ARAMEX PJSC — Interim / Quarterly Report 2012

Nov 5, 2012

UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

30 SEPTEMBER 2012

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P.O. Box 9267 28th Floor - Al Attar Business Tower Sheikh Zayed Road Dubai, United Arab Emirates Tel: +971 4 332 4000 Fax: +971 4 332 4004 dubai@ae.ev.com www.ev.com/me

REPORT ON REVIEW OF INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS TO THE SHAREHOLDERS OF ARAMEX PJSC

Introduction

We have reviewed the accompanying interim condensed consolidated financial statements of Aramex PJSC and its subsidiaries ("the Group") as at 30 September 2012, comprising the interim consolidated statement of financial position as at 30 September 2012 and the related interim consolidated statements of income and comprehensive income for the three-month and nine-month periods then ended and the related interim consolidated statements of changes in equity and cash flows for the nine-month period then ended and explanatory information. Management is responsible for the preparation and presentation of these interim condensed consolidated financial statements in accordance with International Financial Reporting Standard IAS 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 the financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the accompanying interim condensed consolidated financial statements are not prepared, in all material respects, in accordance with IAS 34.

Emsi & Yang

Signed by Ashraf Abu-Sharkh Partner Registration no. 690

29 October 2012 Dubai, United Arab Emirates

INTERIM CONSOLIDATED STATEMENT OF FINANCIAL POSITION At 30 September 2012 (Unaudited)

	$N \Theta / \delta$	30 September 2912 AED 000 (Unaudited)	31 December 2011 AED 000 (Audited)
ASSETS
Non-current assets
Property, plant and equipment	5.	519,580	445,360
Gradwill		1,010,109 27,785	1,010,109 39,357
Other intangible assets Available-for-sale financial assets		$\tilde{\phantom{a}}$	2,219
Investments in joint ventures	6	55,477	18,108
Investment in an associate		1,138	1.271 2.555
Deferred tax assets Caher non-current assets		2,147 48	72
			and a series
		$1.6 + 6.284$	1.510.051 ,,,,,,,,,,,,,,,,,,,,,,,,,,
Current assets
Accounts receivable, net		556,921 180.413	499,671 169,048
Other corrent assets Bank balances and eash	7	276,767	314,011
		1,014,101	982,730
TOTAL ASSETS		2.6.10., 85	2,492.781
		--------------	---------------------------------------
EQUITY AND LIABILITIES
Equity Share capital		1,464,100	1,464.100
Standory reserve		87,312	87,312
Foreign currency translation reserve		(23, 511)	(17,703)
Fuir value reserve	9	$\omega$ (2,989)	(502)
Cash-flow hedge roserve Reserve arising from acquisition of non-controlling interests		(16, 011)	(15.278)
Retained camings		450,104	347,181
Equity auributable to equity holders of the Parent		1,959,005	1.865, 110
Non-controlling interests		33,317	30,972
Total equity		1,992,322 --------------------------------------	1,896,082
Non-current Habilities
Interest-bearing loans and borrowings		8,369	9.637
Employees' end of service bonefits		87,262 351	79,660 1.200
Other non-current liabilities Deferred tax liabilities		1,530	1.117
		. .
		98,212	91.614 . .
Current liabilities
Accounts payable		162.926	383,222
Back overdrafts	7	经移	19,445
Interest-bearing loans and borrowings Other corrent liabilities		13.611 347.819	12,003 310.417
		539,851	505.085
		638,063	596,699
Total Habiblics		2,630,385	2,492,781
TOTAL EQUITY AND LIABILITIES		,,,,,,,,,,,,,,,,,,,,	ಮುಜ
A-Macan

The attached notes from 1 to 14 form part of these interim condensed consolidated financial statements $\overline{3}$

Eadi Ghandoal
(Founder & CEO)

Abdullah Al Asym

Emad Shishtawi

(Senler Vice President Finance)

$\ldots \ldots \ldots$

$\tau$ , $\tau$ , $\tau$

$\sim 10^{11}$ km s and $\alpha$

INTERIM CONSOLIDATED STATEMENT OF INCOME

For the three and nine months ended 30 September 2012 (Unaudited)

			Three months ended 30 September	Nine months ended 30 September
	Notes	2012 AED'000	2011 AED'000	2012 AED'000	2011 AED 000
Continuing operations Rendering of services		765,207	650,008	2,291,250	1,889,652
Cost of services		(359, 569)	(315,074)	(1,060,337)	(895,940)
Gross profit		405,638	334,934	1,230,913	993,712
Share of results of joint ventures Share of results of an associate Selling and marketing expenses Administrative expenses Operating expenses Other income (expense)		(295) (71) (36, 258) (151, 022) (154, 895) 2,074	(78) (69) (30, 102) (118, 407) (127, 896) (293)	(440) (133) (110, 400) (449, 499) (451, 856) 3,397	(487) (69) (91,400) (347,726) (371, 138) 1,664
Operating profit Finance income Finance expense Gain from sale of available -for-sale financial assets		65,171 399 (1,2.53)	58,089 1,539 (254)	221,982 2,033 (2,049) 280	184,556 6,831 (639)
Profit from continuing operations
before tax Income tax		64,317 (7,215)	59,374 (4,625)	222.246 (21, 357)	190,748 (13,232)
Profit for the period from continuing operations		57,102	54,749	200,889	177,516
Discontinued operations Profit (loss) after tax from discontinued operations	8	389	(130)	(142)	389
Profit for the period		57,491	54.619	200,747	177,905
Attributable to: Equity holders of the parent Profit for the period from continuing operations Profit (loss) for the period from discontinued operations		52,644 484 53,128	48,134 (98) 48,036	178,292 86 178,378	154.081 291 154,372
Non-controlling interests
Profit for the period from continuing operations (Loss) profit for the period from		4,458	6,615	22,597	23,435
discontinued operations		(95)	(32)	(228)	98
		4,363	6,583	22,369	23,533
		57,491	54,619	200,747	177,905
Earnings per share attributable to the equity holders of the Parent:	10
Basic and diluted earnings per share		0.036	0.033	0.122	0.105
Basic and diluted earnings per share from continuing operations		0.036	0.033	0.122	0.105

The attached notes from 1 to 14 form part of these interim condensed consolidated financial statements

INTERIM CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME For the three and nine months ended 30 September 2012 (Unaudited)

			Three months ended 30 September		Nine months ended 30 September
	Notes	2012 AED'000	2011 AED'000	2012 AED'000	2011 AED'000
Profit for the period		57,491	54,619	200,747	177,905
Other comprehensive income (expense), net of tax: Exchange differences on translation
of foreign operations Net (loss) gain on available - for-sale		2,710	(3,723)	(5,402)	(5,855)
financial assets			(211)	782	(1,109)
Gain realized on sale of available-for-sale financial assets transferred to statement
of income				(280)
Net movement of cash flow hedge	9	(1, 257)		(2,989)
Other comprehensive income (expense)
for the period, net of tax		1.453	(3,934)	(7, 889)	(6,964)
Total comprehensive income for the period		58,944	50,685	192,858	170,941
Total comprehensive income attributable to:
Equity holders of the Parent		54,393	44,029	170,083	147,814
Non-controlling interests		4,551	6,656	22,775	23,127
		58,944	50,685	192,858	170,941

The attached notes from 1 to 14 form part of these interim condensed consolidated financial statements

					Attributable to equity holders of the Parent
	AED'000 capital Share	OO.GTA Statutory reserve	translation AED'000 curve y Foreign recerve	Fair value OO.GAV reserve	hedge reserve AED'000	Cash flow non-controlling Retained acquisition of arising from AED'000 interests Reserve	AED'000 earnings	AED'000 Total	Non-controlling AFD'000 interests	AED'000 Total
Nine month period ended 30 September 2012
Acquisition of non-controlling interests (note 3) Total comprehensive income for the period Dividends paid to shareholders (note 4) Dividends of subsidiaries Non-controlling interests Directors' fees paid At 1 January 2012	1,464,100	87,312	(17,703) (5,808)	$\frac{60}{502}$	(2,989)	(15, 278) (733)	(2,250) (73,205) 178,378 347,181	(73,205) (733) (2,250) 1,865,110 170,083	(185) (21,177) 22,775 932 30,972	(918) (2,250) (21, 177) (73, 205) 192,858 1,896.082 932
At 30 September 2012	1,464,100	87,312	(23, 511)		(2,989)	(16.011)	450,104	1,959,005	33,317	1,992,322
Nine month period ended 30 September 2011
Total comprehensive income At 1 January $2011$	1,464,100	62,274	(6,335)	1,268		(12.397)	272,089	1,780,999	24,577	1,805,576
Acquisition of non - controlling interests (note 3) Dividends paid to shareholders (note 4) Acquisition of subsidiaries (note 3) Dividends of subsidiaries Non-controlling interests At 30 September 2011 Directors' fees paid for the period	1,464,100	62,274	(5,448) (11, 783)	(1,109) 159		(2, 881) (15, 278)	(109, 808) (1,600) 315,052 154,371	(2,881) (1,600) (109, 808) 147,814 1,814,524	(1, 134) (11,033) (14, 805) 22,804 2,072 23,127	(1,600) (4,015) (14, 805) (11,033) (109, 808) 2,072 1,837,328 170,941
	∥ ║

The attached notes from 1 to 14 form part of these interim condensed consolidated financial statements

$\mathbf{v}$

Aramex PJSC and its subsidiaries
INTERIM CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

$\frac{1}{2}$ Ĵ,

$\frac{1}{4}$

$\label{eq:1} \begin{split} \mathcal{L}{\mathcal{F}}(\mathcal{L}{\mathcal{F}}) &\stackrel{\mathcal{L}{\mathcal{F}}}{\longrightarrow} \mathcal{L}{\mathcal{F}}(\mathcal{L}{\mathcal{F}}) &\stackrel{\mathcal{L}{\mathcal{F}}}{\longrightarrow} \mathcal{L}{\mathcal{F}}(\mathcal{L}{\mathcal{F}}) &\stackrel{\mathcal{L}{\mathcal{F}}}{\longrightarrow} \mathcal{L}{\mathcal{F}}(\mathcal{L}{\mathcal{F}}) &\stackrel{\mathcal{L}{\mathcal{F}}}{\longrightarrow} \mathcal{L}{\mathcal{F}}(\mathcal{L}{\mathcal{F}}) &\stack$

For the nine months ended 30 September 2012 (Unaudited)

INTERIM CONSOLIDATED STATEMENT OF CASH FLOWS

For the nine months ended 30 September 2012 (Unaudited)

		Nine month period ended 30 September
	Note	2012 AED '000	2011 AED '000
OPERATING ACTIVITIES
Profit before tax from continuing operations (Loss) profit before tax from discontinued operations	8	222,246 (142)	190,748 518
Profit before tax		222,104	191,266
Adjustments for:
Depreciation of property, plant and equipment		51,038 2,574	41,401 1,795
Amortization of other intangible assets (Gain) loss on disposal of property, plant and equipment		(663)	164
Provision for employees' end of service benefits		14,575	14,090
Provision for doubtful accounts, net		12,580	7,543
Net finance income (expense)		16 (280)	(6, 192)
Gain from sale of available-for-sale financial assets Share of results of joint ventures		440	487
Share of results of an associate		133	69
Gain on disposal of the discontinued operation	8	(771)
Working capital changes:
Accounts receivable		(70, 259) 129	(95, 448) (1,649)
Accounts payable Other current assets		(8,217)	(23, 445)
Other current liabilities		32,489	18,718
Cash from operations		255,888	148,800
Employees' end of service benefits paid		(6, 173)	(4,175) (10, 800)
Income tax paid		(18, 247)
Net cash flows from operating activities		231,468	133,825
INVESTING ACTIVITIES
Purchase of property, plant and equipment		(129, 281)	(102, 575)
Proceeds from sale of property, plant and equipment Proceeds from sale of available-for-sale financial assets		3,560 3,000	1,246
Interest received		2,033	6,831
Acquisition of a subsidiaries, net of cash acquired			(9,939)
Acquisition of non – controlling interest	3	(918)	(3, 456)
Proceeds from sale of a subsidiary, net of cash	8	176 24	(545
Other non-current assets Margin deposits		785	(2, 438)
Intangible assets		(353)	(2, 884)
Investments in a joint venture Investment in an associate		(37, 734)	۰ (1, 471)
Net cash flows used in investing activities		(158, 708)	(115, 231)
FINANCING ACTIVITIES Interest paid		(2,049)	(639)
Net proceeds from (repayment of) loans and borrowings		616	(4, 870)
Dividends of subsidiaries		(21, 177)	(14,805
Non-controlling interests		932	(11,033)
Directors' fees paid Dividends paid to shareholders		(2,250) (73,205)	(1,600) (109, 808)
		(97, 133)	(142, 755)
Net cash flows used in financing activities
NET DECREASE IN CASH AND CASH EQUIVALENTS		(24, 373)	(124, 161)
Net foreign exchange difference	7	(8,136) 280,879	(5,795 536,542
Cash and cash equivalents at 1 January
CASH AND CASH EQUIVALENTS AT 30 SEPTEMBER	7	248,370	406,586

The attached notes from 1 to 14 form part of these interim condensed consolidated financial statements

NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS At 30 September 2012 (Unaudited)

$\mathbf{I}$ ACTIVITIES

Aramex PJSC ("the Parent Company") is a Public Joint Stock Company registered in the Emirate of Dubai, United Arab Emirates on 15 February 2005 under UAE Federal Law No 8 of 1984 (as amended). The condensed consolidated financial statements of the Company as at 30 September 2012 comprise the Parent company and its subsidiaries (collectively referred to as "the Group" and individually as "Group entities").

The Parent Company was listed on the Dubai Financial Market on 9 July 2005.

The Principal activities of the Group are to invest in the freight, express, logistics and supply chain management businesses through acquiring and owning controlling interests in companies in the Middle East and other parts of the world.

The Parent Company's registered office is, Business Center Towers, 2302A, Media City (TECOM), Sheikh Zayed Road, Dubai, United Arab Emirates.

The interim condensed consolidated financial statements were authorised for issue by the Board of Directors on 29 October 2012.

$\overline{\mathcal{L}}$ BASIS OF PREPARATION AND ACCOUNTING POLICIES

Basis of preparation

The interim condensed consolidated financial statements for the nine months ended 30 September 2012 have been prepared in accordance with IAS 34 Interim Financial Reporting.

The interim condensed consolidated financial statements do not include all information and disclosures required in the annual financial statements, and should be read in conjunction with the Group's annual financial statements as at 31 December 2011. In addition, results for the nine months ended 30 September 2012 are not necessarily indicative of the results that may be expected for the financial year ending 31 December 2012.

Changes in accounting policies

The accounting policies adopted in the preparation of the interim condensed consolidated financial statements are consistent with those used in the preparation of the Group's annual consolidated financial statements for the year ended 31 December 2011, except for the following amended IFRS effects as of 1 January 2012:

IAS 12 Income Taxes - Recovery of Underlying Assets.

IFRS 7 Financial Instruments: Disclosures - Enhanced Derecognition Disclosure Requirements

The adoption of the new amendments to IFRS did not have an impact on the financial statements of the Group.

Accounting policies

The accounting policies adopted by the Group relating to bank balances and short term deposits and derivative financial instruments are as follows:

Cash and short term deposits

For the purpose of the consolidated statement of cash flows, cash and cash equivalents consist of cash in hand, bank balances, and short-term deposits with an original maturity of three months or less, net of outstanding bank overdrafts and cash margin.

Derivative financial instruments

Initial recognition and subsequent measurement

The Group uses derivative financial instruments (interest rate swaps) to hedge its interest rate risk. Such derivative financial instruments are initially recognized at fair value on the date on which a derivative contract is entered into and are subsequently premeasured at fair value. Derivatives are carried as financial assets when the fair value is positive and as financial liabilities when the fair value is negative.

Any gains or losses arising from changes in fair value on derivatives during the year that do not qualify for hedge accounting and the ineffective portion of an effective hedge, are taken directly to the consolidated statement of comprehensive income.

NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS At 30 September 2012 (Unaudited)

$\overline{2}$ BASIS OF PREPARATION AND ACCOUNTING POLICIES (continued)

Accounting policies (continued)

Derivative financial instruments (continued)

The fair value of interest rate swap contracts is determined by reference to market values for similar instruments.

For the purpose of hedge accounting, the Group's interest rate swaps are classified as cash flow hedges, as the Group is hedging exposure to variability in cash flows that is attributable to the interest rate risk associated with a highly probable forecast transaction.

At the inception of a hedge relationship, the Group formally designates and documents the hedge relationship to which the Group wishes to apply hedge accounting and the risk management objective and strategy for undertaking the hedge. The documentation includes identification of the hedging instrument, the hedged item or transaction, the nature of the risk being hedged and how the entity will assess the hedging instrument's effectiveness in offsetting the exposure to changes in the hedged item's cash flows attributable to the hedged risk. Such hedges are expected to be highly effective in achieving offsetting changes in cash flows and are assessed on an ongoing basis to determine that they actually have been highly effective throughout the financial reporting periods for which they were designated.

Hedges which meet the strict criteria for hedge accounting are accounted for as follows:

Cash flow hedges

The effective portion of the gain or loss on the hedging instrument is recognized directly in equity, while any ineffective portion is recognized immediately in the statement of income.

Amounts taken to equity are transferred to the consolidated statement of income when the hedged transaction affects profit or loss, such as when the hedged financial expense is recognized.

If the forecast transaction or firm commitment is no longer expected to occur, amounts previously recognized in equity are transferred to the consolidated statement of income. If the hedging instrument expires or is sold, terminated or exercised without replacement or rollover, or if its designation as a hedge is revoked, amounts previously recognized in equity remain in equity until the forecast transaction or firm commitment occurs.

Current versus non-current classification

Derivative instruments that are not a designated and effective hedging instrument are classified as current or noncurrent or separated into a current and non-current portion based on an assessment of the facts and circumstances (i.e., the underlying contracted cash flows).

Derivative instruments that are designated as, and are effective hedging instruments, are classified consistent with the classification of the underlying hedged item. The derivative instrument is separated into a current portion and non-current portion only if a reliable allocation can be made.

$\overline{\mathbf{3}}$ ACOUISITION OF NON-CONTROLLING INTEREST

Acquisition of additional interest in Aramex Courier, Freight and Logistics Services LLC - Erbil

On 25 April 2012, the Group acquired an additional 20% interest of the voting shares of Aramex Courier, Freight and Logistics Services LLC - Erbil, increasing its ownership interest to 100%. A consideration of AED 918 thousand was paid to the non-controlling interest shareholders. The carrying value of the net assets of Aramex Courier, Freight and Logistics Services LLC - Erbil at the acquisition date was AED 924 thousand, and the carrying value of the additional interest acquired was measured at AED 185 thousand. The difference of AED 733 thousand between the consideration paid and the carrying value of the interest acquired has been recognised within equity as a reserve arising from acquisition of non-controlling interests.

NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS At 30 September 2012 (Unaudited)

$\overline{\mathbf{A}}$ DIVIDENDS

The General Assembly approved in its meeting held on 11 April 2012 a cash dividend for 2011 of 5% of the Company's share capital.

The General Assembly approved in its meeting held on 30 May 2011 a cash dividend for 2010 of 7.5% of the Company's share capital.

5 PROPERTY, PLANT AND EQUIPMENT

During the nine months ended 30 September 2012, the Group acquired property, plant and equipment with a cost of AED 129.3 million (nine months ended 30 September 2011: AED 102.6 million).

$6\phantom{1}$ INVESTMENT IN JOINT VENTURES

$i$ ). Aramex Sinotrans Co. Ltd

During the nine months ended 30 September 2012, the Group entered into a joint venture agreement to establish and operate a joint venture company named Aramex Sinotrans Co. Ltd located in China which is involved in the international mail, freight forwarding, logistics and warehousing. The Group has a 50% interest in Sinotrans. Sinotrans Express Limited is a private entity that is not listed on any public exchange.

Aramex Al Mashreq for Logistic Services S.A.E $ii)$ .

During the nine months ended 30 September 2012, the Group paid an amount of AED 32.2 million in respect of capital increase of its joint venture (Aramex Al Mashreq for Logistic Services S.A.E).

$\overline{7}$ CASH AND CASH EQUIVALENTS

	30 September 2012 AED'000	31 December 2011 AED'000
Cash and short term deposits	276.767	314,011
Less: Cash margin	(12,902)	(13,687)
Less: Bank overdrafts	(15, 495)	(19, 445)
	248,370	280,879

Included within bank balances and cash are amounts totaling AED 162,728 thousand (31 December 2011: AED 163,335 thousand) held at foreign banks abroad.

$\mathbf{R}$ DISCONTINUED OPERATION

During 2012, the Group publicly announced the decision of its Board of Directors to dispose of 33.3% of its interest in PT Global Distribution Alliance Company (Indonesia) which resulted in decreasing its ownership in PT Global Distribution Alliance Company (Indonesia) to 50%. As a new local law in Indonesia restricting the investment of foreign entities is intended to go into effect in 2014. On 30 September 2012, the Group completed the sale of PT Global Distribution Alliance Company (Indonesia) for AED 367 thousand in cash and an amount of AED 514 thousand to be deducted from the buyer's share of the future profits of PT Global Distribution Alliance Company (Indonesia), resulting in a pre-tax gain of AED 771 thousand. The cash flows generated by the sale of the discontinued operation during 2012 have been considered in the cash flow statement as part of the investing activities. The remaining investment in PT Global Distribution Alliance Company (Indonesia) was classified as an investment in a joint venture.

NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS At 30 September 2012 (Unaudited)

DISCONTINUED OPERATION (continued) $\overline{\mathbf{8}}$

The results of PT Global Distribution Alliance Company (Indonesia) for the period are as follows:

	For the Nine month period ended 30 September
	2012 AED '000	2011 AED '000
Revenue	3,304	4,432
Expenses	(1,695)	(1,696)
Gross profit Less: Overheads	1,609 (2, 423)	2,736 (2,088)
Operating (loss) income	(814)	648
Add: Other income	126	118
Less: Expenses	(225)	(247)
(Loss) profit before tax from the discontinued operation	(913)	519
Income tax expense		(130)
Gain on disposal of the discontinued operation	771
(Loss) profit after tax for the period from the discontinued operation	(142)	389
Cash outflow on sale: Consideration received	367
Cash included as cash and cash equivalents at 30 September in the statement of cash flows	(191)
Net cash inflow	176

The net cash flows incurred by PT Global Distribution Alliance Company are as follows:

		For the Nine month period ended 30 September
	2012 AED '000	2011 AED '000
Operating Investing Financing	182 (431) 73	(355) (338) 48
Net cash outflow	(176)	(645)

NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS At 30 September 2012 (Unaudited)

$\boldsymbol{Q}$ DERIVATIVE FINANCIAL INSTRUMENTS

On 31 January 2012, The Group entered into a loan agreement with Arab Bank for an amount of USD 50 million. The loan bears interest at USD three month LIBOR plus 225 basis points per annum and will be paid on quarterly basis. The Group has an availability withdrawal period to draw down the loan up to January 2013. The purpose of the loan is to finance expected acquisition costs.

To mitigate its exposure to fluctuations in market interest rates, the Group entered into interest rate swap contracts that effectively fix the interest rate on 100% of its available facilities with the Arab Bank. Under the terms of these contracts, the Company pays a pre-determined fixed rate $(1.19%)$ of interest on a notional principal balance equal to amounts expected to be drawn down and receives from the counter-party a floating rate of interest on the same notional principal balance equal to USD three month LIBOR.

For the purpose of hedge accounting, the Group's interest rate swap contracts were classified as cash flow hedges, as the Group is hedging its exposure to variability in cash flows that is attributable to the interest rate risk associated with a highly probable forecast transaction.

As of 30 September 2012, the cash flow hedges were assessed to be highly effective and an unrealized loss of AED 2,989 thousand was included in other comprehensive income, and the corresponding negative fair value of the interest rate swap deal was recorded as a liability in the statement of financial position.

10 EARNINGS PER SHARE

		Three months ended 30 September		Nine months ended 30 September
	2012	2011	2012	2011
Profit attributable to shareholders of the Parent (AED'000)	53,128	48.036	178,378	154,372
Weighted average number of shares during the period (shares)	1.464.1 million	1.464.1 million	$1,464.1$ million	1.464.1 million
Basic and diluted earnings per share (AED)	0.036	0.033	0.122	0.105

$11$ SEGMENT INFORMATION

For management purposes, the Group is organized into five operating segments:

• International express: includes delivery of small packages across the globe to both, retail and wholesale customers.
• Freight forwarding: includes forwarding of loose or consolidated freight through air, land and ocean transport, warehousing, customer clearance and break bulk services.
• Domestic express: includes express delivery of small parcels and pick up and deliver shipments within the country.
• Logistics: includes warehousing and its management distribution, supply chain management, inventory management as well as other value added services.
• Other operations: includes catalogue shipping services, document storage, airline ticketing and travel, visa services and publication and distribution.

Management monitors the operating results of the operating segments separately for the purpose of making decisions about resource allocation and performance assessment. Segment performance is evaluated based on operating profit or loss.

NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS At 30 September 2012 (Unaudited)

$\overline{11}$ SEGMENT INFORMATION (continued)

Transfer prices between operating segments are on an arm's - length basis in a manner similar to transactions with third parties.

The following table presents revenue and profit information regarding the Group's operating segment for the nine months ended 30 September 2012 and 2011, respectively.

	International express AED'000	Freight forwarding AED'000	Domestic express AED'000	Logistics AED'000	Others AED'000	Eliminations AED'000	Total AED'000
Nine months ended 30 September 2012
Revenue
Third party	729,320	873,612	439,623	97,883	150,812		2,291,250
Inter-segment	319,271	156.726	11,368	2.978	3,422	(493,765)
Total revenue	1,048,591	1,030,338	450,991	100,861	154,234	(493,765)	2,291,250
Gross profit	478,480	230,158	319,946	81,830	120,499		1,230,913
Nine months ended 30 September 2011
Revenue
Third party	608,534	797,676	270,343	80,400	132,699		1,889,652
Inter-segment	273,449	131,407	12,629	1,518	3,335	(422, 338)
Total revenue	881,983	929,083	282,972	81,918	136.034	(422, 338)	1,889,652
Gross profit	396,730	220,890	207,729	65,313	103,050		993,712

Transactions between stations are priced at agreed upon rates. All material intra - group transactions have been eliminated on consolidation. The Group does not segregate assets and liabilities by business segment and accordingly such information is not presented.

Geographical Information

The business segments are managed on a worldwide basis, but operate in four principal geographical areas, Middle East and Africa, Europe, North America and Asia. In presenting information on the geographical segments, segment revenue is based on the geographical location of customers. Segments assets are based on the location of the assets.

Revenue, assets and liabilities by geographical segment are as follows:

		Nine months ended 30 September 2011 2012
	AED'000	AED'000
Revenues
Middle East and Africa	1,657,821	1,303,497
Europe	380,504	371,136
North America	47,922	35,637
Asia	205,003	179,382
	2,291,250	1,889,652

NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS At 30 September 2012 (Unaudited)

$\mathbf{11}$ SEGMENT INFORMATION (continued)

	30 September 2012 AED'000	31 December 2011 AED'000
Assets
Middle East and Africa	2,138,958 349,675	2,071,639 296,697
Europe North America	26,261	24,993
Asia	115,491	99,452
	2,630,385	2,492,781
	30 September	31 December
	2012	2011
	AED'000	AED'000
Non – current assets*
Middle East and Africa	505,074	448,014
Europe	71,831	24,877
North America Asia	8,567	9,677
	18,508	12,528
	603,980	495,096
	30 September	31 December
	2012	2011
	AED'000	AED'000
Liabilities
Middle East and Africa	467,455	432,887
Europe	111,275	111,526
North America Asia	16,872 42,461	15,050 37,236
	638,063	596,699

Non- current assets for this purpose consist of property, plant and equipment, other intangible assets, $\ast$ investments in joint ventures and investment in an associate. Goodwill is allocated to business segments.

$12$ COMMITMENTS AND CONTINGENCIES

	30 September 2012 AED'000	31 December 2011 AED'000
Letters of guarantee	62,147	60.822

Capital commitments

As at 30 September 2012, the Group has capital commitments of AED 11.45 million (31 December 2011: AED 9.04 million) towards the purchase/construction of property, plant and equipment.

NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS At 30 September 2012 (Unaudited)

13 RELATED PARTY TRANSACTIONS

Certain related parties (directors, officers of the Group and companies which they control or over which they exert significant influence) were suppliers of the Company and its subsidiaries in the ordinary course of business. Such transactions were made on substantially the same terms as with unrelated parties.

Transactions with related parties included in the consolidated statement of income are as follows:

		Related party			Total
	Officers AED'000	Companies controlled by the directors Directors AED'000	AED'000	30 September 2012 AED'000	30 September 2011 AED'000
Rent expense	137	1,078	$\blacksquare$	1.215	5.638

Key management compensation

Compensation of the key management personnel, including executive officers, comprises the following:

	30 September 2012 AED'000	30 September 2011 AED'000
Salaries and other short term benefits	9,969	8.565
End of service benefits	290	260

14 SEASONALITY OF OPERATIONS

The Group's business is seasonal in nature. Historically, the Group experienced a decrease in demand for its services in the post-winter holiday and summer vacation seasons. The Group traditionally experiences its highest volumes towards the latter half of the year. The seasonality of the Group's revenue may cause a variation in its quarterly operating results. However, local Middle East and Islamic holidays vary from year to year and, as a result, the Group's seasonality may shift over time.