 2017 that we have reviewed

are in compliance with Shari ’a rules and

principles

2. The Company has maintained separate

accounts for Policyholders and Shareholders

3. The Allocation of profit and charging of

losses for investments account conform

to the basis that has been approved by

us in accordance with Shari ’a rules and

principles

4. We have reviewed the financial statements

for the year ended 31 December 2017, and

discussed Shareholders and Policyholders ’

accounts, the calculation of profit and

surplus and accuracy of information from

Shari ’a prospective which were generally

found complied with general principles and

rules of Islamic insurance.

5. The Company has complied with the Shari ’a

Board ’s decisions concerning the surplus

or deficit, and the rates of Wakala and

Mudaraba between the Company and the

Policyholders.

We pray to Almighty Allah, to grant success for

those who are in charge of the management of

General Takaful Company for more constructive

contribution to establish the edifice and

achieve the purpose of Islamic economy, to

grant success to the Company ’s customers, and

to protect our beloved Countr y from any harm.

“And The Last of our Call is Praise to Allah, the

Lord of all the Worlds.”

28 Jumada Al Oula 1439 HijriCorresponding to 14 February 2018

Peace and blessings of Allah be upon you.

SHARI’A



CONSOLIDATED FINANCIAL STATEMENTS

31 DECEMBER 2017


IndependentAuditor’s ReportTO THE SHAREHOLDERS QATAR GENERAL INSURANCE & REINSURANCE COMPANY Q.P.S.C.Doha, Qatar

Report on the Audit of the Consolidated Financial Statements

Opinion

We have audited the consol idated f inancial statements of Qatar General Insurance & Reinsurance

Company Q.P.S.C. (the “Company ”) and its subsidiar ies (together refer red to as the “Group”) ,

which comprise the consol idated statement of f inancial posit ion as at 31 December 2017, and

the consol idated statement of prof i t or loss, consol idated statement of comprehensive income,

consol idated statement of changes in equity and consol idated statement of cash f lows for the

year then ended, and notes to the consol idated f inancial statements, including a summar y of

s igni f icant accounting pol icies.

In our opinion, the accompanying consol idated f inancial statements present fai r ly, in al l mater ial

respects, the consol idated f inancial posit ion of the Group as at 31 December 2017, and its

consol idated f inancial per formance and its consol idated cash f lows for the year then ended in

accordance with International Financial Report ing Standards ( IFRS) .

Basis for Opinion

We conducted our audit in accordance with International Standards on Audit ing ( ISAs) . Our

responsibi l i t ies under those standards are further descr ibed in the Auditor ’s Responsibi l i t ies for

the Audit of the Consol idated Financial Statements sect ion of our report. We are independent of

the Group in accordance with the International Ethics Standards Board for Accountants ’ Code

of Ethics for Profess ional Accountants ( IESBA Code) together with the ethical requi rements that

are relevant to our audit of the consol idated f inancial statements in the State of Qatar, and we

have fu l f i l led our other ethical responsibi l i t ies in accordance with the IESBA Code. We bel ieve

that the audit evidence we have obtained is suf f ic ient and appropriate to provide a basis for

our opinion.


IndependentAuditor’s ReportTO THE SHAREHOLDERS QATAR GENERAL INSURANCE & REINSURANCE COMPANY Q.P.S.C.Doha, Qatar (CONTINUED)

Emphasis of Matters

Without qual i fy ing our opinion, we would l ike to draw attent ion to;

Note 41 to these consol idated f inancial statements, where in i t is ment ioned that, the Board of

Di rectors is in the process of reviewing the modal i t ies of calculat ing the Group Chief Execut ive

Off icer ’s remunerat ion as per the terms of his employment contract, which has been approved by

the Board of Di rectors. Cumulat ive adjustments, i f any, as a result of such review wi l l be recorded

in Financial statements in the subsequent per iods.

Note 40 to these consol idated f inancial statements, whereby the Board of Di rectors through

i ts decis ion has decided to exit the insurance business in the UAE. We are not aware of any

contingent l iabi l i t ies related to this matter.

Further, dur ing the year, the Dubai Branch of the Company has not met the capital and solvency

requi rements as mandated by the UAE Insurance Author i ty Regulat ions. We are not aware of any

contingent l iabi l i t ies related to this matter.

Key Audit Matters

Key audit matters are those matters that, in our profess ional judgment, were of most s igni f icance

in our audit of the consol idated f inancial statements of the current year. These matters were

addressed in the context of our audit of the consol idated f inancial statements as a whole, and

in forming our opinion thereon, and we do not provide a separate opinion on these matters. For

each matter below, our descr ipt ion of how our audit addressed the matter is provided in that

context.

We designed our audit by determining mater ial i ty and assess ing the r isks of mater ial misstatement

in the f inancial statements. In part icular, we looked at where the Directors made subject ive

judgements, for example in respect of s igni f icant accounting est imates that involved making

assumptions and consider ing future events that are inherent ly uncertain. As in al l of our audits we

also addressed the r isk of management overr ide of internal controls, including evaluating whether

there was evidence of bias by the Directors that represented a r isk of mater ial misstatement due

to f raud.


Areas of focus How our audit addressed the area of focus

• We evaluated the objectivity, independence and expertise of the external valuators appointed by the management.

• We tested the accuracy and completeness of the underlying data used as inputs for the valuation.

• We involved our internal specialist to evaluate the reasonableness of the underlying assumptions used by the valuator by comparing the assumptions used with internal and external data.

• Assessed the adequacy and completeness of the disclosures on the valuation of investment properties, presented in Note 4 of the consolidated financial statements.

Provision for reported claims by policyholders:

• We tested controls over the initiation, review and approval of the claim process across the different lines of business including the claim settlement process.

• We evaluated the provision for reported claims by policyholder recorded by management by reviewing the loss adjusters reports, internal policies for reserves and other assumptions made by management.

• We performed a substantive analytical review on the movements in the provision for reported claims by policyholders during the year.

• We tested the adequacy and completeness of the disclosures on the provision for reported claims by policyholders, presented in Note 20 of the consolidated financial statements.

Incurred but not reported reserve (IBNR):

• We evaluated the objectivity, independence and expertise of the actuarial valuator appointed by management.

• We verified the data used by external actuary to the actuarial exhibits and verified that the data on which the estimate is based is accurate and complete.

• We involved our internal specialist to verify the computation and evaluate the methodology and assumptions used by the actuary by comparision to generally accepted industry practices.

• We tested the adequacy and completeness of the disclosures on the IBNR, presented in Note 20 of the consolidated financial statements.

Valuation of investment properties:

Since investment properties of QR 5.638 billion represent significant portion of the Group’s total assets, was considered a matter of most signifcance to our current year audit due to the magnitude of the balance in relation to the financial statements,and its valuation involves computations dependent on estimates.

The Group records its investment properties at fair value, with changes in fair value being recognised in the consolidated statement of profit or loss.

The fair values are determined by external valuators appointed by the management. These valuations are based on estimates such as estimated rental revenues, occupancy rates, discount rates and market indicators.

Valuation of provision for reported claims by policyholders and Incurred But Not Reported Reserve:

Due to the magnitude of the balances and the estimation uncertainty and subjectivity involved in the assesment of these reserves we have considered the valuation of the provision for reported claims by policyholders and IBNR as a key audit matter. Further, the measurement of these insurance contract liabilities involves significant judgment over uncertain future outcomes, mainly the ultimate total settlement value of the insurance contract liabilities, including any guarantees provided to policyholders.

The Group’s provision for reported claims by policyholders and incurred but not reported reserve (IBNR) represent 22% of the total liabilities:

The provision for reported claims by policyholders recorded by the Group comprises of the total value of individual outstanding claims estimated by internal or external loss adjusters when a claim has been initiated. These estimates are reassessed during the various stages of the claim processing cycle and are revised based on changes in specific circumstances pertaining to each claim.

The IBNR recorded by the Group represents an estimate of the liability for a claim-generating event that has taken place during the year but has not yet been reported to the Group as of 31 December 2017. IBNR is calculated at the reporting date based on the computations performed by an external actuary appointed by the management, after considering historical claim trends, empirical data and current assumptions that may include a margin for adverse deviations.


The r isks of mater ial misstatement that had the greatest ef fect on our audit, including the al location of our resources and ef fort, are ident i f ied as “areas of focus ” in the table below. We have also set out how we tai lored our audit to address these specif ic areas in order to provide an opinion on the f inancial statements as a whole, and any comments we make on the results of our procedures should be read in th is context. This is not a complete l is t of al l r i sks ident i f ied by our audit.

We ident i f ied the fol lowing key areas of focus:



Other information

The Board of Di rectors is responsible for the other information. The other information comprises

the information included in the annual report, but does not include the consol idated f inancial

statements and our auditor ’s report thereon. The annual report is expected to be made avai lable

to us after the date of th is auditor ’s report.

Our opinion on the consol idated f inancial statements does not cover the other information and

we do not express any form of assurance conclus ion thereon.

In connection with our audit of the consol idated f inancial statements, our responsibi l i ty is to read

the other information ident i f ied above when i t becomes avai lable and, in doing so, consider

whether the other information is mater ial ly inconsistent with the consol idated f inancial statements

or our knowledge obtained in the audit, or otherwise appears to be mater ial ly misstated.

When we read the annual report, i f we conclude that there is a mater ial misstatement therein we

are requi red to communicate the matter (s) with those charged with governance.

Other matters

Financial statements of the Group for the year ended December 31, 2016, were audited by

other independent auditors whose report dated March 19, 2017 expressed an unqual i f ied audit

opinion on those f inancial statements.



Responsibil it ies of Management and Those Charged with Governance for the Consolidated Financial Statements

The Board of Di rectors is responsible for the preparation and fai r presentat ion of the consol idated

f inancial statements in accordance with IFRSs and for such internal control as the Board of Di rectors

determines is necessar y to enable the preparation of the consol idated f inancial statements that

are f ree f rom mater ial misstatement, whether due to f raud or er ror.

In preparing the consol idated f inancial statements, the Board of Di rectors is responsible for

assess ing the Group’s abi l i ty to continue as a going concern, disclosing, as appl icable, matters

related to going concern and using the going concern basis of accounting unless the Board

of Di rectors either intends to l iquidate the Group or to cease operations, or has no real ist ic

alternative but to do so.

The Audit Committee is responsible for overseeing the Group’s f inancial report ing process.

Auditor ’s Responsibil it ies for the Audit of the Consolidated Financial Statements

Our object ives are to obtain reasonable assurance about whether the consol idated f inancial

statements as a whole are f ree f rom mater ial misstatement, whether due to f raud or er ror, and

to issue an auditor ’s report that includes our opinion. Reasonable assurance is a high level of

assurance, but is not a guarantee that an audit conducted in accordance with ISA wi l l always

detect a mater ial misstatement when i t exists. Misstatements can ar ise f rom f raud or er ror and are

considered mater ial i f, indiv idual ly or in the aggregate, they could reasonably be expected to

inf luence the economic decis ions of users taken on the basis of these consol idated f inancial

statements.



As part of an audit in accordance with ISA, we exercise profess ional judgment and maintain profess ional skepticism throughout the audit. We also:

— Identi fy and assess the r isks of mater ial misstatement of the consol idated f inancial statements, whether due to f raud or er ror, design and per form audit procedures responsive to those r isks, and obtain audit evidence that is suf f ic ient and appropriate to provide a basis for our opinion. The r isk of not detecting a mater ial misstatement result ing f rom f raud is h igher than for one result ing f rom error, as f raud may involve col lus ion, forger y, intent ional omiss ions, mis representat ions, or the overr ide of internal control.

— Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the ci rcumstances, but not for the purpose of express ing an opinion on the ef fect iveness of the Group’s internal control.

— Evaluate the appropriateness of accounting pol icies used and the reasonableness of accounting est imates and related disclosures made by management.

— Conclude on the appropriateness of management ’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a mater ial uncertainty exists related to events or condit ions that may cast s igni f icant doubt on the Group’s abi l i ty to continue as a going concern. I f we conclude that a mater ial uncertainty exists, we are requi red to draw attent ion in our auditor ’s report to the related disclosures in the consol idated f inancial statements or, i f such disclosures are inadequate, to modify our opinion. Our conclus ions are based on the audit evidence obtained up to the date of our auditor ’s report. However, future events or condit ions may cause the Group to cease to continue as a going concern.

— Evaluate the overal l presentat ion, st ructure and content of the consol idated f inancial statements, including the disclosures, and whether the consol idated f inancial statements represent the under ly ing t ransactions and events in a manner that achieves fai r presentat ion.

— Obtain suf f ic ient appropriate audit evidence regarding the f inancial information of the ent i t ies or business activ i t ies with in the Group to express an opinion on the consol idated f inancial statements. We are responsible for the di rect ion, super vis ion and per formance of the Group audit. We remain solely responsible for our audit opinion.



We communicate with the Audit Committee regarding, among other matters, the planned scope and t iming of the audit and s igni f icant audit f indings, including any s igni f icant def iciencies in internal control that we ident i fy dur ing our audit.

We also provide the Audit Committee with a statement that we have compl ied with relevant ethical requi rements regarding independence, and communicate with them al l relat ionships and other matters that may reasonably be thought to bear on our independence, and where appl icable, related safeguards.

From the matters communicated with the Audit Committee, we determine those matters that were most of s igni f icance in the audit of the consol idated f inancial statements of the current per iod and are therefore the key audit matters. We descr ibe these matters in our auditor ’s report unless law or regulat ion precludes publ ic disclosures about the matter or when, in ext remely rare ci rcumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the publ ic interest benef i ts of such communication.

Report on Legal and Other Regulator y Matters

Furthermore, in our opinion, proper books of account have been kept by the Group and the consol idated f inancial statements comply with the Qatar Commercial Companies Law No. 11 of 2015, the appl icable provis ions of Qatar Central Bank Law No. 13 of 2012 and the Company ’s Art ic les of Associat ion. We have obtained al l the information and explanations we requi red for the purpose of our audit, and are not aware of any violat ions of the above mentioned laws or the Company ’s Art ic les of Associat ion having occurred dur ing the year, which might have had a mater ial adverse ef fect on the Group’s f inancial posit ion or per formance.

Rödl & Partner- Qatar BranchCertif ied Public Accountants

Hikmat Mukhaimer, FCCA Doha- Qatar

(License No.297) 14 Februar y 2018

QFMA Registration Auditor ’s No.120151

71www.qgirco.com

The attached notes 1 to 42 form an integral part of these consol idated f inancial statements.


Consolidated Statement of Financial PositionAs at 31 December 2017

Assets

Available-for-sale financial assets

Share capital

Property and equipment

Financial assets at fair value through profit or loss

Legal reserve

Total equity

Investment properties

Takaful participants’ assets

Retained earnings

Investment in associates

Other assets

Other components of equity

Reinsurance assets

Cash and bank balances

Financial assets:


Insurance receivables

Total assets

Non-controlling interests

Receivables from related parties

Equity

Equity and liabilities

QR ‘000

2016

1,016,777

104,013

164,129

875,067

6,409,059

6,064,376

286,600

558,904

345,225

232,759

4,421,367

779,723

303,287

512,599

217,287

9,514,428

6,367,937

252

41,122

QR ‘000

2017

905,356

158,904

129,148

875,067

6,191,145

5,638,381

296,263

584,995

942,591

208,012

4,570,656

771,433

260,056

165,773

204,506

9,514,816

6,196,491

166

(5,346)

Notes

8

3

9

13

4

10

14

5

11

6

12

15

7

35 (b)

18

Qatar General Insurance and Reinsurance Company Q.P.S.C. | Annual Report 201772


Consolidated Statement of Financial Position (continued)As at 31 December 2017

Employees’ end-of-service benefits

Loans and borrowings

Payables to related parties

Insurance contract liabilities

Derivative financial instruments

Takaful participants’ liabilities

Total equity and liabilities

Liabilities

Financial liabilities:

Insurance payables

Total liabilities

Other liabilities

QR ‘000

2016

37,744

1,270,651

81,992

1,038,757

19,820

286,600

9,514,428

220,496

3,105,369

149,309

QR ‘000

2017

41,049

1,538,815

21,973

1,037,447

8,592

296,263

9,514,816

245,396

3,323,671

134,136

Notes

19

21

35 (b)

23

24

20

22

10

Nasse r B in A l i B in Saud A l -Than i

Chairman and Managing Di rector

Jama l Kame l Abu Nah l

Chief Execut ive Of f icer

73www.qgirco.com


Consolidated Statement of Profit or LossFor the year ended 31 December 2017

Claims ceded to reinsurers

Underwriting results

(Loss) profit from operations

Gross written premiums

Gross change in insurance contract liabilities

Investment and other operations results

Share of profits of associates, net of impairment

Premiums ceded to reinsurers

Change in insurance contract liabilities ceded to reinsurers

Investment income

Finance costs

Net change in unearned premiums provision

Net realised gains

Cost of construction activities

Profit for the year

Profit attributable to:


Earnings per share

Net earned premiums

Net claims

Fair value (losses) gains

Other operating and administrative expenses

Equity holders of the Parent

Basic and diluted earnings per share (in Qatari Riyals per share)

Net commission and other insurance income

Income from construction activities

Total expenses

Gross claims paid

Other income

QR ‘000

2016

96,450

236,534

(29,161)

219,341

38,913

629,949

(102,665)

18,336

(189,251)

258,254

2.51

(415,179)

56,600

(11,109)

(114,893)

34,406

(266,405)

203,661

18,301

69,687

256,227

(314,417)

107,069

415,563

2,027

205,739

(47,993)

258,254

QR ‘000

2017

(49,770)

200,025

(41,778)

307,381

(46,468)

566,971

39,205

2,656

(190,007)

260,913

3.51

(387,282)

(642,697)

3,585

(103,910)

41,894

(285,916)

183,274

26,282

942

(577,450)

(240,431)

105,646

(397,180)

838,363

147,086

(54,131)

260,913

Notes

28

20 (b)

29

20 (b)

30

26

20 (b)

27

31

32

33



Consolidated Statement of Comprehensive IncomeFor the year ended 31 December 2017

Profit for the year

Total comprehensive (loss) income attributable to:

Equity holders of the Parent

Other comprehensive loss

Items not to be reclassified to profit or loss in subsequent periods


Items may be reclassified to profit or loss in subsequent periods

Net change in revaluation surplus

Exchange differences on translation of foreign operations

Other comprehensive loss for the year

Net gain on cash flow hedge

Total comprehensive (loss) income for the year

Net loss on available-for-sale financial assets

QR ‘000

2016

258,254

38,913

-

(17,094)

(5,021)

8,695

(20,768)

(17,094)

202,247

QR ‘000

2017

260,913

(46,468)

(85,913)

(18,744)

(346,826)

(218,048)

(85,913)

11,228

(121,262)

(328,082)

(39,445)

241,160

241,160

Note

5

75www.qgirco.com


Consolidated Statement of Changes in EquityFor the year ended 31 December 2017



At 1 January 2017

Transfer to legal reserve

Shareholders dividends

Profit (loss) for the year

Contribution to social and sports activities fund

Other comprehensive (loss) income

Total comprehensive income (loss)

QR ‘000QR ‘000

6,409,059

Total equity

77,355

Revalua-tion surplus

(131,260)-

(741)-

260,913-

(346,826)(18,744)

(85,913)(18,744)

--

QR ‘000QR ‘000 QR ‘000QR ‘000 QR ‘000QR ‘000 QR ‘000QR ‘000

41,122

Non-controlling

interests

597,183

Available-for-sale

financial assets

6,367,937

Total ordinary

sharehold-ers’ equity

4,421,367

Retained earnings

(142,119)

Foreign currency

translation reserve

Cash flow hedge

558,904

Legal reserve

(19,820)875,067

Share capital

-- (131,260)(131,260) -- --

-- (741)(741) -- --

(46,468)- 307,381307,381 -- --

-(121,262) (346,826)- (218,048)- 11,228-

(46,468)(121,262) (39,445)307,381 (218,048)- 11,228-

-- -(26,091) -26,091 --

Notes

16

17

14

At 31 December 2017 6,191,14558,611 (5,346)475,921 6,196,4914,570,656 (360,167)584,995 (8,592)875,067



Consolidated Statement of Changes in Equity (continued)For the year ended 31 December 2017



At 1 January 2016

Transfer to legal reserve

Shareholders dividends

Profit (loss) for the year

Contribution to social and sports activities fund

Other comprehensive (loss) income

Total comprehensive income (loss)

Bonus shares issued

QR ‘000QR ‘000

6,292,454

Total equity

77,355

Revaluation surplus

(119,327)-

(5,228)-

258,254-

(17,094)

241,160-

--

--

QR ‘000QR ‘000 QR ‘000QR ‘000 QR ‘000QR ‘000 QR ‘000QR ‘000

2,209

Non-controlling

interests

617,951

Available-for-sale

financial assets

6,290,245

Total ordinary

sharehold-ers’ equity

4,431,958

Retained earnings

(137,098)

Foreign currency

translation reserve

Cash flow hedge

533,079

Legal reserve

(28,515)795,515

Share capital

-- (119,327)(119,327) -- --

-- (5,228)(5,228) -- --

38,913- 219,341-- 219,341 --

-(20,768) (17,094)- (5,021)- 8,695--

38,913(20,768) 202,247219,341 (5,021)- 8,695-

-- -(79,552) -- -79,552

-- -(25,825) -25,825 --

Notes

16

17

13

14

At 31 December 2016 6,409,05977,355 41,122597,183 6,367,9374,421,367 (142,119)558,904 (19,820)875,067

77www.qgirco.com


Consolidated Statement of Cash FlowsFor the year ended 31 December 2017

Operating activities

Fair value losses (gains)

Amortization of intangible asset

Finance costs

Profit for the year

Impairment loss (recoveries) on receivables

Gain from sale of property and equipment

Provision for employees’ end of service benefits

Adjustment for:

Impairment losses on available-for-sale financial assets

Gain from sale of investment in an associate

Net change in operating assets

Impairment losses on investment in associates

Gain from sale of available-for-sale financial assets

Cash generated from operations

Net change in operating liabilities

Impairment of goodwill

Gain from sale of financial assets at fair value through profit or loss

Employees’ end of service benefits paid

Share of profits of associates

Net movement in outstanding claims provision

Non-cash items included in profit for the year:

Depreciation of property and equipment

Net movement in unearned premiums provision

Net cash flows from operating activities

QR ‘000

2016

(1,392)

(1,314)

224,573

258,254

26,751

(42,538)

(1,921)

5,765

(1,235)

7,288

-

6,215

(43,523)

(7,792)

11,109

222,652

8,409

47,993

1,676

5,723

(56,600)

(216)

QR ‘000

2017

6,222

-

125,810

260,913

12,026

(14,453)

(1,617)

62,503

(229)

15,307

14,409

10,565

(50,829)

(900,866)

(3,585)

124,193

10,469

54,131

1,676

4,922

642,697

(68)

Notes

32

29

29

15 (a)

5

29

34

32

20 (a)

34

5

3

31

32

19

30

19


Consolidated Statement of Cash Flows (continued)For the year ended 31 December 2017

Investing activities

Purchase of available-for-sale financial assets

Financing activities

Interest paid

Additions to property and equipment

Proceeds from sale of available-for-sale financial assets

Proceeds from loans and borrowings

Net (decrease) increase in cash and cash equivalents

Interest received

Proceeds from sale of property and equipment

Purchase of financial assets at fair value through profit or loss

Repayment of loans and borrowings

Cash and cash equivalents at the beginning of the year

Dividends received

Proceeds from sale of investment in an associate

Proceeds from sale of financial assets at fair value through profit or loss

Finance costs paid

Additions to investment properties

Dividends paid to equity holders of the Parent

Cash and cash equivalents at the end of the year

Dividends received from associates

Net cash flows used in investing activities

Purchase of additional shares in associates

Net cash flows from (used in) financing activities

Operational cash flows from interest and dividends

QR ‘000

2016

97,863

(300,095)

(28,263)

-

(48,742)

300,576

639

12,192

(119,327)

1,314

(76,987)

(78,909)

(72,417)

(46,590)

11,577

17,722

(34,229)

71,326

36,543

(63,015)

395,747

229,250

QR ‘000

2017

100,471

(327,475)

(38,245)

(1,186)

(54,335)

260,056

75

4,008

(131,260)

-

(197,976)

(236,533)

71,820

(51,528)

3,407

16,785

-

(40,520)

29,407

(107,087)

584,890

300,576

Notes

3

5

5

12



Notes to the Consolidated Financial StatementsFor the year ended 31 December 2017

1. COMPANY INFORMATION

Qatar General Insurance & Reinsurance Company Q.P.S.C. (the “Company ” or the “Parent

Company ”) is a publ ic shareholding company incorporated by Emir i Decree No. 52 of 1978

under commercial regist r y number 7200 and governed by the provis ions of the Qatar Commercial

Companies ’ Law No. 11 of 2015 and the appl icable provis ions of Qatar Central Bank Law No.

13 of 2012. The Company and its subsidiar ies (together refer red to as the “Group”) are engaged

in the business of general insurance and reinsurance including Is lamic Takaful insurance, real

estate, investment, manufactur ing, t rading and contract ing. The shares of the Company are l is ted

on the Qatar Exchange.

The Company has seven local branches in Qatar and one overseas branch in United Arab

Emirates ( in Dubai) . The consol idated f inancial statements incorporate the f inancial statements of

the Company and its subsidiar ies and the Group’s interest in the associates. The subsidiar ies are:

These consol idated f inancial statements of the Group for the year ended 31 December 2017

were author ised for issue by the Board of Di rectors on 14 Februar y 2018.

Principal activities

Manufacturing of rebar

Investments management of the Group

Manufacturing of insulation materials

Water bottling and beverages trading

Islamic insurance

Automobiles repair

Real estate investment and development

Real estate investment and management

Hospitality, exihibition and events management

Insurance marketing services

Real estate investment and development

Contracting and construction

Ownership

100%

100%

100%

60%

100%

100%

50%

100%

100%

100%

100%

100%

Country of incorporation

State of Qatar

State of Qatar

State of Qatar

State of Qatar

State of Qatar

State of Qatar

State of Qatar

State of Qatar

State of Qatar

State of Qatar

State of Qatar

State of Qatar

Name of the subsidiary

National Rebar Formation Factory W.L.L.

Qatar General Holding Company W.L.L.

Orient Insulation Factory W.L.L.


General Takaful Company W.L.L.

Orientals Garage W.L.L.

Mozoon Real Estate Company W.L.L.


World Trade Center – Qatar W.L.L.

Mozoon Insurance Marketing Services W.L.L.

General Tower for Real Estate Investments W.L.L.




2. SIGNIFICANT ACCOUNTING POLICIES

Basis of preparationThese consol idated f inancial statements have been prepared in accordance with International

Financial Report ing Standards ( IFRS) and appl icable provis ions of the Qatar Commercial

Companies ’ Law No. 11 of 2015 and the appl icable provis ions of Qatar Central Bank Law No.

13 of 2012.

The consol idated f inancial statements are prepared under the accrual basis and histor ical cost

convention, except for the fol lowing mater ial i tems in the consol idated statement of f inancial

posit ion that have been measured at fai r value:

— derivat ive f inancial inst ruments

— non der ivat ive f inancial inst ruments carr ied at fai r value through prof i t or loss

— avai lable-for-sale f inancial assets

— investment propert ies

The methods used to measure fai r values have been discussed in detai l in the notes to these

consol idated f inancial statements.

The Group presents i ts consol idated statement of f inancial posit ion broadly in order of l iquidity.

An analys is regarding ut i l i sat ion or sett lement of assets and l iabi l i t ies, with in 12 months after

the report ing date (current) and more than 12 months after the report ing date (non-current) is

presented in Note 38.

The consol idated f inancial statements are presented in Qatar i Riyal (QR), which is the Group’s

funct ional cur rency. Al l f inancial information presented in Qatar i Riyal has been rounded to the

nearest thousands (QR ‘000) except when otherwise indicated.

The preparation of the consol idated f inancial statements in conformity with IFRSs requi res

management to make judgements, est imates and assumptions that ef fect the appl ication of

accounting pol icies and the reported amounts of assets, l iabi l i t ies, income and expenses and

disclosure of cont ingent l iabi l i t ies at the report ing date. Est imates and judgements are continual ly

evaluated and are based on histor ical exper ience and other factors, including expectation of

future events that are bel ieved to be reasonable under the ci rcumstances. Actual results may

di f fer f rom these est imates.



2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Basis of preparation (continued)In formation about cr i t ical judgements and s igni f icant areas of est imates in applying accounting

pol icies that have the most s igni f icant ef fect on the amounts recognised in the consol idated

f inancial statements are included within th is note.

Est imates and under ly ing assumptions are reviewed on an ongoing basis. Revis ions to accounting

est imates are recognised in the year in which the est imates are revised.

Changes in accounting policies and disclosures The accounting pol icies adopted are consistent with those of the previous f inancial year, except

for the fol lowing:

New and amended standards and interpretations adopted during the yearThe Group appl ied for the f i rst-t ime certain standards and amendments, which are ef fect ive for

annual per iods beginning on or after 1 Januar y 2017. The Group has not ear ly adopted any

other standard, interpretat ion or amendment that has been issued but is not yet ef fect ive. The

nature and the impact of each new standard and amendment is descr ibed below:

IAS 7 Disclosure Init iative – Amendments The amendments to IAS 7 Statement of Cash Flows are part of the IASB’s Disclosure In i t iat ive and

require an ent i ty to provide disclosures that enable users of f inancial statements to evaluate

changes in l iabi l i t ies ar is ing f rom f inancing activ i t ies, including both changes ar is ing f rom cash f lows

and non-cash changes. The amendments to IAS 7 Statements of Cash Flows, ef fect ive 1 Januar y

2017, requi re the Group to provide disclosures about the changes in l iabi l i t ies f rom f inancing

activ i t ies. The Group has made adequate disclosure with in the notes to these consol idated

f inancial statements.

IAS 12 Recognition of Deferred Tax Assets for Unrealized Losses – AmendmentsThe amendments clar i fy that an ent i ty needs to consider whether tax law rest r icts the sources

of taxable prof i ts against which i t may make deductions on the reversal of that deductible

temporar y di f ference. Furthermore, the amendments provide guidance on how an ent i ty should

determine future taxable prof i ts and explain the ci rcumstances in which taxable prof i t may include

the recover y of some assets for more than thei r carr y ing amount. These amendments are ef fect ive

for annual per iods beginning on or after 1 Januar y 2017 with ear ly appl ication permitted. As

the Group is not exposed to income taxes the amendment did not have any impact on these

consol idated f inancial statements.




Changes in accounting policies and disclosures (continued)

Annual Improvements to IFRS Standards 2014-2016 cycleIASB has issued Annual Improvements to IFRS 2014- 2016 Cycle, amending IFRS 12 - Disclosure

of Interests in Other Ent i t ies.

IFRS 12 states that an ent i ty need not provide summarised f inancial information for interests in

subsidiar ies, associates or joint ventures that are class i f ied (or included in a disposal group

that is class i f ied) as held for sale. The amendments clar i fy that th is is the only concession f rom

the disclosure requi rements of IFRS 12 for such interests. The Annual Improvements is ef fect ive for

accounting per iods commencing on or after 1 Januar y 2017. These amendments do not have a

s igni f icant impact on these consol idated f inancial statements of the Group.

New and amended standards and interpretations not yet effective

Amendments to IFRS 10 and IAS 28 Sale or Contribution of Assets between an Investor and its Associate or Joint VentureThe amendments address the conf l ict between IFRS 10 and IAS 28 in deal ing with the loss

of control of a subsidiar y that is sold or contr ibuted to an associate or joint venture. The

amendments clar i fy that the gain or loss result ing f rom the sale or contr ibut ion of assets that

const i tute a business, as def ined in IFRS 3, between an investor and its associate or joint venture,

is recognised in fu l l . Any gain or loss result ing f rom the sale or contr ibut ion of assets that do not

const i tute a business, however, is recognised only to the extent of unrelated investors ’ interests

in the associate or joint venture. The IASB has deferred the ef fect ive date of these amendments

indef in i tely, but an ent i ty that ear ly adopts the amendments must apply them prospectively. The

Group wi l l apply these amendments when they become effect ive.

IFRS 15 Revenue from Contracts with CustomersIFRS 15 was issued in May 2014 and establ ishes a f ive-step model to account for revenue ar is ing

f rom contracts with customers. Under IFRS 15, revenue is recognised at an amount that ref lects

the considerat ion to which an ent i ty expects to be ent i t led in exchange for t ransfer r ing goods or

ser vices to a customer. The new revenue standard wi l l supersede al l cur rent revenue recognit ion

requi rements under IFRS. Ei ther a fu l l ret rospective appl ication or a modif ied retrospective

appl ication is requi red for annual per iods beginning on or after 1 Januar y 2018. Ear ly adoption

is permitted. The Group plans to adopt the new standard on the ef fect ive date.




Changes in accounting policies and disclosures (continued)New and amended standards and interpretations not yet effective (continued)

IFRS 9 Financial InstrumentsIn Ju ly 2014, the IASB issued the f inal vers ion of IFRS 9 Financial Inst ruments that replaces IAS 39

Financial Inst ruments : Recognit ion and Measurement and al l previous vers ions of IFRS 9. IFRS 9

br ings together al l three aspects of the accounting for f inancial inst ruments project : class i f icat ion

and measurement, impairment and hedge accounting. IFRS 9 is ef fect ive for annual per iods

beginning on or after 1 Januar y 2018, with ear ly appl ication permitted. Except for hedge

accounting, retrospective appl ication is requi red but providing comparative information is not

compulsor y. For hedge accounting, the requi rements are general ly appl ied prospectively, with

some l imited exceptions.

The Group plans to adopt the new standard on the ef fect ive date. Dur ing 2017, the Group

has per formed a high- level impact assessment of al l three aspects of IFRS 9. This prel iminar y

assessment is based on current ly avai lable information and may be subject to changes ar is ing

f rom further detai led analyses or addit ional reasonable and supportable information being made

avai lable to the Group in the future. Overal l , the Group expects no s igni f icant impact on i ts

f inancial posit ion and equity except for the ef fect of applying the impairment requi rements of

IFRS 9.

a) Classif ication and measurementThe Group expects to continue measur ing at fai r value al l f inancial assets current ly held at fai r

value. Quoted equity shares current ly held as avai lable-for-sale with fai r value gains and losses

recorded in OCI wi l l be class i f ied as equity inst ruments categorized under fai r value through

OCI and fai r value changes shal l cont inue to be recognised under OCI. Any gains or losses

recognised upon derecognit ion of these inst ruments wi l l no longer be reclass i f ied into prof i t or

loss.

Debt secur i t ies are expected to be measured at fai r value through OCI under IFRS 9 as the Group

expects not only to hold the assets to col lect contractual cash f lows but also to sel l a s igni f icant

amount on a relat ively f requent basis. Any gains or losses recognised upon derecognit ion of

these inst ruments wi l l cont inue to be reclass i f ied into prof i t or loss.




Changes in accounting policies and disclosures (continued)New and amended standards and interpretations not yet effective (continued)IFRS 9 Financial Instruments (continued)a) Classif ication and measurement (continued)

The equity shares in non-l isted companies are intended to be held for the foreseeable future. The

Group expects to apply the option to present fai r value changes in OCI, and, therefore, bel ieves

the appl ication of IFRS 9 would not have a s igni f icant impact.

Loans and receivables are held to col lect contractual cash f lows and are expected to give

r ise to cash f lows represent ing solely payments of pr incipal and interest. Thus, the Group expects

that these wi l l cont inue to be measured at amort ized cost under IFRS 9. However, the Group

wi l l analyse the contractual cash f low character ist ics of those inst ruments in more detai l before

concluding whether al l those inst ruments meet the cr i ter ia for amort ized cost measurement under

IFRS 9.

b) ImpairmentIFRS 9 requi res the Group to record expected credit losses on al l i ts debt secur i t ies, loans and

receivables, either on a 12-month or l i fet ime basis. The Group expects a s igni f icant impact on i ts

equity due to unsecured nature of i ts loans and receivables, but i t wi l l need to per form a more

detai led analys is which considers al l reasonable and supportable information, including forward-

looking elements to determine the extent of the impact.

(c) Hedge accountingThe Group intends to review al l exist ing hedge relat ionships that are current ly designated in

ef fect ive hedging relat ionships whether they wi l l st i l l qual i fy for hedge accounting under IFRS 9.





Applying IFRS 9 Financial Instruments with IFRS 4 Insurance Contracts (Amendments to IFRS 4)The IASB issued amendments to IFRS 4 Insurance Contracts providing two options for ent i t ies that

issue insurance contracts with in the scope of IFRS 4:

— an option that permit ent i t ies to reclass i fy, f rom prof i t or loss to other comprehensive income,

some of the income and expenses ar is ing f rom designated f inancial assets, def ined as over lay

approach;

— an optional temporar y exemption f rom applying IFRS 9 for ent i t ies whose predominant activ i ty

is issuing contracts with in the scope of IFRS 4, def ined as deferral approach.

An ent i ty choosing to apply over lay approach retrospectively the qual i fy ing f inancial assets

does so when i t f i rs t appl ies IFRS 9. An ent i ty choosing to apply the deferral approach does so

for annual per iods beginning on or after 1 Januar y 2018. The appl ication of both approaches

is optional, and an ent i ty is permitted to stop applying them before the new insurance contracts

standards is appl ied. The Group plans to adopt the new amendments on the ef fect ive date.

Prepayment Features with Negative Compensation (Amendments to IFRS 9)The International Accounting Standards Board (the IASB) has issued amendments to IFRS 9

Financial Inst ruments relat ing to prepayment features with negative compensation.

The amendments al low f inancial assets with a prepayment option that could result in the option’s

holder receiving compensation for ear ly termination to meet the SPPI condit ion i f speci f ied cr i ter ia

are met. The amendment appl ies to annual per iods beginning on or after 1 Januar y 2019, with

ear l ier appl ication permitted.

The Group plans to adopt the new amendments on the ef fect ive date.





IFRS 16 LeasesIFRS 16 was issued in Januar y 2016 and it replaces IAS 17 Leases, IFRIC 4 determining whether

an arrangement contains a Lease, SIC-15 Operating Leases – Incent ives and SIC-27 Evaluating

the Substance of Transactions Involving the Legal Form of a Lease. IFRS 16 sets out the pr inciples

for the recognit ion, measurement, presentat ion and disclosure of leases and requires lessees

to account for al l leases under a s ingle on-f inancial posit ion model s imi lar to the accounting

for f inance leases under IAS 17. The standard includes two recognit ion exemptions for lessees,

leases of ’ low-value’ assets (e.g. , personal computers) and short-term leases ( i .e. , leases with a

lease term of 12 months or less) . At the commencement date of a lease, a lessee wi l l recognize

a l iabi l i ty to make lease payments ( i .e. , the lease l iabi l i ty) and an asset represent ing the r ight to

use the under ly ing asset dur ing the lease term ( i .e. , the r ight-of-use asset) .

Lessees wi l l be requi red to separately recognize the interest expense on the lease l iabi l i ty and

the depreciat ion expense on the r ight-of-use asset. Lessees wi l l be also requi red to remeasure the

lease l iabi l i ty upon the occurrence of certain events (e.g. , a change in the lease term, a change

in future lease payments result ing f rom a change in an index or rate used to determine those

payments) . The lessee wi l l general ly recognize the amount of the re- measurement of the lease

l iabi l i ty as an adjustment to the r ight-of-use asset.

Lessor accounting under IFRS 16 is substant ial ly unchanged f rom today ’s accounting under IAS

17. Lessors wi l l cont inue to class i fy al l leases us ing the same class i f icat ion pr inciple as in IAS 17

and dist inguish between two types of leases: operat ing and f inance leases. IFRS 16 also requi res

lessees and lessors to make more extensive disclosures than under IAS 17. IFRS 16 is ef fect ive

for annual per iods beginning on or after 1 Januar y 2019. Ear ly appl ication is permitted, but

not before an ent i ty appl ies IFRS 15. A lessee can choose to apply the standard using either

a fu l l ret rospective or a modif ied retrospective approach. The standard ’s t ransit ion provis ions

permit certain rel iefs. The Group is in the process to assess the potent ial ef fect of IFRS 16 its

consol idated f inancial statements and plans to adopt the new standard on the ef fect ive date.





Transfer of Investment Properties (Amendments to IAS 40 - Investment Properties)The IASB has amended the requi rements in IAS 40 Investment property on when a company

should t ransfer a property asset to, or f rom, investment property. A t ransfer is made when and

only when there is an actual change in use – i .e. an asset meets or ceases to meet the def in i t ion

of investment property and there is evidence of the change in use. A change in management

intent ion alone does not support a t ransfer.

The revised examples of evidence of a change in use included in the amended vers ion of IAS 40

are not exhaust ive – i .e. other forms of evidence may support a t ransfer.

The amendments apply for annual per iods beginning on or after 1 Januar y 2018. Ear ly adoption

is permitted. A company has a choice on t ransit ion to apply :

— the prospective approach – i .e. apply the amendments to t ransfers that occur after the date

of in i t ial appl ication and reassess the class i f icat ion of property assets held at that date; or

— the retrospective approach – i .e. apply the amendments retrospectively, but only i f i t does not

involve the use of hindsight.


IFRIC 22 Foreign Currency Transactions and Advance ConsiderationsThe IFRS Interpretat ion Committee has issued IFRIC 22 which addresses the issue of determining

the date to be used for t ranslat ion of foreign currency t ransactions involving an advance or

payment or receipt. IFRIC 22 clar i f ies that the t ransaction date is the date on which the company

in i t ial ly recognises the prepayment or deferred income ar is ing f rom the advance considerat ion.

For t ransactions involving mult iple payments or receipts, each payment or receipt gives r ise to a

separate t ransaction date. The interpretat ion is ef fect ive f rom 1 Januar y 2018, the Group is in

the process of assess ing the impact of the interpretat ion on i ts consol idated f inancial statements

and plans to apply the interpretat ion on the ef fect ive date.





IFRS 17 Insurance ContractsIn May 2017, the IASB issued IFRS 17 Insurance Contracts, a comprehensive new accounting

standard for insurance contracts cover ing recognit ion and measurement, presentat ion and

disclosure, which replaces IFRS 4 Insurance Contracts.

In contrast to the requi rements in IFRS 4, which are largely based on grandfather ing previous

local accounting pol icies for measurement purposes, IFRS 17 provides a comprehensive model

(the general model) for insurance contracts, supplemented by the var iable fees approach for

contracts with di rect part icipation features that are substant ial ly investment-related ser vice

contracts, and the premium al location approach mainly for short durat ion which typical ly appl ies

to certain non-l i fe insurance contracts.

The main features of the new accounting model for insurance contracts are as fol lows:

— The measurement of the present value of future cash f lows incorporat ing an expl ici t r isk

adjustment remeasured ever y report ing per iod (the fu l f i lment cash f lows)

— A Contractual Ser vice Margin (CSM) that is equal and opposite to any day one gain in the

fu l f i lment cash f lows of a group of contracts. The CSM represents the unearned prof i tabi l i ty

of the insurance contracts and is recognised in prof i t or loss over the ser vice per iod ( i .e. ,

coverage per iod)

— Certain changes in the expected present value of future cash f lows are adjusted against the

CSM and thereby recognised in prof i t or loss over the remaining contractual ser vice per iod

— The ef fect of changes in discount rates wi l l be reported in either prof i t or loss or other

comprehensive income wi l l bedetermined by an accounting pol icy choice

— The recognit ion of insurance revenue and insurance ser vice expenses in the statement of

comprehensive income based on the concept of ser vices provided dur ing the per iod

— Insurance ser vices results (earned revenue less incurred claims) are presented separately f rom

the insurance f inance income or expense

— Extensive disclosures to provide information on the recognised amounts f rom insurance

contracts and the nature and extent of r isks ar is ing f rom these contract




Changes in accounting policies and disclosures (continued)New and amended standards and interpretations not yet effective (continued)IFRS 17 Insurance Contracts (continued)

IFRS 17 is ef fect ive for annual report ing per iods beginning on or after 1 Januar y 2021, with

comparative f igures requi red. Ear ly appl ication is permitted, provided the ent i ty also appl ies IFRS

9 and IFRS 15 on or before the date i t f i rs t appl ies IFRS 17. Retrospective appl ication is requi red.

However, i f fu l l ret rospective appl ication for a group of insurance contracts is impracticable,

then the ent i ty is requi red to choose either a modif ied retrospective approach or a fai r value

approach. The Group plans to adopt the new standard on the ef fect ive date.

The Group expects that the new standard wi l l result in an important change to the accounting

pol icies for insurance contract l iabi l i t ies of the Group and is l i kely to have a s igni f icant impact

on prof i t and total equity together with presentat ion and disclosures.

Annual Improvements to IFRS Standards 2015-2017 CycleIASB has issued Annual Improvements to IFRS 2015- 2017 cycle, amending IAS 23 – Borrowing

Costs. The amendment clar i f ies that, i f any specif ic borrowing remains outstanding after the

related asset is ready for i ts intended use or sale, that borrowing becomes part of the funds that

an ent i ty borrows general ly when calculat ing the capital izat ion rate on general borrowings. The

annual improvement is ef fect ive for accounting per iods commencing on or after 1 Januar y 2019.


Amendments to IAS 28 Long-term interests in Associates and Joint VenturesThe amendment clar i f ies that an ent i ty appl ies IFRS 9 Financial Inst ruments to long-term interests

in associate or joint venture that form part of the net investment in the associate or joint venture

but to which equity method is not appl ied. The amendment is ef fect ive for accounting per iods

commencing on or after 1 Januar y 2019. Ear ly appl ication is permitted. The Group plans to adopt

the new amendments on the ef fect ive date.




Changes in accounting policies and disclosures (continued)

Other new and amended standards and interpretations not yet effective — Annual Improvements to IFRS 2014-2016 Cycle: IFRS 1 Fi rst Time Adoption of International

Financial Report ing Standards, Ef fect ive date 1 Januar y 2018

— Annual Improvements to IFRS 2014 -2016 Cycle: IAS 28 Investments in Associates and Joint

Ventures, Ef fect ive date 1 Januar y 2018

— IFRS 2 Class i f icat ion and Measurements of Share-based Payment Transactions – Amendments,

Ef fect ive date 1 Januar y 2018

— IFRIC 23 Uncertainty over Income Tax Treatments, Ef fect ive date 1 Januar y 2019

— Annual Improvements to IFRS 2015-2017 Cycle: IFRS 3 Business Combinations and IFRS 11

Joint Arrangements, Ef fect ive date 1 Januar y 2019

— Annual Improvements to IFRS 2015-2017 Cycle: IAS 12 Income Taxes, Ef fect ive date 1 Januar y

2019

The above amendments do not have a s igni f icant impact on the consol idated f inancial statements

of the Group, and therefore no further disclosures have been made.

Summar y of signif icant accounting policies, judgements and key estimatesThe accounting pol icies set out below have been appl ied by the Group consistent ly to al l

per iods presented in the consol idated f inancial statements, and have been appl ied consistent ly

by the Group ent i t ies.

Basis of consolidationThe consol idated f inancial statements comprise the f inancial statements of the Company and its

subsidiar ies as at 31 December 2017.

Subsidiar ies are consol idated f rom the date of acquis i t ion, being the date on which the Group

obtains control, and continue to be consol idated unt i l the date when such control ceases. The

f inancial statements of the subsidiar ies are prepared for the same report ing per iod as the Parent

Company, us ing consistent accounting pol icies. Al l int ra-group balances, t ransactions, recognised

gains and losses result ing f rom int ra-group transactions and dividends are el iminated in fu l l .




Summar y of signif icant accounting policies, judgements and key estimates (continued)Basis of consolidation (continued)

Total comprehensive income within a subsidiar y is att r ibuted to the non-control l ing interest even

i f i t results in a def icit balance.

A change in the ownership interest of a subsidiar y, without a loss of control, is accounted for as

an equity t ransaction. I f the Group loses control over a subsidiar y, i t :

— derecognises the assets ( including goodwi l l ) and l iabi l i t ies of the subsidiar y ;

— derecognises the carr y ing amount of any non-control l ing interests ;

— derecognises the cumulat ive t ranslat ion di f ferences recorded in equity ;

— recognises the fai r value of the considerat ion received;

— recognises the fai r value of any investment retained;

— recognises any surplus or def icit in prof i t or loss ;

— reclass i f ies the Parent ’s share of components previously recognised in other comprehensive

income to prof i t or loss or retained earnings, as appropriate.

Business combinations and goodwil l Business combinations are accounted for us ing the acquis i t ion method. The cost of an acquis i t ion

is measured as the aggregate of the considerat ion t ransfer red, which is measured at acquis i t ion

date fai r value, and the amount of any non-control l ing interests in the acquiree. For each business

combination, the Group elects whether to measure the non-control l ing interests in the acquiree at

fai r value or at the proport ionate share of the acquiree’s ident i f iable net assets.

Acquis i t ion-related costs are expensed as incurred and included in administ rat ive expenses.

When the Group acquires a business, i t assesses the f inancial assets and l iabi l i t ies assumed for

appropriate class i f icat ion and designation in accordance with the contractual terms, economic

ci rcumstances and pert inent condit ions as at the acquis i t ion date. This includes the separation

of embedded der ivat ives in host contracts by the acquiree.




Summar y of signif icant accounting policies, judgements and key estimates (continued)Basis of consolidation (continued)Business combinations and goodwil l (continued)

Any contingent considerat ion to be transfer red by the acquirer wi l l be recognised at fai r value at

the acquis i t ion date. Contingent considerat ion class i f ied as an asset or l iabi l i ty that is a f inancial

inst rument and within the scope of IAS 39 Financial Inst ruments : Recognit ion and Measurement, is

measured at fai r value with the changes in fai r value recognised in the consol idated statement

of prof i t or loss.

Goodwi l l is in i t ial ly measured at cost (being the excess of the aggregate of the considerat ion

t ransfer red and the amount recognised for non-control l ing interests) and any previous interest

held over the net ident i f iable assets acquired and l iabi l i t ies assumed. I f the fai r value of the net

assets acquired is in excess of the aggregate considerat ion t ransfer red, the Group re-assesses

whether i t has correct ly ident i f ied al l of the assets acquired and al l of the l iabi l i t ies assumed

and reviews the procedures used to measure the amounts to be recognised at the acquis i t ion

date. I f the reassessment st i l l results in an excess of the fai r value of net assets acquired over the

aggregate considerat ion t ransfer red, then the gain is recognised in prof i t or loss.

After in i t ial recognit ion, goodwi l l is measured at cost less any accumulated impairment losses.

For the purpose of impairment test ing, goodwi l l acquired in a business combination is, f rom the

acquis i t ion date, al located to each of the Group’s cash-generat ing units that are expected to

benef i t f rom the combination, i r respective of whether other assets or l iabi l i t ies of the acquiree

are assigned to those units.

Where goodwi l l has been al located to a cash-generat ing unit (CGU) and part of the operation

with in that unit is disposed of, the goodwi l l associated with the disposed operation is included

in the carr y ing amount of the operation when determining the gain or loss on disposal. Goodwi l l

disposed in these ci rcumstances is measured based on the relat ive values of the disposed

operation and the port ion of the cash-generat ing unit retained.




Summar y of signif icant accounting policies, judgements and key estimates (continued)Basis of consolidation (continued)

Is lamic insurance operationsOne of the Group’s subsidiar ies, General Takaful Company W.L.L. , is an operator of Is lamic

insurance business operating under Is lamic Shar i ’a pr inciples. In accordance with appl icable

Shar i ’a pr inciples, part icipants ’ (pol icyholders ’ ) funds are maintained separately f rom the

operator ’s (shareholders ’ ) funds. Accordingly, the part icipants ’ assets and l iabi l i t ies including the

fund balances are shown separately as Takaful part icipants ’ assets and Takaful part icipants ’ fund

and l iabi l i t ies respectively in the consol idated statement of f inancial posit ion as supplementar y

information (Note 10). The Group manages the Takaful funds on behalf of the pol icyholders under

the Hybr id model as an operator.

The Hybr id model uses the pr inciples of both Wakala and Mudaraba. Accordingly, the operator

receives a f ixed Wakala fee of 15% (2016: 15%) of gross wr i t ten contr ibut ions, in addit ion to the

70% (2016: 70%) share in the investment gains on the pol icyholders ’ contr ibut ions. The operating

and administ rat ive expenses are covered by the Wakala fee and borne by the shareholders.

Investment in associate companiesAssociate companies are those ent i t ies in which the Group has s igni f icant inf luence, but not

control, over the f inancial and operating pol icies. The consol idated f inancial statements include

the Group’s share of total recognised gains and losses of associates on an equity accounted

basis, f rom the date that s igni f icant inf luence commences unt i l the date that s igni f icant inf luence

ceases.

Al l subsequent changes to the Group’s share of interest in the equity of the associate are

recognised in the Group’s carr y ing amount of the investment. Changes result ing f rom the prof i t

and loss generated by the associate are reported in the consol idated statement of prof i t or loss

and therefore af fects the net results of the Group.

Amounts reported in the f inancial statements of associates have been adjusted where necessar y

to ensure consistency with the accounting pol icies adopted by the Group. Unreal ized gains

ar is ing f rom t ransactions with associates are el iminated against the investment to the extent of

the Group’s interest in the investee.




Summar y of signif icant accounting policies, judgements and key estimates (continued)Basis of consolidation (continued)Investment in associate companies (continued)

When the Group’s share of losses exceeds i ts interest in an associate, the carr y ing amount of

that interest, including any long term investments, is reduced to zero and the recognit ion of

further losses is discontinued except to the extent that the Group has an obl igation or has made

payments on behalf of the investee.

After appl ication of the equity method, the Group determines whether i t is necessar y to recognise

an impairment loss on i ts investment in associate. At each report ing date, the Group determines

whether there is object ive evidence that the investment in associate is impaired. I f there is

such evidence, the Group calculates the amount of impairment as the di f ference between the

recoverable amount of the associate and its carr y ing value, and then recognises the loss under

‘ share of prof i ts of associate’ in the consol idated statement of prof i t or loss.

Foreign currency translation

Foreign operations For the purpose of the consol idated f inancial statements, the results and f inancial posit ion of the

foreign branch is expressed in the funct ional cur rency of the Parent Company at the exchange rate

prevai l ing at the report ing date. Income and expenses are t ranslated at the average exchange

rates for the year unless exchange rates f luctuated s igni f icant ly dur ing the year in which case

the exchange rates at the dates of the t ransactions are used. Investment in foreign associates is

t ranslated at the closing exchange rates. Foreign currency t ranslat ion di f ferences are recognised

direct ly in other comprehensive income. When a foreign operation is disposed of in part or fu l l ,

the relevant amount in the reser ve is t ransfer red to the consol idated statement of prof i t or loss

for the corresponding per iod.




Summar y of signif icant accounting policies, judgements and key estimates (continued)Foreign currency translation (continued)

Foreign currency transactionsForeign currency t ransactions are in i t ial ly recorded in Qatar i Riyals at exchange rates at the

dates of the t ransactions. Monetar y assets and l iabi l i t ies denominated in foreign currencies at

the report ing date are retranslated to Qatar i Riyal at the exchange rate at that date.

Non-monetar y assets and l iabi l i t ies denominated in foreign currencies that are measured at fai r

value are retranslated to Qatar i Riyal at the exchange rate at the date that the fai r value was

determined. Non-monetar y i tems in a foreign currency that are measured based on histor ical cost

are t ranslated using the exchange rates at the date of the t ransactions. The resultant exchange

di f ferences are included in the consol idated statement of prof i t or loss.

Financial instruments Financial inst ruments represent the Group’s f inancial assets and l iabi l i t ies. Financial inst ruments

include cash and cash equivalents, insurance and other receivables, receivables f rom related

part ies, and reinsurance assets, insurance payables, loans and borrowings, der ivat ive f inancial

inst ruments, insurance contract l iabi l i t ies, payables to related part ies and other l iabi l i t ies.

Classif ication and subsequent measurement of f inancial assets For the purposes of subsequent measurement f inancial assets, other than those designated

and effect ive as hedging inst ruments, are class i f ied into the fol lowing categories upon in i t ial

recognit ion:

— loans and receivables

— f inancial assets at fai r value through prof i t or loss (FVTPL)

— held-to-matur i ty (HTM) investments

— avai lable-for-sale (AFS) f inancial assets




Summar y of signif icant accounting policies, judgements and key estimates (continued)Financial instruments (continued)Classif ication and subsequent measurement of f inancial assets (continued)

Al l f inancial assets except for those at FVTPL are reviewed for impairment at least at each

report ing date to ident i fy whether there is any object ive evidence that a f inancial asset or a

group of f inancial assets is impaired. Di f ferent cr i ter ia to determine impairment are appl ied for

each categor y of f inancial assets.

Al l income and expenses relat ing to f inancial assets that are recognised in prof i t or loss are

presented within f inance costs, Investment income or other f inancial i tems, except for impairment

of receivables which is presented within operating and administ rat ive expenses.

Loans and receivables Loans and receivables are non-der ivat ive f inancial assets with f ixed or determinable payments

that are not quoted in an active market. After in i t ial recognit ion, these are measured at amort ised

cost us ing the ef fect ive interest method, less provis ion for impairment. Discount ing is omitted where

the ef fect of discount ing is immater ial.

Indiv idual ly s igni f icant receivables are considered for impairment when they are past due or when

other object ive evidence is received that a specif ic counterparty wi l l default. Receivables that

are not considered to be individual ly impaired are reviewed for impairment in groups, which are

determined by reference to the industr y and region of the counterparty and other shared credit

r isk character ist ics. The impairment loss est imate is then based on recent histor ical counterparty

default rates for each ident i f ied group.

Financial assets at fair value through profit or lossAn inst rument is class i f ied at fai r value through prof i t or loss i f i t is held for t rading or is designated

as such upon in i t ial recognit ion. Financial inst ruments are held for t rading i f the Group manages

such investments and makes purchase and sale decis ions based on thei r fai r value in accordance

with the Group’s investment st rategy. Upon in i t ial recognit ion, att r ibutable t ransaction costs are

recognised in prof i t or loss as incurred. Financial inst ruments at fai r value through prof i t or loss are

measured at fai r value, and changes therein are recognised in prof i t or loss.




Summar y of signif icant accounting policies, judgements and key estimates (continued)Financial instruments (continued)

Held to maturity (HTM) investmentsHTM investments are non-der ivat ive f inancial assets with f ixed or determinable payments and

f ixed matur i ty other than loans and receivables. Investments are class i f ied as HTM i f the Group

has the intent ion and abi l i ty to hold them unt i l matur i ty.

HTM investments are measured subsequent ly at amort ised cost us ing the ef fect ive interest method.

I f there is object ive evidence that the investment is impaired, determined by reference to external

credit rat ings, the f inancial asset is measured at the present value of est imated future cash f lows.

Any changes in the carr y ing amount of the investment, including impairment losses, are recognised

in prof i t or loss.

Available-for-sale f inancial assets The Group’s managed funds and debt secur i t ies part of i ts investments in equity secur i t ies are

class i f ied as avai lable-for-sale f inancial assets. Subsequent to in i t ial recognit ion, they are

measured at fai r value and changes therein, other than impairment losses, and foreign currency

di f ferences on avai lable-for-sale monetar y i tems, are recognised direct ly in other comprehensive

income and presented within equity in the fai r value reser ve. When an investment is derecognised,

the cumulat ive gain or loss in equity is t ransfer red to prof i t or loss. Al l purchases and sales of

investments are recognised at the sett lement date.

RecognitionThe f inancial assets and l iabi l i t ies are recognised on the date they are generated and on the

date at which the Group becomes a party to the contractual provis ions of the inst rument.

Al l f inancial assets are recognised in i t ial ly at fai r value plus t ransaction costs, except in the case

of f inancial assets recorded at fai r value through prof i t or loss.





De-recognitionThe Group derecognises the f inancial asset when the contractual r ights to receive cash f lows

f rom that asset expire or i t t ransfers the r ight to receive the contractual cash f low of that asset in

a t ransaction in which substant ial ly al l the r isks and rewards of ownership of the f inancial assets

are t ransfer red.

The Group also derecognizes certain assets when i t expenses balances pertaining to assets

deemed to be uncol lect ible. The Group derecognizes a f inancial l iabi l i ty when i ts contractual

obl igations are discharged, cancel led or expired.

Offsetting of f inancial instrumentsFinancial assets and f inancial l iabi l i t ies are of fset and the net amount is reported in the

consol idated statement of f inancial posit ion i f there is a current ly enforceable legal r ight to

of fset the recognised amounts and there is an intent ion to sett le on a net basis, to real ise the

assets and sett le the l iabi l i t ies s imultaneously.

Cash and cash equivalentsCash and cash equivalents comprise cash at bank and in hand and short-term deposits with an

or iginal matur i ty of three months or less as on the consol idated statement of f inancial posit ion

date. For the purpose of the consol idated statement of cash f lows, cash and cash equivalents

consist of cash and cash equivalents as def ined above, net of outstanding bank overdrafts.

Insurance and other receivablesInsurance and other receivables are measured at in i t ial recognit ion at fai r value, and are

subsequent ly measured at amort ised cost us ing the ef fect ive interest rate method. Appropriate

al lowances for est imated i r recoverable amounts are recognised in the consol idated statement of

prof i t or loss when there is an objective evidence that the asset is impaired.





Reinsurance assetsThe Group cedes insurance r isk in the normal course of business. Reinsurance assets represent

balances recoverable f rom reinsurance companies. Amounts recoverable f rom reinsurers are

est imated in a manner consistent with the outstanding claims provis ion or sett led claims associated

with the reinsurers ’ pol icies and are in accordance with the related reinsurance contract.

Classif ication and subsequent measurement of f inancial l iabil it iesThe Group’s f inancial l iabi l i t ies include loans and borrowings, t rade and other payables and

der ivat ive f inancial inst ruments.

Financial l iabi l i t ies are measured subsequent ly at amort ised cost us ing the ef fect ive interest

method except for der ivat ives, which is carr ied subsequent ly at fai r value with gains or losses

recognised in prof i t or loss (other than der ivat ive f inancial inst ruments that are designated and

effect ive as hedging inst ruments) .

Al l interest- related charges and, i f appl icable, changes in an inst rument ’s fai r value that are

reported in prof i t or loss are included within f inance costs or f inance income.

Loans and borrowingsAl l loans and borrowings are in i t ial ly recognised at the fai r value of the considerat ion received

less di rect ly att r ibutable t ransaction costs. After the in i t ial recognit ion, loans and borrowings are

subsequent ly measured at amort ised cost us ing the ef fect ive interest rate method. Gains and

losses are recognised in the prof i t or loss when l iabi l i t ies are derecognised.

OthersOther non-der ivat ive f inancial inst ruments are measured at amort ised cost us ing the ef fect ive

interest rate method, less any impairment losses.





Derivative f inancial instrumentsThe Group uses interest rate swap contracts to hedge its r isk associated with interest rate

f luctuations relat ing to the interest payments on the Group’s term loan. These interest rate swap

contracts are stated at fai r value. The Group class i f ies a hedge as a cash f low hedge where i t

hedges the exposure to var iabi l i ty in cash f lows that are either att r ibutable to a part icular r isk

associated with a recognised asset or l iabi l i ty or a forecasted transaction. The interest rate

swap contract has been class i f ied as a cash f low hedge and meets the condit ions for hedge

accounting.

Der ivat ives are in i t ial ly recognised at fai r value at the date a der ivat ive contract is entered into

and are subsequent ly re-measured to thei r fai r value at each consol idated statement of f inancial

posit ion date. The result ing gain or loss is recognised in prof i t or loss immediately unless the

der ivat ive is designated and effect ive as a hedging inst rument, in which event the t iming of the

recognit ion in prof i t or loss depends on the nature of the hedge relat ionship.

Cash f low hedgeThe ef fect ive port ion of changes to the fai r value of der ivat ives that are designated and qual i fy

as cash f low hedge are deferred in other comprehensive income. The gain or loss relat ing to the

inef fect ive port ion is recognised immediately in the consol idated statement of prof i t or loss.

Insurance contract l iabil it iesInsurance contract l iabi l i t ies include the outstanding claims provis ion, provis ion for claims incurred

but not reported and the provis ion for unearned premium.

Amounts payable for insurance claims reported up to the report ing per iod end and the amounts

payable to reinsurance companies are accrued as a provis ion for outstanding claims. The

insurance claims are accrued on the basis of the actual losses reported against the pol icies

underwr i t ten by the Group dur ing the year.




Summar y of signif icant accounting policies, judgements and key estimates (continued)Financial instruments (continued)Insurance contract l iabil it ies (continued)

Provis ion for claims incurred but not reported are computed based on actuar ial review after

consider ing current assumptions, h istor ical t rends and empir ical data which is not discounted for

the t ime value of money.

Unearned premiums represent the port ion of net premiums wr i t ten relat ing to the unexpired per iod

of coverage calculated on the actual number of days method (dai ly pro rata basis) . The change

in the provis ion for unearned premium is recognised in the consol idated statement of prof i t or loss

in the order that revenue is recognised over the per iod of r isk.

Fair value measurementThe Group measures f inancial and certain non-f inancial inst ruments at fai r value at each

consol idated f inancial posit ion date. Fai r value related disclosures for such inst ruments are

disclosed in the fol lowing notes:

— investment propert ies in Note 4.

— avai lable-for-sale f inancial assets in Note 8.

— f inancial assets at fai r value through prof i t or loss in Note 9.

— derivat ive f inancial inst ruments in Note 22.

— quanti tat ive disclosures of fai r value measurement hierarchy in Note 37.

— disclosures for valuation methods, s igni f icant est imates and assumptions with in th is note.

Fai r value is the pr ice that would be received to sel l an asset or paid to t ransfer a l iabi l i ty in

an order ly t ransaction between market part icipants at the measurement date. The fai r value

measurement is based on the presumption that the t ransaction to sel l the asset or t ransfer the

l iabi l i ty takes place either :

— in the pr incipal market for the asset or l iabi l i ty ; or

— in the absence of a pr incipal market, in the most advantageous market for the asset or l iabi l i ty.




Summar y of signif icant accounting policies, judgements and key estimates (continued)Fair value measurement (continued)

The pr incipal or the most advantageous market must be accessible by the Group. The fai r value

of an asset or a l iabi l i ty is measured using the assumptions that market part icipants would use

when pr icing the asset or l iabi l i ty, assuming that market part icipants act in thei r economic best

interest.

Al l assets and l iabi l i t ies for which fai r value is measured or disclosed in the consol idated f inancial

statements are categorized within the fai r value hierarchy, descr ibed as fol lows, based on the

lowest level input that is s igni f icant to the fai r value measurement as a whole:

— Level 1: Quoted (unadjusted) market pr ices in active markets for ident ical assets or l iabi l i t ies.

— Level 2: Valuation techniques for which the lowest level input that is s igni f icant to the fai r

value measurement is di rect ly or indi rect ly obser vable.

— Level 3: Valuation techniques for which the lowest level input that is s igni f icant to the fai r

value measurement is unobser vable.

For assets and l iabi l i t ies that are recognised in the consol idated f inancial statements on a

recurr ing basis, the Group determines whether t ransfers have occurred between levels in the

hierarchy by re-assess ing categorizat ion (based on the lowest level input that is s igni f icant to the

fai r value measurement as a whole) at the end of each report ing per iod.

The Group determines the pol icies and procedures for both recurr ing fai r value measurement such

as unquoted avai lable-for-sale f inancial assets, and for non-recurr ing measurement.

External valuers are involved in the valuation of s igni f icant assets, such as investment propert ies,

and s igni f icant l iabi l i t ies. Involvement of external valuers is decided upon annual ly by the

management after discuss ion with and approval by the Group’s Audit Committee. Select ion

cr i ter ia include market knowledge, reputat ion, independence and whether profess ional standards

are maintained. The Group decides, after discuss ions with the Group’s external valuers, which

valuation techniques and inputs to use for each case.




Summar y of signif icant accounting policies, judgements and key estimates (continued)Fair value measurement (continued)

At each report ing date, the Group analyses the movements in the values of assets and l iabi l i t ies

which are requi red to be re-measured or re-assessed as per the Group’s accounting pol icies.

For th is analys is, the Group ver i f ies the major inputs appl ied in the latest valuation by agreeing

the information in the valuation computation to contracts and other relevant documents. The

Group, in conjunct ion with the Group’s external valuers, also compares the change in the fai r

value of each asset and l iabi l i ty with relevant external sources to determine whether the change

is reasonable.

For the purpose of fai r value disclosures, the Group has determined classes of assets and l iabi l i t ies

on the basis of the nature, character ist ics and r isks of the asset or l iabi l i ty and the level of the

fai r value hierarchy as explained above.

Financial assets at fair value through profit or loss and available-for-sale f inancial assetsThe fai r value of f inancial inst ruments that are actively t raded in organized f inancial markets is

determined by reference to quoted market bid pr ices for assets and offer pr ices for l iabi l i t ies, at

the close of business on the consol idated statement of f inancial posit ion date. I f the fai r value

cannot be measured rel iably us ing any of the methods mentioned, then these f inancial inst ruments

are measured at cost, being the fai r value of the considerat ion paid for the acquis i t ion of the

investment or the amount received on issuing the f inancial l iabi l i ty unt i l a rel iable measure of

the fai r value is avai lable. Al l t ransaction costs di rect ly att r ibutable to the acquis i t ion are also

included in the cost of the investment.

Investment propertiesThe fai r value of an investment property is determined by independent real estate valuation

experts with recent exper ience in the location and categor y of the property being valued. The

fai r values are based on market values, being the est imated amount for which a property could

be exchanged on the valuation date between a wi l l ing buyer and a wi l l ing sel ler in an arm’s

length t ransaction after proper market ing wherein part ies had each acted knowledgeably.




Summar y of signif icant accounting policies, judgements and key estimates (continued)Fair value measurement (continued)Investment properties (continued)

Transfers are made to or f rom investment propert ies only when there is a change in use evidenced

by owner-occupation, commencement of an operating lease to another party or complet ion of

construct ion or development. For a t ransfer f rom investment property to owner-occupied property,

the deemed cost for subsequent accounting is the fai r value at the date of change in use. I f

owner-occupied property becomes an investment property, the Group accounts for such property

in accordance with the pol icy stated under property and equipment up to the date of the

change in use.

Interest rate swap agreementsThe fai r value of interest rate swap contracts is calculated by discount ing the expected future

cash f lows at the prevai l ing interest rate based on broker ’s quotes.

Impairment

Financial assetsA f inancial asset is assessed at each report ing date to determine whether there is any object ive

evidence that i t is impaired. I f such evidence exists, the est imated recoverable amount of that

asset is determined and any impairment loss is recognised in the consol idated statement of prof i t

or loss. For assets carr ied at fai r value, impairment is the di f ference between cost and fai r value,

less any impairment loss previously recognised in the consol idated statement of prof i t or loss. For

an investment in equity secur i ty class i f ied under avai lable-for-sale, a s igni f icant or prolonged

decl ine in i ts fai r value below its cost provides object ive evidence of impairment. Reversal of

impairment losses in respect of equity investments class i f ied as avai lable-for-sale are t reated as

increases in fai r value through the consol idated statement of comprehensive income. Reversal of

impairment losses on debt inst ruments are done through the consol idated statement of prof i t or

loss, when the increase in fai r value can be objectively related to an event occurr ing after the

impairment loss was recognised in the consol idated statement of prof i t or loss.




Summar y of signif icant accounting policies, judgements and key estimates (continued)Impairment (continued)Financial assets (continued)

For assets carr ied at cost, impairment is the di f ference between the carr y ing value and the

present value of future cash f lows discounted at the current market rate of return for a s imi lar

f inancial asset.

For assets carr ied at amort ised cost, impairment is calculated as the di f ference between i ts

carr y ing amount and the present value of the est imated future cash f lows discounted at the

f inancial asset ’s or iginal ef fect ive interest rate.

Non-financial assetsThe carr y ing amounts of the Group’s non-f inancial assets are reviewed at each report ing date

to determine whether there is any indication of impairment. I f any such indication exists, then the

asset ’s recoverable amount is est imated.

Intangible assets Intangible assets acquired separately are measured on in i t ial recognit ion at cost. The cost of

intangible assets acquired in a business combination is thei r fai r value at the date of acquis i t ion.

Fol lowing in i t ial recognit ion, intangible assets are carr ied at cost less any accumulated amort isat ion

and accumulated impairment losses. The useful l ives of intangible assets are assessed as either

f in i te or indef in i te.

Intangible assets with f in i te l ives are amort ised over the useful economic l i fe and assessed

for impairment whenever there is an indication that the intangible asset may be impaired. The

amort isat ion per iod and the amort isat ion method for an intangible asset with a f in i te useful l i fe

are reviewed at least at the end of each report ing per iod. Changes in the expected useful l i fe

or the expected pattern of consumption of future economic benef i ts embodied in the asset are

considered to modify the amort isat ion per iod or method, as appropriate, and are t reated as

changes in accounting est imates. The amort isat ion expense on intangible assets with f in i te l ives

is recognised in the consol idated statement of prof i t or loss in the expense categor y that is

consistent with the funct ion of the intangible assets.




Summar y of signif icant accounting policies, judgements and key estimates (continued)Impairment (continued)Intangible assets (continued)

Intangible assets with indef in i te useful l ives are not amort ised, but are tested for impairment

annual ly, either individual ly or at the cash-generat ing unit level. The assessment of indef in i te l i fe

is reviewed annual ly to determine whether the indef in i te l i fe continues to be supportable. I f not,

the change in useful l i fe f rom indef in i te to f in i te is made on a prospective basis.

Gains or losses ar is ing f rom derecognit ion of an intangible asset are measured as the di f ference

between the net disposal proceeds and the carr y ing amount of the asset and are recognised in

the consol idated statement of prof i t or loss when the asset is derecognised. The current pol icy

appl ied to the Group’s intangible asset is the r ight of use intangible asset (acquired) with an

economic l i fe of 13 years amort ised on a st raight- l ine basis over the per iod of the r ight to use.

Investment propertiesInvestment property is property held either to earn rental income or for capital appreciat ion or

for both, but not for sale in the ordinar y course of business or use in the production or supply

of goods and ser vices or for administ rat ive purposes. Investment propert ies are measured by

applying the fai r value model.

Cost includes expenditure that is di rect ly att r ibutable to the acquis i t ion of the investment property.

The cost of sel f-constructed investment property includes the cost of mater ials and direct labour,

any other cost di rect ly att r ibutable to br inging the investment property to a work ing condit ion for

thei r intended use and capital ised borrowing cost.

Any gain or loss on disposal of any investment property (calculated as a di f ference between the

net proceeds f rom disposal and the carr y ing amount of the i tem) is recognised in prof i t or loss.

When the use of a property changes such that i t is reclass i f ied as property and equipment, i ts fai r

value at the date of reclass i f icat ion becomes i ts cost for subsequent accounting.




Summar y of signif icant accounting policies, judgements and key estimates (continued)


Recognition and measurementProperty and equipment is stated at cost less accumulated depreciat ion and impairment losses.

Cost includes expenditure that is di rect ly att r ibutable to the acquis i t ion of the asset. The cost of

sel f-constructed assets includes the cost of mater ials and direct labour, any other costs di rect ly

att r ibutable to br inging the assets to a work ing condit ion for thei r intended use, and the costs of

dismant l ing and removing the i tems and restor ing the s i te on which they are located.

Gains and losses on disposal of an i tem of property and equipment are determined by comparing

the proceeds f rom disposal with the carr y ing amount of property and equipment, and are

recognised net with in other income in prof i t or loss.

Subsequent costsThe cost of replacing part of an i tem of property and equipment is recognised in the carr y ing

amount of the i tem i f i t is probable that the future economic benef i ts embodied within the part

wi l l f low to the Group and its cost can be measured rel iably. The carr y ing amount of the replaced

part is derecognised. The costs of the day-to-day ser vicing of property and equipment are

recognised in prof i t or loss as incurred.

Depreciation Depreciat ion is calculated on a st raight- l ine method over the est imated useful l ives of property

and equipment other than land which is determined to have an indef in i te l i fe as fol lows:

Bui ldings 20 years

Furniture and f ixtures 4 years

Computers 3 – 5 years

Motor vehicles 3 – 5 years

Tools and equipment 3 – 10 years

Depreciat ion methods, useful l ives and residual values are reviewed at each f inancial year end

and adjusted i f appropriate. Depreciat ion is al located within the consol idated statement of prof i t

or loss under cost of construct ion activ i t ies and other operat ing and administ rat ive expenses.





LeasesThe determination of whether an arrangement is (or contains) a lease is based on the substance

of the arrangement at the inception of the lease. The arrangement is, or contains, a lease i f

fu l f i lment of the arrangement is dependent on the use of a specif ic asset (or assets) and the

arrangement conveys a r ight to use the asset (or assets) , even i f that asset is (or those assets are)

not expl ici t ly specif ied in an arrangement.

Group as a lesseeA lease is class i f ied at the inception date as a f inance lease or an operating lease. A lease

that t ransfers substant ial ly al l the r isks and rewards of ownership to the Group is class i f ied as a

f inance lease.

Finance leases are capital ised at the commencement of the lease at the inception date fai r

value of the leased property or, i f lower, at the present value of the minimum lease payments.

Lease payments are apport ioned between f inance charges and reduction of the lease l iabi l i ty

so as to achieve a constant rate of interest on the remaining balance of the l iabi l i ty. Finance

charges are recognised in f inance costs in the consol idated statement of prof i t or loss.

A leased asset is depreciated over the useful l i fe of the asset. However, i f there is no reasonable

certainty that the Group wi l l obtain ownership by the end of the lease term, the asset is depreciated

over the shorter of the est imated useful l i fe of the asset and the lease term.

An operating lease is a lease other than a f inance lease. Operating lease payments are

recognised as an operating expense in the consol idated statement of prof i t or loss on a st raight-

l ine basis over the lease term.

Group as a lessor Leases in which the Group does not t ransfer substant ial ly al l the r isks and rewards of ownership of an

asset are class i f ied as operating leases. In i t ial di rect costs incurred in negotiat ing and arranging

an operating lease are added to the carr y ing amount of the leased asset and recognised over

the lease term on the same basis as rental income. Contingent rents are recognised as revenue

in the per iod in which they are earned.





ProvisionsProvis ions are recognised in the consol idated statement of f inancial posit ion when the Group

has a legal or construct ive obl igation as a result of a past event that can be est imated rel iably,

and it is probable that an outf low of economic benef i ts wi l l be requi red to sett le the obl igation.

Finance costsThe f inance costs incurred on qual i f ied assets are capital ised being part of cost of construct ion.

Al l other f inance costs are recognised on an accrual basis in the consol idated statement of

prof i t or loss dur ing the year in which they ar ise.

Employee benefits

Local employees With respect to local employees, the Group makes contr ibut ions to the government pension

fund to the respective local regulator y author i t ies as a percentage of the employees ’ salar ies

in accordance with the requi rements of respective local laws pertaining to ret i rement and

pensions, wherever requi red. The Group’s share of contr ibut ions to these schemes, which are

def ined contr ibut ion schemes under International Accounting Standard 19 Employee Benef i ts are

charged to the consol idated statement of prof i t or loss in the year to which they relate.

Expatriate employees For the expatr iate employees, the Group provides for employees ’ end-of-ser vice benef i ts

determined in accordance with the requi rements of contractual obl igation and appl icable labour

laws. Provis ions are made towards such benef i ts on the basis of employees ’ salar ies and the

number of years of ser vice at the report ing date. Although the expected costs of these benef i ts

are accrued over the per iod of employment, these are paid to employees only on complet ion of

thei r term of employment with the Group.





Share capital

Ordinar y share capitalOrdinar y shares are class i f ied as equity. The bonus shares issued dur ing the year are shown as

an addit ion to the share capital and deducted f rom the accumulated retained earnings of the

Group.

Dividends on ordinar y share capitalDividends on ordinar y shares are recognised as a l iabi l i ty and deducted f rom retained earnings

when they are approved by the Company ’s shareholders. Div idends for the year that are approved

after the consol idated statement of f inancial posit ion date are dealt with as an event after the

consol idated statement of f inancial posit ion date.

Income recognition

Gross written premiumsGross wr i t ten premiums comprise total premiums receivable for the whole per iod of cover provided

by contracts entered into dur ing the accounting per iod and are recognised on the date on

which the pol icy commences.

Net earned premiumsPremiums, net of reinsurance, are recognised in the consol idated statement of prof i t or loss

over the terms of the related contracts or pol icies. The port ion of premium received on in-force

contracts that relates to unexpired r isks at the consol idated statement of f inancial posit ion date

is reported as the unearned premium l iabi l i ty. Unearned premiums are calculated pr incipal ly on

the actual number of day ’s method (dai ly pro rata basis) .




Summar y of signif icant accounting policies, judgements and key estimates (continued)Income recognition (continued)

Reinsurance arrangements As part of managing i ts insurance r isks, the Group enters into contracts with other reinsurers for

compensation of losses on insurance contracts issued by the Group. A proport ionate amount of

gross wr i t ten premiums, in proport ion to the amount of r isk reinsured on an individual pol icy basis

are paid to reinsurance companies according to the rates agreed in reinsurance contracts, as

reinsurance premiums. In the ordinar y course of business, the Group assumes and cedes reinsurance.

Such reinsurance arrangements provide for greater divers i f icat ion of business, al low management

to control exposure to potent ial losses ar is ing f rom large r isks, and provide addit ional capacity

for growth. A s igni f icant port ion of reinsurance is ef fected under t reaty, facultat ive and excess-

of- loss reinsurance contracts. Unearned reinsurance premiums are those proport ions of premiums

wr i t ten in a year that relate to per iods of r isk after the consol idated statement of f inancial

posit ion date and are deferred over the term of the under ly ing di rect insurance pol icies.

Net commission incomeA proport ionate amount of reinsurance premium paid to reinsurance companies is paid back

to the Group as commiss ion for undertaking the business. This commiss ion percentage is agreed

according to reinsurance contracts entered per individual l ine of business with di f ferent reinsurance

companies. The amount of commiss ion is recognised according to the reinsurance commiss ion

receivable on an individual pol icy basis.

Fees Insurance contract pol icyholders are charged for pol icy administ rat ion ser vices, management

ser vices and other contract fees. This income is recognised dur ing the per iod when the pol icy is

underwr i t ten or the ser vice is provided.




Summar y of signif icant accounting policies, judgements and key estimates (continued)Income recognition (continued)

Investment income Rental income f rom investment propert ies is recognised in the consol idated statement of prof i t

or loss on a st raight- l ine basis over the per iod of the lease. Investment income also includes

dividends, which are recognised when the r ight to receive the same is establ ished. Interest income

is recognised in the consol idated statement of prof i t or loss as i t accrues. Income f rom associate

companies is recognised as per the equity accounting method. Changes result ing f rom the prof i t

or loss generated by the associates are recognised under the consol idated statements of prof i t

or loss.

Income from/cost of construction activit iesCost of construct ion activ i t ies is recognised when incurred. When the outcome of a f ixed pr ice

construct ion contract cannot be est imated rel iably, income f rom construct ion activ i t ies is

recognised only to the extent of contract costs incurred that are l ikely to be recoverable.

When the outcome of a f ixed pr ice construct ion contract can be est imated rel iably and it is

probable that the contract wi l l be prof i table, contract revenue is recognised over the per iod of

the contract. When i t is probable that total contract costs wi l l exceed total contract revenue,

the expected loss is recognised as an expense immediately.

The Group uses the percentage of complet ion method to determine the appropriate amount of

revenue to recognize in a given per iod. The stage of complet ion is measured by the proport ion

that contract costs incurred for work per formed to date relat ive to the est imated total contract

costs for each contract. Costs incurred in the year in connection with future activ i ty on a contract

are excluded f rom contract costs in determining the stage of complet ion.

Claims and related expenses

Gross claims paidClaims and related expenses are accounted for based on reports received and subsequent

review on an individual case basis. Provis ion is made to cover the est imated ult imate cost of

sett l ing claims ar is ing out of events, which have occurred by the end of the f inancial year,

including unreported losses, and claims handl ing expenses.




Summar y of signif icant accounting policies, judgements and key estimates (continued)Claims and related expenses (continued)

Reinsurance and other recoveriesCompensations receivable f rom reinsurers are est imated in a manner consistent with the

corresponding claim l iabi l i ty. The obl igations ar is ing under reinsurance contracts are recognised

in prof i t or loss and the related l iabi l i t ies are recognised as accounts receivable or deducted

f rom reinsurers ’ share of technical reser ves. Hence, a port ion of the reinsurance premium payable

is provided as a reser ve for future claims in order to provide addit ional l iquidity for the Group,

which is f inal ly sett led at the end of the reinsurance per iod.

Movement in outstanding claims

Provision for reported claims by policyholdersProvis ion for outstanding claims is recognised at the date the claims are known and covers

the l iabi l i ty for loss and loss adjustment expenses based on loss reports f rom independent loss

adjusters and management ’s best est imates.

Provision for claims incurred but not reported (IBNR)Claims provis ion also includes a l iabi l i ty for claims incurred but not reported as at the consol idated

statement of f inancial posit ion date. The l iabi l i ty is general ly calculated at the report ing date,

after consider ing the independent actuar ial report, h istor ic t rends, empir ical data and current

assumptions that may include a margin for adverse deviat ions. The l iabi l i ty is not discounted for

the t ime value of money.

Provision for premium deficiencyAt the end of each report ing per iod, provis ion is made for premium def iciency ar is ing f rom

general insurance contracts where the expected value of claims and expenses att r ibutable to

the unexpired per iods of pol icies in force at the report ing date exceeds the unearned premiums

provis ion and already recorded claim l iabi l i t ies in relat ion to such pol icies. The provis ion for

premium def iciency is made by reference to classes of business at the date of consol idated

statement of f inancial posit ion based on actuar ial est imates.




Summar y of signif icant accounting policies, judgements and key estimates (continued)Movement in outstanding claims (continued)

Provision for unallocated loss adjustment expense (ULAE)Provis ion for unal located loss adjustment expense represents an est imate of ul t imate payments for

losses and related sett lement expenses f rom claims that have been reported but not paid. The

loss reser ve est imates are expectations of what ul t imate sett lement and administ rat ion of claims

wi l l cost upon f inal resolut ion. These est imates are based on facts and ci rcumstances then known

to us, review of histor ical sett lement patterns, est imates of t rends in claims f requency and sever i ty,

project ions of loss costs, expected interpretat ions of legal theor ies of l iabi l i ty and other factors.

In establ ishing the provis ion, we also take into account est imated recover ies f rom reinsurance,

salvage and subrogation. The provis ion is reviewed regular ly by the Group’s actuar y.

Reserve for unexpired risksThe reser ve for unexpired r isk represents the est imated port ion of net premium income which

relates to per iods of insurance subsequent to the consol idated statement of f inancial posit ion

date. The reser ve is calculated using the actual number of day ’s method. The reinsurers ’ share

on est imated l iabi l i ty of RBNS, IBNR and unexpired insurance premium is separately class i f ied as

reinsurance assets in the consol idated statement of f inancial posit ion.

Segment reportingSegment results that are reported to senior management includes i tems di rect ly att r ibutable to

a segment as wel l as those that can be al located on a reasonable basis. Unal located items

comprise mainly corporate assets and head off ice expenses. For management purpose, the Group

is organised into two business segments, insurance and investments. These segments are the basis

on which the Group reports i ts operat ing segement information. No operating segment has been

aggregated in arr iv ing at the reportable segment of the Group.

Earnings per shareThe Group presents basic and di luted earnings per share (EPS) data for i ts ordinar y shares. Basic

EPS is calculated by dividing the prof i t att r ibutable to ordinar y equity holders of the Parent by

the weighted number of ordinar y shares outstanding dur ing the year.





Critical judgements in applying the Group’s accounting policiesIn the process of preparing these consol idated f inancial statements, management has made use

of a number of judgments relat ing to the appl ication of accounting pol icies which are descr ibed

in th is note. Those which have the most s igni f icant ef fect on the reported amounts of assets,

l iabi l i t ies, income and expense are l is ted below (apart f rom those involving est imations which are

dealt with in the subsequent paragraphs) .

These judgments are based on histor ical exper ience and other factors, including expectations of

future events that are bel ieved to be reasonable under the ci rcumstances. Management bel ieves

that the fol lowing discuss ion addresses the accounting pol icies that requi re judgments.

Classif ication of investmentsQuoted secur i t ies could be class i f ied either as avai lable-for-sale or at fai r value through

prof i t or loss. The Group invests substant ial ly in quoted secur i t ies either local ly or overseas and

management has pr imar i ly decided to account for these investments based on thei r potent ial

for long term growth rather than on the short term prof i t basis. Consequent ly, the major i ty of such

investments are recognised as avai lable-for-sale rather than at fai r value through prof i t or loss.

Financial assets are class i f ied as fai r value through prof i t or loss where the assets are either held

for t rading or in i t ial ly designated at fai r value through prof i t or loss.

Impairment of f inancial assetsThe Group determines that avai lable-for-sale f inancial assets are impaired when there has

been a ‘ s igni f icant ’ or ‘ prolonged ’ decl ine in the fai r value below its cost. The determination of

what is ‘ s igni f icant ’ or ‘ prolonged ’ requi res judgment and is assessed based on qual i tat ive and

quanti tat ive factors, for each avai lable-for-sale f inancial asset separately. In making a judgment

on impairment, the Group evaluates among other factors, evidence of deter iorat ion in the f inancial

health of the ent i ty, impact of delay in execut ion, industr y and sector per formance, changes in

technology and operational and f inancing cash f lows.





Key sources of estimates and uncertaintyThe key assumptions concerning the future and other key sources of est imating uncertainty at

the consol idated statement of f inancial posit ion date, that have a s igni f icant r isk of causing a

mater ial adjustment to the carr y ing amounts of assets and l iabi l i t ies with in the next f inancial year

are discussed below.

Claims made under insurance contractsClaims and loss adjustment expenses are charged to the consol idated statement of prof i t or loss

as incurred based on the est imated l iabi l i ty for compensation owed to contract holders or th i rd

part ies damaged by the contract holders. L iabi l i t ies for unpaid claims are est imated using the

input of assessments for individual cases reported to the Group and management est imations

for the claims incurred but not reported ( IBNR). The method for making such est imates and for

establ ishing the result ing l iabi l i ty is cont inual ly reviewed. Any di f ference between the actual

claims and the provis ions made are included in the consol idated statement of prof i t or loss in the

year of sett lement.

Unearned premiumsThe provis ion for unearned premiums represents that port ion of premiums received or receivable

that relates to r isks that have not yet expired at the report ing date. The provis ion is recognised

when contracts are entered into and premiums are charged, and is brought to account as

premium income over the term of the contract in accordance with the pattern of insurance ser vice

provided under the contract. Unearned premiums are calculated on a dai ly pro rata basis.

Impairment of insurance and other receivables An est imate of the col lect ible amount of insurance and other receivables is made when col lect ion

of the fu l l amount is no longer probable. The determination of whether insurance and other

receivables are impaired, involves the Group evaluating, the credit and l iquidity posit ion of

the pol icyholders and the insurance companies, h istor ical recover y rates including detai led

invest igations carr ied out dur ing 2017 and feedback received f rom the legal department. The

di f ference between the est imated col lect ible amount and the book amount is recognised as

an expense in the consol idated statement of prof i t or loss. Any di f ference between the amounts

actual ly col lected in future per iods and the amounts expected wi l l be recognised in the

consol idated statement of prof i t or loss at the t ime of col lect ion.




Summar y of signif icant accounting policies, judgements and key estimates (continued)Key sources of estimates and uncertainty (continued)

Useful l ives, residual values and depreciation charges of property and equipmentThe Group’s management determines the est imated useful l ives, res idual values and related

depreciat ion charges of i ts property and equipment. These est imates are determined after

consider ing the expected usage of the asset, physical wear and tear and technical or commercial

obsolescence.

Liabil ity adequacy testsAt each consol idated statement of f inancial posit ion date, l iabi l i ty adequacy tests are per formed

to ensure the adequacy of insurance contract l iabi l i t ies. The Group makes use of the best

est imates of future contractual cash f lows and claims handl ing and administ rat ion expenses, as

wel l as investment income f rom the assets backing such l iabi l i t ies in evaluating the adequacy of

the l iabi l i ty. Any def iciency is immediately charged to the consol idated statement of prof i t or loss.

Interest rate swaps valuationThe fai r value of interest rate swaps is based on broker quotes. Those quotes are tested for

reasonableness by discount ing est imated future cash f lows based on the terms and matur i ty of

each contract and using market interest rates for a s imi lar inst rument at the measurement date.

Fai r values ref lect the credit r isk of the inst ruments and include adjustments to take account of the

credit r isk of the Group and counterparty when appropriate.

Investment properties valuationThe fai r value of investment property is determined by independent real estate valuation experts

with recent exper ience in the location and categor y of property being valued. The fai r values are

based on market values, being the est imated amount for which a property could be exchanged

on the valuation date between a wi l l ing buyer and a wi l l ing sel ler in an arm’s length t ransaction

after proper market ing wherein part ies had each acted knowledgeably.


* The depreciat ion for the year has been al located within the consol idated statement of prof i t

or loss as fol lows:

3. PROPERTY AND EQUIPMENT


Cost:

At 1 January

Accumulated depreciation:

Net carrying amounts:

Transferred from investment properties (Note 4)

At 1 January

At 31 December 2017

Additions

Depreciation for the year*

Disposals

Disposals

At 31 December 2016

At 31 December

At 31 December

QR ‘000QR ‘000

Total 2016

Furniture and fixtures

1,727

175,88318,196

91,30116,030

--

8,409990

104,0132,166

28,263551

(769)(769)

(1,192)(769)

98,94116,251

202,95417,978

QR ‘000QR ‘000 QR ‘000QR ‘000 QR ‘000QR ‘000

Total 2017Buildings

Tools and equipment

Freehold land

Motor VehiclesComputers

158,90455,550 41,28454,576 1,3884,379

202,95469,851 42,72639,154 11,06021,967

98,94130,999 25,671- 9,68416,557

27,12211,700 -15,422 --

10,4692,267 4,187- 8472,178

38,852 17,05539,154 1,3765,410

38,2457,265 28,416- 8611,152

(2,848)- -- (631)(1,448)

(2,855)- -- (633)(1,453)

106,56233,266 29,858- 9,90017,287

265,46688,816 71,14254,576 11,28821,666



QR ‘000

2016

7,765

644

8,409

QR ‘000

2017

6,285

4,184

10,469

32

Note


4. INVESTMENT PROPERTIES


At 1 January

Additions

Transferred to property and equipment

Fair value (losses) gains for the year

At 31 December

QR ‘000

2016

5,936,607

78,637

-

49,132

6,064,376

QR ‘000

2017

6,064,376

211,436

(27,122)

(610,309)

5,638,381

Notes

3

30

As at 31 December 2017, the fai r values of the propert ies are based on valuations per formed

by accredited independent valuers who are special ists in valuing these types of investment

propert ies. The valuation models used are in accordance with recommended industr y practice.

The fai r value of the investment propert ies was est imated based on fai r valuation techniques and

assumptions with reference to recent sales t ransactions of s imi lar propert ies in an active market.

Any s igni f icant increase or decrease in the est imated pr ice per square meter would result in a

s igni f icant ly higher or lower fai r value of the investment propert ies.

The rental income f rom the investment propert ies dur ing the year amounted to QR 152.42 mi l l ion

(2016: QR 182.69 mi l l ion) is part of the investment income (Note 28) and direct operating

expenses of QR 21.19 mi l l ion (2016: QR 17.33 mi l l ion) is part of the operating and administ rat ive

expenses (Note 32).

Investment propert ies include propert ies with total carr y ing value of QR 3.79 bi l l ion (2016:

QR 2.98 bi l l ion) that are pledged against f i rs t degree real estate mortgages along with the

assignment of future rental proceeds f rom such propert ies.

The addit ions include borrowing costs capital ized dur ing the year amounted to QR 18.15 mi l l ion

(2016: QR 8.67 mi l l ion) .

Dur ing the year, the Group transfer red certain propert ies at thei r fai r values to property and

equipment due to change in use.


5. INVESTMENT IN ASSOCIATES

The Group has the fol lowing investment in associates :

*Dur ing the year, the Central Bank of Alger ia (known as “Bank of Alger ia”) has issued its f inal

approval and adoption of the Group’s 20% shareholding in the share capital of Trust Bank

Alger ia.

The Group carr ied out a review of the recoverable amount of i ts investment in associates at the

report ing date and the assessment resulted in an impairment loss of QR 62.50 mil l ion (2016: QR 5.77 mil l ion).


Trust Investment Holding Algeria

At 1 January

Trust Syria Insurance Company S.A.S.C.

Less: impairment losses

Trust Bank Algeria*


The Arab Insurance Institute Company S.A.S.C.

Oman Reinsurance Company S.A.O.C.

Additional shares in associates

Trust Insurance – Libya

At 31 December

Trust Algeria Assurances & Reassurance S.P.A.

Dividends received from associates

International Financial Securities Company Q.P.S.C.

Share of other comprehensive (loss) income of associates

Gulf Assist B.S.C.

Exchange differences on translation of foreign operations

Qatari Unified Bureau Insurance W.L.L.

QR ‘000

QR ‘000

2016

2016

2016

113,095

324,749

5,061

123,192

7,792

4,770

345,225

52,392

34,229

23,181

(11,577)

345,225

9,166

818

868

(5,021)

7,558

350,990

5,942

(5,765)

QR ‘000

QR ‘000

Ownership Ownership

2017

2017

2017

751,876

345,225

20.00% 20.00%

-20.90% 20.90%

123,206

900,866

20.00% 20.00%

-

942,591

15.00% 15.00%

33,510

-

24.58% 24.58%

24,033

(3,407)

22.50% 22.50%

942,591

9,061

(19,542)

12.00% 12.00%

905

(218,048)

8.00% 8.00%

-

1,005,094

25.00% 25.00%

-

(62,503)

32.00% 32.00%

Note

(a)

(b)


5. INVESTMENT IN ASSOCIATES (CONTINUED)

(a) Dur ing the year, a s igni f icant share of prof i ts of associates included fai r value gains of QR

841.59 mi l l ion f rom an investment property located in Alger ia. Consider ing that s igni f icant part of

the project was st i l l under development in the pr ior years, the management exercised prudence

by not accounting for the fai r value dur ing those per iods but considered the same in the current

per iod as i t is near ing the complet ion stage of development.

(b) The Group carr ied out a review of the recoverable amount of i ts investment in associates at

the report ing date and the assessment resulted in an impairment loss of QR 62.50 mi l l ion (2016:

QR 5.77 mi l l ion) .

The fol lowing table i l lust rates summarised f inancial information of the Group’s investment in

associates :

6. REINSURANCE ASSETS


Share in the associates statement of financial position:

Reported claims by policyholders

Non-current assets

Unearned premiums

Current assets

Claims IBNR

Non-current liabilities

Current liabilities

Net assets

QR ‘000

QR ‘000

2016

2016

454,752

479,772

273,361

245,702

(44,662)

54,249

(338,226)

779,723

345,225

QR ‘000

QR ‘000

2017

2017

1,209,342

524,681

403,915

198,207

(103,974)

48,545

(566,692)

771,433

942,591

Note

20


7. INSURANCE RECEIVABLES

As at the report ing date, the aging of unimpaired insurance receivables was as fol lows:

Unimpaired insurance receivables are expected to be fu l ly recoverable. I t is not the practice of

the Group to obtain col lateral over receivables and the vast major i ty is therefore unsecured. The

net carr y ing values of insurance receivables are considered to be reasonable approximation of

thei r fai r value.


Due from insurers and reinsurers

Due from policyholders

Due from agents, brokers and intermediaries

Claims recoveries

Less: provision for impairment

QR ‘000

2016

125,324

108,224

13,511

5,284

252,343

(35,056)

217,287

QR ‘000

2017

119,724

107,532

11,580

8,099

246,935

(42,429)

204,506

Note

38

Past due but not impaired

2017

2016

QR ‘000

82,049

> 9 months

114,373

QR ‘000QR ‘000QR ‘000QR ‘000

45,450

3 – 9 months

26,286

< 3 months

50,721

Neither past due

nor impaired

204,506

Total

36,9798,64057,295217,287


8. AVAILABLE-FOR-SALE FINANCIAL ASSETS

9. FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS


Equity securities

Equity securities

Debt securities

Managed funds

QR ‘000

QR ‘000

2016

2016

814,785

164,129

180,885

21,107

1,016,777

QR ‘000

QR ‘000

2017

2017

681,217

129,148

202,432

21,707

905,356


10. TAKAFUL PARTICIPANTS’ FUND ACCOUNTS

(a) Statement of f inancial position – Takaful policyholders




Takaful contract liabilities

Furniture and equipment

Other assets



Cash and cash equivalents

Takaful payables

Retakaful assets


Financial assets:

Takaful participants’ fund and liabilities

Other liabilities

Takaful receivables

Retained surplus


Fair value reserve

QR ‘000

2016

3,356

6,809

45,487

81,821

41,581

1,370

39,261

286,600

4,008

286,600

64,141

5,669

1,232

128

48,399

229,938

QR ‘000

2017

2,379

3,257

52,389

100,688

41,286

597

34,876

296,263

7,544

296,263

67,128

11,099

992

(1,160)

45,657

225,794


10. TAKAFUL PARTICIPANTS’ FUND ACCOUNTS (CONTINUED)

(b) Statement of profit or loss – Takaful policyholders


Gross written contributions

Claims ceded to retakaful companies

Wakala fees

Contributions ceded to retakaful companies

Gross change in Takaful contract liabilities


Net change in unearned contributions provision

Change in Takaful contract liabilities ceded to retakaful companies

Investment income (losses)

Surplus for the year

Impairment losses on receivables

Net earned contributions

Net claims

Surplus for the year before wakala fees

Gross claims paid

Net commission and other Takaful expenses

QR ‘000

2016

207,644

(23,505)

(1,280)

5,669

(28,393)

10,053

(937)

7,875

(142,364)

36,259

187,126

(6,286)

(135,829)

(30,590)

6,917

38,476

QR ‘000

2017

229,056

17,435

4,472

5,430

(36,833)

(9,098)

(1,688)

(8,576)

(137,110)

39,437

183,647

(9,884)

(165,306)

(34,007)

19,859

36,653


11. OTHER ASSETS


Advance payments against investments to related party

Staff receivables

Qard Hasan to Takaful participants’ fund

Goodwill

Prepayments and advances

Other receivables

Intangible asset

Inventory

Accrued rent

Accrued interest

QR ‘000

2016

70,949

14,409

30,347

34,448

21,529

232,759

19,135

8,299

30,509

2,334

800

QR ‘000

2017

79,412

-

30,347

42,430

19,385

208,012

17,459

7,976

6,248

3,751

1,004

35 (e)

Notes

(c)

(a)

(b)

(a) The Qard Hasan was provided by the shareholders of General Takaful Company W.L.L. to cover

the accumulated def icit in Takaful part icipants ’ fund as per the Board of Di rectors ’ resolut ion and

Shar i ’a Super visor y Board ’s approval.

(b) The intangible asset represents a r ight of use over property leased by Orientals Enterpr ises

W.L.L. in the Mesaieed industr ial area. The r ight of use intangible asset is amort ized on a systematic

basis over the per iod of the lease which is 13 years.

(c) Goodwi l l of QR 14.41 mi l l ion that arose on the acquis i t ion of Orientals Enterpr ises W.L.L. has

been al located to Orientals cash-generat ing unit (Orientals CGU). As part of the annual goodwi l l

impairment test per formed dur ing the year, the Group reviewed future cash f low project ions

f rom the approved f inancial budget and annual business plan of Orientals CGU, and has also

considered other factors such as the overal l decl ine in construct ion and development activ i t ies

as wel l as ongoing economic uncertainty. Based on the test, the management is of the view that

the goodwi l l al located to Orientals CGU is no longer recoverable and hence to be impaired

in fu l l . The impairment loss of QR 14.41 mi l l ion is recorded in other operat ing and administ rat ive

expenses (Note 32).


12. CASH AND CASH EQUIVALENTS

The cash and cash equivalents posit ion for cash f low purposes, net of the overdraft is as fol lows:

13. SHARE CAPITAL

Author ised, issued and ful ly paid up share capital comprises of 87,506,703 shares of QR 10

each (2016: 87,506,703 shares of QR 10 each) .

14. LEGAL RESERVE

The Qatar Commercial Companies ’ Law No. 11 of 2015 requires that 10% of the net profit for each year should be appropriated to a legal reserve unti l the balance therein equals to 50% of the paid up capital. During the year, the Group has transferred an amount of QR 26.09 mil l ion (restated 2016: QR 25.83 mil l ion) from retained earnings to the legal reserve. The Group’s legal reserve exceeds 50% of share capital. However, in accordance with Qatar Central Bank ’s Law No. 13 of 2012 as amended, 10% of net profit is required to be transferred to legal reserve unti l the legal reserve equals 100% of the paid up capital. The balance under this reserve is not available for distr ibution, except in the circumstances specified in the above law and after Qatar Central Bank approval.

Cash and bank balances include short term deposits of QR 176.70 million (2016: QR 246.69 million).



Reconciliation of the number of ordinary shares outstanding

Number of shares outstanding at 31 December (in thousands)

Bank overdrafts

Number of shares outstanding at 1 January (in thousands)

Bonus shares issued during the year (in thousands)

Balance at 31 December (in QR ‘000)


QR ‘000

2016

2016

303,287

87,507

(2,711)

79,552

7,955

875,067

300,576

QR ‘000

2017

2017

260,056

87,507

-

87,507

-

875,067

260,056

Note

21


15. OTHER COMPONENTS OF EQUITY



At 1 January

At 31 December

Revaluation surplus

Transferred to the consolidated statement of profit or loss upon impairment

Cash flow hedge

Transferred to the consolidated statement of profit or loss upon sale

Foreign currency translation reserve

Fair value change during the year

QR ‘000

QR ‘000

2016

2016

597,183

617,951

512,599

597,183

77,355

26,751

(19,820)

(42,538)

(142,119)

(4,981)

QR ‘000

QR ‘000

2017

2017

475,921

597,183

165,773

475,921

58,611

12,026

(8,592)

(14,453)

(360,167)

(118,835)

(a)

Notes

Note

(b)

29

(c)

(d)

(a) Available-for-sale f inancial assetsThe fai r value reser ve comprises the cumulat ive net change in the fai r value of avai lable-for-

sale f inancial assets unt i l the investments are derecognised or impaired. The movement in the

balances is as fol lows:

(b) Revaluation surplusOne of the associate companies, Trust Investment Holding Alger ia where the Group has a 20%

equity investment, revalues i ts propert ies and any revaluation surplus is di rect ly recognised in

the statement of comprehensive income of the associate. As at 31 December 2017, the Group

proport ionate share of the revaluation surplus is QR 58.61 mi l l ion (2016: QR 77.36 mi l l ion) .

(c) Cash f low hedgeThe hedge reser ve comprises the ef fect ive port ion of the cumulat ive net change in the fai r value

of cash f low hedge related to hedge transactions that have not yet af fected prof i t or loss.


15. OTHER COMPONENTS OF EQUITY (CONTINUED)

(d) Foreign currency translation reserveThe t ranslat ion reser ve comprises al l foreign currency di f ferences ar is ing f rom the t ranslat ion of

investments in foreign associates at the closing exchange rates.

16. SHAREHOLDERS DIVIDENDS

The Board of Di rectors has proposed a cash dividend of 22% of the nominal share value (QR 2.2

per share) for the year ended 31 December 2017 (2016: cash dividend of 15% of the nominal

share value (QR 1.50 per share) were approved and paid for the year ended 31 December

2016). The proposed dividends are subject to the approval of the general assembly.

17. CONTRIBUTION TO SOCIAL AND SPORTS ACTIVITIES FUND

Pursuant to the Qatar Law No. 13 of 2008 and the related clar i f icat ions issued in 2012, which is

appl icable for al l Qatar i l i s ted shareholding companies with publ icly t raded shares, the Group

has made an appropriat ion of 2.5% of i ts net prof i t for the year, excluding unreal ized fai r value

gains or losses on investment propert ies of the Group as wel l as on the investment propert ies of

i ts associates, result ing in a net amount of QR 741 thousand being i ts contr ibut ion to the social

and sports act iv i t ies fund for the year 2017 (2016: QR 5.23 mi l l ion) .

18. NON-CONTROLLING INTERESTS

The non-control l ing interests relate to the subsidiar ies Mozoon Real Estate Company W.L.L. and




19. EMPLOYEES’ END-OF-SERVICE BENEFITS

20. INSURANCE CONTRACT LIABILITIES


At 1 January

At 31 December

Provided during the year

Paid during the year

QR ‘000

2016

33,942

37,744

5,723

(1,921)

QR ‘000

2017

37,744

41,049

4,922

(1,617)

Provision for reported claims by policyholders

At 1 January

Provision for claims IBNR

Gross / ceded change in insurance contract liabilities

Provision for unallocated loss adjustment expense

At 31 December

Provision for premiums deficiency

Outstanding claims provision

Provision for unearned premiums (reserve for unexpired risks)

QR ‘000

QR ‘000

119,081

142,947

Net

Net

24,466

6,215

2,932

149,162

2,683

149,162

109,872

259,034

QR ‘000

QR ‘000

2016

2016

2017

2017

QR ‘000

QR ‘000

QR ‘000

QR ‘000

QR ‘000

QR ‘000

QR ‘000

QR ‘000

(479,772)

(636,686)

Reinsurance of insurance

contract liabilities



598,853

779,633







125,095

149,162

Net

Net



(524,681)

(534,021)

649,776

683,183

(54,249)

102,665

78,715

(96,450)

28,969

10,565

(48,545)

(39,205)

77,514

49,770

-

(534,021)

2,932

683,183

4,473

159,727

-

(573,226)

4,473

732,953

-2,6831,190-1,190

(534,021)683,183159,727(573,226)732,953

(245,702)355,574106,287(198,207)304,494

(779,723)1,038,757266,014(771,433)1,037,447

Notes

(a)

(b)

(a) Outstanding claims provision


20. INSURANCE CONTRACT LIABILITIES (CONTINUED)

(b) Provision for unearned premiums (reserve for unexpired risks)

Claims development 2017

The fol lowing table shows the est imated cumulat ive incurred claims, including both claims noti f ied

and IBNR for each successive accident year at the end of each report ing per iod, together with

cumulat ive payments to date:


At 1 January

Estimate of cumulative claims

Premiums written during the year

At end of the accident year

Premiums earned during the year

One year later

Two years later

Current estimate of cumulative claims

Four years later

Total cumulative claims recognised in the consolidated

statement of financial position as at 31 December 2017

At 31 December

Three years later

Cumulative payments to date

QR ‘000

QR ‘000

98,763

Net

Total

214,770

(203,661)

1,911,670

109,872

(1,757,606)

154,064

QR ‘000

QR ‘000

2016

Accident year

2017

QR ‘000

QR ‘000

QR ‘000

QR ‘000

QR ‘000

QR ‘000

QR ‘000

QR ‘000

(223,184)

150,056



2017

321,947

152,356


2016



2014

109,872

156,754

Net

2015


2013 and before

(245,702)

162,598

355,574

1,418,440

(415,179)629,949179,689(387,282)566,971

392,661

-

(596,322)

120,467

(183,274)

128,364

434,777

136,241

(618,051)

1,407,702

-

150,056

-

-

120,467

-

120,572

120,572

-

128,798

125,754

-

1,401,308

1,394,821

1,394,821

(245,702)

-

(53,806)

355,574

-

(93,095)

106,287

-

(107,567)

(198,207)

125,754

(118,967)

304,494

1,396,953

(1,384,171)

96,25027,37213,0056,78710,650


20. INSURANCE CONTRACT LIABILITIES (CONTINUED)

Claims development 2016

The fol lowing table shows the est imated cumulat ive incurred claims, including both claims noti f ied

and IBNR for each successive accident year at the end of each report ing per iod, together with

cumulat ive payments to date:

The claims development table is presented net of r isk mit igation through reinsurance to give the

most meaningful ins ight into the impact on the operating results.


Estimate of cumulative claims

At end of the accident year

One year later

Two years later

Current estimate of cumulative claims

Four years later

Total cumulative claims recognised in the consolidated

statement of financial position as at 31 December 2016

Three years later

Cumulative payments to date

QR ‘000

Total

1,806,473

(1,662,926)

143,547

QR ‘000

Accident year

QR ‘000QR ‘000QR ‘000QR ‘000

201620152013 20142012 and

before

160,0311,231,545 152,356156,754162,598

-128,364136,241149,2191,258,409

-

152,356

-

-

128,364

-

128,798

128,798

-

142,206

139,427

-

1,258,482

1,257,528

1,257,528

-

(63,343)

89,013

-

(102,708)

25,656

-

(116,510)

12,288

139,427

(132,973)

6,454

1,259,101

(1,247,392)

10,136


21. LOANS AND BORROWINGS


Term loans

Term loans

Term loans

Bank overdrafts

Bank overdrafts

QR ‘000

QR ‘000

QR ‘000

QR ‘000

2016

2016

2016

2016

1,267,940

309,040

456,250

223,271

958,900

2,711

2,711

68,026

7,215

421,361

1,267,940

1,270,651

311,751

91,817

QR ‘000

QR ‘000

QR ‘000

QR ‘000

2017

2017

2017

2017

1,538,815

193,716

456,250

101,470

1,345,099

-

-

379,253

-

345,610

1,538,815

1,538,815

193,716

256,232

19 September 20191) USD 2.625% plus 3 months LIBOR

Revolving5) USD 2.45% plus 3 months LIBOR

Note

Note

MaturityCurrency Interest rate

Note

12

12

30 September 20302) QAR 0.25% plus QMRL rate

Settled6) EUR 0.50% plus 6 months EURIBOR

30 April 20213) USD 2.25% plus 3 months LIBOR

31 March 20264) USD 2.50% plus 3 months LIBOR

(a) Current portion

(b) Non-current portion

The terms and condit ions of the outstanding faci l i t ies are as fol lows:


22. DERIVATIVE FINANCIAL INSTRUMENTS


Derivatives held as cash flow hedge

Interest rate swaps

QR ‘000

Notionalamount

417,469

QR ‘000

20162017

QR ‘000QR ‘000

LiabilityNotional

amountLiability

19,820342,1888,592

Interest rate swapsThe Group entered into interest rate swap contracts designated as a hedge of expected future

LIBOR interest rate payable. Under the terms of the interest rate swap contracts, the Group pays

a f ixed rate of interest and receives f loating LIBOR rates. The terms of the interest rate swap

contracts have been negotiated to match the terms of the under ly ing commitments.

Prospective ef fect iveness was tested at the inception of the hedge and is tested at each

report ing date by comparing cr i t ical terms of the hedging inst rument and the hedged item.

Retrospective ef fect iveness is tested at each report ing date using the cummulat ive dol lar of fset

method. Hedged effect iveness is assessed and measured on a cumulat ive basis by calculat ing

the change in the fai r value of the IRS as a percentage change in the fai r value of the designated

hedged item.

Dur ing the year, measurement of the fai r value of the hedge resulted in an net gain of QR 11.23

mi l l ion (2016: net gain of QR 8.70 mi l l ion) being recognized in equity as a cash f low hedge

reser ve.


The carr y ing values of insurance payables are considered to be reasonable approximation of

thei r fai r value.

23. INSURANCE PAYABLES

24. OTHER LIABILITIES


Due to insurers and reinsurers

Due to policyholders

Due to agents, brokers and intermediaries

QR ‘000

2016

161,425

40,634

18,437

220,496

QR ‘000

2017

206,819

19,536

19,041

245,396

Advance rent

Accounts payables

Accrued expenses

Accrued interest

Staff payables

Other payables

QR ‘000

2016

48,778

47,532

16,802

2,435

6,216

27,546

149,309

QR ‘000

2017

41,456

28,194

24,170

2,231

677

37,408

134,136


25. SEGMENT INFORMATION

Segment consolidated statement of profit or loss:


Gross written premiums

Premiums ceded to reinsurers

Net change in unearned premiums provision

Net earned premiums

Gross claims paid


Gross change in insurance contract liabilities

Change in insurance contract liabilities ceded to reinsurers

Net claims

Net commission and other insurance income


Investment income

Net realized gains

Fair value (losses) gains

Income from construction activities

Investment and other operations results

Other income

QR ‘000

629,949

(415,179)

(11,109)

203,661

(314,417)

205,739

96,450

(102,665)

(114,893)

18,301

107,069

236,534

18,336

56,600

34,406

415,563

69,687

Total

QR ‘000

20162017

QR ‘000QR ‘000 QR ‘000QR ‘000

-

-

-

-

-

-

-

-

-

-

-

236,534

18,336

56,600

34,406

415,563

69,687

Investments

629,949

(415,179)

(11,109)

203,661

(314,417)

205,739

96,450

(102,665)

(114,893)

18,301

107,069

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

200,025

2,656

(642,697)

41,894

(397,180)

942

InsuranceInvestments

566,971

(387,282)

3,585

183,274

(240,431)

147,086

(49,770)

39,205

(103,910)

26,282

105,646

200,025

2,656

(642,697)

41,894

(397,180)

942

566,971

(387,282)

3,585

183,274

(240,431)

147,086

(49,770)

39,205

(103,910)

26,282

105,646

-

-

-

-

-

-

TotalInsurance


25. SEGMENT INFORMATION (CONTINUED)

Segment consolidated statement of profit or loss (continued):

Segment assets and l iabil it ies Assets and l iabi l i t ies of the Group are commonly used across the pr imar y segments.

Geographic information The Group operates in two geographic markets, in the State of Qatar and the United Arab

Emirates. Gross wr i t ten premiums in the State of Qatar amounted to QR 505.21 mi l l ion (2016:

QR 574.29 mi l l ion) and the United Arab Emirates amounted to QR 61.76 mi l l ion (2016: QR 55.66

mi l l ion) .


Finance costs




Total expenses

Profit (loss) from operations


Impairment of associates

Profit for the year

QR ‘000

(47,993)

(29,161)

(189,251)

-

(266,405)

256,227

7,792

(5,765)

258,254

Total

QR ‘000

20162017

QR ‘000QR ‘000 QR ‘000QR ‘000

(46,031)

(29,161)

(107,211)

-

(182,403)

233,160

7,792

(5,765)

235,187

Investments

(1,962)

-

(82,040)

-

(84,002)

23,067

-

-

23,067

(51,916)

(41,778)

(82,112)

(14,409)

(190,215)

(587,395)

900,866

(62,503)

250,968

InsuranceInvestments

(54,131)

(41,778)

(175,598)

(14,409)

(285,916)

(577,450)

900,866

(62,503)

260,913

(2,215)

-

(93,486)

-

(95,701)

9,945

-

-

9,945

TotalInsurance


26. NET CLAIMS

27. NET COMMISSION AND OTHER INSURANCE INCOME


(a) Gross claims paid

Reinsurance and other commission income

(c) Gross change in insurance contract liabilities

(d) Change in insurance contract liabilities ceded to reinsurers

Gross claims paid

Shareholders’ income from Takaful operations



Claims recoveries

Miscellaneous income

Provision for unallocated loss adjustment expense



(b) Claims ceded to reinsurers

Provision for premium deficiency


Net claims

QR ‘000

QR ‘000

2016

2016

11,618

(118,205)

120,332

339,320

2,928

2,932

102,665

(24,903)

3,755

18,301

16,140

314,417

2,683

114,893

(96,450)

(205,739)

(17,667)

QR ‘000

QR ‘000

2017

2017

21,383

50,923

(44,909)

264,550

3,435

1,541

(39,205)

(24,119)

1,464

26,282

(1,201)

240,431

(1,493)

103,910

49,770

(147,086)

5,704

Note

20 (a)

20 (a)


28. INVESTMENT INCOME

29. NET REALIZED GAINS

30. FAIR VALUE (LOSSES) GAINS






Rental income

Equity securities


Interest income


Debt securities

Dividend income


Interest income

Equity securities



Dividend income

Impairment losses on available-for-sale financial assets

QR ‘000

QR ‘000

QR ‘000

2016

2016

2016

49,132

4,234

18,336

182,686

41,246

7,468

236,534

1,292

56,600

30,666

13,071

1,235

1,314

5,877

(26,751)

QR ‘000

QR ‘000

QR ‘000

2017

2017

2017

(610,309)

4,907

2,656

152,416

12,753

(32,388)

200,025

1,700

(642,697)

24,606

13,295

229

-

4,801

(12,026)

4

Note

Note

15 (a)


31. FINANCE COSTS

32. OTHER OPERATING AND ADMINISTRATIVE EXPENSES


Interest expenses

Less: borrowing costs capitalized

Interest on reinsurance premium reserves

Bank charges

QR ‘000

2016

54,215

(8,665)

45,550

291

45,841

2,152

47,993

QR ‘000

2017

69,196

(18,150)

51,046

278

51,324

2,807

54,131

Borrowing costs capital ized pertain to a credit faci l i ty which was avai led specif ical ly for

construct ion of investment property.

Employee benefits expenses

Consultancy expenses

Investment properties operating expenses

Marketing expenses


Amortization of intangible asset

Occupancy expenses

Other expenses

Board of Directors’ remuneration

Depreciation of property and equipment

Impairment losses (recoveries) on receivables

QR ‘000

2016

116,119

6,306

17,333

1,676

-

15,363

189,251

12,916

8,310

7,765

(1,392)

4,855

QR ‘000

2017

97,608

4,236

21,187

1,676

14,409

10,782

190,007

12,328

10,250

6,285

6,222

5,024

Notes

4

11 (c)

35 (a)

3


33. EARNINGS PER SHARE

34. CASH GENERATED FROM AND USED IN OPERATING ASSETS AND LIABILITIES


Profit attributable to the ordinary equity holders of the Parent (QR ‘000)

Weighted average number of shares (in thousands)

Earnings per share (in Qatari Riyals per share)

QR ‘000

2016

219,341

87,507

2.51

QR ‘000

2017

307,381

87,507

3.51

Net change in insurance receivables

Net change in payables to related parties

Net change in receivables from related parties

Net change in other liabilities

Net change in other assets

Net change in operating liabilities

Net change in operating assets

Net change in insurance payables

QR ‘000

2016

24,858

(52,693)

(688)

(31,458)

(43,523)

(7,288)

(15,361)

24,531

QR ‘000

2017

(5,408)

(15,710)

(86)

(9,813)

(50,829)

(15,307)

24,900

(60,019)


35. RELATED PARTY DISCLOSURES

Related part ies consist of shareholders, related companies, key management personnel of the

Group, and ent i t ies control led, joint ly control led or s igni f icant ly inf luenced by such part ies. Pr icing

pol icies and terms of these t ransactions are approved by the Group’s management.

(a) Related party transactionsTransactions with related part ies included in the consol idated statement of prof i t or loss were as

fol lows:

*Ef fect ive 30 June 2017, the Group has terminated al l i ts contracts with Trust Re – Bahrain, and

any amounts ar is ing f rom transactions that occurred pr ior to the said date wi l l be sett led in

accordance with the agreed terms.


2017

2016

Trust Re – Bahrain*

Trust Re – Bahrain*

Others

Others

QR ‘000

QR ‘000

(309)

(406)

Otheroperating expenses

Otheroperating expenses

(1,850)

(2,750)

QR ‘000

QR ‘000

QR ‘000

QR ‘000

QR ‘000

QR ‘000

QR ‘000

QR ‘000

QR ‘000

QR ‘000

3,311

3,153

Fees and commission

income

Fees and commission

income

3,486

10,514

Claimsceded to reinsurers

Claimsceded to reinsurers

-

-

Grossclaims

paid

Grossclaimspaid

(98,896)

(74,129)

-

-

Premiumsceded to reinsurers

Premiumsceded to reinsurers

Gross written

premiums

Gross written

premiums

-

-

-

-

(10,318)

(8,371)

(13)

(5)

11,244

11,580


35. RELATED PARTY DISCLOSURES (CONTINUED)

(a) Related party transactions (continued)The compensation of key management personnel dur ing the year were as fol lows:

(b) Receivables from / payables to related partiesNon-insurance related balances with related part ies included in the consol idated statement of

f inancial posit ion are as fol lows:




Salaries and other short-term benefits

North Africa Energy Company W.L.L.

Alsari Trading Company W.L.L.

Board of Directors’ remuneration

Trust Syria Insurance Company S.A.S.C.

Falcon Readymix Company W.L.L.

End-of-service benefits

Trust Algeria Assurances & Reassurance S.P.A.

Nest Investments (Holdings) Limited

Trust Re – Bahrain

Trust Holding Ltd. Company

Trust Holding Ltd. Company

International Financial Securities Company Q.P.S.C.

QR ‘000

QR ‘000

QR ‘000

2016

2016

2016

38,613

54

73,141

8,310

54

6,260

1,522

52

2,591

48,445

5

-

76

81,992

11

252

QR ‘000

QR ‘000

QR ‘000

2017

2017

2017

19,497

70

13,407

10,250

54

4,442

1,034

41

3,940

30,781

1

184

-

21,973

-

166

Affiliate

Affiliate

Note

Relationship

Relationship

32

Associate

Affiliate

Associate

Affiliate

Affiliate

Affiliate

Affiliate

Associate


35. RELATED PARTY DISCLOSURES (CONTINUED)

(c) Insurance receivables and payables Insurance related balances with related part ies included in the consol idated statement of

f inancial posit ion are as fol lows:

(d) Investment propertiesThe addit ions to investment propert ies include QR 27.13 mi l l ion (2016: QR 18.93 mi l l ion) in

suppl ies f rom Falcon Readymix Company W.L.L.

(e) Other assetsOther assets include advance payments to a related party are as fol lows:

Al l above disclosed balances are unsecured and interest f ree. There have been no guarantees

provided or received for any related party receivables. Dur ing the year, the Group has not

recorded any impairment of receivables relat ing to amounts owed by related part ies (2016: Ni l ) .


Trust Investment Holding Algeria

Trust Re – Bahrain

Other insurance receivables

Other insurance payables

QR ‘000

QR ‘000

2016

2016

70,949

21,196

3,494

(1,086)

QR ‘000

QR ‘000

2017

2017

79,412

(13,080)

3,281

(1,098)

11

Affiliate

Note

Relationship

Others

Others


36. CONTINGENT LIABILITIES AND COMMITMENTS


(a) Capital commitments

Less than one year

Between one and five years

(b) Contingent liabilities

Letters of guarantee

(c) Lease commitments

Operating lease commitments are payable as follows:

QR ‘000

2016

428,593

6,701

12,905

116,751

6,204

QR ‘000

2017

251,880

2,995

8,353

116,031

5,358

(d) Lit igationsThe insurance sector of the Group is subject to l i t igation and is cont inuously involved in legal

proceedings ar is ing in i ts normal course of business. The Group carr ies adequate provis ions against

such l i t igations which are included as part of insurance contract l iabi l i t ies. The Group is also a

party to non-insurance related l i t igations with a total net exposure as at 31 December 2017 of

QR 8.03 mi l l ion (2016: QR 12.59 mi l l ion) towards al l such l i t igations. The Group has considered

adequate provis ions based on best est imate where the probabi l i ty has been predictable. In

addit ion, the Group and its af f i l iates have f i led legal suits against and are subject to counter-

suits f rom var ious part ies in relat ion to one of the Group’s associate companies which is under

l iquidation. The outcomes of the proceedings f rom these cases are unpredictable as of the

report ing date. No further disclosures are made on the stated l i t igations to avoid prejudicing the

posit ion of the part ies in dispute.


37. FAIR VALUE MEASUREMENT


Avai lable-for-sale f inancial assets carr ied at cost amount to QR 3.65 mi l l ion (2016: QR 3.65

mi l l ion) . Dur ing the year, there were no t ransfers between Level 1, Level 2 and Level 3 (2016: Ni l ) .

The fol lowing table provides the fai r value measurement hierarchy of the Group’s assets and

l iabi l i ty that are measured at fai r value.

Assets measured at fair value:

Assets measured at fair value:









Liability measured at fair value:

Liability measured at fair value:

QR ‘000

QR ‘000

Total

Total

5,638,381

6,064,376

901,706

1,013,127

129,148

164,129

6,669,235

7,241,632

8,592

19,820

QR ‘000

QR ‘000

QR ‘000

QR ‘000

QR ‘000

QR ‘000

Date of valuation

Date of valuation

Significant unobservable

inputsLevel 3

Significant unobservable

inputsLevel 3

Significant observable

inputsLevel 2

Significant observable

inputsLevel 2

Quoted prices in

active marketsLevel 1

Quotedprices in

active marketsLevel 1

5,638,381

6,064,376

-

-

-

-

31 December 2017

31 December 2016

-

-

21,707

21,107

879,999

992,020

31 December 2017

31 December 2016

-

-

-

-

129,148

164,129

31 December 2017

31 December 2016

5,638,381

6,064,376

21,707

21,107

1,009,147

1,156,149

-

-

8,592

19,820

-

-

31 December 2017

31 December 2016

Notes

Notes

4

4

8

8

9

9

22

22


38. RISK MANAGEMENT

The Group, in the normal course of business, der ives i ts revenue mainly f rom assuming and managing

insurance, investments and investment propert ies. The Group’s l ines of business are exposed to

the fol lowing r isks :

— Insurance r isk

— Credit r isk

— Liquidity r isk

— Market r isk, and

— Operational r isk

This note presents information about the Group’s exposure to each of the above r isks, the Group’s

object ives, pol icies and processes for measur ing and managing r isk, and the Group’s management

of capital. Further quanti tat ive disclosures are included throughout these consol idated f inancial

statements.

The Board of Di rectors has overal l responsibi l i ty for the establ ishment and overs ight of the

Group’s r isk management f ramework. These pol icies def ine the Group’s ident i f icat ion of r isk and its

interpretat ion, l imit st ructure to ensure the appropriate qual i ty and divers i f icat ion of assets, al ign

underwr i t ing and reinsurance st rategy to the corporate goals, and specify report ing requi rements.

The Group’s r isk management pol icies are establ ished to ident i fy and analyse the r isks faced

by the Group, to set appropriate r isk l imits and controls, and to monitor r isks and adherence to

l imits. Risk management pol icies and systems are reviewed regular ly to ref lect changes in market

condit ions and the Group’s activ i t ies.

The Audit Committee and the Risk Committee of the Group oversee how management monitors

compl iance with the Group’s r isk management pol icies and procedures, and reviews the adequacy

of the r isk management f ramework in relat ion to the r isks faced by the Group. The Committees are

assisted in thei r overs ight role by Internal Audit Department. Internal Audit Department undertakes

both regular and ad hoc reviews of r isk management controls and procedures, the results of which

are reported to the Audit Committee.



38. RISK MANAGEMENT (CONTINUED)

Insurance riskThe r isk under any insurance contract is the possibi l i ty that the insured event occurs and the

uncertainty of the amount of the result ing claim. By the ver y nature of an insurance contract,

th is r isk is random and therefore unpredictable. The insurance contracts issued by the Group for

var ious r isks are homogeneous.

For a port fol io of insurance contracts where the theor y of probabi l i ty is appl ied to pr icing and

provis ioning, the pr incipal r isk that the Group faces under i ts insurance contracts is that the

actual claims and benef i t payments exceed the carr y ing amount of the insurance l iabi l i t ies. This

could occur when the f requency or sever i ty of claims and benef i ts are greater than est imated.

Insurance events are random and the actual number and amount of claims and benef i ts wi l l var y

f rom year to year f rom the level establ ished using stat ist ical techniques.

Exper ience shows that the larger the port fol io of s imi lar insurance contracts, the smal ler the

relat ive var iabi l i ty of the expected outcome wi l l be. In addit ion, a more divers i f ied port fol io is less

l i kely to be affected by a change in any subset of the port fol io. The Group has developed its

insurance underwr i t ing st rategy to divers i fy the type of insurance r isks accepted and within each

of these categories to achieve a suf f ic ient ly large populat ion of r isks to reduce the var iabi l i ty of

the expected outcome.

Risks are accepted based on an evaluation of pr icing and pr ior underwr i t ing exper ience in

accordance with underwr i t ing guidel ines that have been laid out for each l ine of business.

Underwr i t ing guidel ines are constant ly reviewed and updated to take account of market

developments, per formance and opportunit ies. Accumulat ion l imits are set to control exposures

to natural hazards and catastrophes. Var ious underwr i t ing and approval l imits are specif ied

for accepting r isks. The reinsurance st rategy of the Group is designed to protect exposures to

individual and event r isks based on current r isk exposures through cost ef fect ive reinsurance

arrangements. The recoverable amounts f rom reinsurers are est imated in a manner consistent with

the outstanding claims provis ion and are in accordance with the reinsurance contracts.



38. RISK MANAGEMENT (CONTINUED)Insurance risk (continued)

Even though the Group has reinsurance arrangements, the di rect obl igation to i ts pol icyholders

is shown as a l iabi l i ty and thus to the extent the reinsurer is not able to meet i ts obl igations

under the reinsurance arrangement, a credit exposure exists. The management ensures that the

Group’s reinsurance placement is divers i f ied with in a range of reinsurers and is not concentrated

or dependent on any s ingle reinsurer.

Frequency and severity of claimsThe f requency and sever i ty of claims can be determined after considerat ion of several factors

as fol lows:

— past exper ience of the claims;

— economic level ;

— laws and regulat ions; and

— publ ic awareness

The Group manages these r isks through i ts underwr i t ing st rategy, adequate reinsurance arrangements

and proactive claims handl ing. The underwr i t ing st rategy attempts to ensure that the underwr i t ten

r isks are wel l divers i f ied in terms of type and amount of r isk, industr y and geography.

Underwr i t ing l imits are in place to enforce appropriate r isk select ion cr i ter ia. For example, the

Group has the r ight not to renew individual pol icies, i t can impose deductibles and it has the

r ight to reject the payment of a f raudulent claim. The Group has the r ight to re-pr ice the r isk on

renewal. Insurance contracts also ent i t le the Group to pursue thi rd part ies for payment of some

or al l costs ( for example, subrogation) .

The reinsurance arrangements include proport ional and non-proport ional coverage. The ef fect

of such reinsurance arrangements is that the Group should not suf fer major insurance losses.

The Group has special ized claims units deal ing with the mit igation of r isks sur rounding general

insurance claims. This unit invest igates, adjusts and sett les al l general insurance claims. The

general insurance claims are reviewed individual ly regular ly and adjusted to ref lect the latest

information on the under ly ing facts, cur rent law, jur isdict ion, contractual terms and condit ions, and

other factors. The Group actively manages sett lements of general insurance claims to reduce its

exposure to unpredictable developments.




Insurance risk (continued)

Sources of uncertainty in the estimation of future claim paymentsClaims on general insurance contracts are payable on a claims-occurrence basis. The Group

is l iable for al l insured events that occurred dur ing the term of the contract, even i f the loss is

discovered after the end of the contract term. As a result, a larger element of the claims provis ion

relates to incurred but not reported claims ( IBNR) which are sett led over a short to medium term

per iod.

There are several var iables that af fect the amount and t iming of cash f lows f rom these contracts.

These mainly relate to the inherent r isks of the business activ i t ies carr ied out by individual

contract holders and the r isk management procedures adopted. The compensation paid on

these contracts is the monetar y awards granted for the loss suf fered by the pol icyholders or th i rd

part ies ( for th i rd party l iabi l i ty covers) .

The est imated cost of claims includes di rect expenses to be incurred in sett l ing claims, net of

the expected subrogation values and other recover ies. The Group takes al l reasonable steps

to ensure that i t has appropriate information regarding i ts claims exposures. However, given

the uncertainty in establ ishing claims provis ions, i t is l i kely that the f inal outcome wi l l prove to

be di f ferent f rom the or iginal l iabi l i ty establ ished. The l iabi l i ty for these contracts comprise a

provis ion for IBNR, a provis ion for reported claims not yet paid and a provis ion for unexpired r isks

as at the consol idated statement of f inancial posit ion date.

In calculat ing the est imated cost of unpaid claims (both reported and not) , the Group’s est imation

techniques are a combination of loss-rat io-based est imates (where the loss rat io is def ined as the

rat io between the ult imate cost of insurance claims and insurance premiums earned in a part icular

f inancial year in relat ion to such claims) and an est imate based upon actual claims exper ience

using predetermined formula where greater weight is given to actual claims exper ience as t ime

passes. An actuar ial valuation is done ever y year to ensure the adequacy of the reser ves.

Claims developmentThe Group maintains st rong reser ves in respect of i ts insurance business in order to protect against

adverse future claims exper iences and developments. The uncertaint ies about the amount and

t iming of claim payments are general ly resolved within one year (Note 20).





Process used to decide on assumptionsThe r isks associated with these insurance contracts are complex and subject to a number of

var iables that compl icate quanti tat ive sensit iv i ty analys is. The exposure of the Group to claims

associated with general insurance is mater ial. This exposure is concentrated in state of Qatar

where s igni f icant t ransactions take place.

The Group uses assumptions based on a mixture of internal and actuar ial reports to measure

i ts general insurance related claims l iabi l i t ies. Internal data is der ived most ly f rom the Group’s

monthly claims reports and screening of the actual insurance contracts carr ied out at year end

to der ive data for the contracts held. The Group has reviewed the individual contracts and thei r

actual exposure to claims. This information is used to develop scenarios related to the latency of

claims that are used for the project ions of the ult imate number of claims.

The table below sets out the concentrat ion of outstanding claims provis ion by type of contract :


Motor

Non-Motor

QR ‘000

108,296

40,866

149,162

Net reserves

QR ‘000

20162017

QR ‘000QR ‘000 QR ‘000QR ‘000

(10,466)

(523,555)

(534,021)

Reinsurancereserves

118,762

564,421

683,183

(10,627)

(562,599)

(573,226)

Gross reservesReinsurance

reserves

108,651

51,076

159,727

119,278

613,675

732,953

Net reservesGross reserves




Sensitivity analysisThe reasonableness of the est imation process is tested by an analys is of sensit iv i ty around

several scenarios. The sensit iv i ty of the Group’s income to insurance r isks is as fol lows:

Credit r iskCredit r isk is the r isk that one party to a f inancial inst rument wi l l cause a f inancial loss to the other

party by fai l ing to discharge an obl igation.

The Group’s exposure to credit r isk is l imited to the carr y ing amount of f inancial assets recognised

at the consol idated statement of f inancial posit ion. The Group manages and l imits i ts credit

exposure as stated below.

The Group credit control pol icy sets out exposures l imits per counter party, which is reviewed and

monitored by the Execut ive Management Committee. L imits are set for investments and minimum

credit rat ings for investments that may be held.

Reinsurance is placed with counterpart ies that have a good credit rat ing and concentrat ion of

r isk is avoided by fol lowing pol icy guidel ines in respect of counterpart ies ’ l imits that are subject to

regular reviews. At each report ing date, management per forms an assessment of creditworthiness

of reinsurers and updates the reinsurance purchase st rategy, ascertaining suitable al lowance for

impairment.


2017



2016

QR ‘000

Netimpact

on equity

(7,927)

(7,324)

7,927

7,324

QR ‘000QR ‘000QR ‘000

Netimpact on net profit

Increase (decrease) in

reinsurance contract liabilities

Increase(decrease) in

insurance contract liabilities

Change in assumptions

(7,927)

(7,324)

28,661

26,701

(36,588)

(34,025)

+5%

+5%

7,927

7,324

(28,661)

(26,701)

36,588

34,025

-5%

-5%


38. RISK MANAGEMENT (CONTINUED)Credit r isk (continued)

The Group sets the maximum credit amounts and terms to i ts customers. The credit r isk in respect

of such customer balances incurred on non–payment of premiums wi l l only pers ist dur ing the

grace per iod specif ied, when the pol icy is either paid up or terminated. Commiss ion paid to

intermediar ies is netted off against amounts receivable f rom them to reduce the r isk of doubtful

debts.

The Group further rest r icts i ts credit r isk exposure by enter ing into master nett ing arrangements

with counterpart ies with which i t enters into s igni f icant volumes of t ransactions. However, such

arrangements do not general ly result in of fsett ing the consol idated statement of f inancial posit ion

assets and l iabi l i t ies, as t ransactions are usual ly sett led on a gross basis. However, the credit

r isk associated with such balances is reduced in the event of a default, when such balances are

sett led on a net basis. The Group actively manages i ts product mix to ensure that there is no

s igni f icant concentrat ion of credit r isk. The credit r isk for l iquid funds and other short-term f inancial

assets is considered negl igible, s ince the counterpart ies are reputable banks with high qual i ty

external credit rat ings.

The table below shows the maximum exposure to credit r isk for the components of the consol idated

statement of f inancial posit ion:


Credit risk exposure by financial asset type:

Reinsurance recoverable on outstanding claims

Total exposure

Bank balances


Available-for-sale financial assets (debt securities)

Other assets


QR ‘000

2016

1,371,065

479,772

302,877

217,287

180,885

189,992

252

QR ‘000

2017

1,373,927

524,681

259,337

204,506

202,432

182,805

166

Note



Credit r isk (continued)

Impaired financial assetsAs at 31 December 2017, the impaired insurance and reinsurance receivables amount to

QR 42.43 mi l l ion (2016: QR 35.06 mi l l ion) and other assets amount to QR 21.91 mi l l ion (2016:

QR 23.06 mi l l ion) . The Group records al l impairment al lowances in separate impairment al lowances

accounts. A reconci l iat ion of al l the al lowances for impairment losses is as fol lows:

Liquidity r iskLiquidity r isk is the r isk that cash may not be avai lable to pay obl igations when due. The Group

manages i ts l iquidity needs by careful ly monitor ing scheduled payments for f inancial l iabi l i t ies as

wel l as cash-outf lows due in day-to-day business.

The Group maintains cash and marketable secur i t ies to meet i ts l iquidity requi rements for up to

90-day per iods. Funding for long-term l iquidity needs is addit ional ly secured by an adequate

amount of committed credit faci l i t ies and the abi l i ty to sel l medium to long-term f inancial assets.


At 1 January

Impairment losses for the year

Impairment recoveries during the year

At 31 December

QR ‘000

23,447

80

(471)

23,056

QR ‘000

201620162017 2017

QR ‘000QR ‘000

23,05636,05735,056

Impairment on insurance and reinsurance assets Impairment on other receivables

73

(1,224)

21,905

1,839

(2,840)

35,056

7,726

(353)

42,429


Insurance payables and other liabilities

Insurance payables and other liabilities









QR ‘000

QR ‘000

379,532

369,805

8,592

19,820

1,037,447

1,038,757

21,973

81,992

1,693,898

1,347,873

3,141,442

2,858,247

Total

Total

QR ‘000

QR ‘000

Non-current

Non-current

Current

Current

QR ‘000

QR ‘000

QR ‘000

QR ‘000

QR ‘000

QR ‘000

QR ‘000

QR ‘000

QR ‘000

QR ‘000

11,750

9,257

-

-

-

-

13,327

73,079

1,455,915

1,005,054

1,480,992

1,087,390

Total non-current

Total non-current

1,767

62

-

-

-

-

-

-

506,764

135,448

508,531

135,510

367,782

360,548

8,592

19,820

1,037,447

1,038,757

8,646

8,913

237,983

342,819

1,660,450

1,770,857

More than 5 years

More than 5 years

Total current

Total current

9,983

9,195

-

-

-

-

13,327

73,079

949,151

869,606

972,461

951,880

160,056

154,720

207,726

205,828

8,592

19,820

-

-

622,468

623,254

414,979

415,503

3,940

8,913

4,706

-

171,591

57,203

66,392

285,616

966,647

863,910

693,803

906,947

1 to 5 years

1 to 5 years

6 to 12 months

6 to 12 months

Within 6 months

Within 6 months

Contractual matur i ty of the Group’s l iabi l i t ies as at 31 December 2016 are summarised below:

The above contractual matur i t ies ref lect the gross cash f lows, which may di f fer to the carr y ing

values of the l iabi l i t ies at the consol idated statement of f inancial posit ion date.



Liquidity r isk (continued)

Contractual matur i ty of the Group’s l iabi l i t ies as at 31 December 2017 are summarised below:



Liquidity r isk (continued)

The table below summarises the expected ut i l i sat ion or sett lement of assets and l iabi l i t ies.





Reinsurance assets

Financial assets:






Other assets


Total assets

Employees’ end-of-service benefits


Other liabilities



Total liabilities


Insurance payables


Takaful participants’ fund and liabilities

QR ‘000

104,013

6,064,376

345,225

779,723

217,287

252

1,016,777

164,129

286,600

232,759

303,287

9,514,428

37,744

1,038,757

149,309

1,270,651

3,105,369

19,820

220,496

81,992

286,600

Total

QR ‘000

20162017

QR ‘000QR ‘000 QR ‘000QR ‘000

104,013

6,064,376

345,225

-

-

-

1,016,777

-

135,686

152,329

-

7,818,406

37,744

-

9,257

958,900

1,084,777

-

-

73,079

5,797

Non-current

-

-

-

779,723

217,287

252

-

164,129

150,914

80,430

303,287

1,696,022

-

140,052

311,751

2,020,592

19,820

220,496

8,913

280,803

158,904

5,638,381

942,591

-

-

-

905,356

-

150,988

143,610

-

7,939,830

41,049

-

11,750

1,345,099

1,421,164

-

-

13,327

9,939

CurrentNon-current

158,904

5,638,381

942,591

771,433

204,506

166

905,356

129,148

296,263

208,012

260,056

9,514,816

41,049

1,037,447 1,038,757

134,136

1,538,815

3,323,671

8,592

245,396

21,973

296,263

-

-

-

771,433

204,506

166

-

129,148

145,275

64,402

260,056

1,574,986

-

1,037,447

122,386

193,716

1,902,507

8,592

245,396

8,646

286,324

TotalCurrent



Market r iskMarket r isk is the r isk that changes in market pr ices, such as foreign exchange rates, interest rates

and equity pr ices wi l l af fect the Group’s income or the value of i ts holdings of f inancial inst ruments.

The objective of market r isk management is to manage and control market r isk exposures with in

acceptable parameters, whi le optimis ing the return.

Currency riskMost of the Group’s t ransactions are carr ied out in Qatar i Riyals. Exposures to currency exchange

rates ar ise f rom the Group’s overseas investments. The Qatar i Riyal is ef fect ively pegged to the

United States Dol lar and thus currency r isk occurs only in respect of cur rencies other than the

United States Dol lar.

Foreign currency denominated f inancial assets, investment in associates and l iabi l i t ies, t ranslated

into Qatar i Riyals at the closing rate, are as fol lows:



Financial assets

Financial liabilities

QR ‘000

69,033

57,591

126,624

-

-

Other

QR ‘000

20162017

QR ‘000QR ‘000 QR ‘000QR ‘000

-

1,719

1,719

(7,216)

(7,216)

Euro

259,468

-

259,468

-

-

-

3,457

3,457

-

-

DZDEuro

34,415

42,810

77,225

-

-

899,115

-

899,115

-

-

OtherDZD



The analys is below is per formed for reasonably possible movements in key var iables with al l other

var iables held constant, showing the impact on prof i t and equity.

Interest rate riskThe Group’s pol icy is to minimise interest rate r isk exposures on term f inancing. The Group is

exposed to changes in the market interest rates through i ts f inancial assets and l iabi l i t ies which

are subject to var iable interest rates.


Currency

EUR

DZD

Total

Others

EUR

Others

DZD

Total

QR ‘000

550

25,947

38,059

(12,662)

(550)

12,662

(25,947)

(38,059)

Impact on equity

QR ‘000

20162017

QR ‘000QR ‘000

550

-

5,209

(5,759)

(550)

5,759

-

(5,209)

Impact on profit

(346)

89,912

97,981

(7,723)

346

7,723

(89,912)

(97,981)

-10%

+10%

-10%

+10%

+10%

-10%

Impact on equityChanges in variables

(346)

-

4,627

(4,281)

346

4,281

-

(4,627)

Impact on profit

Fixed and variable rate instruments

Financial assets

Financial liabilities

QR ‘000

2016

452,065

1,290,471

QR ‘000

2017

409,834

1,547,407

Carrying amounts


2017

Variable rate instruments

Variable rate instruments

Interest rate swaps

Interest rate swaps

Cash flow sensitivity (net)

Cash flow sensitivity (net)

2016

QR ‘000

(2,784)

8,105

(1,846)

5,500

6,259

8,284

QR ‘000

50 bps increase 50 bps decrease

2,784

(8,105)

1,846

(5,500)

(6,259)

(8,284)

Profit or loss

38. RISK MANAGEMENT (CONTINUED)Market r isk (continued)

Fair value sensit ivity analysis for f ixed rate instrumentsThe Group does not account for any f ixed rate f inancial assets at fai r value through prof i t or

loss, and the Group does not designate interest rate swaps as hedging inst ruments under the fai r

value hedge accounting model. Therefore a change in interest rate at the report ing date would

not af fect prof i t or loss.

Cash f low sensit ivity analysis for variable rate instrumentsA change of 50 basis points in interest rate at the report ing date would have increased

(decreased) prof i t or loss by the amount shown below. This analys is assumes that al l other

var iables, in part icular foreign currency exchange rates, remain constant.




Market r isk (continued)

Equity price risk The Group is exposed to other market pr ice r isk in respect of i ts l i s ted equity secur i t ies and bonds.

Equity pr ice r isk is the r isk that the fai r values of equit ies decrease as a result of changes in the

levels of equity and the value of individual stocks. The ef fect on equity due to a reasonably

possible change in equity indices by (+/-) 10%, with al l other var iables held constant is as fol lows:

Operational r iskOperational r isk is the r isk of loss ar is ing f rom systems and control fai lures, f raud and human errors,

which can result in f inancial and reputation loss, and legal and regulator y consequences. The

Group manages operational r isk through appropriate controls, inst i tut ing segregation of dut ies

and internal checks and balances, including internal audit and compl iance.


Qatar Market

Qatar Market

International Markets

International Markets

QR ‘000

(78,300)

78,300

(20,902)

20,902

Impact on other comprehensive

income

QR ‘000

20162017

QR ‘000QR ‘000

(16,149)

16,149

(264)

264

Impact on profit

(66,153)

66,153

(21,847)

21,847

+10%

-10%

+10%

-10%

Impact on other comprehensive

incomeChanges in variables

(12,683)

12,683

(232)

232

Impact on profit



Capital managementThe Group’s capital management pol icy for i ts insurance and non–insurance business is to

hold suf f ic ient capital to cover the statutor y requi rements based on the Qatar Central Bank ’s

inst ruct ions, including any addit ional amounts requi red by the regulator as wel l as to maintain

investor, creditor and market conf idence and to sustain future development of the business. The

Group monitors the return on capital, which is def ined as prof i t for the year div ided by total

equity. The Group’s object ives when managing capital is :

— To safeguard the Group’s abi l i ty to continue as a going concern so that i t can continue to

provide returns for shareholders and benef i ts for other stakeholders ; and

— To provide an adequate return to shareholders by pr icing insurance and investment contracts

commensurately with the level of r isk.

The Group monitors capital on the basis of the carr y ing amount of equity excluding cash f low

hedge reser ve and cash and bank balances as presented on the face of the consol idated

statement of f inancial posit ion. The Group’s goal in capital management is to maintain a capital-

to-overal l f inancing st ructure rat io of 1:1.5. Capital for the report ing per iods under review is

summarised as fol lows:


Equity

Less: cash flow hedge reserve and cash and bank balances

Overall financing

Capital

Capital to overall financing

Equity excluding cash flow hedge reserve

Add: loans and borrowings

QR ‘000

2016

6,409,059

7,699,530

(283,467)

1:1.26

6,125,592

6,428,879

1,270,651

QR ‘000

2017

6,191,145

7,738,552

(251,464)

1:1.30

5,939,681

6,199,737

1,538,815



Capital management (continued)

The operations of the Group are also subject to regulator y requi rements with in the jur isdict ions in

which i t operates. Such regulat ions not only prescr ibe approval and monitor ing of activ i t ies, but

also impose certain rest r ict ive provis ions (e.g. , capital adequacy) to minimize the r isk of default

and insolvency on the part of the insurance companies to meet unforeseen l iabi l i t ies as they

ar ise. The Group and its regulated subsidiar ies, in general, have compl ied with the requi rements

throughout the f inancial year. In report ing f inancial st rength, capital and solvency are measured

using the ru les prescr ibed by the Qatar Central Bank. These regulator y capital tests are based

upon requi red levels of solvency, capital and a ser ies of prudent assumptions in respect of the

type of business wr i t ten.


39. RECLASSIFICATION OF COMPARATIVE AMOUNTS

Certain comparative f igures have been reclass i f ied to conform to the presentat ion in the current

year ’s consol idated f inancial statements. However, such reclass i f icat ions did not have any ef fect

on the net prof i t and equity of the comparative year.

The fol lowing summarises the reclass i f icat ions of i tems with in the consol idated statement of

f inancial posit ion.

QR ‘000

217,287Insurance receivables

286,600Takaful participants’ assets

232,759Other assets

(220,496)Insurance payables

(286,600)Takaful participants’ fund and liabilities

(149,309)Other liabilities

80,241

QR ‘000

(16,802)

(9,895)

(10,250)

10,783

9,895

16,269

-

QR ‘000

As previously reported

2016Increase

(Decrease)As reclassified

2016

234,089

296,495

243,009

(231,279)

(296,495)

(165,578)

80,241



40. DUBAI BRANCH OPERATIONS

During the year, the Board issued a resolut ion to exit the insurance market in Dubai after obtaining

necessar y approvals of the concerned regulators.

41. GROUP CHIEF EXECUTIVE OFFICER’S REMUNERATION

The Board of Di rectors is in the process of reviewing the modal i t ies of calculat ing the Group Chief

Execut ive Off icer ’s remunerat ion as per the terms of his employment contract, which has been

approved by the Board of Di rectors. Cumulat ive adjustments, i f any, as a result of such review wi l l

be recorded by the Group in subsequent per iods.

42. EVENTS AFTER THE REPORTING PERIOD

The consol idated f inancial statements are adjusted to ref lect events that occurred between the

consol idated statement of f inancial posit ion date and the date when the consol idated f inancial

statements are author ised for issue, provided they give evidence of condit ions that existed at

the consol idated statement of f inancial posit ion date. There were no subsequent events which

requi red either adjustments or disclosures in the consol idated f inancial statements except for the

proposed dividend (Note 16).

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Confidence - Qatar General Insurance

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