QNB FINANCE LTD INTERIM CONDENSED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 SEPTEMBER 2015

Transcription

1 QNB FINANCE LTD INTERIM CONDENSED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 SEPTEMBER 2015

2 Independent Auditors' Report on Review of Interim Condensed Financial Statements to the Shareholder of QNB Finance Limited Introduction We have reviewed the accompanying interim condensed financial statements of QNB Finance Limited (the "Company") as at 30 September 2015, comprising of the interim statement of financial position as at 30 September 2015 and the related interim statements of income and comprehensive income for the nine-month period ended 30 September 2015, the related interim statement of changes in equity and interim condensed statement of cash flows for the nine-month period then ended, and the related explanatory notes. The Management are responsible for the preparation and presentation of these interim condensed financial statements in accordance with IAS 34 - Interim Financial Reporting ("IAS 34"). Our responsibility is to express a conclusion on these interim condensed financial statements based on our review. Scope of review We conducted our review in accordance with International Standard on Review Engagements 2410, Review of Interim Financial Information Performed by the Independent Auditor of the Entity. A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion. Conclusion Based on our review, nothing has come to our attention that causes us to believe that the accompanying interim condensed financial statements are not prepared, in all material respects, in accordance with IAS 34. Firas Qoussous of Ernst & Young Qatar Auditors Registry Number 236 Doha - State of Qatar 11 October 2015

3 Interim Statement of Financial Position As at 30 September 2015 ASSETS 30 September 31 December (Reviewed) (Audited) Notes Due from Parent Company 7,342,543,995 7,855,748,123 Total Assets 7,342,543,995 7,855,748,123 LIABILITIES AND EQUITY LIABILITIES Debt Securities 3 5,987,758,215 5,982,519,160 Other Borrowings 4 1,303,366,027 1,832,606,800 Other Liabilities 51,419,653 40,622,063 Total Liabilities 7,342,543,895 7,855,748,023 EQUITY Share Capital Retained Earnings - - Total Equity Total Liabilities and Equity 7,342,543,995 7,855,748,123 The interim condensed consolidated financial statements were approved by the Board of Directors on 11 October 2015 and were signed on its behalf by:.. Abdulla Mubarak Al-Khalifa Director.. Noor Mohamed Al-Naimi Director The attached notes 1 to 5 form an integral part of these interim condensed financial statements.

4 Interim Statement of Comprehensive Income Nine months to Nine months to 30 September 30 September (Reviewed) (Reviewed) Income Interest Income 133,215, ,674,555 Expenses Interest Expense (133,215,738) (137,674,555) Profit for the Period - - Total Comprehensive Income for the Period - - The attached notes 1 to 5 form an integral part of these interim condensed financial statements.

5 Interim Statement of Changes in Equity Share Retained Total Capital Earnings Balance at 1 January 2015 (Audited) Profit for the Period (Reviewed) Total Comprehensive Income for the Period (Reviewed) Balance at 30 September 2015 (Reviewed) Balance at 1January 2014 (Audited) Profit for the Period (Reviewed) Total Comprehensive Income for the Period (Reviewed) Balance at 30 September 2014 (Reviewed) The attached notes 1 to 5 form an integral part of these interim condensed financial statements.

6 Interim Statement Cash Flows Nine months to Nine months to 30 September 30 September (Reviewed) (Reviewed) Cash Flows from Operating Activities Profit for the Period - - Adjustment for: Interest income 133,215, ,674,555 Interest expense (133,215,738) (137,674,555) - - Changes in Operating Assets: Changes in Amounts Due from Parent Company 502,260,801 (317,381,953) Net Cash used in Operating Activities 502,260,801 (317,381,953) Cash Flows from Investing Activities Interest received 117,575, ,243,421 Net Cash from Investing Activities 117,575, ,243,421 Cash Flows from Financing Activities Interest paid (117,575,565) (120,243,421) Net Proceeds from issuance of Debt Securities - - Net Proceeds from issuance of Other Borrowings 431,374, ,385,524 Repayment of Other Borrowings (933,635,490) (264,003,571) Net Cash used in Financing Activities (619,836,366) 197,138,532 Net increase in cash and cash equivalents - - Cash and cash equivalent at 1 January - - Cash and cash equivalent as at 30 September - - The attached notes 1 to 5 form an integral part of these interim condensed financial statements.

7 Notes to the Interim Condensed Financial Statements 1. CORPORATE INFORMATION QNB Finance Ltd. (the "Company") was incorporated on 18 October 2010 and registered as an exempt company with limited liability in Cayman Islands. The principal purpose of the Company is to raise funding through the international capital markets for lending to Qatar National Bank S.A.Q. (the "Bank" or "Parent Company"). All the Debt Securities and Other Borrowings issued by the Company are irrevocably and unconditionally guaranteed by the Bank. The registered office of the Company is situated at P.O. Box 309, Ugland House, Grand Cayman, KY1-1104, Cayman Islands. The Company is wholly owned by Qatar National Bank S.A.Q. 2. SIGNIFICANT ACCOUNTING POLICIES AND BASIS OF PRESENTATION a) Basis of Presentation These interim condensed financial statements have been prepared in accordance with IAS 34 - "Interim Financial Reporting". These interim condensed interim financial statements should be read in conjunction with the 2014 annual financial statements of the Company. This interim condensed financial statements are presented in US Dollars. All financial information presented in US Dollars has been rounded to the nearest US Dollar. The functional currency of the Company has been assessed as the US Dollar. The interim condensed financial statements does not contain all information and disclosures required for full financial statements prepared in accordance with International Financial Reporting Standards. In addition, results for the nine month period ended 30 September 2015 are not necessarily indicative of the results that may be expected for the financial year ending 31 December The significant accounting policies adopted in the preparation of the interim condensed financial statements are consistent with those used in the preparation of the financial statements as at and for the year ended 31 December The preparation of the interim condensed financial statements requires management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expenses. Actual results may differ from these estimates. The significant judgments made by management in applying the Company's accounting policies and the key sources of estimation uncertainty were the same as those that applied to the financial statements for the year ended 31 December The Company's financial risk management objectives and policies are consistent with those disclosed in the financial statements for the year ended 31 December b) New Standards and Interpretations New standards, amendments and interpretations that are effective for the period ended 30 September 2015 The following new and amended standards have been adopted by the Company in preparation of these interim condensed financial statements. The new standards do not have any material impact to the Company, but they may result in additional disclosures at year-end: - Defined Benefit Plans: Employee Contributions (Amendment to IAS 19) - Annual Improvements Cycle - Annual Improvements Cycle The adoption of the above did not result in any changes to previously reported net profit or equity of the Company.

8 Notes to the Interim Condensed Financial Statements 2. SIGNIFICANT ACCOUNTING POLICIES AND BASIS OF PRESENTATION (continued) Standards Issued but not yet Effective The below mentioned standards, interpretations and amendments to standards are not yet effective. The Company is currently evaluating the impact of these new standards. The Company will adopt these new standards on the respective effective dates. - IFRS 9 Financial Instruments (Effective 1 January 2018). - IFRS 14 Regulatory Deferral Accounts (Effective 1 January 2016). - IFRS 15 Revenue from Contracts with Customers (Effective 1 January 2017). - Amendments to IFRS 11 Joint Arrangements: Accounting for Acquisition of Interests (Effective 1 January 2016). - Amendments to IAS 16 and IAS 38: Clarification of Acceptable Methods of Depreciation and Amortisation (Effective 1 January 2016). - Amendments to IAS 27: Equity Method in Separate Financial Statements (Effective 1 January 2016). 3. DEBT SECURITIES 30 September December 2014 (Reviewed) (Audited) Face Value of the Bonds 6,000,000,000 6,000,000,000 Less: Unamortised discount (12,241,785) (17,480,840) 5,987,758,215 5,982,519,160 The table shows below the details of the debt securities issued: As at 30 September 2015 Issue Price Maturity Date Amounts in (net of unamortised discount) Currency Amount Coupon 1,500,000, % 3.125% 16-Nov-15 1,499,699,485 1,000,000, % 3.375% 22-Feb ,955,807 1,000,000, % 2.125% 14-Feb ,763,565 1,000,000, % 2.875% 29-Apr ,839, ,000, % 2.750% 31-Oct ,499, ,000, % 3M LIBOR +125bps 31-Oct ,000,000 5,987,758,215 As at 31 December 2014 Issue Price Maturity Date Amounts in (net of unamortised discount) Currency Amount Coupon 1,500,000, % 3.125% 16-Nov-15 1,497,406,493 1,000,000, % 3.375% 22-Feb ,414,527 1,000,000, % 2.125% 14-Feb ,786,751 1,000,000, % 2.875% 29-Apr ,027, ,000, % 2.750% 31-Oct ,884, ,000, % 3M LIBOR +125bps 31-Oct ,000,000 5,982,519,160

9 Notes to the Interim Condensed Financial Statements 4. OTHER BORROWINGS Following is the list of private placements issued by the Company: As at 30 September 2015 Currency Amount Issue Price Coupon Maturity Date Amounts in HKD 184,000, % 2% 20-Dec-17 23,742,343 HKD 155,000, % 2% 29-Jan-18 20,000,343 CHF 200,000, % 3M LIBOR +53bps 13-May ,466,282 CHF 200,000, % 0.5% 27-Jun ,466,282 60,000, % 3M LIBOR +72bps 24-Feb-16 60,000,000 35,000, % 3M LIBOR +104bps 21-Feb-17 35,000,000 43,000, % 3M LIBOR +40bps 26-Aug-16 43,000,000 50,000, % 3M LIBOR +40bps 27-Feb-16 50,000,000 EUR 96,000, % 3M EURIBOR +16.1bps 23-Dec ,659,497 EUR 125,000, % 3M EURIBOR +12bps 21-Apr ,181,637 EUR 25,000, % 0.12% 12-May-16 28,028,216 EUR 80,000, % 3M EURIBOR +13bps 18-Jul-16 89,716,248 EUR 100,000, % 3M EURIBOR bps 27-Oct ,145,312 EUR 25,000, % 3M EURIBOR +36bps 20-Feb-17 28,036,327 EUR 31,000, % 3M EURIBOR +44bps 20-Apr-17 34,765,046 EUR 30,000, % 3M EURIBOR +42bps 20-Apr-17 33,643,593 CNY 160,000, % 5.38% 26-Mar-18 25,167,971 CNY 190,000, % 5.1% 1-Apr-18 29,886,966 CNY 200,000, % 5% 2-Apr-18 31,459,964 1,303,366,027

10 Notes to the Interim Condensed Financial Statements 4. OTHER BORROWINGS (CONTINUED) As at 31 December 2014 Currency Amount Issue Price Coupon Maturity Date Amounts in CHF 300,000, % 3M LIBOR +40bps 12-Jan ,152, ,000, % 1M LIBOR +58bps 23-Jan ,000,000 EUR 100,000, % 3M EURIBOR bps 24-Jan ,514,902 EUR 150,000, % 3M EURIBOR bps 20-Feb ,272, ,000, % 3M LIBOR +50bps 30-Apr ,000,000 50,000, % 3M LIBOR +80bps 16-Jul-15 50,000,000 50,000, % 3M LIBOR +75bps 16-Sep-15 50,000,000 HKD 400,000, % 0.54% 18-Sep-15 51,580,827 EUR 96,000, % 3M EURIBOR +16.1bps 23-Dec ,654,306 60,000, % 3M LIBOR +72bps 24-Feb-16 60,000,000 50,000, % 3M LIBOR +40bps 27-Feb-16 50,000,000 CHF 200,000, % 3M LIBOR +53bps 13-May ,101,360 CHF 200,000, % 0.5% 27-Jun ,101,360 43,000, % 3M LIBOR +40bps 26-Aug-16 43,000,000 EUR 100,000, % 3M EURIBOR bps 27-Oct ,514,902 35,000, % 3M LIBOR +104bps 21-Feb-17 35,000,000 HKD 184,000, % 2% 20-Dec-17 23,727,180 HKD 155,000, % 2% 29-Jan-18 19,987,570 1,832,606, SHARE CAPITAL The issued and paid up share capital of the Company as at 30 September 2015 is 100 (31 December 2014: 100). All shares carry equal voting rights.