United Development Company Q.P.S.C.
Consolidated financial statements
As at and for the year ended 31 December 2024
United Development Company Q.P.S.C.
Consolidated financial statements as at and for the year ended 31 December 2024
Contents | Page |
Independent auditor's report | 1 - 5 |
Consolidated statement of profit or loss and other comprehensive income | 6 |
Consolidated statement of financial position | 7 |
Consolidated statement of changes in equity | 8 |
Consolidated statement of cash flows | 9 |
Notes to the consolidated financial statements | 10 - 49 |
INDEPENDENT AUDITOR'S REPORT
TO THE SHAREHOLDERS OF UNITED DEVELOPMENT COMPANY Q.P.S.C.
Report on the audit of the consolidated financial statements
Opinion
We have audited the consolidated financial statements of United Development Company Q.P.S.C. (the "Company") and its subsidiaries (together referred as the "Group"), which comprise the consolidated statement of financial position as at 31 December 2024, and 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 material accounting policy information.
In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Group as at 31 December 2024 and its consolidated financial performance and its consolidated cash flows for the year then ended in accordance with IFRS Accounting Standards as issued by the International Accounting Standards Board (IASB).
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 are independent of the Group in accordance with the International Ethics Standards Board for Accountants' International Code of Ethics for Professional Accountants (including International Independence Standards) (IESBA Code) together with the ethical requirements that are relevant to our audit of the consolidated financial statements in State of Qatar, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the IESBA Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Key audit matters
Key audit matters are those matters that, in our professional judgment, were of most significance in the audit of the consolidated financial statements of the current period. These matters were addressed in the context of the audit of the consolidated financial statements as a whole, and in forming the auditor's opinion thereon, and we do not provide a separate opinion on these matters. For each matter below, our description of how our audit addressed the matter is provided in that context.
We have fulfilled the responsibilities described in the Auditor's responsibilities for the audit of the consolidated financial statements section of our report, including in relation to these matters. Accordingly, our audit included the performance of procedures designed to respond to our assessment of the risks of material misstatement of the consolidated financial statements. The results of our audit procedures, including the procedures performed to address the matters below, provide the basis for our audit opinion on the accompanying consolidated financial statements.
Key audit matter | How our audit addresses the key audit matter |
Valuation of investment properties | |
The Group owns investment properties (lands and | Our audit procedures included the following key |
buildings) located primarily in The Pearl Island, State of | areas, among others: |
Qatar. | • We performed walkthrough procedures and |
The fair value of Group's investment properties as at | |
obtained understanding of the controls relating to | |
31 December 2024 amounted to QR 10,102 million | the valuation of investment properties including |
(2023: QR 10,432 million), which is approximately 54% | valuation methods, assumptions and estimates |
(2023: 53%) of the Group's total assets at the reporting | used in the valuation of investment properties. |
date. The Group recorded a net fair value loss of QR 171 | • We assessed the competence, capabilities and |
million for the year ended 31 December 2024 (2023: QR | |
132 million) as disclosed in Note 10 to the consolidated | objectivity of the external valuer appointed by the |
financial statements. | management along with the terms of appointment |
and the scope of work. | |
INDEPENDENT AUDITOR'S REPORT
TO THE SHAREHOLDERS OF UNITED DEVELOPMENT COMPANY Q.P.S.C. (CONTINUED)
Report on the audit of the consolidated financial statements (continued)
Key Audit Matters (continued)
Key audit matter | How our audit addresses the key audit matter | ||||||||
Valuation of investment properties (continued) | |||||||||
Valuation of investment properties was considered a | • With the assistance of our internal valuation | ||||||||
key audit matter due to the significance of the balance | specialist, we assessed: | ||||||||
and the extent of significant judgments and estimates | - whether | the | valuation | approach | and | ||||
applied in assessing the fair values. | |||||||||
methodology used by the management are in | |||||||||
accordance with generally accepted valuation | |||||||||
standards practices; and | |||||||||
- appropriateness of the assumptions and data | |||||||||
used in the valuation such as annual cash flows, | |||||||||
operating costs, terminal value, growth rate, | |||||||||
weighted average cost of capital, occupancy and | |||||||||
market comparable prices where applicable. | |||||||||
• We checked the arithmetical accuracy of the | |||||||||
valuations on a sample basis. | |||||||||
• We reviewed the adjustments made in the books in | |||||||||
relation to the change in fair value of investment | |||||||||
properties. | |||||||||
In addition, we assessed the adequacy of the related | |||||||||
disclosures in the consolidated financial statements | |||||||||
including the disclosure of key assumptions and | |||||||||
judgments. | |||||||||
Disposal of a subsidiary | |||||||||
The Group executed a disposal of 40% of its equity | Our audit procedures included the following key | ||||||||
interest in Qatar District Cooling Company Q.C.S.C. | areas, among others: | ||||||||
("QDCC"), as detailed in Note 37 Discontinued | • We reviewed the relevant legal contracts, | ||||||||
Operations. A shareholder agreement with the buyer | |||||||||
was signed on 20 November 2024. Post the transaction, | shareholder / board of director's approvals and | ||||||||
the remaining interest has been recorded as a joint | assessed that the Group had lost control of QDCC | ||||||||
arrangement, as detailed in Note 13 Investment in | in accordance with IFRS 10. | ||||||||
Associate and Joint Ventures. | |||||||||
Key areas of judgements include assessment of loss of | • We assessed the Group's policies and procedures | ||||||||
for | accounting for | discontinued operations | in | ||||||
control, gain or loss on loss of control, accounting for | |||||||||
compliance with IFRS Accounting Standards and | |||||||||
the retained holding and the related disclosures and | |||||||||
we | analysed | the | financial | effects | from | the | |||
presentation in the consolidated financial statements. | |||||||||
discontinued operations and that they have been | |||||||||
Disposal of QDCC was considered a key audit matter | appropriately | separated | from | continuing | |||||
operations. | |||||||||
due to the significance of the transaction and the | |||||||||
consequential impact on the Group's consolidated | |||||||||
financial position as at 31 December 2024 and the | |||||||||
consolidated results for the year ended 31 December | |||||||||
2024. | |||||||||
Page 2 |
INDEPENDENT AUDITOR'S REPORT
TO THE SHAREHOLDERS OF UNITED DEVELOPMENT COMPANY Q.P.S.C. (CONTINUED)
Report on the audit of the consolidated financial statements (continued)
Key Audit Matters (continued)
Key audit matter | How our audit addresses the key audit matter |
Disposal of a subsidiary (continued) | |
• We checked whether the retained interest in QDCC, | |
has been appropriately accounted as per IFRS | |
Accounting Standards requirements and re- | |
calculated and checked the mathematical accuracy | |
of the gain associated with loss of control and | |
checked the accuracy of journal entries. | |
In addition, we assessed the adequacy of the related | |
disclosures in the consolidated financial statements | |
compliance with IFRS Accounting Standards. | |
Other information included in the Group's 2024 Annual Report
Other information consists of the information included in The Group's 2024 Annual Report other than the consolidated financial statements and our auditor's report thereon. Management is responsible for the other information. The Group's 2024 Annual Report is expected to be made available to us after the date of this auditor's report.
Our opinion on the consolidated financial statements does not cover the other information and we 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 when it becomes available 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.
Responsibilities of management and Board of Directors for the consolidated financial statements Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with IFRS Accounting Standards, 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.
The Board of Directors 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.
Page 3
INDEPENDENT AUDITOR'S REPORT
TO THE SHAREHOLDERS OF UNITED DEVELOPMENT COMPANY Q.P.S.C. (CONTINUED)
Report on the audit of the consolidated financial statements (continued)
Auditor's responsibilities for the audit of the consolidated financial statements (continued)
As part of an audit in accordance with ISAs, we exercise professional judgment and maintain professional skepticism 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.
- Obtain an understanding of internal control relevant to the audit 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 Group's internal control.
- Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
- Conclude on the appropriateness of management's use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor's report to the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may cause the Group to cease to continue as a going concern.
- Evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
- Plan and perform the group audit to obtain sufficient appropriate audit evidence regarding the financial information of the entities or business units within the group as a basis for forming an opinion on the consolidated financial statements. We are responsible for the direction, supervision and review of the audit work performed for the purposes of the group audit. We remain solely responsible for our audit opinion.
We communicate with Board of Directors regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
We also provide Board of Directors with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, actions taken to eliminate threats or safeguards applied.
From the matters communicated with Board of Directors, we determine those matters that were of most significance in the audit of the consolidated financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor's report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.
Page 4
INDEPENDENT AUDITOR'S REPORT
TO THE SHAREHOLDERS OF UNITED DEVELOPMENT COMPANY Q.P.S.C. (CONTINUED)
Report on the audit of the consolidated financial statements (continued)
Report on other legal and regulatory requirements
Furthermore, in our opinion, proper books of account have been kept by the Group, an inventory counts have been conducted in accordance with established principles, and the consolidated financial statements comply with the Qatar Commercial Companies' Law No. 11 of 2015, whose certain provisions were subsequently amended by Law No.8 of 2021 and the Company's Articles of Association. We have obtained all the information and explanations we required for the purpose of our audit and are not aware of any violations of the above mentioned law or the Articles of Association having occurred during the year, which might have had a material adverse effect on the Group's consolidated financial position or performance.
Ahmed Sayed
of Ernst & Young
Auditor's Registration No. 326
Date: 9 February 2025
Doha, State of Qatar
Page 5
United Development Company Q.P.S.C.
Consolidated statement of profit or loss and other comprehensive income for the year ended 31 December 2024
Notes | 2024 | 2023 | |||
QR'000 | QR'000 | ||||
Continuing operations | 36 | 1,032,105 | |||
Revenue | 1,572,079 | ||||
Cost of revenue | (700,417) | (1,083,546) | |||
Gross profit | 331,688 | 488,533 | |||
Other income | 6 | 847,882 | 368,132 | ||
Fair value gain on investment securities | 14 | 982 | 11,320 | ||
(Provision)/ Reversal of impairment on trade receivables | 17 | (10,500) | 17,108 | ||
Impairment of property, plant and equipment | 9 | (158,201) | (8,144) | ||
General and administrative expenses | 7 | (359,571) | (279,495) | ||
Sales and marketing expenses | (28,700) | (23,252) | |||
Operating profit before fair value change in investment | |||||
properties | 623,580 | 574,202 | |||
Fair value loss on investment properties | 10 | (171,484) | (132,401) | ||
Finance income | 65,812 | 84,301 | |||
Finance costs | (249,331) | (247,023) | |||
Net finance costs | (183,519) | (162,722) | |||
Net share of profit on associate and joint ventures | 13 | 921 | (4,031) | ||
Profit before tax from continuing operations | 269,498 | 275,048 | |||
Income tax | 30 | (2,722) | (7,802) | ||
Profit after tax from continuing operations | 266,776 | 267,246 | |||
Discontinued operations | 37 | 160,332 | |||
Profit after tax from discontinued operations | 134,474 | ||||
Net Profit for the year | 427,108 | 401,720 | |||
Other comprehensive income | |||||
Other comprehensive income that will not be reclassified to | |||||
profit or loss in subsequent periods: | - | ||||
Revaluation of property | (3,322) | ||||
Other comprehensive loss for the year | - | (3,322) | |||
Total comprehensive income for the year | 427,108 | 398,398 | |||
Net profit for the year attributable to: | 425,924 | ||||
Equity holders of the Parent | 402,065 | ||||
Non-controlling interests | 1,184 | (345) | |||
427,108 | 401,720 | ||||
Total comprehensive income for the year attributable | |||||
to: | 425,924 | ||||
Equity holders of the Parent | 398,743 | ||||
Non-controlling interests | 1,184 | (345) | |||
427,108 | 398,398 | ||||
Basic/Diluted earnings per share attributable to | |||||
equity holders of the Parent: | 8 | 0.120 | |||
Basic and diluted earnings per share (QR) | 0.114 | ||||
Basic/Diluted earnings per share from continuing | |||||
operations attributable to equity holders of the Parent: | 8 | 0.079 | |||
Basic and diluted earnings per share (QR) | 0.079 |
The attached notes from 1 to 37 form part of these consolidated financial statements. - 6 -
United Development Company Q.P.S.C.
Consolidated statement of financial position as at 31 December 2024
Note | 2024 | 2023 | |||
Assets | QR'000 | QR'000 | |||
Non-current assets | 9 | 1,932,567 | |||
Property, plant and equipment | 3,504,202 | ||||
Investment properties | 10 | 10,101,760 | 10,432,175 | ||
Right-of-use assets | 11 | 3,076 | 8,810 | ||
Intangible assets | 12 | 5,376 | 7,105 | ||
Investment in associate and joint ventures | 13 | 941,436 | 16,484 | ||
Investment securities | 14 | 63,795 | 62,813 | ||
Accounts and other receivables | 17 | 298,084 | 482,020 | ||
Deferred costs | 16 | - | 115,621 | ||
Total non-current assets | 13,346,094 | 14,629,230 | |||
Current assets | 15 | 83,456 | |||
Inventories | 97,507 | ||||
Work in progress | 2,754,417 | 1,821,456 | |||
Accounts and other receivables | 17 | 1,058,642 | 1,285,816 | ||
Deferred costs | 16 | - | 15,123 | ||
Cash and bank balances | 18 | 1,433,018 | 1,726,980 | ||
Total current assets | 5,329,533 | 4,946,882 | |||
Total assets | 18,675,627 | 19,576,112 | |||
Equity and liabilities | |||||
Equity | 19 | 3,540,862 | |||
Share capital | 3,540,862 | ||||
Legal reserve | 20 | 1,770,431 | 1,770,431 | ||
Other reserves | 21 | 1,148,009 | 1,208,727 | ||
Retained earnings | 5,061,238 | 4,779,992 | |||
Equity attributable to equity holders of the parent | 11,520,540 | 11,300,012 | |||
Non-controlling interests | (31,140) | 65,923 | |||
Total equity | 11,489,400 | 11,365,935 | |||
Liabilities | |||||
Non-current liabilities | 24 | 4,515,956 | |||
Loans and borrowings | 3,842,429 | ||||
Accounts and other payables | 25 | 147,521 | 125,889 | ||
Retention payable | 26 | 3,294 | 31,080 | ||
Deferred revenue | 27 | - | 628,980 | ||
Employees' end-of-service benefits | 28 | 47,165 | 59,175 | ||
Lease liabilities | 29 | 2,060 | 7,752 | ||
Total non-current liabilities | 4,715,996 | 4,695,305 | |||
Current liabilities | 24 | 501,008 | |||
Loans and borrowings | 1,305,919 | ||||
Accounts and other payables | 25 | 1,763,249 | 1,962,947 | ||
Retention payable | 26 | 204,550 | 176,663 | ||
Deferred revenue | 27 | - | 67,227 | ||
Lease liabilities | 29 | 1,424 | 2,116 | ||
Total current liabilities | 2,470,231 | 3,514,872 | |||
Total liabilities | 7,186,227 | 8,210,177 | |||
Total equity and liabilities | 18,675,627 | 19,576,112 |
These consolidated financial statements were approved by the Board of Directors and signed on their behalf on
9 February 2025 by:
______________________________ | _____________________________ |
Yasser Salah Al-Jaidah | Ahmed Ali Al-Hammadi |
President and Chief Executive Officer | Chairman of the Board |
The attached notes from 1 to 37 form part of these consolidated financial statements. - 7 -
United Development Company Q.P.S.C.
Consolidated statement of changes in equity for the year ended 31 December 2024
Attributable to equity-holders of the Parent | Non- | ||||||||||||||
Share | Legal | Other | Retained | controlling | Total | ||||||||||
capital | reserve | reserves | earnings | Total | interests | equity | |||||||||
QR'000 | QR'000 | QR'000 | QR'000 | QR'000 | QR'000 | QR'000 | |||||||||
Balance at 1 Jan 2023 | 3,540,862 | 1,770,431 | 1,212,049 | 4,582,726 | 11,106,068 | 70,688 | 11,176,756 | ||||||||
Net profit for the year | - | - | - | 402,065 | 402,065 | (345) | 401,720 | ||||||||
Other comprehensive | |||||||||||||||
income for the year | - | - | (3,322) | - | (3,322) | - | (3,322) | ||||||||
Dividend paid (Note 22) | - | - | - | (194,748) | (194,748) | (4,420) | (199,168) | ||||||||
Contribution to Social | |||||||||||||||
and Sports Fund (Note | |||||||||||||||
23) | - | - | - | (10,051) | (10,051) | - | (10,051) | ||||||||
Balance at 31 | |||||||||||||||
December 2023 | 3,540,862 | 1,770,431 | 1,208,727 | 4,779,992 | 11,300,012 | 65,923 | 11,365,935 | ||||||||
Net profit for the year | - | - | - | 425,924 | 425,924 | 1,184 | 427,108 | ||||||||
Other comprehensive | - | - | - | - | - | - | - | ||||||||
income for the year | |||||||||||||||
Dividend paid (Note | - | - | - | (194,748) | (194,748) | (1,475) | (196,223) | ||||||||
22) | |||||||||||||||
Disposal of a | - | - | - | - | - | (96,772) | (96,772) | ||||||||
subsidiary (Note 37) | |||||||||||||||
Transfer of revaluation | - | - | (60,718) | 60,718 | - | - | - | ||||||||
surplus | |||||||||||||||
Contribution to Social | - | - | - | (10,648) | (10,648) | - | (10,648) | ||||||||
and Sports Fund (Note | |||||||||||||||
23) | |||||||||||||||
Balance at 31 | |||||||||||||||
December 2024 | 3,540,862 | 1,770,431 | 1,148,009 | 5,061,238 | 11,520,540 | (31,140) | 11,489,400 | ||||||||
The attached notes from 1 to 37 form part of these consolidated financial statements. - 8 -