Risks

Interest rate risk is the risk from changes in market interest rates, relating primarily to the Company’s exposure to floating interest rates

Interest rate sensitivity

Foreign currency risk is the risk from changes in the foreign exchange rates, affecting balances upon translation into Qatari Riyals.

The Company does not hedge its currency exposure. As both Qatari Riyal and UAE Dirhams are pegged to the US Dollar, balances in US Dollars and UAE Dirhams are not considered to represent significant currency risks to the Company.

Aamal has no FX deposits in foreign currencies.

Accounts payable and accrued expenses:

Foreign exchange sensitivity

The effect of decreases in foreign currency exchange rates is expected to be equal and opposite to the effect of the increases shown.

Credit risk is the risk that one party to a financial instrument will fail to discharge an obligation and cause the other party to incur a financial loss.

It is the Company’s policy that all customers who wish to obtain on credit terms are subject to prior due diligence checks. Customers that fail these credit worthiness checks may transact with the Company only on a prepayment basis. In addition, there are regular aged debtor analyses and purchase limits are reviewed regular, based on the level of past transactions and settlement.

The Company’s maximum exposures with regard to trade accounts receivable net of provisions reflected at 31 December 2011 were:

Other financial assets:

Liquidity risk is the risk that the Company will not be able to meet financial obligations as they fall due.

The Group continually monitors its liquidity risk, optimising the match between projected cash flows from operations and liabilities when they fall due.