Qatar Navigation Q.P.S.C.

CONSOLIDATED FINANCIAL STATEMENTS AND INDEPENDENT AUDITOR'S REPORT FOR THE YEAR ENDED

31 DECEMBER 2022

Qatar Navigation Q.P.S.C.

CONSOLIDATED FINANCIAL STATEMENTS

As at and for the year ended 31 December 2022

CONTENTS

Page(s)

Independent auditor's report

1-5

Consolidated financial statements:

Consolidated income statement

6

Consolidated statement of comprehensive income

7

Consolidated statement of financial position

8-9

Consolidated statement of cash flows

10-11

Consolidated statement of changes in equity

12

Notes to the consolidated financial statements

13-65

Independent auditor's report to the shareholders of Qatar Navigation Q.P.S.C.

REPORT ON THE AUDIT OF THE CONSOLIDATED FINANCIAL STATEMENTS

Our opinion

In our opinion, the consolidated financial statements of Qatar Navigation Q.P.S.C. (the "Company") and its subsidiaries (together the "Group") present fairly, in all material respects, the consolidated financial position of the Group as at 31 December 2022 and its consolidated financial performance and its consolidated cash flows for the year then ended in accordance with International Financial Reporting Standards ("IFRS").

What we have audited

The Group's consolidated financial statements comprise:

  • The consolidated income statement for the year ended 31 December 2022;
  • The consolidated statement of comprehensive income for the year ended 31 December 2022;
  • The consolidated statement of financial position as at 31 December 2022;
  • The consolidated statement of cash flows for the year ended 31 December 2022;
  • The consolidated statement of changes in equity for the year ended 31 December 2022; and
  • The notes to the consolidated financial statements, which include significant accounting policies and other explanatory information.

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 consolidated financial statements section of our report.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Independence

We are independent of the Group in accordance with the International Code of Ethics for Professional Accountants (including International Independence Standards) issued by the International Ethics Standards Board for Accountants (IESBA Code) and the ethical requirements that are relevant to our audit of the consolidated financial statements in the State of Qatar. We have fulfilled our other ethical responsibilities in accordance with IESBA Code and the ethical requirements in the State of Qatar.

Our audit approach

Overview

Key audit matter | Impairment of property, vessels and intangible assets

As part of designing our audit, we determined materiality and assessed the risks of material misstatement in the consolidated financial statements. In particular, we considered where management made subjective judgements; for example, in respect of significant accounting estimates that involved making assumptions and considering future events that are inherently uncertain. As in all of our audits, we also addressed the risk of management override of internal controls, including among other matters consideration of whether there was evidence of bias that represented a risk of material misstatement due to fraud.

We tailored the scope of our audit in order to perform sufficient work to enable us to provide an opinion on the consolidated financial statements as a whole, taking into account the structure of the Group, the accounting processes and controls, and the industry in which the Group operates.

PricewaterhouseCoopers - Qatar Branch, P.O. Box: 6689, Doha, Qatar.

Ministry of Commerce and Industry License number 6 / Qatar Financial Markets Authority License number 120155

T: +974 4419 2777, F: +974 4467 7528, www.pwc.com/middle-east

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Key audit matter

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 year. 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

Impairment of property, vessels and intangible assets

Impairment of property, vessels and equipment represent the management's best estimate of the losses arising from the decline in value.

The most significant risks in relation to management's assessment of the recoverability of the carrying amount of property, vessels and equipment relate to the identification of the Cash Generating Units ("CGUs") with indicators of impairment and, where relevant, the estimate of the fair values less costs to sell and the values in use, including determination of key assumptions.

Bearing in mind the generally long-lived nature of the assets, the most critical assumptions in estimating the future cash flows are management's long-term outlook for contractual rates, utilization of property and vessels, growth rates, terminal value and capital expenditures as well as determining the discount rates.

We focused on this area, as the carrying amounts are significant and because management is required to exercise considerable judgement due to the inherent complexity pertaining to the underlying assumptions used in estimating the fair values less costs to sell or the values in use, as disclosed in Note 7, 9 and 38 to the consolidated financial statements.

In addressing the risks, we performed the following procedures:

  • We examined the methodology used by management to assess the carrying amount of property, vessels and intangible assets assigned to CGUs, and the process for identifying CGUs that required impairment testing to determine compliance with IFRS.
  • We performed detailed testing for the assets where indicators of impairment were identified. For those assets, we reviewed management's testing of the fair values less costs to sell or the values in use, including analysing the reasonableness of key assumptions in relation to the ongoing operation of the assets.
  • We corroborated management's estimates of future cash flows and challenged whether these are appropriate in respect of key assumptions, such as contractual rates, growth rates, terminal value and capital expenditures.
  • We used our internal valuation specialists to independently challenge the discount rates. In calculating the discount rates, the key inputs used were independently sourced from market data, and we assessed the methodology applied.
  • We verified the valuation reports from external valuers appointed by management to assess its reasonableness to support the value of the asset.
  • We have ensured that the impairment has been accurately allocated to reduce the intangible asset (i.e., customer contracts) associated with those vessels.
  • Further, we tested the mathematical accuracy of the relevant fair value less cost to sell and value in use models prepared by management.
  • We ensured the reasonableness of the disclosures related to the impairment of property, vessels and intangible assets in the consolidated financial statements.

2

Other information

The Directors are responsible for the other information. The other information comprises the Board of Directors' Report (but does not include the financial statements and our auditor's report thereon), which we obtained prior to the date of this auditor's report, and the complete 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

The Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with IFRS and with the requirements of the Qatar Commercial Companies Law number 11 of 2015, as amended by Law number 8 of 2021, 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.

In preparing the consolidated financial statements, management is responsible for assessing the Group's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Group or to cease operations, or has no realistic alternative but to do so.

Those charged with governance are responsible for overseeing the Group's financial reporting process.

Auditor's responsibilities for the audit of the consolidated financial statements

Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, 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 ISAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated financial statements.

As part of an audit in accordance with ISAs, we exercise professional judgment and maintain professional scepticism throughout the audit. We also:

  • Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

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Qatar Navigation QSC published this content on 15 February 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 15 February 2023 17:47:04 UTC.