Industries Qatar Q P S C : Financial Results Q4, 2021

INDUSTRIES QATAR Q.P.S.C.

CONSOLIDATED FINANCIAL STATEMENTS AND

INDEPENDENT AUDITOR'S REPORT

FOR THE YEAR ENDED

DECEMBER 31, 2021

INDUSTRIES QATAR Q.P.S.C.

CONSOLIDATED FINANCIAL STATEMENTS AND INDEPENDENT AUDITOR'S REPORT For the year ended December 31, 2021

CONTENTS	Page
Independent auditor's report	--
Consolidated statement of financial position	1
Consolidated statement of profit or loss	2
Consolidated statement of other comprehensive income	3
Consolidated statement of changes in equity	4
Consolidated statement of cash flows	5 - 6
Notes to the consolidated financial statements	7 - 81

Deloitte and Touche - Qatar Branch

Al Ahli Bank Building

Sheikh Suhaim Bin Hamad Street

Doha, P.O. Box 431

The State of Qatar

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www.deloitte.com

QR. 99-8

RN: 781/BH/FY2022

INDEPENDENT AUDITOR'S REPORT

To the Shareholders of

Industries Qatar Q.P.S.C.

Doha

Qatar

Report on the Audit of the Consolidated Financial Statements

Opinion

We have audited the consolidated financial statements of Industries Qatar Q.P.S.C. (the "Company") and its subsidiaries (the "Group"), which comprise the consolidated statement of financial position as at December 31, 2021, and the consolidated statement of profit or loss, the consolidated statement of profit or loss and other comprehensive income, consolidated statement of changes in equity and consolidated statement of cash flows for the year then ended, and notes to the consolidated financial statements, including a summary of significant accounting policies.

In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Group as at December 31, 2021, and its consolidated financial performance and its consolidated cash flows for the year then ended in accordance with International Financial Reporting Standards ('IFRSs').

Basis for Opinion

We conducted our audit in accordance with International Standards on Auditing (ISAs). Our responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the Group in accordance with the International Ethics Standards Board for Accountants' Code of Ethics for Professional Accountants (IESBA Code) together with the other ethical requirements that are relevant to our audit of the Group's consolidated financial statements in Qatar, and we have fulfilled our other ethical responsibilities. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

INDEPENDENT AUDITOR'S REPORT (CONTINUED)

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the consolidated financial statements of the current period. These matters were addressed in the context of our audit of the consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

Key audit matter		How our audit addressed the Key
			audit matter
Revenue recognition	Our procedures in relation to revenue
	recognition from sales made by the
Total revenue recognized by the Group during	subsidiary and individual joint ventures
the year amounted to QR. 14,169 million.	are as follows:
International Standards on Auditing require us	•	Understanding	and	evaluating	the
to consider the risk of fraud in revenue		design and implementation of the
recognition. There is an inherent risk of fraud		internal	controls	over	revenue
given the high value of transactions and price		recognition of the Group and joint
fluctuations of the products affecting the		venture companies.
revenue recognized for the year.
	• Understanding, evaluating and testing
As disclosed in note 9, the Group's share of the		the Group and joint venture
combined results from the joint ventures		companies'	revenue	accounting
(QAPCO and QAFAC) of QR. 2,479 million for		policies against the requirements of
the year ended December 31, 2021 represents		IFRSs, our understanding of the
31% of profit for the year of the Group.		business		and	related	industry
		practice.
The results of operations of these joint ventures
of QR. 2,209 million for the year ended	• Reviewing the terms of the revenue
December 31, 2021 represent 34% of the sales		contracts of the Group and joint
revenue generated by these joint ventures.		venture	companies	with	their
		customers.
With the exception of one subsidiary, the
majority of the subsidiaries' and joint ventures'	•	Performing	test	of	details	to verify
sales are made to one customer "Qatar		occurrence and accuracy of revenue
Chemical and Petrochemical Marketing and		transactions on a sample basis.
Distribution Company" ("Muntajat").
	•	Performing	substantive	analytical
According to the revenue recognition policy,		procedure for each of the revenue
revenue from sale of products is recognized		streams and identify any significant
when the Group companies have transferred		deviations		from the	expectations
the control of the products to the customer at		based on the understanding of each of
the point of delivery, where terms of delivery		the revenue	streams	business
are specified in the contracts.		process and procedures.
We identified the recognition of revenue as a	• Obtaining and inspecting, on a sample
key audit matter, because of the high values of		basis, a confirmation including the
individual shipments. The potential errors in the		statements of the major customer of
occurrence and accuracy of revenue		the Group and joint venture
recognition at the Group, subsidiary and joint		companies, and agreeing them to the
venture company level could result in material		accounting records.
misstatements in the financial statements of the
Group when it recognises revenue and its

INDEPENDENT AUDITOR'S REPORT (CONTINUED)

Key Audit Matters (continued)

Key audit matter	How our audit addressed the Key
	audit matter
Revenue recognition (continued)	• Evaluating the disclosures relating to
share of each joint venture's net income under	revenue to determine if they are in
compliance with the requirements of
the equity method of accounting.	IFRSs.
The following notes to the consolidated
financial statements contain the relevant
information related to the above discussed
matters.
Note 3 - Significant Accounting Policies
Note 4 - Critical Judgments and Keys Sources
of Estimation Uncertainty
Note 9 - Investments in Joint Ventures
Note 26 - Revenue
Other Information

Management is responsible for the other information. The other information comprises the Board of Directors' Report but does not include the consolidated financial statements and our auditor's report thereon, which we obtained prior to the date of this auditor's report, and the Annual Report, which is expected to be made available to us after that date.

Our opinion on the consolidated financial statements does not cover the other information and we do not and will not express any form of assurance conclusion thereon.

In connection with our audit of the consolidated financial statements, our responsibility is to read the other information identified above and, in doing so, consider whether the other information is materially inconsistent with the consolidated financial statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated.

If, based on the work we have performed, on the other information that we obtained prior to the date of this auditor's report, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

When we read the complete Annual Report, if we conclude that there is a material misstatement therein, we are required to communicate the matter to those charged with governance.

Responsibilities of Management and Those Charged with Governance for the Consolidated Financial Statements

Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with IFRSs and applicable provisions of Qatar Commercial Companies Law, and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.