QATAR GENERAL INSURANCE & REINSURANCE CO. (S.A.Q.) DOHA - QATAR

QATAR GENERAL INSURANCE & REINSURANCE CO. (S.A.Q.) DOHA - QATAR FINANCIAL STATEMENTS AND INDEPENDENT AUDITOR S REPORT FOR THE YEAR ENDED DECEMBER 31, 2007

QATAR GENERAL INSURANCE & REINSURANCE CO. (S.A.Q.) DOHA - QATAR INDEX Independent Auditor s Report PAGE Balance Sheet 1 Statement of Income 2 Statement of Changes in Shareholders Equity 3 Statement of Cash Flows 4 Notes to the Financial Statements 5-34

1996152 INDEPENDENT AUDITOR S REPORT TO The Shareholders Qatar General Insurance & Reinsurance Co. (S.A.Q.) Doha - Qatar Report on the Financial Statements We have audited the accompanying financial statements of Qatar General Insurance & Reinsurance Co. (S.A.Q.), which comprise the balance sheet as at December 31, 2007, and the income statement, statement of changes in shareholders equity and cash flow statement for the year then ended, and a summary of significant accounting policies and other explanatory notes. Management Responsibility Management is responsible for the preparation and fair presentation of these financial statements in accordance with International Financial Reporting Standards. This responsibility includes designing, implementing and maintaining internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error, selecting and applying appropriate accounting policies and making accounting estimates that are reasonable in the circumstances. Auditor's Responsibility 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 comply with ethical requirements and plan and perform the audit to obtain reasonable assurance whether the financial statements are free from material misstatements. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. An audit includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Opinion In our opinion, the financial statements give a true and fair view of the financial position of Qatar General Insurance & Reinsurance Co. (S.A.Q.), as of December 31, 2007, and of its financial performance and its cash flows for the year then ended in accordance with International Financial Reporting Standards.

Further more, in our opinion, the company has maintained proper accounting records and the financial statements are in agreement therewith. We further confirm that the financial information included in the Annual Report of the Board of Directors is in agreement with the books and records of the company and that we are not aware of any contravention by the company of its Memorandum and Articles of Association, and of the Qatar Commercial Companies Law No. 5 of 2002 during the financial year that would materially affect its activities or financial position. For Grant Thornton - AL EID & CO. Rustom M. Shadid (License No. 67) Doha, January 20, 2008

QATAR GENERAL INSURANCE & REINSURANCE CO. (S.A.Q.) DOHA QATAR BALANCE SHEET AS OF DECEMBER 31, 2007 (Expressed in Qatari Riyal 000) Notes ASSETS Cash and cash equivalents - 3-45,435 57,692 Statutory deposits - 4-4,500 4,500 Investments In trading securities - 5-90,733 75,317 In available for sales securities - 5-961,879 691,887 In associate companies - 6-100,989 90,783 In property - 7-306,441 215,618 Insurance contracts receivables - 8-169,046 134,473 Others receivables - 9-31,661 19,215 Property and equipment -10-19,031 18,826 Total Assets 1,729,715 ========= 1,308,311 ========= LIABILITIES AND SHAREHOLDERS EQUITY LIABILITIES Payables and accrued liabilities Policyholders 24,139 12,717 Insurance and reinsurance companies 123,836 93,700 Others 18,240 16,723 Due to Banks -11-201,529 185,642 Insurance funds Outstanding claims net -12-87,456 63,509 Unearned premiums -13-94,162 71,024 Provision for employees leaving indemnities -14-15,595 14,616 Total Liabilities 564,957 457,931 _ SHAREHOLDERS EQUITY Share capital -15-136,400 113,667 Statutory reserve -16-44,887 38,857 Investments fair value reserve 642,425 431,174 Retained earnings 341,046 266,682 Total Shareholders Equity 1,164,758 850,380 Total Libilities and Shareholders Equity 1,729,715 ========= 1,308,311 ========= The financial statements were approved on January 20, 2008 and signed on behalf of the Board of Directors of the company by: Sh. Nasser Bin Ali Bin Saud Al Thani Chairman and Managing Director Member of the Board THE ACCOMPANYING NOTES FORM PART OF THESE FINANCIAL STATEMENTS - 1 -

QATAR GENERAL INSURANCE & REINSURANCE CO. (S.A.Q.) DOHA QATAR STATEMENT OF INCOME FOR THE YEAR ENDED DECEMBER 31, 2007 (Expressed in Qatari Riyal 000) Notes Gross premiums 818,373 602,729 Reinsurance cessions ( 583,513) ( 423,290) Retained premiums 234,860 179,439 Unearned premiums adjustments -17- ( 23,139) ( 26,062) Net premiums earned in the year -17-211,721 153,377 Net commission income 29,798 31,679 Other income technical 576 653 Underwriting revenue 242,095 185,709 Gross claims paid ( 178,746) ( 148,120) Reinsurance and other recoveries 52,877 59,642 Outstanding claims adjustment net -18- ( 23,947) ( 12,816) Net claims incurred -18- ( 149,816) ( 101,294) Underwriting profit before allocation of underwriting expenses & investment income 92,279 84,415 Underwriting expenses -21- ( 49,173) ( 37,051) Investment income attributable to underwriting -19-7,342 895 Underwriting profit for the year 50,448 48,259 Investment income -19-106,695 29,790 Other income / (expenses) -20-3,863 3,594 General and administrative expenses allocated to investments -21- ( 33,546) ( 21,346) Net profit for the year 127,460 60,297 ========= ========= Earnings per share (Qatari Riyals) -22-9.34 5.30 The financial statements were approved on January 20, 2008 and signed on behalf of the Board of Directors of the company by: Sh. Nasser Bin Ali Bin Saud Al Thani Chairman and Managing Director Member of the Board THE ACCOMPANYING NOTES FORM PART OF THESE FINANCIAL STATEMENTS - 2 -

QATAR GENERAL INSURANCE & REINSURANCE CO. (S.A.Q.) DOHA - QATAR STATEMENT OF CHANGES IN SHAREHOLDERS EQUITY FOR YEAR ENDED DECEMBER 31, 2007 (Expressed in Qatari Riyal 000) Share Capital Statutory Reserve Investments Fair Value Reserve Retained Earnings Total Balance as of January 1, 2006 85,250 28,417 743,592 277,849 1,135,108 Transfer to share capital 28,417 - - ( 28,417 ) - Transfer to statutory reserve (2005) - 10,440 - ( 10,440 ) - Dividend declared (2005) - - - ( 25,575 ) ( 25,575 ) Directors remuneration paid (2005) - - - ( 2,400 ) ( 2,400 ) Transfer to income statement on sale of investments - - ( 48,633 ) ( 4,632 ) ( 53,265 ) Year end fair value adjustments in available for sale securities - - ( 263,785 ) - ( 263,785 ) Net profit for the year - - - 60,297 60,297 Balance as of December 31, 2006 113,667 38,857 431,174 266,682 850,380 Transfer to share capital 22,733 - - ( 22,733 ) - Transfer to statutory reserve (2006) - 6,030 - ( 6,030 ) - Dividend declared (2006) - - - ( 22,733 ) ( 22,733) Directors remuneration paid (2006) - - - ( 1,600 ) ( 1,600) Transfer to income statement on sale of investments - - ( 45,856) - ( 45,856) Year end fair value adjustments in available for sale securities - - 257,107-257,107 Net profit for the year - - - 127,460 127,460 Balance as of December 31, 2007 136,400 ======== 44,887 ======== 642,425 ======== 341,046 ======= 1,164,758 ========= THE ACCOMPANYING NOTES FORM PART OF THESE FINANCIAL STATEMENTS - 3 -

QATAR GENERAL INSURANCE & REINSURANCE CO. (S.A.Q.) DOHA QATAR STATEMENT OF CASH FLOWS FOR THE YEAR ENDED DECEMBER 31, 2007 (Expressed in Qatari Riyal 000) Note OPERATING ACTIVITIES Net profit 127,460 60,297 Adjustments:- Depreciation 2,581 3,071 Profit on sale of investments ( 49,731) ( 46,784) Revaluation (gain)/loss on trading securities ( 22,752) 50,567 Loss/(Income) from investments in associates 890 ( 3,351) Transfer to income statement on sale of investments - ( 4,632) 58,448 59,168 Changes in Operating Assets and Liabilities Accounts and other receivables ( 49,826) ( 41,349) Reinsurance balances 31,484 26,334 Insurance funds 47,085 38,878 Creditors and other accounts payables 15,377 ( 1,418) Net cash generated from operating activities 102,568 81,613 INVESTING ACTIVITIES Purchase of investment securities ( 84,275) ( 33,106) Purchase of shares in associate companies ( 10,289) ( 61,575) Purchase of investment property ( 91,466) ( 76,403) Purchase of property and equipment ( 2,143) ( 1,112) Proceeds from sale of investment securities 81,794 69,174 Net cash used in investing activities ( 106,379) ( 103,022) FINANCING ACTIVITIES Dividends paid ( 22,733) ( 25,575) Directors remuneration paid ( 1,600) ( 2,400) Bank borrowings 15,887 55,515 Net cash (used in) / generated from financing activities ( 8,446) 27,540 (Decrease) / Increase in cash and cash equivalents ( 12,257) 6,131 Cash and cash equivalents at the beginning of the year 57,692 51,561 Cash and cash equivalents at the end of the year - 3-45,435 57,692 ======== ======== THE ACCOMPANYING NOTES FORM PART OF THESE FINANCIAL STATEMENTS -4 -

QATAR GENERAL INSURANCE & REINSURANCE CO. (S.A.Q.) DOHA - QATAR NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECAMBER 31, 2007 (Expressed in Qatari Riyal 000) _ 1. STATUS AND OPERATIONS Qatar General Insurance & Reinsurance Co. (S.A.Q.) QGIR was incorporated as a Qatari shareholding company by Emiri Decree No. 52 for 1978. Qatar General Insurance & Reinsurance Company s shares are listed on Doha Stock Market. The company is engaged in the business of all kind of general insurance and reinsurance. 2. SIGNIFICANT ACCOUNTING POLICIES Basis of preparation The financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB) and the applicable requirements of the Qatar Commercial Companies Law No. 5 of 2002. The financial statements are prepared in Qatari Riyals on the historical cost basis, except for investment in securities which are stated at their fair value. All accounting estimates and assumptions that are used in preparing the financial statements are consistent with QGIR's latest approved budgeted forecast where applicable. Judgements are based on the information available at each balance sheet date. Although these estimates are based on the best information available to management, actual results may ultimately differ from those estimates. The financial statements include the assets, liabilities and the result of operations of the company s activities in Qatar and its branch in Dubai United Arab Emirates. CHANGE IN ACCOUNTING POLICIES The following accounting policies have been changed and becoming mandatory for financial year beginning on or after January 1, 2007: IFRS 7 Financial Instruments: Disclosures This standard requires disclosures that enable users of the financial statements to evaluate the significance of QGIR s financial instruments and the nature and extend of risks arising from those financial instruments. The new disclosures are included throughout the financial statements. While there has been no effect on the financial position or results, comparative information has been revised where needed. IAS 1 Presentation of Financial Statements This amendment requires QGIR to make new disclosures to enable users of the financial statements to evaluate QGIR s objectives, policies and procedures for managing capital. -5-

Standards and Interpretations yet to be applied The following new Standards and Interpretations, which are yet to become mandatory, have not been applied in 2007 financial statements. New Standard or Interpretation IFRS 3 Business Combinations (Revised 2008) Effective for in reporting periods starting on or after 1 July 2009 IFRS 8 Operating Segments 1 January 2009 IAS 1 IAS 23 Presentation of Financial Statements Comprehensive revision including requiring a statement of comprehensive income (Revised 2007) Borrowing Costs Comprehensive revision to prohibit immediate expensing (Revised 2007) 1 January 2009 1 January 2009 IAS 27 Consolidated and Separate Financial Statements (Revised 2008) 1 July 2009 IAS 28 Investments in Associates (Revised 2008) 1 July 2009 IAS 31 Interests in Joint Ventures (Revised 2008) 1 July 2009 IFRIC 11 IFRS 2: - Group and Treasury Share Transactions 1 March 2007 IFRIC 12 Service Concession Arrangements 1 January 2008 IFRIC 13 Customer Loyalty Programmes 1 July 2008 IFRIC 14 IAS 19 The Limit on a Defined Benefit Asset, Minimum Funding Requirements and their Interaction 1 January 2008 Based on QGIR's current business model and accounting policies, management does not expect material impacts on the Company's financial statements when the Interpretations and Standards become effective. -6-

Adoption of IFRS 4 Insurance Contracts IFRS 4 Insurance Contracts is mandatory for reporting periods beginning on 1 January 2006 or later. This Standard requires disclosure of information that helps users to understand the figures in the insurer s financial statements that arise from insurance contracts, and the estimated amount, timing and uncertainty of future cash flows arising from insurance contracts. All disclosures relating to insurance contracts including all comparative information have been updated to reflect these requirements. Foreign Currency Transactions Transactions in foreign currencies are recorded in Qatari Riyal at the exchange rate ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies at the balance sheet date are translated at the rate of exchange ruling at the balance sheet date. All exchange differences are taken to the income statements. Non-monetary assets and liabilities are translated at rates ruling at the date of the transaction Segment Reporting A business segment is a group of assets and operations engaged in providing products or services that are subject to risks and returns in which they are different from those of other business segments. A geographical segment is engaged in providing products or services within a particular economic environment that are subject to risks and returns that are different from those segments operating in other economic environments INSURANCE OPERATIONS Insurance Contracts QGIR issues contracts that transfer insurance risk from the insured to the insurer. The Company s insurance products are general and personal lines insurance. Gross Premiums Gross premiums in respect of annual policies, are credited at policy level in the inception date. In respect of policies with term of more than one year, the premiums are spread over the tenure of the policies on a straight-line basis, the un-expired portion of such premiums being included under Unearned Premium in the balance sheet. Unearned Premiums Unearned premiums represent the portion of net retained premiums relating to the unexpired period or coverage. This has been calculated principally on the basis of 40% of net retained premiums during the year for all classes of business. -7-

Policyholders Receivables Policyholders receivables are stated at original invoice amount less any impairment losses Reinsurance In the ordinary course of business, the company assumes and cedes reinsurance. Such reinsurance arrangements provide for greater diversification of business, allow management to control exposure to potential losses arising from large risks, and provide additional capacity for growth. A significant portion of the reinsurance is effected under treaty, facultative and excess-of-loss reinsurance contracts. Amounts receivable from reinsurers are estimated in a manner consistent with the claim liability associated with the reinsured parties. Claims Paid Claims settled during the year are charged to the income statement net of reinsurance and other recoveries. Outstanding Claims Provision is made for all outstanding claims, including claims incurred but not reported (IBNR). The provision for outstanding claims is based on estimates of the loss which will eventually become payable on each unpaid claim. This provision is estimated by management in the light of available information, past experience modified for changes due in current conditions, increase exposure, rising claims cost and the severity and frequency of recent claims as appropriate. The IBNR provision is based on statistical information related to actual past experience of claims incurred but not reported. The IBNR provision also includes a further amount, subject to annual review by the management, to meet certain contingencies such as: a) Unexpected and court decisions which may require a higher payout than the original estimate. b) Settlement of claims, which may take longer than excepted, results in actual payouts being higher than the estimated amount. General insurance provisions are not discounted for time value of money. Any difference between the provisions at the balance sheet date and the provision in the following year due to settlement and reporting new claims is included in the income statement for the year. Liability Adequacy Test At each balance sheet date, liability adequacy tests are performed to ensure the adequacy of the insurance liabilities. In performing these tests, current best estimates of future cash flows and claims handling and administration expenses are used. Any deficiency is immediately charged to the income statements. -8- Commissions Earned

Commissions are recognized as income in the period in which they were earned. Commissions Paid Commissions paid are accounted for, at the time policies are written. INVESTMENTS - Classification Trading investments are financial assets that are held for resale with the intent of generating a profit from short-term fluctuations in price. These constitute quoted and unquoted equity instruments and investments in managed funds. Available for sale (AFS) investments are financial assets that are not held for trading purposes or held to maturity. These constitute quoted and unquoted equity instruments and investments in managed funds. - Recognition Trading and AFS investments are initially recorded at cost, including transaction costs. - Subsequent Measurements Trading investments are stated at their fair value, with any resultant gain or loss transferred to the income statement. AFS investments are stated at their fair value, with any resultant gain or loss transferred to an investments fair value reserve. In the event of sale or impairment, the cumulative gains or losses recognized in shareholders' equity are included in the net profit or loss for the year. Bonds are classified as available for sale investments because the company does not have the intent to hold them till maturity date. Furthermore, some bonds are subject to call options. Purchase and sale of Trading and AFS investments are accounted for, on the trade date. Investments in Associates Companies Associate companies are those entities in which the company has significant influence but not control over the financial and operating policies. The financial statements include the Company's share of total recognized gains and losses of associates on an equity accounted basis, from the date that significant influence commences until the date that significant influence ceases. All subsequent changes to the Company s share of interest in the equity of the associate are recognised in the company's carrying amount of the investment. Changes resulting from the profit or loss generated by the associate are reported under "Investment income" in the income statement and therefore affect net results of the company. Amounts reported in the financial statements of associates have been adjusted where necessary to ensure consistency with the accounting policies adopted by the Company. -9- Investment In Property

Investments in property are measured by applying the cost value model and are stated at cost of acquisition less depreciation and impairment losses. These are depreciated using the straight -line method over their estimated useful lives of 20 years. Investments Fair Value Reserve Investments fair value reserve represents the unrealized gains or losses on the year-end valuation of AFS investments. In the event of sale or impairment, the cumulative gains or losses recognized under investments fair value reserve are included in the income statement for the year. Investment Income Interest, rent and dividend income are recognized on an accrual basis. Gains and losses arising from changes in the fair value of held for trading investments are included in the income statement in the period in which they arise. When available for sale investments are disposed off, the related fair value adjustments are included in the income statement. A proportional investment income arising from investment business is allocated to the underwriting results of the general insurance businesses based on the share of their respective insurance funds to shareholders' funds during the financial year. Insurance funds comprise of technical reserves, policyholder payables, insurance and reinsurance companies payables and other insurance payables less policyholder receivables and insurance and reinsurance companies receivables. Shareholders' funds comprise of total shareholders' equity. Financial Instruments Financial instruments comprise cash and cash equivalents, due to banks, investments, receivables, outstanding claims, payables and certain other assets and liabilities. Fair values of financial instruments are based on quoted prices for marketable instruments, or estimated fair values calculated by using methods such as net present values of future cash flows. Off-balance Sheet Items These items are resulting from the company being a party to an option contract involving selling of put options and covered call options, where, these options do not constitute actual assets or liabilities at the balance sheet date. Property and Equipment Property and equipment are stated at cost less accumulated depreciation and impairment losses. Subsequent to initial recognition, expenditure is capitalized only when its future economic benefits exceeds its carrying amount embodied in the item of property and equipment. All other expenditures are recognized in the income statement as an expense when incurred. Depreciation is provided on cost by the straight-line method and is charged to the income statement, at annual rates which are intended to write off the cost of the assets over their estimated useful lives as follows: Buildings Furniture, fixtures and computers Motor vehicles 20 years 4 years 4 years -10- Employee Benefits

End of Service Benefits The Company provides for end of service benefits determined in accordance with Qatari and UAE labour laws for expatriate employees at the Head-office and the branch respectively, based on expatriate employees' salaries at the time of leaving and number of years of service. Although the expected costs of these benefits are accrued over the period of employment, these are paid to employees only on completion of their term of employment with the Company. Defined Contribution Plans The company makes contribution to the government pension fund calculated as a percentage of the Qatari employees' salaries in accordance with the requirements of Law No.24 of 2002. Amount pertaining to government retirement and pensions plan are recognized as an expense in the statement of income as incurred. Impairment The carrying amounts of the Company s assets are reviewed at each balance sheet date to determine whether there is any indication of impairment. If such indication exists, the recoverable amount of the assets is estimated. An impairment loss is recognized whenever the carrying amount of an asset exceeds its recoverable amount. All impairment losses are recognized in the income statement. To determine the recoverable amount, QGIR's management estimates expected future cash flows. The data used for QGIR's impairment testing procedures are directly linked to the Company's latest approved budget. Cash and Cash Equivalents Cash and cash equivalents comprise cash in hand and at bank and short-term deposits. Cash equivalents are short-term, highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of change in value. Dividends and Directors Remuneration Dividends and directors' remuneration are recognized as a liability in the period when they are declared. Hedging Derivatives are initially recognized at fair value on the date a derivative contract is entered into and are subsequently remeasured at their fair value. The company designates certain derivatives as hedges of a net investment in a foreign operation (net investment hedge) and fair value hedges. The company documents at the inception of the transaction the relationship between hedging instruments and hedged items, as well as its risk management objectives and strategy for undertaking the hedging transactions. The company also documents its assessment, both at hedge inception and on an ongoing basis, of whether the derivatives that are used in hedging transactions are highly effective in offsetting changes in fair values of hedged items. -11- Other provisions, contingent liabilities and contingent assets

Other provisions are recognised when present obligations will probably lead to an outflow of economic resources from the Company and they can be estimated reliably. Timing or amount of the outflow may still be uncertain. A present obligation arises from the presence of a legal or constructive commitment that has resulted from past events, legal disputes or onerous contracts. Restructuring provisions are recognized only if a detailed formal plan for the restructuring has been developed and implemented, or management has at least announced the plan s main features to those affected by it. Provisions are not recognised for future operating losses. Provisions are measured at the estimated commitments required to settle the present obligation, based on the most reliable evidence available at the balance sheet date, including the risks and uncertainties associated with the present obligation. Where there are a number of similar obligations, the likelihood that an outflow will be required in the settlement of these obligations is determined by considering the class of obligations as a whole. Any reimbursement that QGIR can be virtually certain to collect from a third party with respect to the obligation is recognised as a separate asset. However, this asset may not exceed the amount of the related provision. All provisions are reviewed at each balance sheet date and adjusted to reflect the current best estimate of QGIR's management. - 12-3. Cash and Cash Equivalents

Cash and bank balances 4,988 11,559 Time deposits maturing within three months 40,447 46,133 45,435 57,692 ======== ======== 4. Statutory Deposit Statutory deposits are maintained under the provisions of the UAE Federal law relating to insurance companies and agents. Such deposits cannot be withdrawn except with the prior approval of the Ministry of Commerce. 5. Investment in Securities Trading Investments Quoted equities 86,541 70,961 Managed funds 4,192 4,356 90,733 75,317 ======== ======== These investments are current. Available for Sales Investments Local portfolio- quoted 829,436 627,925 Local portfolio- unquoted 7,428 7,428 Foreign portfolio -quoted 47,070 26,088 Managed funds 23,095 913 Bonds 54,850 29,533 These investments are non-current. 961,879 691,887 ======== ======== Quoted equities are publicly traded on various stock markets. Fair values for these securities have been determined by reference to their quoted bid prices at the balance sheet date. The fair value of managed funds approximately equal to their funds originally placed with markets. The fair values of bonds have been determined by reference to the fair market price at the balance sheet date. No impairment loss has been recorded in relation to these investments. -13-6. Investment in Associate Companies

Owner ship % Equity Method United Insurance Bureau 25.0% 614 614 International Financial Securities* 12.0% 3,220 2,997 Gulf Petroleum 20.0% 1,600 800 Trust Insurance Algeria 22.5% 20,735 13,356 Trust Investment Algeria 20.0% 13,780 12,993 Trust Bank Algeria* 3.7% 6,590 6,776 Trust Syria Insurance 32.0% 20,400 19,312 Trust Libya Insurance* 15.0% 1,346 1,231 68,285 58,079 Cost Method Gulf Assist 8.00% 722 722 Fair Oil & Energy Syndicate 2.85% 235 235 Gulf Union Co. for Cooperative Insurance 1.65% 4,211 4,211 Wataniya Restaurant 3.00% 3,030 3,030 Lebanese Canadian Bank 3.00% 24,506 24,506 These investments are non-current. 32,704 32,704 100,989 90,783 ======== ======== * The company has accounted for these investments under equity method, though the ownership percentages are less than 20%, as it has representatives in the board of directors of these associate companies. During the year QGIR received dividends amounting to QR 2,172 thousand (2006: QR 9,338 thousand) -14-7. Investment in Property Land Buildings Buildings Under Construction Total

Gross carrying amount 123,347 40,914 11,032 175,293 Accumulated depreciation - ( 34,651) - ( 34,651) Carrying amount 1 January 2006 123,347 6,263 11,032 140,642 ======= ======= ======= ======== Gross carrying amount 170,885 41,914 38,897 251,696 Accumulated depreciation - ( 36,078) - ( 36,078) Carrying amount 31 December 2006 170,885 5,836 38,897 215,618 ======= ======= ======= ======== Gross carrying amount 230,871 41,914 70,377 343,162 Accumulated depreciation - ( 36,721) - ( 36,721) Carrying amount 31 December 2007 230,871 5,193 70,377 306,441 ======= ======= ======= ======== The carrying amounts of investment property for the periods presented in the financial statements as at 31 December 2007 are reconciled as follows: Buildings Under Land Buildings Construction Total Carrying amount 1 January 2006 123,347 6,263 11,032 140,642 Additions 47,538 1,000 27,865 76,403 Depreciation - ( 1,427) - ( 1,427) Carrying amount 31 December 2006 170,885 5,836 38,897 215,618 Additions 59,986-31,480 91,466 Depreciation - ( 643) - ( 643) Carrying amount 31 December 2007 230,871 5,193 70,377 306,441 ====== ===== ===== ======= The fair value of investment property as appraised by an independent appraiser is QR 2,379,371 thousand as at 31 December 2007 (2006: QR 1,071,924 thousand). Direct operating expenses recognised in the income statement that generated rental income are QR1,031 thousand (2006: QR1,748 thousand), and the rental income recognised during the year is QR8,612 thousand (2006:QR7,480 thousand). There are no restrictions pertaining to realisation of the properties or remittance of rental income. The properties are non-current. -15-8. Receivables from insurance contracts Policyholders 184,534 141,335

Insurance and reinsurance companies 33,679 35,027 Less: provision for impairment ( 49,167) ( 41,889) The above amounts are recoverable within one year. 169,046 134,473 ======== ======== The Company covers losses on credit insurance provided to policy holders by securing them against payment warranties. The carrying amount of the above receivables is considered a reasonable approximation of their fair value. 9. Other Receivables Staff loans 48 6,083 Accrued dividend and rental income 5,081 6,674 Prepayments and others 30,502 10,428 35,631 23,185 Less: provision for impairment ( 3,970) ( 3,970) The above amounts are recoverable within one year. 31,661 19,215 ======== ======== The carrying amount of the above receivables is considered a reasonable approximation of their fair value. -16-

10. Property and Equipment Furniture & Motor Land Buildings Fixtures Computers Vehicles Total Gross Carrying amount 7,548 21,166 6,867 4,640 592 40,813 Accumulated depreciation - ( 11,055) ( 6,248) ( 3,605) ( 547 ) ( 21,455 ) Carrying amount as of January 1, 2006 7,548 ======= 10,111 ======= 619 ======= 1,035 ======= 45 ======== 19,358 ======== Gross Carrying amount 7,548 21,392 7,314 5,079 592 41,925 Accumulated depreciation - ( 12,094) ( 6,553) ( 3,874) ( 578 ) ( 23,099 ) Carrying amount as of December 31, 2006 7,548 ======= 9,298 ======= 761 ======= 1,205 ======= 14 ======== 18,826 ======== Gross Carrying amount 7,548 21,445 8,312 6,062 701 44,068 Accumulated depreciation - ( 13,141) ( 6,998) ( 4,265) ( 633 ) ( 25,037 ) Carrying amount as of December 31, 2007 7,548 ======= 8,304 ======= 1,314 ======= 1,797 ======= 68 ======== 19,031 ======== The carrying amount of property and equipment for the periods presented in the financial statements as at 31 December 2007 are presented in as follows: Furniture & Motor Land Buildings Fixtures Computers Vehicles Total Carrying amount as of January 1, 2006 7,548 10,111 619 1,035 45 19,358 Additions - 226 447 439-1,112 Depreciation - ( 1,039) ( 305) ( 269) ( 31 ) ( 1,644 ) Carrying amount as of December 31, 2006 7,548 9,298 761 1,205 14 18,826 Additions - 53 998 983 109 2,143 Depreciation - ( 1,047) ( 445) ( 391) ( 55 ) ( 1,938 ) Carrying amount as of December 31, 2007 7,548 ======= 8,304 ======= 1,314 ======= 1,797 ======= 68 ======== 19,031 ======== Depreciation charges are included in Underwriting expenses and General and administrative expenses in the income statement. -17-

11. Due to Banks Bank overdrafts 66,204 90,722 Loans 135,325 94,920 201,529 185,642 ======== ======== Bank overdrafts represent two credit facilities with a limit of QR 50 million each for a period of one year starting from 27 January 2007 and 5 November 2007. These facilities are renewable automatically unless otherwise notified by either party. Loans represent short term facilities of QR 150 million, US$5 million and 1.8 million, out of which QR 107 million, US$5 million and 1.8 million were utilized respectively. These loan facilities are renewable automatically on yearly basis unless otherwise notified by either party. The company pledged part of its investment portfolio amounting to QR 318 million to secure the above facilities. These facilities are carried at amortised cost in the balance sheet. As of 31 December 2007, the effective interest rate of the overdraft facilities is 7.1%. The effective interest rates of the loan facilities are between 4.5% to 7%. 12. Movements in Insurance Liabilities and Related Reinsurance Assets ----------------------------------------------------------------------------------------------- ---------------------------------------------------------------------------------------------- Gross Reinsurance Net Gross Reinsurance Net As of January 1, Reported claims 98,046 ( 44,037) 54,009 94,470 ( 53,277) 41,193 IBNR 47,256 ( 37,756) 9,500 47,256 ( 37,756) 9,500 Total 145,302 ( 81,793) 63,509 141,726 ( 91,033) 50,693 Reported claims 39,611 ( 15,664) 23,947 3,576 9,240 12,816 Movement during the year 39,611 ( 15,664) 23,947 3,576 9,240 12,816 As of December 31, Reported claims 137,657 ( 59,701) 77,956 98,046 ( 44,037) 54,009 IBNR 47,256 ( 37,756) 9,500 47,256 ( 37,756) 9,500 Total 184,913 ( 97,457) 87,456 145,302 ( 81,793) 63,509 ======= ======= ======= ======= ======= ======= The gross claims reported and the liability for claims incurred but not reported are net of expected recoveries from salvage and subrogation. The amounts for salvage and subrogation at the end of 2007 and 2006 are not material. -18-

13. Unearned Premiums As of January 1 71,024 44,962 Increases during the year 94,162 71,024 Release during the year ( 71,024) ( 44,962) As of December 31, 94,162 71,024 ======== ======== 14. Provision for Employees Leaving Indemnities Expatriate employees are entitled to leaving indemnities payable under the Qatari Labour Law and the UAE Labour Law (for the Dubai branch), based on length of service and final remuneration. The liability, which is unfunded, is provided for on the basis of the notional cost had all employees left at the balance sheet date. As of January 1, 14,616 13,959 Charge for the year 1,804 4,244 Paid during the year ( 825) ( 3,587) As of December 31, 15,595 14,616 ======== ======== 15. Share Capital Authorized, issued any fully paid up share capital (13,640,000 shares of QR 10 each) As of December 31, 136,400 113,667 16. Statutory Reserve The Qatar Commercial Companies Law No.5 of 2002 requires that 10% of the net profit for each year should be appropriated to a Statutory Reserve until the balance therein equals to 50% of the paid up capital. The balance under this reserve is not available for distribution, except in the circumstances specified in the above law. 17. Retained Premiums and Earned Premiums ------------------------------------------------------------------------------------ ---------------------------------------------------------------------------------------- Gross Reinsurance Net Gross Reinsurance Net Written premiums 818,373 (583,513 ) 234,860 602,729 ( 423,290) 179,439 Unearned premiums adjustments ( 87,186) 64,047 ( 23,139) ( 98,313) 72,251 ( 26,062) 731,187 ( 519,466) 211,721 504,416 ( 351,039) 153,377 ======= ======= ======= ======= ======= ======= -19-

18. Net Claims Incurred --------------------------------------------------------------------------------------- ---------------------------------------------------------------------------------------- Gross Reinsurance Net Gross Reinsurance Net Claims Settled ( 178,746) 52,877 (125,869) ( 148,120) 59,642 ( 88,478) Outstanding claims adjustments ( 39,611) 15,664 ( 23,947) ( 3,576) ( 9,240) ( 12,816) ( 218,357) 68,541 ( 149,816) ( 151,696) 50,402 (101,294) ======= ======= ======= ======= ======= ======= 19. Investment Income Rent 8,612 7,480 Profit on sale of investments 49,731 54,684 Dividend income 26,309 8,142 Year end fair value adjustments - trading securities 22,752 ( 50,567) Income from associate companies 2,173 9,338 Others 4,460 1,608 114,037 30,685 Investment income attributable to underwriting ( 7,342) ( 895) 20. Other income / (expenses) 106,695 29,790 ======== ======== Interest income 1,926 1,817 Foreign exchange gain 1,656 1,617 Miscellaneous income 281 160 3,863 3,594 ======== ======== -20-

21. General and Administrative Expenses Staff cost 45,995 35,922 Depreciation 2,581 3,072 Finance cost 16,092 11,633 Others 18,051 7,770 82,719 58,397 Transferred to underwriting expenses ( 49,173) ( 37,051) 33,546 21,346 ======== ======== 22. Earnings per Share Net profit for the year 127,460 60,297 Number of shares outstanding ( 000) 13,640 11,367 Earnings per QR 10 per share (Qatari Riyals) 9.34 5.30 The earnings per share has been computed on the basis of net profit for the year divided by the number of shares outstanding at 31 December 2007. 23. Related Party Transactions These represent transactions with related parties, i.e. shareholders, companies affiliated to the shareholders, directors and senior management of the Company and companies of which they are principal owners. Pricing policies, terms and payment for these transactions are approved by the Company's management. The significant related party transactions during the year were mainly in respect of reinsurance arrangements The related party balances at the end of the year as follows: Reinsurance companies payable ( 19,250) ( 12,628) Other payables ( 37) ( 67) Other receivables 24,564 4,652 Investment in associate companies 62,854 56,889 The key management and senior personnel salaries and other benefits include the following expenses: Short-term employee benefits Salaries and other benefits 17,849 10,219 Long term employee benefits End of service benefits 190 312 In the opinion of management there are no additional significant related party transactions. -21-

24. Departmental Underwriting Results The classification of business for departmental purposes is as follows: General accident : Motor comprehensive and third party and workmen s compensation etc. Fire : Fire, other consequential losses due to fire etc. Marine and war : Marine hull, cargo and war risk etc. Engineering and others : Energy, engineering, machinery break down, contractors all risks etc. As the company s activities are operated on an integrated basis, a segmental analysis of assets and liabilities between these segments will not be meaningful. General Accident Fire Marine and War Engineering and Others Total 2007 Gross premiums 202,845 21,311 50,330 543,887 818,373 Reinsurance ceded ( 13,202) ( 19,704) ( 44,527) ( 506,080) ( 583,513) Retained premiums 189,643 1,607 5,803 37,807 234,860 Unearned premium adjustments ( 13,138) 226 ( 1,178) ( 9,049) ( 23,139) Net premium earned 176,505 1,833 4,625 28,758 211,721 Net commission income ( 1,100) 3,169 6,441 21,288 29,798 Other income technical 186 18 288 84 576 Net claims incurred (140,742) ( 935) ( 2,893) ( 5,246) ( 149,816) Underwriting profit before allocating of underwriting expenses and investment income 34,849 4,085 8,461 44,884 92,279 ========== ========= ========== ========== ========== 2006 Gross premiums 167,048 17,932 38,413 379,336 602,729 Reinsurance ceded ( 10,261 ) ( 15,760 ) ( 35,554 ) ( 361,715) ( 423,290 ) Retained premiums 156,787 2,172 2,859 17,621 179,439 Unearned premium adjustments ( 25,419 ) ( 625 ) ( 260) 242 ( 26,062 ) Net premium earned 131,368 1,547 2,599 17,863 153,377 Net commission income 1,118 2,501 6,171 21,889 31,679 Other income technical 73 15 435 130 653 Net claims incurred ( 98,949) 9 ( 408 ) ( 1,946) (101,294 ) Underwriting profit before allocating of underwriting expenses and investment income 33,610 4,072 8,797 37,936 84,415 ========== ========= ========== ========== ========== -22-

25. Profit Appropriations The Board of Directors propose a cash dividend of QR 2.5 per QR 10 share from current year profit and bonus shares 50% ( i.e. 1 share for every 2 shares issued ).These and other appropriations mentioned below are subject to the shareholders' approval at the annual general meeting: Statutory reserve 12,746 6,030 Proposed dividend 34,100 22,733 Proposed bonus shares 68,200 22,733 Directors remuneration 2,400 1,600 117,446 53,096 ======== ======== 26. Derivative financial instruments The Company uses hedges of the net investments in certain overseas operations. The derivatives that the Company has entered into are settled on a net basis (a) Fair value hedge of investments securities Covered stock options 1,165 1,583 These are treated as off balance sheet items. (b) Hedge of net investment in foreign fund The Company s Euro EL Ysee Fund amounting to 1.8 million with guaranteed income of 8% per annum is hedged by a loan amounting to 1.8 million secured on the fund with a variable interest rate set every six months between 4% to 4.5% per annum. This fund is designated as a hedge of a net investment in a foreign operation. The fair value of the borrowing equalled the fair value of the fund. Therefore, the hedge was effective in offsetting the exposure to changes in the fair value of the fund s future cash flows. There were no gains arising from the above hedge. - 23 -

27. Capital management The Company s objectives when managing capital are: To comply with the insurance capital requirements required by the regulators of the insurance markets where the Company operates; To safeguard the Company s ability to continue as a going concern so that it can continue to provide returns for shareholders and benefits for other stakeholders; and To provide an adequate return to shareholders by pricing insurance and investment contracts commensurately with the level of risk. The Company monitors capital on the basis of the carrying amount of equity less cash and cash equivalents as presented on the face of the balance sheet. Capital for the reporting periods under review is summarised as follows: QGIR's goal in capital management is to maintain a capital-to-overall financing structure ratio of 1:1 to 1:1.5. The Company sets the amount of capital in proportion to its overall financing structure, i.e. equity and financial liabilities. QGIR manages the capital structure and makes adjustments to it in the light of changes in economic conditions and the risk characteristics of the underlying assets. In order to maintain or adjust the capital structure, the Company may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares, or sell assets to reduce debt. Total equity 1,164,758 850,380 - cash and cash equivalents ( 45,435) ( 57,692) Capital 1,119,323 792,688 Total equity 1,164,758 850,380 + Borrowings 201,529 185,642 Overall financing 1,366,287 1,036,022 Capital-to-overall financing ratio 1:1.21 1:1.31 QGIR has been honouring its covenant obligations, including maintaining capital rations -24-

28. MANAGEMENT OF INSURANCE AND FINANCIAL RISK QGIR issues contracts that transfer insurance risk or financial risk or both. The Company is exposed to market risk through its use of insurance contracts and financial instruments which result from both its operating, insurance and investing activities. The Company's risk management is coordinated at its headquarters, in close co-operation with the board of directors, and focuses on actively securing the Company's short to medium term cash flows by minimising the exposure to insurance risks and financial markets. Financial investments are managed to generate lasting returns. QGIR does not actively engage in the trading of financial assets for speculative purposes. The most significant financial risks to which the Company is exposed to are described below. See also note 28.3 for a summary of QGIR's financial assets and liabilities by category and note12 for a summary of its insurance assets and liabilities. 28.1 INSURANCE RISK The risk under any insurance contract is the possibility that the insured event occurs and the uncertainty of the amount of the resulting claim. By the very nature of an insurance contract, this risk is random and therefore unpredictable. The insurance contracts issued by the Company for various risks are homogeneous. For a portfolio of insurance contracts where the theory of probability is applied to pricing and provisioning, the principal risk that the Company faces under its insurance contracts is that the actual claims and benefit payments exceed the carrying amount of the insurance liabilities. This could occur because the frequency or severity of claims and benefits are greater than estimated. Insurance events are random and the actual number and amount of claims and benefits will vary from year to year from the level established using statistical techniques. Experience shows that the larger the portfolio of similar insurance contracts, the smaller the relative variability about the expected outcome will be. In addition, a more diversified portfolio is less likely to be affected by a change in any subset of the portfolio. The Company has developed its insurance underwriting strategy to diversify the type of insurance risks accepted and within each of these categories to achieve a sufficiently large population of risks to reduce the variability of the expected outcome. 28.1.1 General Insurance Risks (a) Frequency and severity of claims The frequency and severity of claims can be affected by several factors. The most significant are Past experience of the claims; Economic level; Laws and regulations; and Public awareness The Company manages these risks through its underwriting strategy, adequate reinsurance arrangements and proactive claims handling. The underwriting strategy attempts to ensure that the underwritten risks are well diversified in terms of type and amount of risk, industry and geography. -25-

Underwriting limits are in place to enforce appropriate risk selection criteria. For example, the Company has the right not to renew individual policies, it can impose deductibles and it has the right to reject the payment of a fraudulent claim. The Company has the right to re-price the risk on renewal. Insurance contracts also entitle the Company to pursue third parties for payment of some or all costs (for example, subrogation). The reinsurance arrangements include proportional, non-proportional and catastrophe coverage. The effect of such reinsurance arrangements is that the Company should not suffer major insurance losses. The Company has specialised claims units dealing with the mitigation of risks surrounding general insurance claims. This unit investigates and adjusts all general insurance claims. The general insurance claims are reviewed individually monthly and adjusted to reflect the latest information on the underlying facts, current law, jurisdiction, contractual terms and conditions, and other factors. The Company actively manages settlements of general insurance claims to reduce its exposure to unpredictable developments. The concentration of insurance risk before and after reinsurance by the type of general insurance risk accepted with reference to the carrying amount of the insurance liabilities (gross and net of reinsurance) arising from general insurance contracts is illustrated under note 24. b) Sources of uncertainty in the estimation of future claim payments Claims on general insurance contracts are payable on a claims-occurrence basis. The Company is liable for all insured events that occurred during the term of the contract, even if the loss is discovered after the end of the contract term. As a result, a larger element of the claims provision relates to incurred but not reported claims (IBNR) which are settled over a short to medium term period. There are several variables that affect the amount and timing of cash flows from these contracts. These mainly relate to the inherent risks of the business activities carried out by individual contract holders and the risk management procedures adopted. The compensation paid on these contracts is the monetary awards granted for the loss suffered by the policy holders or third parties (for third party liability covers). The estimated cost of claims includes direct expenses to be incurred in settling claims, net of the expected subrogation values and other recoveries. The Company takes all reasonable steps to ensure that it has appropriate information regarding its claims exposures. However, given the uncertainty in establishing claims provisions, it is likely that the final outcome will prove to be different from the original liability established. The liability for these contracts comprise a provision for IBNR, a provision for reported claims not yet paid and a provision for unexpired risks at the balance sheet date. In calculating the estimated cost of unpaid claims (both reported and not), the Company estimation techniques are a combination of loss-ratio-based estimates (where the loss ratio is defined as the ratio between the ultimate cost of insurance claims and insurance premiums earned in a particular financial year in relation to such claims) and an estimate based upon actual claims experience using predetermined formula where greater weight is given to actual claims experience as time passes. -26-

The initial loss-ratio estimate is an important assumption in the estimation technique and is based on previous years experience, adjusted for factors such as premium rate changes, anticipated market experience and historical claims inflation. The initial estimate of the loss ratios used for the current year are analysed below by type of risk and industry where the insured operates for current and prior year premiums earned. Type of risk General accident -79.74 % -75.32 % Fire -51.01 % +0.58 % Marine and war -62.55 % -15.70 % Engineering and other -18.24 % -10.89 % Total -70.76 % -66.04 % (c) Process used to decide on assumptions The risks associated with these insurance contracts are complex and subject to a number of variables that complicate quantitative sensitivity analysis. The exposure of the Company to claims associated with general insurance is material. This exposure is concentrated in Qatar where significant transactions take place. The Company uses assumptions based on a mixture of internal and actuarial reports to measure its general insurance related claims liabilities. Internal data is derived mostly from the Company s monthly claims reports and screening of the actual insurance contracts carried out at year-end to derive data for the contracts held. The Company has reviewed the individual contracts and their actual exposure to claims. This information is used to develop scenarios related to the latency of claims that are used for the projections of the ultimate number of claims. (d) Change in assumptions and sensitivity analysis The Company did not change its assumptions for its general insurance contracts. -27-

(e) Sensitivity analysis sensitivity of general insurance -related liabilities and claims development tables The reasonableness of the estimation process is tested by an analysis of sensitivity around several scenarios. At 31 December 2007 General insurance - impact on profit (QR,000) Gross loss Gross loss ratios ratios +5% -5% Gross of reinsurance (11,743) 11,743 Net of reinsurance (11,743) 11,743 At 31 December 2007 General insurance - impact on shareholders equity (QR,000) Gross loss Gross loss ratios ratios +5% -5% Gross of reinsurance (11,743) 11,743 Net of reinsurance (11,743) 11,743 At 31 December 2006 General insurance - impact on profit (QR,000) Gross loss Gross loss ratios ratios +5% -5% Gross of reinsurance (8,972) 8,972 Net of reinsurance (8,972) 8,972 At 31 December 2006 General insurance - impact on shareholders' equity (QR'000) Gross loss Gross loss ratios ratios +5% -5% Gross of reinsurance (8,972) 8,972 Net of reinsurance (8,972) 8,972 The sensitivity to a 5% increase/decrease in gross loss ratios is the same both net and gross of reinsurance because this increase does not result in any material excess of loss reinsurance limits being reached. 28.2 FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES QGIR is exposed to market risk through its use of financial instruments and specifically to currency risk, interest rate risk and certain other price risks, which result from both its operating and investing activities. The Company's risk management is handled at its head office, in close co-operation with the board of directors, and focuses on actively securing the Company's short to medium term cash flows by cautiously calculating the exposure to financial markets. Long term financial investments are managed to generate secured returns. -28-

QGIR does not actively engage in the trading of financial assets for speculative purposes. The most significant financial risks to which the Company is exposed to are described below. See also note 28.3 for a summary of QGIR's financial assets and liabilities by category. 28.2.1 Foreign currency sensitivity Most of QGIR's transactions are carried out in Qatar Riyals. Exposures to currency exchange rates arise from the Company's overseas investments, and insurance and reinsurance contracts, which are primarily denominated in US-Dollars and Euros. QGIR also holds an investment in US-Dollar managed funds. The Qatari Riyal is effectively pegged to the United States dollar and thus currency risk occurs only in respect of currencies other than the United States Dollar. The investment in Euro is effectively hedged as illustrated in note 26 (b). The Company does not have significant exposures in other currencies. Therefore the management of the company does not expect fluctuations in exchange rates to significantly affect its foreign currency denominated assets and liabilities. Foreign currency denominated financial assets and liabilities, translated into Qatar Riyals at the closing rate, are as follows: QR'000 QR'000 Nominal amounts US$ Other US$ Other Financial assets 5,994 - - 3,707 - - Financial liabilities -0- - - -0- - - Short -term exposure 5,994 - - 3,707 - - Financial assets 68,185 9,760 47,070 32,267-26,088 Financial liabilities - (9,743) - -0- - -0- Long-term exposure 68,185 17 47,070 32,267-26,088 The sensitivity of net results for the year and equity in regards to the Company s financial assets and liabilities and the US Dollars-Qatar Riyal exchange rate and other currencies would not be significant. The analysis above is considered to be representative of QGIR s exposure to currency risk. 28.2.2 Interest rate sensitivity QGIR's policy is to minimise interest rate cash flow risk exposures on term financing and investments. Term borrowings and investments are usually at variable rates. The Company is exposed to changes in the market interest rates through its financial assets and liabilities which are subject to variable interest rates. -29- The following table illustrates the sensitivity of the net result for the year and equity to a reasonably possible change in interest rates of +1% and -1% (2006: +/-1%), with effect

from the beginning of the year. These changes are considered to be reasonably possible based on observation of current market conditions. The calculations are based on QGIR's financial instruments held at each balance sheet date. All other variables are held constant. +1% -1% +1% -1% Net result for the year (QR '000) (1,611) 1,611 (1,395) 1,395 Equity (QR '000) (1,611) 1,611 (1,395) 1,395 28.2.3 Price risk analysis QGIR is exposed to other price risk in respect of its listed equity securities. Equity price risk is the risk that the fair values of equities decrease as a result of changes in the levels of equity and the value of individual stocks. The effect on equity due to a reasonably possible change in equity indices, with all other variables held constant, is as follows: Change in equity price Effect on equity Change in equity price Effect on equity % QR'000 % QR'000 2007 2006 Market Indices Doha Securities Market -+10 -+91,417 -+10 -+69,888 Geographical concentration of investments in securities is as follows: (QR '000) Qatar 938,175 712,583 Other GCC 47,470 31,256 Middle East 43,818 43,818 North Africa 40,318 34,356 North America 83,820 35,974 1,153,601 857,987 ======== ======== The investments in listed equity securities are considered long-term, strategic investments. In accordance with QGIR's policies, no specific hedging activities are undertaken in relation to these investments. However, the investments are continuously monitored by the specialised investment team. -30-

28.2.4 Credit risk analysis QGIR's exposure to credit risk is limited to the carrying amount of financial assets recognised at the balance sheet date, as summarised below: Classes of financial assets - carrying amounts (QR '000) Available for sales financial assets Trading securities financial assets 961,879 90,733 691,887 75,317 Statutory deposits Cash and cash equivalents 4,500 45,435 4,500 57,692 Insurance contract receivables 169,046 134,473 Other receivables 31,661 19,215 1,303,254 983,084 QGIR continuously monitors defaults of customers and other counterparties, identified either individually or by company, and incorporates this information into its credit risk controls. Where available at reasonable cost, external credit ratings and/or reports on customers and other counterparties are obtained and used. QGIR's policy is to deal only with creditworthy counterparties. QGIR's management considers that all the above financial assets that are not impaired for each of the reporting dates under review are of good credit quality. In respect of trade and other receivables, QGIR is not exposed to any significant credit risk exposure to any single counterparty or any company of counterparties having similar characteristics. The credit risk for liquid funds and other short-term financial assets is considered negligible, since the counterparties are reputable banks with high quality external credit ratings. 28.2.5 Liquidity risk analysis QGIR manages its liquidity needs by carefully monitoring scheduled payments for financial liabilities as well as cash-outflows due in day-to-day business. Liquidity needs are monitored in various time bands, on a day-to-day and week-to-week basis, as well as on the basis of a rolling 30-day projection. Long-term liquidity needs for a 180-day and a 360-day lookout period are identified monthly. QGIR maintains cash and marketable securities to meet its liquidity requirements for up to 90-day periods. Funding for long-term liquidity needs is additionally secured by an adequate amount of committed credit facilities and the ability to sell medium to long-term financial assets. -31- QGIR's liabilities have contractual maturities which are summarised below:

31 December 2007 (QR 000) Current Non-current within 6 to12 1 to 5 later 6 months months years than 5 years Due to bank - 201,529 - - Policyholders payables 20,861 3,278 - - Insurance and reinsurance companies payables 85,496 38,340 - - Other payables 8,620 9,620 - - Insurance funds outstanding claims -net 39,650 23,026 15,280 9,500 Insurance funds -unearned premiums 50,879 43,283 - - End of service benefits - - - 15,595 205,506 319,076 15,280 25,095 This compares to the maturity of QGIR's financial liabilities in the previous reporting period as follows: 31 December 2006 (QR,000) Current Non-current within 6 to12 1 to 5 later 6 months months years than 5 years Due to bank - 185,642 - - Policyholders payables 12,717-0- - - Insurance and reinsurance companies payables 53,269 40,431 - - Other payables 7,513 9,210 - - Insurance funds -outstanding claims -net 23,520 14,259 16,230 9,500 Insurance funds -unearned premiums 41,100 29,924 - - End of service benefits - - - 14,616 138,119 279,466 16,230 24,116 The above contractual maturities reflect the gross cash flows, which may differ to the carrying values of the liabilities at the balance sheet date. -32-28.3 Summary of financial assets and liabilities by category The carrying amounts of QGIR's financial assets and liabilities as recognised at the balance sheet date of the reporting periods under review may also be categorised as follows. See accounting

policies for explanations about how the category of financial instruments affects their subsequent measurement. ASSETS QR '000 QR '000 Cash and cash Equivalents 45,435 57,692 Cash in hand 919 2,255 Cash at banks 4,069 9,304 Time deposits 40,477 46,133 Statutory deposits 4,500 4,500 Insurance contracts receivables 169,046 134,473 Policyholders 143,125 107,204 Insurance and reinsurance treaty 5,374 5,359 Insurance and reinsurance facultative 20,547 21,910 Other receivables 31,661 19,215 Staff loans 48 6,083 Accrued dividend and rental income 1,111 2,704 Prepayments and others 30,502 10,428 Investment in trading securities 90,733 75,317 Local portfolio 86,541 71,610 Foreign portfolio 4,192 3,707 Investment in available for sales securities 961,879 691,887 Local portfolio 829,436 627,925 Foreign portfolio 47,070 26,088 Bonds 54,850 29,533 Managed funds 23,095 913 Private equity 7,428 7,428 LIABILITIES Due to banks 201,529 185,642 Bank overdrafts 69,109 90,722 Loans 132,420 94,920 Policyholders payable 24,139 12,717 Insurance contracts receivables 123,836 93,700 Treaty 29,167 17,297 Facultative 72,316 57,166 Premium reserve 22,353 19,237 Other payables 18,240 16,723 Insurance Funds Outstanding claims net 87,456 63,509 General accident 77,596 56,775 Fire 2,740 2,300 Marine and war 4,050 2,137 Engineering and others 3,070 2,297 Insurance funds Unearned premiums 94,162 71,024 General accident 75,853 62,715 Fire 643 869 Marine and war 2,322 1,144 Engineering and others 15,344 6,296-33- 29. Contingent Liabilities

Letters of guarantee 6,698 6,438 30. Comparative Information Certain corresponding figures for 2006 have been reclassified where necessary to preserve comparability with the current year presentation. Such reclassifications have no effect on the net profit or shareholders' equity for the last year. 31. Events after the Balance Sheet Date The company announced its plans to establish a holding company in October 2007.However, the establishment of the new entity is still under process. -34-