Qatar Exchange Price
13:10 on 20 July 2017
11.48
+0.25
+2.23%

Interest rate risk

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

  2016
QR
2015
QR
Fixed interest rate instruments:    
Financial assets - -
Financial liabilities (136,127,878)
(142,029,684)
  (136,127,878)
(142,029,684)
     
Floating interest rate instruments:    
Financial assets 117,909,266
331,499,622
Financial liabilities (658,101,081)
(866,418,000)
  (540,191,815)
(534,918,378)

Interest rate sensitivity

  Changes in
basis points
Effect on
profit QR
2016    
Floating interest rate instruments +25 b.p (1,350,480)
2015    
Floating interest rate instruments +25 b.p (1,337,296)

Foreign currency risk

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:

  2016 2015
QR 49,545,893 QR 49,557,381

Foreign exchange sensitivity

  Increase in
Euro rate to
the QR
Effect on
profit QR
2016 5% (2,447,295)
2015 5% (2,447,869)

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

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 2015 were:

  2016
QR
2015
QR
Business segment:    
Property 14,636,469
21,327,881
Trading and distribution 212,547,160
261,420,649
Industrial manufacturing 645,453,944
305,318,370
Managed services 28,048,062
22,308,287
  900,685,635
610,375,187

Other financial assets:

  2016
QR
2015
QR
Bank balances 554,941,666

642,210,740

Amounts due from related parties 101,182,268
112,907,906
Other receivables 355,772,450
113,115,776
  1,011,896,384
868,234,422

Liquidity risk

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.

  On demand Less than 3 months 3 to 12 months 1 to 5 years > 5 years Total
  QR QR QR QR QR QR
At 31 December 2016            
Interest bearing loans and borrowings - 293,540,841 381,973,861
149,098,538
3,509,578
828,122,818
Bank overdrafts 1,458,876
- - - - 1,458,876
Trade accounts payable 18,599,039
426,495,708
24,935,504
- - 470,030,251
Other payables 38,041,537
86,601,113
17,494,403
- - 142,137,053
Amounts due to related parties - 34,655,639
42,459,981
- - 77,115,620
  58,099,452
841,293,301
466,863,749
149,098,538
3,509,578
1,518,864,618
At 31 December 2015            
Interest bearing loans and borrowings - 373,027,786 370,175,811
184,386,146
6,355,957 933,945,700
Bank overdrafts 1,302,167 - - - - 1,302,167
Trade accounts payable 8,786,465
164,792,521
22,480,792
-
- 196,059,778
Other payables - 2,058,327
87,922,422
-
- 89,980,749
Amounts due to related parties - 32,973,330
326,566,934
-
- 359,540,264
  10,088,632 572,851,964
807,145,959
184,386,146
6,355,957 1,580,828,658