Aldar Properties PJSC — Interim / Quarterly Report 2017

Nov 12, 2017

INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

30 SEPTEMBER 2017

Ernst & Young P.O. Box: 136 27^th Floor, Nation Tower 2 Abu Dhabi Corniche Abu Dhabi, United Arab Emirates Tel: +971 2 417 4400 Fax: +971 2 627 3383 abudhabi@ae.ey.com ev.com/mena

REPORT ON REVIEW OF INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

TO THE BOARD OF DIRECTORS OF ALDAR PROPERTIES PJSC

Introduction

We have reviewed the accompanying interim condensed consolidated financial statements of Aldar Properties PJSC (the "Company") and its subsidiaries (together referred to as the "Group") as at 30 September 2017 comprising of the interim consolidated statement of financial position as at 30 September 2017 and the related interim consolidated statements of income and comprehensive income for the three-month and nine-month periods then ended and the related statement of changes in equity and condensed statement of cash flows for the nine-month period then ended and other explanatory notes. Management is responsible for the preparation and presentation of these interim condensed consolidated financial statements in accordance with International Accounting Standard 34, "Interim Financial Reporting (IAS 34)". Our responsibility is to express a conclusion on these interim condensed consolidated 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. Consequently, it 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 consolidated financial statements are not prepared, in all material respects, in accordance with IAS 34.

Signed by Anthony O'Sullivan Partner Ernst & Young Registration No. 687

12 November 2017 Abu Dhabi

INTERIM CONSOLIDATED STATEMENT OF FINANCIAL POSITION As at 30 September 2017 (Unaudited)

			(Audited)
		30 September	31 December
	Notes	2017 AED'000	2016 AED'000
ASSETS
Non-current assets
Property, plant and equipment	5	2,891,416	2,986,073
Intangible assets		4,585	3,967
Investment properties	6 $\overline{7}$	15,844,491	15,773,282
Investment in associates and joint ventures Available-for-sale financial assets	8	973,049 110,502	964,408 126,448
Trade and other receivables	9	434,738	726,974
Total non-current		20,258,781	20,581,152
Current assets
Land held for sale		2,386,308	2,228,191
Development work in progress Inventories	10 11	1,502,047 174,183	1,298,384 220,645
Trade and other receivables	9	5,411,748	4,536,385
Cash and bank balances	12	5,499,604	6,696,340
Total current assets		14,973,890	14,979,945
TOTAL ASSETS		35,232,671	35,561,097
EQUITY AND LIABILITIES Equity
Share capital		7,862,630	7,862,630
Statutory reserve		3,931,315	3,931,315
Hedging reserve Fair value reserve		(36, 226) 32,964	(19, 136) 38,171
Retained earnings		11,059,136	10,069,933
Equity attributable to the owners of the Company		22,849,819	21,882,913
Non-controlling interests		210,883	203,181
Total equity		23,060,702	22,086,094
Non-current liabilities Non-convertible sukuk	13	2,751,920	2,749,189
Bank borrowings	13	2,065,378	2,168,792
Retentions payable		312,971	165,234
Provision for employees' end of service benefit		137,729	128,137
Other financial liabilities	16	33,732	15,081
Total non-current liabilities		5,301,730	5,226,433
Current liabilities Non-convertible sukuk	13	39,931	9,983
Bank borrowings	13	639,766	636,268
Retentions payable		265,806	397,525
Advances from customers Trade and other payables	14 15	423,025 5,501,711	424,642 6,780,152
Total current liabilities		6,870,239	8,248,570
Total liabilities		12,171,969	13,475,003
TOTAL EQUITY AND LIABILITIES		35,232,671	35,561,097
Mohammed Khalifa Al Mubarak		Greg Fewer
Chairman		Chief Financial Officer

The attached notes 1 to 23 form part of these interim condensed consolidated financial statements.

INTERIM CONSOLIDATED INCOME STATEMENT For the period ended 30 September 2017 (Unaudited)

			Three months ended 30 September		Nine months ended 30 September
	Notes	2017 AED'000	2016 AED'000	2017 AED'000	2016 AED'000
Revenue		1,379,900	1,898,328	4,311,686	4,826,241
Direct costs		(792, 327)	(1,015,555)	(2,429,257)	(2,709,297)
GROSS PROFIT		587,573	882,773	1,882,429	2,116,944
Selling and marketing expenses		(15,310)	(15, 417)	(56,089)	(44, 675)
General and administrative expenses
Staff costs		(50, 897)	(55, 721)	(163, 146)	(173, 592)
Depreciation and amortisation		(40, 042)	(48, 463)	(137, 771)	(149, 105)
Reversal – net / (provisions, impairments and
write downs)		59,727	(5, 873)	47.114	15,946
Others		(17,986)	(27, 954)	(44, 877)	(73, 228)
Share of profit from associates
and joint ventures	7	14,677	19,281	42,244	53,323
Fair value loss on investment properties	6	(39, 421)	(35, 191)	(118, 263)	(104, 716)
Gain / (loss) on disposal of investment properties		3,835	(355)	3,835	14,764
Finance income		28,786	31,174	87,366	89,270
Finance costs	17	(63,081)	(60, 849)	(185, 961)	(178, 767)
Other income	18	133,171	53,658	504,913	479,263
PROFIT FOR THE PERIOD		601,032	737,063	1,861,794	2,045,427
Attributable to:
Owners of the Company		597,822	747,836	1,854,092	2,054,476
Non-controlling interests		3,210	(10, 773)	7,702	(9,049)
		601,032	737,063	1,861,794	2,045,427
Basic and diluted earnings per share attributable to owners of the Company in AED	19	0.076	0.095	0.236	0.261

The attached notes 1 to 23 form part of these interim condensed consolidated financial statements.

INTERIM CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME For the period ended 30 September 2017 (Unaudited)

		Three months ended 30 September		Nine months ended 30 September
	2017 AED'000	2016 AED'000	2017 AED'000	2016 AED'000
Profit for the period	601,032	737,063	1,861,794	2,045,427
Other comprehensive income / (loss) to be reclassified to profit or loss in subsequent periods: Gain / (loss) on revaluation of available-for-sale financial assets	2,122	1,583	(5,207)	2,394
Changes in fair value of cash flow hedges	1,916	496	(17,090)	1,471
Other comprehensive income / (loss)	4,038	2,079	(22, 297)	3,865
TOTAL COMPREHENSIVE INCOME FOR THE PERIOD	605,070	739,142	1,839,497	2.049.292
Total comprehensive income attributable to: Owners of the Company Non-controlling interests	601,860 3,210	749,915 (10,773)	1,831,795 7,702	2,058,341 (9,049)
	605,070	739,142	1,839,497	2,049,292

The attached notes 1 to 23 form part of these interim condensed consolidated financial statements.

$\overline{4}$

INTERIM CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the period ended 30 September 2017 (Unaudited)

	capital AED'000 Share	000. G3P reserve Statutory	Hedging AED'000 reserve	Fair value NED 000 AED 000	AED'000 Retained earnings	attributable Company AED 000 to owners of the Equity	000.CHV Non- controlling interests	000. CFF Total
Other comprehensive income Balance at 1 January 2016 Profit for the period Dividends	7,862,630	3,931,315	(25,908) 2,394 $\begin{array}{c} \hline \end{array}$	29,283 1,471 $\frac{1}{\sqrt{2}}$	(786, 263) 8,073,832 2,054,476	(786, 263) 9,871,152 2,054,476 3,865	(54, 800) (9,049) 287,939	3,865 2,045,427 (841,063) 160,651,091
Balance at 30 September 2016	7,862,630	3,931,315	(23,514)	30.754	9,342,045	21,143,230	224,090	21,367,320
Balance at 31 December 2016 (audited) Other comprehensive income Profit for the period Dividends (i)	7,862,630	3,931,315	(19, 136) (17,090)	(5,207) $\overline{\phantom{a}}$ 38,171	(864, 889) 0,069,933 1,854,092	$(22, 297)$ $(864, 889)$ 1,854,092 21,882,913	7,702 203,181	22,086,094 1,861,794 (22,297) (864, 889)
Balance at 30 September 2017	7,862,630	3,931,315	(36, 226)	32,964	1,059,136	22,849,819	210,883	23,060,702
The shareholders of the Company in their Annual General Meeting held on 20 March 2017 annoyed a dividend of 11 file ner critinary share for the veer ended G

iviarian zull approved a dividend of 11 fils per ordinary share for the year ended ivicenting neid on 20 UELLEI AL Company in their Amilian ЦC Ine snarenolers or
31 December 2016. $\sum_{i=1}^{n}$

The attached notes 1 to 23 form part of these interim condensed consolidated financial statements.

$\overline{5}$

INTERIM CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS For the period ended 30 September 2017 (Unaudited)

		Nine months ended 30 September
		2017	2016
	Note	AED'000	AED'000
Net cash generated from operating activities		66,418	974,752
INVESTING ACTIVITIES
Payments for purchase of property, plant and equipment		(48, 690)	(200, 583)
Payments for purchase of intangible assets		(3,764)	(1, 868)
Additions to investment properties		(190, 919)	(65,062)
Movement in term deposits with
original maturities above three months		343,801	1,037,879
Movement in restricted bank balances		(152, 751)	(151, 244)
Proceeds from disposal of investment properties		15,094	49,358
Finance income received		55,829	51,416
Capital call contributions made for
available for sale financial assets			(1,067)
Capital repayments received for
available for sales financial assets		10,738	4,806
Dividend received		45,638	42,038
Net cash generated from investing activities		74,976	765,673
FINANCING ACTIVITIES
Dividend paid		(865, 823)	(841,892)
Directors' remuneration payments		(23,000)	(23,000)
Repayment of operating lease liability		(20,750)	(19,750)
Repayment of borrowings		(114, 062)
Borrowings raised			5,000
Finance costs paid		(123, 445)	(124, 945)
Net cash used in financing activities		(1, 147, 080)	(1,004,587)
NET (DECREASE)/ INCREASE IN CASH AND
CASH EQUIVALENTS		(1,005,686)	735,838
		1,511,533	1,604,167
Cash and cash equivalents at the beginning of the period
CASH AND CASH EQUIVALENTS AT
THE END OF THE PERIOD	12	505,847	2,340,005

The attached notes 1 to 23 form part of these condensed consolidated financial statements.

6

NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS For the period ended 30 September 2017 (Unaudited)

$\mathbf{1}$ CORPORATE INFORMATION

The establishment of Aldar Properties PJSC (the "Company") was approved by Decision No. (16) of 2004 of the Abu Dhabi Department of Planning and Economy dated 12 October 2004. The Company's incorporation was declared by Ministerial Resolution No. (59) of 2005 issued by the UAE Minister of Economy dated 23 February 2005.

The Company is domiciled in the United Arab Emirates and its registered office address is P O Box 51133, Abu Dhabi.

The Company's ordinary shares are listed on the Abu Dhabi Securities Exchange.

The Company and its subsidiaries (together referred to as the "Group") are engaged in various businesses primarily the development, sales, investment, construction, management and associated services for real estate, operation of hotels, schools, marinas and golf courses.

$\overline{2}$ NEW AND REVISED INTERNATIONAL FINANCIAL REPORTING STANDARDS (IFRS)

$2.1$ Standards issued and adopted

The Group early adopted following standards issued but not yet effective:

• IFRS 15 'Revenue from Contracts with Customers' with effect from 1 January 2015; and
• IFRS 16 'Leases' with effect from 1 January 2016.

The Group has not early adopted any other standard, interpretation or amendment that has been issued but is not yet effective.

$\overline{\mathbf{3}}$ SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

$3.1$ Statement of compliance

The interim condensed consolidated financial statements have been prepared in accordance with International Accounting Standard 34 Interim Financial Reporting and also comply with the applicable requirements of the laws in the UAE.

The interim condensed consolidated financial statements do not include all the information and disclosures required in the annual financial statements, and should be read in conjunction with the Group's consolidated financial statements for the year ended 31 December 2016. In addition, results for the nine-months period ended 30 September 2017 are not necessarily indicative of the results that may be expected for the financial year ending 31 December 2017.

$\overline{\mathbf{3}}$ SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES continued

$3.2$ Basis of preparation

The interim condensed consolidated financial statements are presented in UAE Dirhams (AED) since that is the currency in which the majority of the Group's transactions are denominated.

These interim condensed consolidated financial statements have been prepared on the historical cost basis, except for the measurement at fair value of financial instruments and investment properties.

The accounting policies used in the preparation of these interim condensed consolidated financial statements are consistent with those applied to the audited annual consolidated financial statements for the year ended 31 December 2016.

During the period, the Group has applied, for the first time, certain standards and amendments as disclosed below. The application of these standards and amendments do not impact the interim condensed consolidated financial statements of the Group.

• Amendments to IAS 7 Statement of Cash Flows: Disclosure Initiative $\bullet$
• $\ddot{\bullet}$ Amendments to IAS 12 Income Taxes: Recognition of Deferred Tax Assets for Unrecognised Losses
• Annual Improvements Cycle 2014-2016: $\bullet$
• Amendments to IFRS 12 Disclosure of Interests in Other Entities: Clarification of the scope of disclosure requirements in IFRS 12

CRITICAL ACCOUNTING JUDGMENTS AND SOURCES ESTIMATION $\overline{\bf 4}$ KEY $\overline{OR}$ UNCERTAINTY

The preparation of these interim condensed consolidated 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 expense. Actual results may differ from these estimates.

In preparing these interim condensed consolidated financial statements, the significant judgments made by management in applying the Group's accounting policies, and the key sources of estimates uncertainty were same as those applied to the consolidated financial statements as at and for the year ended 31 December 2016.

PROPERTY, PLANT AND EQUIPMENT 5

The movement in property, plant and equipment pertains to depreciation charge for the period of AED 141.9 million and transfers to investment properties of AED 9.6 million (Note 6). This is offset by additions during the period of AED 48.7 million and transfer from development work in progress of AED 8.2 million (Note 10).

$\boldsymbol{6}$ INVESTMENT PROPERTIES

Investment properties comprise completed properties (buildings and retail centers) and properties under development. The movement during the period $\overline{\prime}$ year is as follows:

	30 September 2017			31 December 2016 (Audited)
	Completed properties AED'000	Properties under development AED'000	Total AED'000	Completed properties AED'000	Properties under development AED'000	Total AED'000
Balance at the beginning of the period / year	14,929,374	843,908	15,773,282	15,114,269	787,469	15,901,738
Development costs incurred during the period / year	2,987	187,932	190,919	908	95,274	96,182
Finance cost capitalised		213	213
Decrease in fair value - net	(118, 263)	٠	(118, 263)	(169, 680)		(169, 680)
Disposals Transfers from / (to):	(11,259)	$\overline{\phantom{a}}$	(11, 259)	(34, 594)		(34, 594)
Property, plant and equipment (Note 5)	9,599		9,599	18,471	(38, 835)	(20.364)
Balance at the end of the period / year	14.812.438	1,032,053	15,844,491	14.929.374	843.908	15,773,282

$\overline{7}$ INVESTMENTS IN ASSOCIATES AND JOINT VENTURES

The movement in the investment in associates and joint ventures is as follows:

		(Audited)
	30 September	31 December
	2017	2016
	AED'000	AED'000
Balance at the beginning of the period / year	964,408	937,442
Share in profit for the period / year	42,244	66,636
Share in hedging reserve	1,562	1,431
Dividends received	(42, 638)	(47, 038)
Transferred to joint venture current accounts	8.273	5,937
Disposals	(800)
Balance at the end of the period / year	973,049	964,408

8 AVAILABLE-FOR-SALE FINANCIAL ASSETS

		(Audited)
	30 September	31 December
	2017	2016
	AED'000	AED'000
Investment in UAE quoted securities	26,000	29,580
Investment in UAE unquoted securities	35,201	35,201
Investment in international unquoted securities	49,301	61,667
	110.502	126,448

NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS For the period ended 30 September 2017 (Unaudited)

$\overline{9}$ TRADE AND OTHER RECEIVABLES

	30 September 2017 AED'000	(Audited) 31 December 2016 AED'000
Non-current portion Receivable from project finance (Note 20) Receivable from the Government of Abu Dhabi (Note 20) Due from associates and joint ventures (Notes 20) Other	149,991 190,000 84,052 10,695 434,738	150,581 474,999 89,114 12,280 726,974
Current portion Trade receivables Less: provision for impairment and cancellations	1,434,965 (271, 638) 1,163,327	1,414,592 (327, 556) 1,087,036
Refundable costs (Note 20) Receivable from project finance (Note 20) Receivable from the Government of Abu Dhabi (Note 20) Due from associates and joint ventures (Note 20) Gross amount due from customers on contracts for sale of properties (Note 9.1) Gross amount due from customers on contracts to construct an asset (Note 9.2) Advances and prepayments Accrued interest Others	424,847 16,932 1,147,562 275,093 828,148 124,057 1,099,989 53,262 278,531	301,395 17,401 815,039 236,485 152,194 129,885 1,428,960 37,493 330,497
9.1 Contracts with customers for sale of properties	5,411,748	4,536,385

	30 September 2017 AED'000	(Audited) 31 December 2016 AED'000
Amount due from customers included in
trade and other receivables (Note 9) Amount due to customers included in	828,148	152,194
trade and other payables (Note 15)	(284, 887)	(556, 489)
	543,261	(404, 295)
Total contracts cost incurred plus recognised
profits less recognised losses to date	2,710,332	1,474,393
Less: total progress billings to date	(2,167,071)	(1,878,688)
	543,261	(404, 295)

The above represents unbilled / (deferred) revenue arising from sale of land and units. With respect to the above contracts, revenue aggregating to AED 4,123 million is expected to be recognised over the term of these contracts.

$\boldsymbol{9}$ TRADE AND OTHER RECEIVABLES continued

$9.2$ Contracts with customers to construct an asset

		(Audited)
	30 September	31 December
	2017	2016
	AED'000	AED'000
Amount due from customers included in
trade and other receivable (Note 9)	124,057	129,885
Amount due to customers included in
trade and other payable (Note 15)	(186, 084)	(70, 238)
	(62, 027)	59,647
Total contracts cost incurred plus recognised profits less
recognised losses to date	5,636,828	5,673,578
Less: total progress billing to date	(5,698,855)	(5,613,931)
	62,02	59,647

The above represents (deferred) / unbilled revenue arising from construction contracts. With respect to the above contracts, revenue aggregating to AED 1,015 million is expected to be recognised over the period of these contracts.

10 DEVELOPMENT WORK IN PROGRESS

Development work in progress represents development and construction costs incurred on properties being developed. Movement during the period / year is as follows:

	(Audited)
30 September	31 December
2017	2016
AED'000	AED'000
1,298,384	2,744,976
966,104	608,220
(752, 935)	(856, 141)
	(1,187,370)
(8,150)	(11,301)
(1, 356)
1,502,047	1.298.384

All development work in progress projects are located in the United Arab Emirates.

11 INVENTORIES

		(Audited)
	30 September	31 December
	2017	2016
	AED'000	AED'000
Completed properties	116,081	163,415
Other operating inventories	58,102	57,230
	174,183	220,645

All completed properties are located in the United Arab Emirates.

12 CASH AND BANK BALANCES

	30 September 2017 AED'000	(Audited) 31 December 2016 AED'000
Cash and bank balances Short term deposits held with banks	1,550,525 3,949,079	2,046,292 4,650,048
Cash and bank balances	5,499,604	6,696,340
Short term deposits with original maturities greater than three months Restricted bank balances	(2,871,358) (2,122,399)	(3,215,160) (1,969,647)
Cash and cash equivalents	505,847	1,511,533

Included are balances amounting to AED 947.0 million (2016: AED 684.4 million) from customers against sale of development properties which are deposited into escrow accounts.

The interest rate on term deposits during the period ranges between 0.50% and 2.55% (2016: 0.75 % and 2.40%) per annum. All bank deposits are placed with local banks in the United Arab Emirates.

INTEREST-BEARING LOANS AND BORROWINGS 13

		Non-convertible sukuk		Bank borrowings		Total borrowings
	30 September 2017	31 December 2016 (audited)	30 September 2017	31 December 2016 (audited)	30 September 2017	31 December 2016 (audited)
	AED '000	AED '000	AED '000	AED '000	AED '000	AED '000
Current Within one year	39,931	9,983	639,766	636,268	679,697	646,251
Non-current
In two to five years	2,751,920	2,749,189	2,065,378	2,168,792	4,817,298	4,917,981
	2,791,851	2,759,172	2,705,144	2,805,060	5,496,995	5,564,232
Finance cost capitalised during the period/year	110	.136	103	.225	213	2,361

a) Loan securities are in the form of mortgage over plots of land, assignment of project receivables and lien on bank deposits.

$b)$ Certain of the Group's borrowings carry a net worth covenant.

14 ADVANCES FROM CUSTOMERS

Advances from customers represent mainly instalments collected from customers for the sale of the Company's property developments and security deposits.

15 TRADE AND OTHER PAYABLES

		(Audited)
	30 September	31 December
	2017	2016
	AED'000	AED'000
Trade payables	348,844	465,869
Accrual for contractors' costs	1,726,712	1,725,527
Advances from the Government of Abu Dhabi (note 20)	798,395	1,829,262
Deferred income	340,991	432,158
Dividends payable	103,123	104,057
Provision for onerous contracts	33,354	67,298
Gross amount due to customers on contracts for sale of properties (Note 9.1)	284,887	556,489
Gross amount due to customers on contracts to construct an asset (Note 9.2)	186,084	70,238
Due to the Government of Abu Dhabi (Note 20)	684,075	502,335
Operating lease liability	476,457	488,333
Other liabilities	518,789	538,586
	5,501,711	6,780,152

The Group has financial and risk management policies in place to ensure that all payables are paid within the preagreed credit terms.

Trade payables and accruals for contractors' costs include amounts due to joint ventures for project related work which has been disclosed in Note 20.

16 OTHER FINANCIAL LIABILITIES

The Company has entered into interest rate swap contracts to hedge its exposure to future cash flows due to interest rate fluctuations. As at 30 September 2017, the notional amount of these derivatives amounted to AED 2,867,272 thousand (USD 780,635 thousand) with a negative fair value (net) of AED 17,090 thousand (USD 4,656 thousand) recorded in the statement of comprehensive income.

17 FINANCE COSTS

		Three months ended 30 September		Nine months ended 30 September
	2017 (unaudited) AED'000	2016 (unaudited) AED'000	2017 (unaudited) AED'000	2016 (unaudited) AED'000
Gross finance costs Unwinding of finance cost on operating lease	58,715	57,200	173,077	166,715
liability (Note 21.2) Less: Amounts included in the cost of qualifying assets	4,366	4,804 (1,155)	13,097 (213)	14,413 (2,361)
	63,081	60,849	185,961	178,767

OTHER INCOME 18

		Three months ended 30 September		Nine months ended 30 September
	2017 (unaudited) AED'000	2016 (unaudited) AED'000	2017 (unaudited) AED'000	2016 (unaudited) AED'000
Government grant income recorded upon handover of infrastructure assets (Note 20)	79,770	s	342,932	326,424
Release of infrastructure accruals and other accruals and provisions	53,192		76,992
Write back on receivables and cancellation of land plots - net				44,426
Recovery of amounts previously charged to direct costs		50,000	73,871	50,000
Others	209	3,658	11,118	58,413
	133,171	53,658	504,913	479,263

19 EARNINGS PER SHARE

Basic earnings per share amounts are calculated by dividing profit for the period attributable to owners of the Company by the weighted average number of ordinary shares outstanding during the period. As there are no dilutive instruments outstanding, basic and diluted earnings per share are identical. The calculation of basic and diluted earnings per share attributable to the owners of the Company is based on the following data:

		Three months ended 30 September		Nine months ended 30 September
	2017 (unaudited)	2016 (unaudited)	2017 (unaudited)	2016 (unaudited)
Earnings (AED '000) Earnings for the purpose of basic and diluted earnings
per share (profit for the period attributable to Owners of the Company)	597,822	747,836	1.854.092	2.054.476
Weighted average number of shares Weighted average number of ordinary shares for the
purpose of basic and diluted earnings per share	7,862,629,603	7,862,629,603	7,862,629,603	7.862,629,603
Earnings per share (AED) Basic and diluted earnings per share attributable to owners of the Company	0.076	0.095	0.236	0.261

$20$ TRANSACTIONS AND BALANCES WITH RELATED PARTIES

Parties are considered to be related if one party has the ability to control the other party or exercise significant influence over the other party in making financial or operational decisions. Related parties comprise of major shareholder, associated companies, directors, key management personnel of the Group and their related entities. The terms of these transactions are approved by the Group's management and are made on terms agreed by the Board of Directors or management. Government of Abu Dhabi is an indirect major shareholder of the Company.

The Group maintains significant balances with these related parties, which are as follows:

		(Audited)
	30 September	31 December
	2017	2016
	AED'000	AED'000
Due from / (to) Government:
Refundable costs (Note 9)	424,847	301,395
Receivable from assets sold (Note 9)	1,011,395	1,290,038
Receivables against infrastructure handovers (Note 9)	326,167
Other payables (Note 15)	(684, 075)	(502, 335)
Other receivables	48,852	57,454
	1,127,186	1,146,552
Advances received (Note 15)	(798, 395)	(1,829,262)
Due from associates and joint ventures (Note 9)	359,145	325,599
Due to joint ventures for project-related work:
Contract payables	32,692	32,692

$\widetilde{\mathcal{E}}$

NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS For the period ended 30 September 2017 (Unaudited)

20 TRANSACTIONS AND BALANCES WITH RELATED PARTIES continued

Certain receivables from joint ventures carry interest of 9% and are repayable within 2 to 5 years from the end of the reporting period.

		(Audited)
	30 September	31 December
	2017	2016
	AED'000	AED'000
Due from major shareholder owned by
Government and / or its associated companies:
Receivable from project finance (Note 9)	136,824	138,649
Significant transactions with related parties during the period were as follows:
		Nine months ended 30 September
	2017	2016
	AED'000	AED'000
Key management compensation:
Salaries, bonuses and other benefits	11,072	11,129
Post-employment benefits	489	497
	11,561	11,626
Directors' remuneration paid
	23,000	23,000
Revenue from Government and major shareholder owned by Government:
Revenue from sale of land and properties	42,000	812,825
Project management income	92,628	91,065
Rental income	234,262	223,193
Government grant income	342,932	326,424
	711,822	1,453,507
Finance income from project finance and joint ventures	14.616	13.743

The amount and timing of the infrastructure cost reimbursement is subject to the completion of certain audit and technical inspections and assessments to be performed by the relevant government authority. Once these activities are completed, there will be reasonable assurance that the grant will be received and at that point it will be recognised as a deferred government grant. Once the conditions of the grant are met, i.e. infrastructure assets are handed over to the designated authorities, the deferred government grant will be recognised in profit or loss. During the period, an amount of AED 342.9 million was recognised as government grant income upon handover of infrastructure assets. (30 September 2016: AED 326.4 million).

NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS For the period ended 30 September 2017 (Unaudited)

$21$ COMMITMENTS AND CONTINGENCIES

$21.1$ Capital commitments

Capital expenditure contracted for but not yet incurred is as follows:

	30 September	(Audited) 31 December
	2017	2016
	AED'000	AED'000
Projects under development	2,980,251	1,731,035
Reimbursable project works in progress	3,088,179	4,489,301
Investment in associates	30,342	30,342
	6,098,772	6,250,678

The above commitments are spread over a period of one to five years.

$21.2$ Operating lease commitments

	30 September 2017 AED'000	(Audited) 31 December 2016 AED'000
The Company as lessor Within one year In the second to fifth year After five years	790,143 1,669,550 390,331	825,892 1,794,525 948,387
	2,850,024	3,568,804

Following the Company election to adopt IFRS 16 (Note 2.1), the resulting impact on the consolidated income statement and consolidated statement of cash flows is as follows:

The Company as a lessee

	Nine months ended 30 September
	2017 AED'000	2016 AED'000
Unwinding of interest expense during the period on lease liabilities (note 17)	13,097	14,413
Expense relating to short-term leases	21,353	20,941
Total cash outflow in respect of leases	20.750	19.750

$21$ COMMITMENTS AND CONTINGENCIES continued

21.3 Contingencies

	30 September	(Audited) 31 December
	2017	2016
	AED'000	AED'000
Letters of credit and bank guarantees:
Issued by the Group	881,974	698,084
Group's share in contingencies of joint ventures and associates	167,609	221,690

Included in the above are bank guarantees and letters of credit amount of AED 809.9 million (31 December 2016: AED 619.2 million) pertaining to a construction related subsidiary.

$\overline{\mathcal{E}}$

NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 30 September 2017 (Unaudited)

SEGMENT INFORMATION $22$

Business segments 22.1

Segment information about the Group's continuing operations for the nine months ended 30 September 2017 is presented below:

	Property development and management		Asset management
development and sales 000. CFF Property	000. CFF Development management	Investment properties 000, CFF	000. GFV and leisure Hospitality	villages 000, GFV Operative	Adjacencies 000, CFF	000, CFF Group
1,455,843	123,911 $\overline{\phantom{a}}$	1,160,161 103,299	323,499 $\overline{\phantom{a}}$	14,116 $\frac{1}{\sqrt{2}}$	1,130,857	103,299 4,208,387
(807, 734) 1,455,843	(13, 100) 123,911	(103, 299) (128, 801) ,263,460	(288, 296) 323,499 $\overline{\phantom{a}}$	(881) 14,116 Ί	1,087,146 1,130,857	4,311,686 (2,325,958) (103, 299)
648,109	110,811	1,031,360	35,203	13,235	43,711	1,882,429
96,019 458,304		(45, 106) (118,263) (4,299) 43,932 3,835	(86, 691)	(735)	$(34,354)$ $(2,567)$	(118, 263) (126, 079) 48,346 43,932 3,835 458,322
1.202.432	110,811	911.459	(51.470)	12,500	6,790	2.192.522
						$(1,688)$ (56,089) (208, 023) (185, 961) $(1,332)$ $(11,692)$ $87,366$ 46,591
						1,861,794

NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS For the period ended 30 September 2017 (Unaudited)

SEGMENT INFORMATION continued $22$

Business segments continued 22.1

Segment information about the Group's continuing operations for the nine months ended 30 September 2016 is presented below:

	Property development	ana management		Asset management
	and sales development 000, G3F Property	000, G3V management Development	properties AED '000 Investment	and leisure 000, CFF Hospitality	000. G3P villages Operative	Adjacencies 000. G3V	000. CFF Group
Revenue excluding service charges Revenue from service charges	2,044,520	91,066 $\overline{\mathcal{L}}$	1,184,814 107,744	365,040	87,611	945,446	107,744 4,718,497
Cost of revenue excluding service charge Service charge expenses Gross revenue	1,122,982 2,044,520	(14, 809) 91,066	$(137, 127)$ $(107, 744)$ ,292,558	(312, 407) 365,040	(67, 405) 87,611	946,823 945,446	(107, 744) 2,601,553) 4,826,241
Gross profit / (loss)	921,538	76,257	1,047,687	52,633	20,206	(1,377)	2,116,944
Reversal - net / (provisions, impairments and write downs) Share of profit from associates and joint ventures Gain on disposal of investment properties Fair value loss on investment properties Depreciation and amortisation Other income	52,375 329,007	16,563	$(5,272)$ $(15,525)$ $(104,716)$ 50,134 14,764 13,028	(87,074)	(14, 733)	(904) (30,091)	$(137,170)$ $35,946$ $(104,716)$ 50,134 14,764 358,598
Segment profit / (loss)	1,302,920	92,820	1,000,100	(34, 441)	$-5,473$	(32,372)	2,334,500
Share of profit from associates and joint venture Provision for impairments/write downs - net General and administrative expenses Selling and marketing expenses Depreciation and amortisation Finance income Other income Finance costs							(246, 820) $(20,000)$ $(11,935)$ $89,270$ (44, 675) (178, 767) 3,189 120,665
Profit for the period							2,045,427

20

NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS For the period ended 30 September 2017 (Unaudited)

SEGMENT INFORMATION continued $22$

Business segments continued $22.1$

The segment assets and liabilities and capital and project expenditure at 30 September 2017 and 31 December 2016 are as follows:

	Property developmem	and management		Asset management
	000. GEV sajps pub sajps pub dxadod	000.GFV 1uaua8butbut Developmen	properties AED '000 Investment	Hospitality and leisure AED '000	Operative villages AED '000	Adjacencies AED '000	Unallocated AED '000	ODO. CEFF dro.cc
As at 30 September 2017 Assets Liabilities Capital expenditures Project expenditures	8,379,113 (1,534,962) (C36,070	2,623,450 (2,465,530)	16,840,665 (1,323,246) 23,744 190,919	2,285,805 (136,316) 6,506	17,926 (6,382) 462	,620,727 (771,937) 15,199 3,034	3,464,985 (5,933,596) 2,780	35,232,671 (12,171,969) 48,691 1,157,023
As at 31 December 2016 Capital expenditures roject expenditures Liabilities Assets	7,201,806 (1,874,422) 606,488	3,405,611 (3,164,341)	16,837,062 (1,495,274) 25,058 96,182	2,409,892 (144,422) 17,617	38,556 (32,591) 613	,578,095 (667,457) 205,431 1,733	4,090,075 (6,096,496) 11,939	35,561,097 (13,475,003) 260,658 704,403

APPROVAL OF INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS $23$

The interim condensed consolidated financial statements were approved by the Board of Directors and authorised for issue on 12 November 2017.

21