| |
QR. 31249
AUDITORS ' REPORT
The Shareholders
Doha Insurance Company - Q.S.C
Doha - Qatar
We have audited the accompanying balance sheet of Doha Insurance Company – Q.S.C., Doha - Qatar as of December 31, 2002 and the related statements of income, changes in shareholders ' equity and cash flows for the year ended December 31, 2002 . These financial statements are the responsibility of the Company ' s management. Our responsibility is to express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with International Standards on Auditing. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the accompanying financial statements present fairly, in all material respects, the financial position of Doha Insurance Company – Q.S.C., Doha - Qatar as of December 31, 2002 and the results of its operations, changes in its shareholders ' equity and its cash flows for the year then ended in accordance with International Financial Reporting Standards.
Furthermore, in our opinion the financial statements provide the information required by the Qatar Commercial Companies ' Law No. 5 of 2002 and the Company ' s Articles of Association. We are also of the opinion that proper books of account were maintained by the Company and the contents of the directors ' report are in agreement with the Company ' s financial statements. To the best of our knowledge and belief and according to the information given to us, no contraventions of the Law or the Company ' s Articles of Association, were committed during the year which would materially affect the Company ' s activities or its financial position.
Doha - Qatar
February 18, 2003
Toufic A. El Khatib
License No. 137
|
DOHA INSURANCE COMPANY – Q.S.C
DOHA - QATAR
BALANCE SHEET
AS OF DECEMBER 31, 2002
|
-------------------------------------------------------------------------------------------------------------- |
ASSETS |
|
Note |
|
2002 |
|
2001 |
| |
|
|
|
QR |
|
QR |
| Current Assets: |
|
|
|
|
|
|
| Cash on hand and at banks |
|
3 |
|
58,249,125 |
|
92,607,802 |
| Accounts receivable |
|
|
|
5,047,949 |
|
5,172,115 |
| Accounts receivable – Reinsurance companies |
|
|
|
1,934,175 |
|
1,489,137 |
| Prepayments and other debit balances |
|
4 |
|
1,381,043 |
|
745,742 |
|
|
|
|
---------------- |
|
---------------- |
| Total Current Assets |
|
|
|
66,612,292 |
|
100,014,796 |
|
|
|
|
---------------- |
|
---------------- |
Investments: |
|
|
|
|
|
|
| Available-for-sale investments |
|
5 |
|
35,239,959 |
|
21,634,082 |
| Held to maturity investments |
|
6 |
|
50,544,417 |
|
15,987,758 |
| |
|
|
|
---------------- |
|
---------------- |
| Total Investments |
|
|
|
85,784,376 |
|
37,621,840 |
| |
|
|
|
---------------- |
|
---------------- |
| Fixed Assets, Net |
|
7 |
|
10,048,969 |
|
11,249,922 |
| |
|
|
|
---------------- |
|
---------------- |
| Total Assets |
|
|
|
162,445,637 |
|
148,886,558 |
| |
|
|
|
========= |
|
========= |
LIABILITIES AND SHAREHOLDERS ' EQUITY
|
Current Liabilities:
|
|
|
|
|
|
|
| Accounts payable |
|
|
|
1,557,539 |
|
163,206 |
| Accounts payable – Reinsurance companies |
|
|
|
2,172,753 |
|
3,002,170 |
| Accruals and other credit balances |
|
8 |
|
911,801 |
|
1,084,933 |
| Share premium surplus |
|
9 |
|
163,809 |
|
163,809 |
| |
|
|
|
---------------- |
|
---------------- |
| Total Current Liabilities |
|
|
|
4,805,902 |
|
4,414,118 |
| |
|
|
|
---------------- |
|
---------------- |
Insurance Reserves: |
|
|
|
|
|
|
| Provision for outstanding claims |
|
|
|
1,700,311 |
|
529,649 |
| Reserve for unexpired risks |
|
|
|
5,839,352 |
|
2,841,728 |
| Technical reserve |
|
|
|
1,256,957 |
|
563,453 |
| |
|
|
|
---------------- |
|
---------------- |
| Total Insurance Reserves |
|
|
|
8,796,620 |
|
3,934,830 |
| |
|
|
|
---------------- |
|
---------------- |
| Provision for Employees ' Terminal Benefits |
|
|
|
256,877 |
|
136,607 |
| |
|
|
|
---------------- |
|
---------------- |
| Shareholders ' Equity : |
|
|
|
|
|
|
| Share capital |
|
1 |
|
127,240,000 |
|
127,240,000 |
| Legal reserve |
|
10 |
|
1,559,137 |
|
858,498 |
| Fair value reserve |
|
5 |
|
5,754,867 |
|
4,576,019 |
| Proposed cash dividend |
|
13 |
|
6,362,000 |
|
- |
| Retained earnings |
|
|
|
7,670,234 |
|
7,726,486 |
| |
|
|
|
---------------- |
|
---------------- |
| Total Shareholders ' Equity |
|
|
|
148,586,238 |
|
140,401,003 |
| |
|
|
|
---------------- |
|
---------------- |
| Total Liabilities and Shareholders ' Equity |
|
|
|
162,445,637 |
|
148,886,558 |
| |
|
|
|
========== |
|
========== |
These financial statements were approved by the Board of Directors and signed on its behalf by:
|
| |
|
|
|
|
|
|
| |
|
|
|
|
|
|
| |
|
|
|
|
|
|
__________________________________ |
|
____________________ |
Sheikh Nawaf Nasser Khaled Al Thani |
|
Bassam Hussein |
Chairman |
|
General Manager |
| |
|
|
|
|
DOHA INSURANCE COMPANY – Q.S.C
DOHA - QATAR
STATEMENT OF INCOME
FOR THE YEAR ENDED DECEMBER 31, 2002
|
_____________________________________________________________________________________________ |
| |
|
|
|
|
|
For the Period |
| |
|
|
|
Ended |
|
From July 4, 2000 |
| |
|
Note |
|
December 31, 2002 |
|
to December 31, 2001 |
| |
|
|
|
QR. |
|
QR. |
| |
|
|
|
|
|
|
| Net insurance revenue |
|
11 |
|
3,849,708 |
|
2,751,489 |
| Investment income |
|
|
|
3,803,573 |
|
1,153,536 |
| Interest income |
|
|
|
1,745,882 |
|
11,445,368 |
| Income from sale of investments |
|
|
|
5,358,977 |
|
113,631 |
| Other income |
|
|
|
93,853 |
|
13,507 |
| |
|
|
|
----------------------- |
|
------------------------- |
| Total Revenue |
|
|
|
14,851,993 |
|
15,477,531 |
| |
|
|
|
----------------------- |
|
------------------------- |
| |
|
|
|
|
|
|
| Salaries and other staff costs |
|
|
|
(4,390,002) |
|
(3,916,547) |
| Depreciation of fixed assets |
|
|
|
(1,273,089) |
|
(1,121,367) |
| General and administrative expenses |
|
12 |
|
(2,182,515) |
|
(1,854,633) |
| |
|
|
|
----------------------- |
|
------------------------- |
| Total Expenses |
|
|
|
(7,845,606) |
|
(6,892,547) |
| |
|
|
|
----------------------- |
|
------------------------- |
| Net Income for the Year / Period |
|
|
|
7,006,387 |
|
8,584,984 |
| |
|
|
|
=============== |
|
================ |
| |
|
|
|
|
|
|
| Earnings Per Share |
|
|
|
0.551 |
|
0.675 |
| |
|
|
|
=============== |
|
================ |
| |
|
|
|
No. of Shares |
|
No. of Shares |
| |
|
|
|
|
|
|
| Weighted Average Number of Shares |
|
|
|
12,724,000 |
|
12,724,000 |
| |
|
|
|
=============== |
|
================ |
| |
|
|
|
|
|
|
|
DOHA INSURANCE COMPANY - Q.S.C
DOHA - QATAR
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED DECEMBER 31, 2002
|
____________________________________________________________________________________ |
| |
|
For the Year |
|
For the Period |
| |
|
Ended |
|
From July 4, 2000 |
| |
|
December 31, 2002 |
|
to December 31, 2001 |
| |
|
QR. |
|
QR. |
| Cash Flows From Operating Activities: |
|
|
|
|
| Net income for the year / period |
|
7,006,387 |
|
8,584,984 |
| Adjustments for: |
|
|
|
|
| Depreciation of fixed assets |
|
1,273,089 |
|
1,121,367 |
| Insurance reserves |
|
4,861,790 |
|
3,934,830 |
| Provision for employees ' terminal benefits |
|
136,426 |
|
136,607 |
| |
|
-------------------------- |
|
-------------------------- |
| Operating Income Before Changes in |
|
|
|
|
| Working Capital Components |
|
13,277,692 |
|
13,777,788 |
| Accounts receivable |
|
124,166 |
|
(5,172,115) |
| Accounts receivable – Reinsurance companies |
|
(445,038) |
|
(1,489,137) |
| Prepayments and other debit balances |
|
(635,301) |
|
(745,742) |
| Accounts payable |
|
1,394,333 |
|
163,206 |
| Accounts payable – Reinsurance companies |
|
(829,417) |
|
3,002,170 |
| Accruals and other credit balances |
|
(173,132) |
|
1,084,933 |
| Share premium surplus |
|
-- |
|
163,809 |
| Employees ' terminal benefits paid |
|
(16,156) |
|
-- |
| |
|
--------------------------- |
|
-------------------------- |
| Net Cash From Operating Activities |
|
12,697,147 |
|
10,784,912 |
| |
|
--------------------------- |
|
-------------------------- |
Cash Flows From Investing Activities: |
|
|
|
|
| Acquisition of investments |
|
(46,983,688) |
|
(33,045,821) |
| Acquisition of fixed assets |
|
(72,136) |
|
(12,371,289) |
| |
|
--------------------------- |
|
-------------------------- |
| Net Cash (Used in) Investing Activities |
|
(47,055,824) |
|
(45,417,110) |
| |
|
--------------------------- |
|
-------------------------- |
Cash Flows From Financing Activities: |
|
|
|
|
| Paid in capital |
|
-- |
|
127,240,000 |
| |
|
--------------------------- |
|
-------------------------- |
| Net Cash From Financing Activities |
|
-- |
|
127,240,000 |
| |
|
--------------------------- |
|
-------------------------- |
| Net (Decrease) Increase in Cash |
|
(34,358,677) |
|
92,607,802 |
| |
|
|
|
|
| Cash on hand and at banks at the beginning |
|
|
|
|
| of the year / period |
|
92,607,802 |
|
-- |
| |
|
--------------------------- |
|
-------------------------- |
| Cash on Hand and at Banks at the End |
|
|
|
|
| of the Year / Period |
|
58,249,125 |
|
92,607,802 |
| |
|
=============== |
|
============== |
|
DOHA INSURANCE COMPANY - Q.S.C
DOHA - QATAR
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2002 |
| |
1. Status and Activities: |
| |
Doha Insurance Company is a public shareholding company governed by the Amiri Decree No. 3 of 1999 promulgated on October 2, 1999 and is incorporated following the general assembly meeting held on July 4, 2000 , the first day of operation for the Company.
|
| |
The Company ' s issued and fully paid capital is stated at QR. 127,240,000 divided into 12,724,000 shares of QR. 10 each. |
| |
| The Company is engaged in providing insurance coverage in the various sectors. |
| |
| |
| 2. Summary of Significant Accounting Policies: |
| |
The financial statements have been prepared in accordance with International Financial Reporting Standards. The following is a summary of the significant accounting policies which have been applied in the preparation of these financial statement. |
| |
| [a] Accounting Convention |
| |
| The financial statements are prepared under the historical cost basis except for the |
| measurement of available-for-sale investments which are stated at fair value. |
| |
[b] Premium Income |
| |
|
Premium income represent total amounts invoiced during the year. However, where the
|
| company carries no financial exposure to insurance risk, i.e. the full amount is re-insured, |
| the premium received is netted off against the premium paid, and the net amount is |
| reported as commission income. |
| |
| [c] Available for Sale Investments |
| |
Available-for-sales investments are initially recognized at cost. At subsequent reporting |
dates, available-for-sale investments are measured at fair value based on quoted market |
| prices at the balance sheet date. Any gains or losses are recognized directly in equity under |
| the fair value reserve until the investment is sold or is determined to be impaired at which |
| time the cumulative gain or loss previously recognized in equity is included in the statement |
of income. |
| |
| [d] Held to Maturity Investments |
| |
| Held to maturity investments are measured at amortized cost less provision for impairment |
| in value. |
| |
|
[e] Fixed Assets |
| |
| Fixed assets are stated at cost less accumulated depreciation. Depreciation is computed |
| following the straight line method over the estimated useful lives of the related assets. |
| |
[f] Impairment and uncollectibility of Financial Assets |
| |
| An assessment is made at each balance sheet date to determine whether there is objective |
| evidence that a financial asset or group of financial assets may be impaired. If such |
| evidence exists, the estimated recoverable amount of that assets is determined and an |
| impairment loss is recognized for the difference between the recoverable amount and the |
carrying amount. Impairment losses are recognized in the statement of income. |
| |
[g] Reserve for Unexpired Risks |
| |
| The reserve for unexpired risk represents the estimated portion of net premium income |
| after deduction of reinsurance share which relates to periods of insurance subsequent to the |
| balance sheet date. The reserve is calculated at 40 per cent of the net premium for all |
| insurance departments except marine department which is calculated at 25 per cent. |
| |
[h] Provision for Outstanding Claims |
| |
| The provision for outstanding claims covers the liability for losses and loss-adjustment |
| expenses and includes an amount determined from loss reports prepared by independent |
| professional loss adjusters and management estimate. The methods for making such |
estimates and for establishing the resulting liability are continually reviewed. |
| |
[i] Technical Reserve |
| |
| The technical reserve is established to meet claims incurred but not reported at the balance |
| sheet date based on management estimates and prior experience. |
| |
[j] Interest Income |
| |
| Interest income is recognized on a time apportionment basis taking account of the principal |
invested and the interest rate applicable. |
| |
[k] Dividend Income |
| |
| Dividend income is recognized when received. |
| |
| [l] Provision for Employees' Terminal Benefits |
| |
| The provision for employees' terminal benefits is computed in accordance with existing |
| laws in the State of Qatar. |
| |
|
| [m] Foreign Currencies |
| |
| Transactions in foreign currencies are recorded in Qatari Riyal at the rates of exchange |
| prevailing at the date of each transaction. Assets and liabilities denominated in foreign |
| currencies at balance sheet date are translated into Qatari Riyals at the rates of exchange |
| prevailing at that date and the resultant gains or losses are included in the statement of |
income. |
| |
| [n] Financial Instruments |
| |
| (i) Reinsurance Risk |
| |
| The Company, in the normal course of business, enters into re-insurance arrangements |
with other parties in order to minimize financial exposure arising from large claims. |
| |
| The Company evaluates the financial condition of its reinsurers and monitors |
| concentrations of credit risk arising from similar geographic regions, activities or |
| economic characteristics of the reinsurers. |
| |
| (ii) Interest Rate Risk |
| |
| The Company invests in securities and has deposits that are subject to interest rate |
| risk. Interest rate risk of the Company is the risk of changes in market interest rates |
| reducing the overall return on its interest bearing securities. The Company limits |
| interest rate risk by monitoring changes in interest rates in the currencies in which its |
deposits and investments are denominated. |
| |
| (iii) Market Risk |
| |
| Market risk is the risk that the value of a financial instrument will fluctuate as a result |
| of changes in market prices, whether those changes are caused by factors specific to |
| the individual security, or its issuer, or factors affecting all securities traded in the |
| market. The Company limits market risk by maintaining a diversified portfolio and by |
| continous monitoring of developments in international and local equity and bond |
| markets. In addition, the Company actively monitors the key factors that affect stock |
| and bond market movements, including analysis of the operational and financial |
performance of investees. |
| |
|
3. Cash on hand and at Banks: |
| |
|
2002 |
|
2001 |
| |
|
-------------- |
|
-------------- |
| |
|
QR. |
|
QR. |
| |
|
|
|
|
| Cash on hand |
|
144,561 |
|
55,837 |
| Current accounts with banks |
|
6,969,861 |
|
4,442,817 |
| Term deposits with banks |
|
51,134,703 |
|
88,109,148 |
| |
|
-------------------- |
|
-------------------- |
| Total |
|
58,249,125 |
|
92,607,802 |
| |
|
=========== |
|
============ |
4. Prepayments and Other Debit Balances: |
|
|
|
|
| |
|
2002 |
|
2001 |
| |
|
-------------- |
|
-------------- |
| |
|
QR. |
|
QR. |
| |
|
|
|
|
| Accrued interest income |
|
791,587 |
|
442,791 |
| Prepaid expenses |
|
295,302 |
|
34,517 |
| Refundable deposits and other debit |
|
|
|
|
| balances |
|
294,154 |
|
268,434 |
| |
|
-------------------- |
|
-------------------- |
| Total |
|
1,381,043 |
|
745,742 |
| |
|
=========== |
|
============= |
| |
|
|
|
|
5. Available-for-Sale Investments: |
|
|
|
|
| |
|
2002 |
|
2001 |
| |
|
-------------- |
|
-------------- |
| |
|
QR. |
|
QR. |
|
|
|
|
|
| Quoted investments |
|
35,239,959 |
|
21,334,082 |
| Unquoted investments |
|
-- |
|
300,000 |
|
|
------------------- |
|
------------------- |
| Total |
|
35,239,959 |
|
21,634,082 |
|
|
============ |
|
============ |
|
|
|
|
|
| 6. Held to Maturity Investments: |
|
|
|
|
|
|
2002 |
|
2001 |
|
|
-------------- |
|
-------------- |
|
|
QR. |
|
QR. |
|
|
|
|
|
| Qatari Government bills in US Dollar |
|
|
|
|
| with fixed interest rate |
|
20,163,858 |
|
15,987,758 |
| Ras Laffan bills in US Dollar with |
|
|
|
|
| fixed interest rate |
|
30,380,559 |
|
-- |
|
|
------------------- |
|
------------------- |
| Total |
|
50,544,417 |
|
15,987,758 |
|
|
============ |
|
============ |
|
|
|
|
|
|
The market value of held to maturity investments amounted to QR. 54,343,193 as of December 31, 2002 .
|
|
|
|
|
|
|
8. Accruals and Other Credit Balances: |
| |
|
2002 |
|
2001 |
| |
|
-------------- |
|
-------------- |
| |
|
QR. |
|
QR. |
| |
|
|
|
|
| Accrued salaries and expenses |
|
153,662 |
|
490,456 |
| Provision for leave and air tickets |
|
279,718 |
|
239,043 |
| Provision for bonus |
|
441,210 |
|
250,000 |
| Other credit balances |
|
37,211 |
|
105,434 |
| |
|
-------------------- |
|
--------------------- |
| Total |
|
911,801 |
|
1,084,933 |
| |
|
=========== |
|
============ |
| |
|
|
|
|
| |
|
|
|
|
9. Share Premium Surplus: |
|
|
|
|
| |
|
2002 |
|
2001 |
| |
|
-------------- |
|
-------------- |
| |
|
QR. |
|
QR. |
| |
|
|
|
|
| Share premium collected |
|
1,272,400 |
|
1,272,400 |
| Actual formation expenses incurred |
|
(1,108,591) |
|
(1,108,591) |
| |
|
-------------------- |
|
-------------------- |
| Net Surplus |
|
163,809 |
|
163,809 |
| |
|
=========== |
|
============= |
| |
|
|
|
|
Share premium was collected from the shareholders at the rate of 1% of the Company ' s share capital. |
| |
|
|
|
|
| 10. Legal Reserve: |
|
|
|
|
| |
|
|
|
|
As per the Company ' s Articles of Association and the provision of Qatar Commercial Companies ' Law No. 5 of 2002, an amount equivalent to 10% of the net income for the year is transferred annually to the legal reserve until it equals 50% of the capital. This reserve is not available for distribution except in circumstances stipulated in the Law. |
| |
|
|
|
|
|
11. Net Insurance Revenue: |
| |
|
Marines & |
|
|
|
Fire and |
|
|
| |
|
Aviation |
|
Motor |
|
General |
|
Total |
| |
|
------------ |
|
------------ |
|
------------ |
|
------------ |
| |
|
QR. |
|
QR. |
|
QR. |
|
QR. |
| Revenues: |
|
|
|
|
|
|
|
|
| Premium |
|
1,501,918 |
|
8,812,894 |
|
23,949,911 |
|
34,264,723 |
| Less: Reinsurers ' share |
|
(1,049,218) |
|
(711,537) |
|
(19,934,399) |
|
(21,695,154) |
|
|
--------------- |
|
--------------- |
|
--------------- |
|
--------------- |
| Net premium |
|
452,700 |
|
8,101,357 |
|
4,015,512 |
|
12,569,569 |
| Reinsurance commissions – net |
|
249,393 |
|
(84,467) |
|
2,042,702 |
|
2,204,628 |
|
|
--------------- |
|
--------------- |
|
--------------- |
|
--------------- |
| Net Revenue |
|
702,093 |
|
8,016,890 |
|
6,058,214 |
|
14,774,197 |
|
|
--------------- |
|
--------------- |
|
--------------- |
|
--------------- |
| Insurance Reserves |
|
(89,436) |
|
(2,769,764) |
|
(2,002,590) |
|
(4,861,790) |
|
|
--------------- |
|
--------------- |
|
--------------- |
|
--------------- |
Claims: |
|
|
|
|
|
|
|
|
| Claims paid |
|
(370,046) |
|
(4,972,737) |
|
(7,750,694) |
|
(13,093,477) |
| Less: Reinsurers ' share |
|
244,182 |
|
247,419 |
|
6,536,177 |
|
7,027,778 |
|
|
--------------- |
|
--------------- |
|
--------------- |
|
--------------- |
| Net Claims |
|
(125,864) |
|
(4,725,318) |
|
(1,214,517) |
|
(6,065,699) |
| |
|
--------------- |
|
--------------- |
|
--------------- |
|
--------------- |
| Net Insurance Revenue |
|
486,793 |
|
521,808 |
|
2,841,107 |
|
3,849,708 |
| |
|
========== |
|
========== |
|
========== |
|
========== |
| |
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
12. General and Administrative Expenses: |
| |
|
2002 |
|
2001 |
|
|
| |
|
------------ |
|
------------ |
|
|
| |
|
QR. |
|
QR. |
|
|
| |
|
|
|
|
|
|
| Advertisement |
|
284,815 |
|
551,398 |
|
|
| Travel and entertainment |
|
206,019 |
|
166,108 |
|
|
| Donations |
|
150,815 |
|
214,528 |
|
|
| Rent |
|
47,600 |
|
35,200 |
|
|
| Stationery and printing |
|
103,460 |
|
104,730 |
|
|
| Recruitment |
|
3,794 |
|
77,247 |
|
|
| Postage and telephone |
|
248,452 |
|
207,239 |
|
|
| Professional expenses |
|
164,200 |
|
75,000 |
|
|
| Amortization of premium on investments |
|
250,619 |
|
18,832 |
|
|
| Miscellaneous expenses |
|
722,741 |
|
404,351 |
|
|
|
|
---------------- |
|
---------------- |
|
|
| Total |
|
2,182,515 |
|
1,854,633 |
|
|
| |
|
========== |
|
========== |
|
|
| |
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
13. Proposed Dividends: |
| |
The Board of Directors decided in its meeting held on February 18, 2003 to propose to the forthcoming General Assembly to approve the distribution of cash dividends for the year 2002 at 5% of share capital. |
| |
14. Financial Instruments and Risk Management: |
| |
| Financial instruments consist of financial assets and financial liabilities. |
| |
The financial assets of the Company include cash and bank balances, accounts receivable and investments. |
| |
| The financial liabilities of the Company include provisions and payables. |
| |
| Accounting policies for financial assets and liabilities are set out in Note 2. |
| |
a) Currency Risk: |
| |
Currency risk is the risk that the value of a financial instrument will fluctuate due to changes in foreign rates. The Company has deposits and investments in Qatari Riyals and United States Dollars. The Qatari Riyals is effectively pegged to the United States Dollar thus minimizing the currency rate risks. |
| |
b) 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. Balances with banks represent term deposits, current and savings accounts placed with banks of repute. Credit risk on receivables is limited as these are shown after reviewing their recoverability. Management seeks to minimize credit risk with respect to insurance and reinsurance companies by only ceding business to companies with good credit ratings. |
| |
c) Liquidity Risk: |
| |
Liquidity risk also referred to as funding risk, is the risk that an enterprise will encounter difficulty in raising funds to meet commitments associated with financial instruments. Liquidity risk may result from an inability to sell a financial assets quickly at close to its fair value. Liquidity requirements are monitored on a periodical basis and the management ensures that sufficient funds are available to meet any future commitments. |
| |
| d) Fair Value of Financial Instruments: |
| |
Fair value is the amount for which an asset could be exchanged or a liability settled between knowledgeable, willing parties in an arm ' s length transaction. Differences can therefore arise between the book values under the historical cost method and fair value estimates. The fair values of the Company ' s cash, receivables, payables and investments held to maturity are not materially different from their carrying values. Available-for-sale investments are stated at their fair value as disclosed in Note 5 to the financial statements. |
| |
|
| 15. Earnings Information: |
|
Basic earnings per share is calculated by dividing the net profit for the year by the adjusted weighted average number of ordinary shares outstanding during the year as follows: |
| |
| |
|
2002 |
|
2001 |
|
| |
|
---------- |
|
---------- |
|
| |
|
QR. |
|
QR. |
|
| |
|
|
|
|
|
| Net profit for the year / period |
|
7,006,387 |
|
8,584,984 |
|
|
|
=========== |
|
=========== |
|
| Adjusted weighted average number of shares |
|
12,724,000 |
|
12,724,000 |
|
|
|
=========== |
|
=========== |
|
| Adjusted earnings per share (expressed in |
|
|
|
|
|
| QR per share |
|
0.551 |
|
0.675 |
|
| |
|
=========== |
|
=========== |
|
| |
|
|
|
|
|
|
No figure for diluted earnings per share has been presented because the Company has issued no financial instruments that may be dilutive. |
| |
| 16. Segment Information: |
| |
| Primary Segment Information |
| |
For management purposes, the Company is organized into three business segments, marine, motor and fire and general. These segments are the basis on which the Company reports its primary segment information. Other operations of the Company comprise investment and cash management for the Company ' s own account. There are no transactions between segments. |
| |
The data with respect to segment information is as disclosed in Note 11 to the financial |
statements. |
| |
| Secondary Segment Information |
| |
The Company operates in the State of Qatar only. |
| |
|
17. Interest Rate Risk: |
| |
|
|
|
|
|
|
|
|
|
|
|
|
The Company ' s interest rate risk based on contractual arrangements at December 31, 2002 was as follows: |
| |
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
Effective |
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Up to 6 |
|
6 Months |
|
1 to 5 |
|
Over 5 |
|
|
|
|
Interest |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Months |
|
to 1 Year |
|
Years |
|
Years |
|
Total |
|
|
|
|
------------ |
|
------------ |
|
------------ |
|
------------- |
|
------------- |
|
---------- |
| |
|
QR. |
|
QR. |
|
QR. |
|
QR. |
|
QR. |
|
% |
| |
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Bank balances |
|
58,249,125 |
|
-- |
|
-- |
|
-- |
|
58,249,125 |
|
2.03 |
| Bonds |
|
-- |
|
-- |
|
-- |
|
50,544,417 |
|
50,544,417 |
|
8.058 |
| |
|
------------- |
|
------------- |
|
------------- |
|
-------------- |
|
-------------- |
|
|
| Total |
|
58,249,125 |
|
-- |
|
-- |
|
50,544,417 |
|
108,793,542 |
|
|
| |
|
======= |
|
======= |
|
======= |
|
======== |
|
======== |
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
18. Related Party Transactions: |
| |
These represent transactions with related parties, i.e. shareholders and directors of the Company and companies in which they are principal owners. Pricing policies and terms of these transactions are approved by the Company ' s management and are negotiated under normal commercial terms. |
| |
| 19. Contingent Liabilities: |
| |
QR.
|
Letters of guarantee 293,999
|
=========
|
|
10. Net Insurance Revenue: |
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
For the Year Ended |
| |
|
|
|
|
Fire and |
|
|
December 31, |
| |
Marine |
|
Motor |
|
General |
|
|
1998 |
|
1997 |
| |
-------------- |
|
-------------- |
|
-------------- |
|
|
------------ |
|
------------ |
| |
QR.000 ' S |
|
QR.000 ' S |
|
QR.000 ' S |
|
|
QR.000 ' S |
|
QR.000 ' S |
| |
|
|
|
|
|
|
|
|
|
|
Revenues: |
|
|
|
|
|
|
|
|
|
|
| Premium |
|
|
|
|
|
|
|
|
|
|
| Less: Reinsurers ' share |
|
|
|
|
|
|
|
|
|
|
|
----------------- |
|
----------------- |
|
----------------- |
|
|
------------- |
|
-------------- |
| Net premium |
|
|
|
|
|
|
|
|
|
|
| Reinsurance commissions - net |
|
|
|
|
|
|
|
|
|
|
|
----------------- |
|
----------------- |
|
----------------- |
|
|
------------- |
|
-------------- |
| Total revenue |
|
|
|
|
|
|
|
|
|
|
|
=========== |
|
=========== |
|
=========== |
|
|
======== |
|
======== |
| Movements in Insurance Reserves |
|
|
|
|
|
|
|
|
|
|
|
----------------- |
|
----------------- |
|
----------------- |
|
|
------------- |
|
-------------- |
| Expenses: |
|
|
|
|
|
|
|
|
|
|
| Claims paid |
|
|
|
|
|
|
|
|
|
|
| Less: Reinsurers ' share |
|
|
|
|
|
|
|
|
|
|
|
----------------- |
|
----------------- |
|
----------------- |
|
|
------------- |
|
-------------- |
| Net claims |
|
|
|
|
|
|
|
|
|
|
|
----------------- |
|
----------------- |
|
----------------- |
|
|
------------- |
|
-------------- |
| Net Insurance Revenue |
|
|
|
|
|
|
|
|
|
|
| |
========== |
|
========== |
|
========== |
|
|
======= |
|
======= |
|
7. Fixed Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
Fixture |
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
Wooden |
|
and |
|
|
|
Motor |
|
Office |
|
|
| |
|
Land |
|
Building |
|
Buildings |
|
Furniture |
|
Computers |
|
Vehicles |
|
Equipment |
|
Total |
| |
|
------------- |
|
------------- |
|
------------- |
|
------------- |
|
------------- |
|
------------- |
|
------------- |
|
------------- |
| |
|
QR. |
|
QR. |
|
QR. |
|
QR. |
|
QR. |
|
QR. |
|
QR. |
|
QR. |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| January 1, 2002 |
|
2,350,000 |
|
7,283,262 |
|
53,495 |
|
1,409,701 |
|
926,716 |
|
263,966 |
|
84,149 |
|
12,371,289 |
| Additions |
|
-- |
|
5,000 |
|
20,000 |
|
8,155 |
|
11,177 |
|
-- |
|
27,804 |
|
72,136 |
|
|
--------------- |
|
--------------- |
|
--------------- |
|
--------------- |
|
--------------- |
|
--------------- |
|
--------------- |
|
----------------- |
| December 31, 2002 |
|
2,350,000 |
|
7,288,262 |
|
73,495 |
|
1,417,856 |
|
937,893 |
|
263,966 |
|
111,953 |
|
12,443,425 |
|
|
--------------- |
|
--------------- |
|
--------------- |
|
--------------- |
|
--------------- |
|
--------------- |
|
--------------- |
|
----------------- |
Accumulated Depreciation: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| January 1, 2002 |
|
-- |
|
723,346 |
|
3,774 |
|
222,387 |
|
102,842 |
|
52,432 |
|
16,586 |
|
1,121,367 |
| Charge for the year |
|
-- |
|
728,743 |
|
6,129 |
|
282,912 |
|
187,299 |
|
52,793 |
|
15,213 |
|
1,273,089 |
|
|
--------------- |
|
--------------- |
|
--------------- |
|
--------------- |
|
--------------- |
|
--------------- |
|
--------------- |
|
----------------- |
| December 31, 2002 |
|
-- |
|
1,452,089 |
|
9,903 |
|
505,299 |
|
290,141 |
|
105,225 |
|
31,799 |
|
2,394,456 |
|
|
--------------- |
|
--------------- |
|
--------------- |
|
--------------- |
|
--------------- |
|
--------------- |
|
--------------- |
|
----------------- |
Net Book Value: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| December 31, 2002 |
|
2,350,000 |
|
5,836,173 |
|
63,592 |
|
912,557 |
|
647,752 |
|
158,741 |
|
80,154 |
|
10,048,969 |
|
|
========= |
|
========= |
|
========= |
|
========= |
|
========= |
|
========= |
|
========= |
|
========== |
| December 31, 2001 |
|
2,350,000 |
|
6,559,916 |
|
49,721 |
|
1,187,314 |
|
823,874 |
|
211,534 |
|
67,563 |
|
11,249,922 |
|
|
========= |
|
========= |
|
========= |
|
========= |
|
========= |
|
========= |
|
========= |
|
========== |
| Rates of Depreciation |
|
-- |
|
10% |
|
10% |
|
20% |
|
20-33% |
|
20% |
|
20% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The value of the land was estimated by the Company's management. |
| |
|
DOHA INSURANCE COMPANY - Q.S.C
DOHA - QATAR |
|
|
|
|
|
|
|
|
|
|
|
|
|
STATEMENT OF CHANGES IN SHAREHOLDERS ' EQUITY
FOR THE YEAR ENDED DECEMBER 31, 2002 |
_______________________________________________________________________________________________________ |
| |
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
Fair |
|
|
|
|
|
|
| |
|
Share |
|
Legal |
|
Value |
|
Proposed |
|
Retained |
|
|
| |
|
Capital |
|
Reserve |
|
Reserve |
|
Dividend |
|
Earnings |
|
Total |
| |
|
------------- |
|
------------- |
|
------------- |
|
------------- |
|
------------- |
|
------------- |
| |
|
QR. |
|
QR. |
|
QR. |
|
QR. |
|
QR. |
|
QR. |
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Paid in capital |
|
127,240,000 |
|
-- |
|
-- |
|
-- |
|
-- |
|
127,240,000 |
| Net income for the period |
|
-- |
|
-- |
|
-- |
|
-- |
|
8,584,984 |
|
8,584,984 |
| Transfer to legal reserve |
|
-- |
|
(858,498) |
|
-- |
|
-- |
|
(858,498) |
|
-- |
| Net changes in fair value reserve |
|
-- |
|
-- |
|
4,576,019 |
|
-- |
|
-- |
|
4,576,019 |
| |
|
--------------- |
|
--------------- |
|
--------------- |
|
--------------- |
|
--------------- |
|
---------------- |
| Balance as of December 31, 2001 |
|
127,240,000 |
|
858,498 |
|
4,576,019 |
|
-- |
|
7,726,486 |
|
140,401,003 |
| Net income for the year |
|
-- |
|
-- |
|
-- |
|
-- |
|
7,006,387 |
|
7,006,387 |
| Transfer to legal reserve |
|
-- |
|
(700,639) |
|
-- |
|
-- |
|
(700,639) |
|
-- |
| Gains on sale of investments |
|
-- |
|
-- |
|
(4,262,379) |
|
-- |
|
-- |
|
(4,262,379) |
| Net changes in fair value reserve |
|
-- |
|
-- |
|
5,441,227 |
|
-- |
|
-- |
|
5,441,227 |
| Proposed cash dividends |
|
-- |
|
-- |
|
-- |
|
(6,362,000) |
|
(6,362,000) |
|
-- |
| |
|
--------------- |
|
--------------- |
|
--------------- |
|
--------------- |
|
--------------- |
|
---------------- |
| Balance as of December 31, 2002 |
|
127,240,000 |
|
1,559,137 |
|
5,754,867 |
|
6,362,000 |
|
7,670,234 |
|
148,586,238 |
| |
|
========= |
|
========= |
|
========= |
|
========= |
|
========= |
|
========== |
| |
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|