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Consolidated financial statements for the year ended 31 December 2015

Consolidated financial statements for the year ended 31 December 2015

	Pages
Director's report
Independent auditor's report on consolidated financial statements	2-3
Consolidated statement of financial position	4
Consolidated statement of profit or loss	5
Consolidated statement of profit or loss and other comprehensive income	6
Consolidated statement of changes in equity	7
Consolidated statement of cash flows	8
Notes to the consolidated financial statements	9- 49

Directors' report

The directors submit their report together with the audited consolidated financial statements of Deyaar Development PJSC ("the Company") and its subsidiaries (collectively referred to as "the Group") for the year ended 31 December 2015.

Principal activities

The principal activities of the Company and its subsidiaries (together, "the Group") are property investment and development, brokering, facility and property management services.

Financial Results

Revenue of the Group for the year 2015 is AED 257 million (2014: AED 1,045 million) and net profit amounted to AED 291 million (2014: AED 282 million).

Directors

The Board of Directors comprised of:

Abdulla Ali Obaid Al Hamli	Chairman
Abdullah Ibrahim Lootah	Vice Chairman
Khalifa Suhail Al Zaffin	Director
Mohamed Al Sharif	Director
Saif Bin Ali Al Khatri	Director
Dr. Adnan Chilwan	Director
Obaid Nasser Lootah	Director
Mohamed Al Nahdi	Director
Saif Al Y arabi	Director

Auditors

The financial statements for the year ended 31 December 2015 have been audited by Mis. KPMG, who were appointed as auditors of the Company at the Annual General Meeting held on 8 March 2015.

On behalf of the Board

~ ·· ^~: .................. . Abdulla Ali Obaid Al Hamli

······· Chairman

24 February 2016

KPMG Lower Gulf Limited P.O.Box 341145 Level 12, IT Plaza Dubai Silicon Oasis Dubai United Arab Emirates

Telephone Mainfax Audit Fa x Website +971 (4) 3569 500 +971 (4) 3263 788 +971 (4) 3263 773 www.ae-kpmg.com

Independent auditors' report

The Shareholders Deyaar Development PJSC

Report on the Consolidated Financial Statements

We have audited the accompanying consolidated financial statements of Deyaar Development PJSC ("the Company") and its subsidiaries (collectively referred to as "the Group"), which comprise the consolidated statement of financial position as at 31 December 2015, the consolidated statements of profit or loss and other comprehensive income (comprising a separate consolidated statement of profit or loss and a consolidated statement of profit or loss and other comprehensive income), changes in equity and cash flows for the year then ended, and notes, comprising a summary of significant accounting policies and other explanatory information.

Management's Responsibility for the Consolidated Financial Statements

Management is responsible for the preparation and fair presentation of these consolidated financial statements in accordance with International Financial Reporting Standards and their preparation in compliance with the applicable provisions of the UAE Federal Law No. 2 of 2015, and for such internal control as management determines is necessary to enable the preparation of the consolidated financial statements that are free from material misstatement, whether due to fraud or error.

Auditors' Responsibility

Our responsibility is to express an opinion on these consolidated 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 about whether the consolidated financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. The procedures selected depend on our judgment, including the assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk assessments, we consider internal control relevant to the entity's preparation and fair presentation of the consolidated 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 also 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 consolidated 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 consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Group as at 31 December 2015, and its consolidated financial performance and its consolidated cash flows for the year then ended in accordance with International Financial Reporting Standards.

Independent auditors' report (continued)

Report on Other Legal and Regulatory Requirements

Further, as required by the UAE Federal Law No. (2) of 2015, we report that:

(i) we have obtained all the information and explanations we considered necessary for the purposes of our audit;
(ii) the consolidated financial statements have been prepared and comply, in all material respects, with the applicable provisions of the UAE Federal Law No. (2) of2015;
(iii) the Group has maintained proper books of account;
(iv) the financial information included in the Directors' report, in so far as it relates to these consolidated financial statements, is consistent with the books of account of the Group;
(v) as disclosed in Note 35 to the consolidated financial statements, the Group has not purchased any shares during the financial year ended 31 December 2015;
(vi) Note 11 to the consolidated financial statements reflects material related party transactions an.d the terms under which they were conducted;
(vii) based on the information that has been made available to us, nothing has come to our attention which causes us to believe that the Group has contravened during the financial year ended 31 December 2015 any of the applicable provisions of the UAE Federal Law No. (2) of2015 or in respect of the Company its Articles of Association, which would materially affect its activities or its consolidated financial position as at 31 December 2015; and
(viii) note 23 to the consolidated financial statements discloses the social contributions made during the year.

KPMG Lower Gulf Limited Muhammad Tariq Registration No: 793

Dubai, United Arab Emirates Date: 2 4· FEB 2016

Consolidated statement of financial position

as at 31 December 2015

·1

			At 31 December
		2015	2014
	Note	AED'OOO	AED'OOO

ASSETS
Non-current assets
Property and equipment	5	264,927	39,865
Investment property	6	253,556	329,320
investments in joint ventures and associates	7	1,181,640	1,032,579
Properties held for development and sale	9	313,543	695,906
Trade and other receivables	JO	5,165	35,005
Long term fixed deposits	J2	51,650	53,559
Available-for-sale financial assets	8	23,893 2 094,374	24,841 2,211,075

Current assets
Properties held for development and sale	9	998,897	707,228
Inventories		2,227	1,742
Trade and other receivables	JO	336,607	224,608
Due from related parties	11	1,951,333	1,959,974
Cash and bank balances	12	823,340	994,292
		4,112,404	3,887,844
Total assets		6,206,778	6,098,919
EQUITY
Share capital	13	5,778,000	5,778,000
Legal reserve	J4	242,529	213,394
Available for sale fair valuation reserve	8	4,558	5,506
Accumulated losses		(1,362,534)	(1 ,623,836) 4,373,064
Total equity		4,662,553
LIABILITIES
Non-current liabilities
Borrowings	J5	342,308	482,870
Advances from customers	J6	12,087	I 01,317
Retentions payable	J8	10,368	1,241
Provision for employees' end of service benefits	J9	10,990	9,350
		375,753	594,778
Current liabilities
Borrowings	15	136,540	167,292
Advances from customers	16	163,061	186,968
Trade and other payables	17	771,392	660,415
Retentions payable	18	17,499	25,733
Provision for claims	25	65,967	76,495
Due to related parties	11	14,013	14,174
		1,168,472	1,131,077
Total liabilities		1,544,225	1,725,855
iB. Total equity and liabilities		6,206,778	6,098,919
These consolidated financial statements were approved by the Board of Directors on			and signed
onitsb			2 4 FEB 2orn


Abdulla Ali Obaid Al Hamli
Chairman

The notes on pages 9 to 49 form an integral part of these consolidated financial statements.

Consolidated statement of profit or loss for the year ended 31December2015

		Year ended 31 December
		2015	2014
	Note	AED'OOO	AED'OOO

Revenue	20	257,102	1,045,337
Direct I operating costs	21	(124,485)	(742,023)
Other operating income	22	15,169	19,483
General and administrative expenses	23	(158,200)	(155,974)
Provision for claims	25	(22,220)	(76,495)
Liability written back	15		147,922
Write back ofprovision/(provision for impairment) against advance
for purchase of properties	26	157,877	(68,625)
Gain on disposal of an investment property	32		16,982
Gain on fair valuation of investment properties	6	16,176	50, 117
Operating profit		141,419	236,724
Finance cost	27	(26,775)	(39,359)
Finance income	27	9,892	7,497
Finance cost, net		(16,883)	(31,862)
Gain on disposal of a joint venture before reclassification adjustment	7		5,880
Reclassification of cumulative exchange translation losses from other
comprehensive income on disEosal ofajoint venture	7		(4,863)
Net gain on disposal of a joint venture	7		1,017
Share of results from joint ventures and associates	7	166,818	75,971
Profit for the year		291,354	281,850
Profit attributable to:
Equity holders of the Company		291,354	281,850
		291,354	281,850
Earning per share attributable to the equity holders of the Company
during the year - basic and diluted	28	Fils 5.04	Fils 4.88

The notes on pages 9 to 49 form an integral part of these consolidated financial statements.

Consolidated statement of profit or loss and other comprehensive income for the year ended 31 December 2015

		Year ended 31 December
		2015	2014
	Note	AED'OOO	AED'OOO

Profit for the year		291,354	281 ,850
Other comprehensive income from items that may be subsequently reclassified to profit or loss:
Change in fair value of available-for-sale financial assets	8	(948)	(540)
Exchange translation loss reclassified to profit or loss on disposal of a
joint venture	7		4,863
Other comprehensive income for the year		(948)	4,323

Total comprehensive income for the year		290,406	286,173
Attributable to:
Equity holders of the Company		290,406	286,173
Total comprehensive income for the year		290,406	286,173

The notes on pages 9 to 49 form an integral part of these consolidated financial statements.

Consolidated statement of changes in equity for the year ended 31December2015

	S ha re ita l ca p A 'O O O E D	l Le g a re ser ve A 'O O O E D	ha Ex c ng e lat io tra ns n re ser ve A 'O O O E D	Av i la b le fo a r le fa ir sa lu io at va n re ser ve A 'O O O E D	Ac lat d cu mu e los ses A E D 'O O O	l To ta ity eq u A E D 'O O O
At I Ja 2 0 1 4 nu ary	5, 7 7 8, 0 0 0	1 9 4, 0 8 1	( 4, 8 6 3 )	6, 0 4 6	( 1, 8 8 6, 3 7 3 )	4, 0 8 6, 8 9 1
Ne f it for he t p t ro y ea r	-	-	-	-	2 8 1, 8 5 0	2 8 1, 8 5 0
Tr fer leg l r to an s a ese rv e		1 9, 3 1 3	-	-	( 1 9, 3 1 3 )
he he ive inc Ot r c om _e re ns om e	-	-	4, 8 3 6	( 5 4 0 )	-	4, 3 2 3
Ba lan 3 1 De be 2 0 1 4 at ce ce m r	5, 7 7 8, 0 0 0	2 1 3, 3 9 4	-	5, 5 0 6	( 1, 2 3, 8 3 ) 6 6	4, 3 7 3, 0 6 4
lan iou ly Ba 1 Ja 2 0 1 5, at ce nu ary as p rev s d ort rep e	5, 8, 0 0 0 7 7	2 1 3, 3 4 9	-	5, 5 0 6	( 1, 6 2 3, 8 3 6 )	4, 3 3, 0 4 7 6
E f fec f c ha in ing l icy ( No t o t te ng e ac co un p o 2. 3 )	-	-	-	-	( 9 1 7 )	( 9 1 7 )
lan 1 2 0 1 5 ( d ) Ba Ja at tat ce nu ary res e	5, 7 7 8, 0 0 0	2 1 3, 3 9 4	-	5, 5 0 6	( 1, 2 4, 5 3 ) 6 7	4, 3 2, 1 4 7 7
Ne f it for he t p t ro y ea r	-	-	-	-	2 9 1, 3 5 4	2 9 1, 3 5 4
Tr fer leg l r to an s a ese rve	-	2 9, 1 3 5	-	-	( 2 9, 1 3 5 )
Ot he he ive inc r c om _e re ns om e		-	-	( 9 4 8 )	-	( 9 4 8 )
lan 3 1 be 2 0 1 5 Ba De at ce ce m r	5, 7 7 8, 0 0 0	2 4 2, 5 2 9	-	4, 5 5 8	( 1, 3 6 2, 5 3 4 )	4, 6 6 2, 5 5 3

L_, L__. L_____. L_J L---.; l__J l____J L-J L-J L----_,< t __ J [____J L---..J ._______] L.___J _____J .,__) __J -------1

The notes on pages 9 to 49 form an integral part of these consolidated financial statements.

Consolidated statement of cash flows

for the year ended 31 December 2015

		Year ended 31 December
		2015	2014
	Note	AED'OOO	AED'OOO

Cash flows from operating activities
Net cash generated from operating activities	29	52,248	710,244
Cash flows from investing activities
Purchase of property and equipment		(30,577)	(5,005)
Proceeds from sale of property and equipment			87
Proceeds on reduction of investment in an associate			2,954
Proceeds from disposal of investment in joint venture			5,880
Additions to investment property		(3,362)	(13,682)
Movement in term deposits with an original maturity of more than three months		186,909	(588,559)
Finance income received on deposits		8,668	4,540
Net cash generated from I (used in) investing activities		161,638	(593,785)
Cash flows from financing activities
Repayment of borrowings		(171,314)	(176,227)
Finance cost paid		(28,524)	(28,765)
Net cash used in financing activities		(199,838)	(204,992)
Increase I (decrease) in cash and cash equivalents		14,048	(88,533)
Cash a~d cash equivalents, beginning of the year		439,292	527,825
Cash and cash equivalents, end of the year	12	453,340	439,292

The notes on pages 9 to 49 form an integral part of these consolidated financial statements.

Notes

(forming part of the consolidated financial statements)

1 Legal status and activities

Deyaar Development PJSC (the "Company") was incorporated and registered as a Public Joint Stock Company in the Emirate of Dubai, UAE on 10 July 2007. The registered address of the Company is P. 0. Box 30833, Dubai, United Arab Emirates ("UAE"). The Company is listed on Dubai Financial market.

The principal activities of the Company and its subsidiaries (together, "the Group") are property investment and development, brokering, facility and property management services.

2 Summary of significant accounting policies

The principal accounting policies applied in the preparation of these consolidated financial statements are set out below. Except for the change in accounting policy for revenue recognition, as a result of early adoption of IFRS 15 Revenue from Contracts with Customers, the Group has consistently applied the accounting policies to all periods presented in these consolidated financial statements.

2.1 Basis of preparation

These consolidated financial statements present the financial position and results of the operations and cash flows of the Company and its subsidiaries (together, "the Group") and the Group's interest in equity accounted investees (Note 34).

The consolidated financial statements of the Group have been prepared in accordance with and comply with International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board (IASB) and the requirements ofUAE Federal Law No. 2 of2015.

UAE Federal Law No. 2of2015 being the Commercial Companies Law ("UAE Companies Law of 2015") was issued on I April 2015 and has come into force on I July 2015. Companies are allowed to ensure compliance with the new UAE Companies Law of2015 by 30 June 2016 as per the transitional provisions contained therein.

The consolidated financial statements have been prepared under the historical cost convention, as modified by_ the revaluation of investment properties and available-for-sale financial assets.

The preparation of the consolidated financial statements in conformity with IFRS requires the use of ce1tain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the Group's accounting policies. The areas involving higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the consolidated financial statements, are disclosed in Note 4.

A number of new standards and amendments to standards are effective for annual period beginning after l January 2015 and earlier application is permitted. Except for the early adoption of IFRS 15 as mentioned in Note 2.3, the other new standards and amendments have not been applied in preparing these financial statements. Those which may be relevant to the Group have been set out below.

2 Summary of significant accounting policies (continued)

2.1 Basis of preparation (continued)

IFRS 9 Financial Instruments

IFRS 9, published in July 2014, replaces the existing guidance in IAS 39 Financial Instruments: Recognition and Measurement. IFRS 9 includes revised guidance on the classification and measurement of financial instniments, including a new expected credit loss model for calculating impairment on financial assets, and the new general hedge accounting requirements. It also carries forward the guidance on recognition and derecognition of financial instruments from IAS 39. IFRS 9 is effective for annual reporting periods beginning on or after l January 2018, with early adoption permitted.

The Group is assessing the potential impact on its consolidated financial statements resulting from the application ofIFRS 9.

The following new or amended standards are not expected to have a significant impact of the Group's consolidated financial statements:

IFRS 14 Regulatory Deferral Accounts.
Accounting for Acquisitions oflnterests in Joint Operations (Amendments to IFRS 11).
Clarification of Acceptable Methods of Depreciation and Amortisation (Amendments to IAS 16 and IAS 38).
Sale or Contribution of Assets between an Investor and its Associate or Joint Venture (Amendments to IFRS 10 and IAS 28).

I I_,

'.J

Annual Improvements to IFRSs 2012-2014 Cycle- various standards.
Investment Entities: Applying the Consolidation Exception (Amendments to IFRS 10, IFRS 12 and IAS 28).
Disclosure Initiative (Amendments to IAS 1).

2.2 Basis of consolidation

(a) Subsidiaries

Subsidiaries are all entities over which the Group has control. The Group controls an entity when the Group is exposed to, or has rights to, variable returns from its involvement with the entity. Subsidiaries are fully consolidated from the date on which control is transferred to the Group and are de-consolidated from the date that control ceases.

The Group applies the acquisition method to account for business combinations. The consideration transferred for the acquisition of a subsidiary is the fair value of the assets transferred, the liabilities incurred to the former owners of the acquiree and the equity interests issued by the Group. The consideration transferred includes the fair value of any asset or liability resulting from a contingent consideration arrangement. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the accounting policies adopted by the Group.

Notes (continued)

2 Summary of significant accounting policies (continued)

2.2 Basis of consolidation (continued)

(a) Subsidiaries (continued)

The Group recognises any non-controlling interest in the acquiree on an acquisition-byacquisition basis, either at fair value or at the non-controlling interest's propo1tionate share of the recognised amounts of acquiree's identifiable net assets.

Goodwill is initially measured as the excess of the aggregate of the consideration transferred, the amount of any non-controlling interest in the acquiree and the acquisition-date fair value of any previous equity interest in the acquiree over the fair value of net identifiable assets acquired and liabilities assumed. If this consideration is lower than the fair value of the net assets of the subsidiary acquired, the difference is recognised in profit or loss.

(b) Eliminations on consolidation

Material inter-company transactions, balances, income and expenses on transactions between Group companies are eliminated. Profits and losses resulting from inter-company transactions that are recognised in assets are also eliminated. Consolidated financial statements are prepared using unifo1m accounting policies for like transactions. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the Group.

(c) Associates

Associates are all entities over which the Group has significant influence but not control, generally accompanying a shareholding of between 20% and 50% of the voting rights. Investments in associates are accounted for using the equity method of accounting. Under the equity method, the investment is initially recognised at cost, and the carrying amount is increased or decreased to recognise the investor's· share of the profit or loss of the investee after the date of acquisition. The Group's investment in joint venture includes goodwill identified on acquisition.

The Group's share of post-acquisition profit or loss is recognised in the consolidated statement of profit or loss, and its share of post-acquisition movements in other comprehensive income is recognised in other comprehensive income with a corresponding adjustment to the carrying amount of the investment. When the Group's share of losses in an associate equals or exceeds its interest in the associate, including any other unsecured receivables, the Group does not recognise further losses, unless it has incurred legal or constructive obligations or made payments on behalf of the associate.

The Group determines at each reporting date whether there is any objective evidence that the investment in associates is impaired. If this is the case, the Group calculates the amount of impairment as the difference between the recoverable amount of the associate and its carrying value and recognises the amount in the consolidated statement of profit or loss.

Profits and losses resulting from upstream and downstream transactions between the Group and its associate are recognised in the Group's consolidated financial statements only to the extent of unrelated investor's interests in the associates. Unrealised losses are eliminated unless the transaction provides evidence of an impairment of the asset transfeITed. Accounting policies of associates have been changed where necessary to ensure consistency with the policies adopted by the Group.

Notes (continued)

2 Summary of significant accounting policies (continued)

2.2 Basis of consolidation (continued)

(d) Joint ventures

The Group's interests in j0intly controlled entities are accounted for using the equity method of accounting. Under the equity method, the investment is initially recognised at cost and adjusted thereafter to recognise the Group's share of the post acquisition profits or losses and movements in other comprehensive income. When the Group's share of losses in a joint venture equals or exceeds its interests in the joint venh1res, the Group does not recognise further losses, unless it has incurred obligations or made payments on behalf of joint ventures. The Group's investment in joint venture includes goodwill identified on acquisition.

-i

r , I

The Group dete1mines at each reporting date whether there is any objective evidence that the investment in joint ventures is impaired. If this is the case, the Group calculates the amount of impaitment as the difference between the recoverable amount of the joint venture and its carrying value and recognises the amount in the consolidated statement of profit or loss.

Profits and losses resulting from upstream and downstream transactions between the Group and its joint venture are recognised in the Group's consolidated financial statements only to the extent of unrelated investor's interests in the joint venture. Unrealised losses are eliminated unless the transaction provides evidence of an impairment of the asset transferred. Accounting policies of joint ventures have been changed where necessa1y to ensure consistency with the policies adopted by the Group.

2.3 Change in accounting policy

Except for the early adoption of IFRS 15 and the corresponding changes below, the Group has consistently applied the accounting policies to all periods presented in these consolidated financial statements.

IFRS 15 Revenue from contracts with customers

IFRS 15 Revenue from contracts with customers was issued in May 2014 and is effective from annual periods commencing on or after 1 January 2018 either based on a full retrospective or modified application, with early adoption permitted. IFRS 15 replaces existing revenue recognition guidance and outlines a single comprehensive model of accounting for revenue arising from contracts with customers that is based on transfer of control. Under IFRS 15, revenue is recognised at an amount that reflects the consideration to which an entity is entitled in exchange for transfen'ing goods or services to a customer.

The Group has reviewed the impact oflFRS 15 and accordingly elected to early adopt IFRS 15 with effect from 1 Januaiy 2015, as the Group considers it to be a better reflection of the business performance of the Group. The Group has applied IFRS 15 using the cumulative effect method i.e., by recognising the cumulative effect of initially applying IFRS 15 as an adjustment to the opening balance of equity as at 1 Januaiy 2015. Therefore, the comparative information has not been restated and continue to be reported in accordance with the previous accounting policy.

The details and the quantitative impact of the change in accounting policy is as follows:

Revenue from sale of properties

The Group previously recognised revenue for sale of prope1ties in the consolidated statement of profit or loss when the risks and rewards of ownership were transferred to the buyer. The significant risks and rewards were deemed to be transferred when the title deed was registered in the name of the buyer or in ce1tain circumstances when equitable interest in the property vest with the buyer before legal title passes. In the current year, upon early adoption of IFRS 15, revenue is recognized as and when the perfonnance obligation of the Group is satisfied. Also refer note 2.20.

Notes (continued)

l l

I )

2 Summary of significant accounting policies (continued)

2.3 Change in accounting policy (continued)

Sales commission

The Group previously recognised sales commission related to sale of properties as selling expenses when these were incurred. Under IFRS 15, the Group capitalises those commission fees as costs of obtaining a contract when they are incremental and amortises them consistently with the pattern of revenue for the related contract. If the expected amo1tization period is one year or less, then the commission fee is expensed when incurred.

Impacts on consolidated financial statements

The details of adjustments to the opening accumulated losses and other account balances are detailed below:

Consolidated statement of financial position

	31 December 2014 AED'OOO	Adjustments/ Reclassifications AED'OOO	1 January 2015 AED'OOO
	(As previously reported)		(Restated)

Assets
Trade and other receivables	259,613	57,411	317,024
Prope1ties held for sale and development	1,403,134	(177,684)	1,225,450
Investments in joint ventures and associates	1,032,579	(17,757)	1,014,822
	2,695,326	(138,030)	2,557,296
Liabilities
Trade and other payables	660,415	4,504	664,919
Advances from customers	288,285	(141,617)	146,668
	948,700	(137, 113)	811,587
Equity
Accumulated losses .	(1,623,836)	(917)	(1,624,753)

Impact of early adopting IFRS 15 on the consolidated financial statements of the Group for the year ended 31 December 2015 is as follows:

i. Consolidated statement of profit or loss

Year ended 31December2015	As per I;FRS 15 AED'OOO	As per old policy AED'OOO	Impact due to change AED'OOO

Revenue	257,102	290,138	(33,036)
Direct I operating costs	124,485	177,261	(52,776)
Share of results from joint ventures and associates	166,818	153,786	13,032
Profit for the year	291,354	258,582	32,772
Earnings per share attributable to the equity holders of the Company - basic and diluted	Fils 5.04	Fils 4.48	Fils 0.56

Notes (continued) r-

2 Summary of significant accounting policies (continued)
2.3 Change in accounting policy (continued)

Impacts 011 co11solidatedfi11ancial statements (co11ti11ued)

ii. Consolidated statement of profit or loss and other comprehensive income

Year ended 31December2015	As per IFRS 15 AED'OOO	As per old policy AED'OOO	Impact due to change AED'OOO
Profit for the year	291,354	258,582	32,772
Total comprehensive income for the year	290,406	257,634	32,772

iii. Consolidated statement of financial position

As at 31December2015 ·	As per IFRS 15 AED'OOO	As per old policy AED'OOO	Impact due to change AED'OOO

Assets Investment in joint ventures and associates	1,181,640	1,186,365	(4,725)
Properties held for development and sale - Non-current	313,543	590,813	(277,270)
Prope1ties held for development and sale - Current	998,897	846,535	152,362
Trade and other receivables - Non-current	5,165	5,165
Trade and other receivables - Current	336,607	297,680	38,927
	2,835,852	2,926,558	(90,706)
Liabilities
Trade and other payables	771,392	766,888	4,504
Advance from customers - Non-current	12,087	161,428	(149,341)
Advance from customers - Current	163,061	140,785	22,276
	946,540	1,069,101	(122,561)
Equity
Accumulated losses	(1,362,534)	(1,394,389)	31,855
Consolidated statement of cash flows iv.
	As per	As per	Impact due
	IFRS 15	old policy	to change
Year ended 31December2015	AED'OOO	AED'OOO	AED'OOO
Cash flows from operating activities
Profit for the year	291,354	258,582	32,772
Share of results from associates and joint ventures	(166,818)	(153,786)	(13,032)
Operating cash flows before payment of employees' end of service benefits and
changes in working capital	(10,262)	(30,002)	19,740
Changes in working capital: Prope1ties held for development and sale	15,412	68,188	(52,776)

net of project cost Trade and other receivables	(22,491)	(40,975)	18,484

2 Summary of significant accounting policies (continued)

2.4 Segment reporting

Operating segments are repo1ted in a manner consistent with the internal reporting provided to the chief operating decision-maker. The chief operating decision-maker, who is responsible for allocating resources and assessing performance of the operating segments, has been identified as the Board of Directors that makes strategic decisions.

2.5 Foreign currency translation

(a) Functional and presentation currency

Items included in the financial statements of each of the Group's entities are measured using the currency of the prima1y economic environment in which the entity operates ("the functional currency"). The consolidated financial statements are presented in United Arab Emirates Dirham ("AED"), which is the Company's functional and the Group's presentation currency.

(b) Transactions and balances

Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions or valuation where items are re-measured. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year end exchange rates of moneta1y assets and liabilities denominated in foreign currencies are recognised in the consolidated statement of profit or loss.

Foreign exchange gains and losses that relate to borrowings and cash and cash equivalents are presented in the consolidated statement of profit or loss within "finance income or cost". All other foreign exchange gains and losses are presented in the consolidated statement of profit or loss within "other operating income or expense".

(c) Group entities

The results and financial position of all the Group entities (none of which has the currency of a hyperinflationary economy) that have a functional cmTency different from the presentation currency are translated into the presentation currency as follows:

(i) Assets and liabilities for each statement of financial position presented are translated at the closing rate at the date of the statement of financial position;
(ii) Income and expenses for each statement of profit or loss are translated at average exchange rates; and
(iii) All resulting exchange differences are recognised as a separate component of equity.

On consolidation, exchange differences arising from the translation of the net investment m foreign operations, and of borrowings are taken to equity.

On the disposal of a foreign operation all of the exchange differences accumulated in equity in respect of that operation attributable to the equity holders of the Company are reclassified to profit or loss.

In the case of a partial disposal that does not result in the Group losing control over a subsidia1y that includes a foreign operation, the propo1tionate share of accumulated exchange differences are re-attributed to non-controlling interests and are not recognised in profit or loss.

2 Summary of significant accounting policies (continued)

2.6 Property and equipment

Property and equipment are ::;tated at historical cost less accumulated depreciation. The cost of property and equipment is its purchase cost together with any incidental costs of acquisition. Subsequent costs are included in the asset's carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably.

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( 1

All other repairs and maintenance costs are charged to the consolidated statement of profit or loss during the financial year in which they are incwi-ed.

Land is not depreciated. Depreciation on other assets is calculated using the straight-line method, at rates calculated to reduce the cost of assets to their estimated residual value over their expected useful lives, as follows:

Type of assets	Years
Buildings	20
Leasehold improvements	4
Furniture and fixtures	4-5
Office equipment	4
Motor vehicles	4

The assets' residual values and useful lives are reviewed, and adjusted if appropriate, at the end of each rep01ting period. An asset's canying amount is written down immediately to its recoverable amount if the asset's carrying amount is greater than its estimated recoverable amount.

Gains and losses on disposals are determined by comparing proceeds with the asset's canying amount. These are recognised within "other income or expense" in the consolidated statement of profit or loss.

Capital work-in-progress is stated at cost and includes prope1ty that is being developed for future use. When commissioned, capital work-in-progress is transferred to the respective category, and depreciated in accordance with the Group's policy.

2.7 ,Investment property

Recognition

Land and buildings owned by the Group for the purposes of generating rental income or capital appreciation or both are classified as investment prope1ties. Prope1ties that are being constructed or developed for future use as investment prope1ties are also classified as investment prope1ties.

Measurement

Investment properties are initially measured at cost, including related transaction costs. Subsequent to initial recognition, investment properties are accounted for using the fair value model under International Accounting Standard No. 40 "Investment Prope1ty". Any gain or loss arising from a change in fair value is recognized in the profit or loss.

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2 Summary of significant accounting policies (continued)

2.7 Investment property (continued)

Measurement (continued)

When the Group begins to redevelop an existing investment property for continued future use as an investment property, the property remains as an investment property, which is measured based on fair value model and is not reclassified as development prope1ty during the redevelopment as an investment prope1ty.

Transferfrom properties held for sale to investment properties

Certain properties held for sale are transferred to investment properties when those prope1ties are either released for rental or for capital appreciation or both. The prope1ties held for sale are transfen-ed to investment properties at fair value on the date of transfer and gain arising on transfer is recognized in statement of profit or loss. Subsequent to initial measurement, such prope1ties are valued at fair value in accordance with the measurement policy for investment properties. Any gain arising on this remeasurement is recognized in the consolidated statement of profit or loss on the specific prope1ty.

Transferfrom investment properties to properties held for sale

Prope1ties are transferred from investment prope1ties to properties held for development and sale when there is a change in intention to use the property. Such transfers are made at the fair value of the prope1ties at the date of transfer and gain arising on transfer is recognized in statement of profit or loss. Subsequent to initial measurement, such properties are valued at cost in accordance with the measurement policy for prope1ties held for development and sale.

Transfer from investment properties to owner-occupied property

If an investment prope1ty becomes owner-occupied prope1ty, it is reclassified as property and equipment. Its fair value at the date of reclassification becomes its cost for subsequent accounting purposes.

Sale of investment properties

Certain investment prope1ties are sold in the ordinary course of business. No revenue and direct costs are recognized for sale of investment properties. Any gain or loss on disposal of sale of investment prope1ties (calculated as the difference between the net proceeds from disposal and carrying amount) is recognized in the consolidated statement of profit or loss.

2.8 Impairment of non-financial assets

At each reporting date, the Group reviews the canying amounts of its non-financial assets, other than investment property, to determine whether there is any indication of impairment. If any such indication exists, then the asset's recoverable amount is estimated.

2 Summary of significant accounting policies (continued)

2.8 Impairment of non-financial assets (continued) .-

A cash generating unit is the smallest identifiable asset group that generates cash flows that are largely independent from other assets and groups. For impairment testing, assets are grouped together into the smallest group of assets that generates cash inflows from continuing use that are , largely independent of the cash inflows of other assets or CGUs.

The recoverable amount of an asset or CGU is the greater of its value in use and its fair value less costs to sell. Value in use is based on the estimated future cash flows, discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset or CGU.

An impairment loss is recognized if the carrying amount of an asset or its cash-generating unit exceeds its recoverable amount. Impainnent losses, if any, are recognized in the consolidated statement of profit or loss.

2.9 Financial assets

2.9.1 Classification

The Group classifies its financial assets in the categories set out below. The classification depends on the purpose for which the financial assets were acquired. Management detennines the classification of its financial assets at initial recognition.

(a) Loans and receivables

Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. They are included in current assets, except for maturities greater than 12 months after the statement of financial position date, which are classified as noncurrent assets. Loans and receivables are carried at amortised cost using the effective interest method. Loans and receivables are classified as trade and other receivables, due from related patties, and cash and cash equivalents (Notes l 0, 11 and 12) in the consolidated statement of financial position.

(b) Available-for-sale financial assets

Available-for-sale financial assets are non-derivatives that are either designated in this category or not classified in any of the other categories of financial assets. They are included in noncurrent assets unless the investment matures or management intends to dispose of it within twelve months of the end of the reporting period.

2.9.2 Recognition and measurement

Regular purchases and sales of financial assets are recognised on the trade-date, being the date on which the Group commits to purchase or sell the asset. Investments are initially recognised at fair value plus transaction costs for all financial assets not carried at fair value through profit or loss. Available-for-sale financial assets are subsequently carried at fair value. Financial assets are derecognised when the rights to receive cash flows from the financial assets have expired or where the Group has transferred substantially all risks and rewards of ownership.

Changes in the fair value of the available-for-sale financial assets are recognised in other comprehensive income. Dividends on available-for-sale financial assets are recognised in the consolidated statement of profit or loss as patt of other income when the Group's right to receive payments is established.

Notes (continued)

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2 Summary of significant accounting policies (continued)

2.10 Impairment of financial assets

(a) Assets carried at amortised cost

The Group assesses at the end of each repo1i:lng period whether the1'e is objective evidence that a financial asset or group of financial assets is impaired.

A financial asset or a group of financial assets is impaired and impairment losses are incurred only if there is objective evidence of impairment as a result of one or more events that occurred after the initial recognition of the asset (a 'loss event') and that loss event (or events) has an impact on the estimated future cash flows of the financial asset or group of financial assets that can be reliably estimated.

Evidence of impairment may include indications that the debtors or a group of debtors is experiencing significant financial difficulty, default or delinquency in interest or principal payments, the probability that they will enter bankruptcy or other financial reorganisation, and where observable data indicate that there is a measurable decrease in the estimated future cash flows, such as changes in arrears or economic conditions that correlate with defaults.

For loans and receivables category, the amount of the loss is measured as the difference between the asset's can-ying amount and the present value of estimated future cash flows (excluding future credit losses that have not been incurred) discounted at the financial asset's original effective interest rate. The carrying amount of the asset is reduced and the amount of the loss is recognised in the consolidated statement of profit or loss.

If, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment was recognised (such as an improvement in the debtor's credit rating), the reversal of the previously recognised impaitment loss is recognised in the consolidated statement of profit or loss.

(b) Assets classified as available-for-sale

In the case of equity securities classified as available-for-sale, a significant or prolonged decline in the fair value of the security below its cost is considered as an indicator that the securities are impaired. If any such evidence exists for available-for-sale financial assets, the cumulative loss measured as the difference between the acquisition cost and the current fair value, less any impairment loss on that financial asset previously recognised in profit or loss - is removed from equity and recognised in the consolidated statement of profit or loss. Impairment losses recognised in the consolidated statement of profit or loss on equity instruments are not reversed through the consolidated statement of profit or loss.

2.11 Properties held for development and sale

Land and buildings identified as held for sale, including buildings under construction, are classified as such and are stated at the lower of cost and estimated net realisable value. The cost of work-in-progress comprises construction costs and other related direct costs. Net realisable value is the estimated selling price in the ordinary course of business, less cost of completion and selling expenses.

2 Summary of significant accounting policies (continued)

2.12 Trade and other receivables

Trade receivables are amounts due from customers for properties sold or services performed in the ordinary course of business. If collection is expected in one year or less (or in the normal operating cycle of the business if longer), they are classified as current assets. If not, they are presented as non-current assets.

·Trade and other receivables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method, less provision for impairment.

A provision for impairment of trade receivables is established when there is objective evidence that the Group will not be able to collect all amounts due according to the original terms of receivables. The amount of the provision is the difference between the asset's carrying amount and the present value of estimated future cash flows, discounted at the original effective interest rate.

The cariying amount of the asset is reduced through the use of an allowance account, and the amount of the loss is recognised in the consolidated statement of profit or loss. When a trade receivable is uncollectible, it is written off against the allowance account for trade receivables. Subsequent recoveries of amounts previously written off are credited to the consolidated statement of profit or loss.

2.13 Cash and cash equivalents

Cash and cash equivalents includes cash in hand, deposits held at call with banks and other sh01tterm highly liquid investments with original maturities of three months or less, net of bank overdrafts. In the consolidated statement of financial position, bank overdrafts are shown within borrowings in current liabilities.

2.14 Employee benefits

(a) End of service benefits to non-UAE nationals

The provision for staff terminal benefits is based on . the liability that would arise if the employment of all staff were terminated at the reporting date and is calculated in accordance with the provisions of UAE Federal Labour Law and the relevant local laws applicable to overseas subsidiaries. Management considers these as long-term obligations and accordingly they are classified as long-term liabilities.

(b) Pension and social security policy within the U.A.E

The Group is a member of the pension scheme operated by the Federal Pension General and Social Security Authority. Contributions for eligible UAE National employees are made and charged to the consolidated statement of profit or loss, in accordance with the provisions of Federal Law No. 7of1999 relating to Pension and Social Security Law.

2.15 Advances from customers

Instalments received from buyers, for properties sold or services performed, prior to meeting the revenue recognition criteria, are recognised as advances from customers. If their settlement, through revenue recognition or refund, is expected in one year or less, they are classified as current liabilities. If not, they are presented as non-current liabilities.

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2 Summary of significant accounting policies (continued)

2.16 Trade payables ⁰

Trade payables are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Accounts payable are 0lassified as current liabilities if payment is due within one year or less (or in the normal operating cycle of the business if longer). If not, they are presented as non-current liabilities. These are recognised initially at fair value and subsequently measured at amo1tised cost using the effective interest method.

2.17 Borrowings

Borrowings are recognised initially at fair value, net of transaction costs incurred. Borrowings are subsequently carried at amo1tised cost; any difference between the proceeds (net of transaction costs) and the redemption value is recognised in the consolidated statement of profit or loss over the period of the borrowings using the effective interest method.

Fees paid on the establishment of loan facilities are recognised as transaction costs of the loan to the extent that it is probable that some or all of the facility will be drawn down. In this case, the fee is deferred until the draw-down occurs.

2.18 Borrowings costs

General and specific borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets that necessarily take a substantial period of time to get ready for their intended use or sale, are added to the cost of those assets, until such time as the assets are substantially ready for their intended use or sale.

Investment income earned on the temporary investment of specific borrowings pending their expenditure on qualifying assets is deducted from the borrowing costs eligible for capitalisation.

All other borrowing costs are recognised in profit or loss in the period in which they are incurred.

2.19 Provisions

Provisions are recognised when: the Group has a present legal or constructive obligation as a result of past events; it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation; and the amount has been reliably estimated. Provisions are not recognised for future operating losses.

Where there are a number of similar obligations, the likelihood that an outflow will be required in settlement is determined by considering the class of obligations as a whole. A provision is recognised even if the likelihood of an outflow with respect to any one item included in the same class of obligations may be small.

Provisions are measured at the present value of the expenditures expected to be requiretl to settle the obligation using a rate that reflects current market assessments of the time value of money and risks specific to the obligation. Increases in provisions due to the passage of time are recognised as interest expense.

2 Summary of significant accounting policies (continued)

2.20 Revenue recognition

As a result of early adoption of IFRS 15 with effect from 1 January 2015, the Group has applied the following accounting policy with effect from 1 January 2015 (Note 2.3). .

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Revenue comprises the fair value of the consideration received or receivable for the sale of goods and services in the ordinary course of the Group's activities. '

Revenue is measured based on the consideration specified in a contract with a customer. Revenue is recognised when the Group transfers control over a product or service to a customer.

(a) Revenue from sale of properties

The Group recognises revenue from sale of properties based on a five step model as set out in IFRS 15:

Step 1 Identify the contract(s) with a customer: A contract is defined as an agreement between two or more patties that creates enforceable rights and obligations and sets out the criteria for every contract that must be met.
Step 2 Identify the performance obligations in the contract: A performance obligation is a promise in a contract with a customer to transfer a good or service to the customer.
Step 3 Determine the transaction price: The transaction price is the amount of consideration to which the Group expects to be entitled in exchange for transferring promised goods or service to a customer, excluding amounts collected on behalf of third parties.
Step 4 Allocate the trnnsaction price to the performance obligations in the contract: For a contract that has more than one performance obligation, the Group will allocate the transaction price to each performance obligation in an amount that depicts the amount of consideration to which the Group expects to be entitled in exchange for satisfying each performance obligation.
Step 5 Recognise revenue when (or as) the entity satisfies a performance obligation.

The Group satisfies a petformance obligation and recognises revenue over time, if one of the following criteria is met:

1. The customer simultaneously receives and consumes the benefits provided by the Group's performance as the Group performs; or
1. The Group's performance creates or enhances an asset that the customer controls as the asset is created or enhanced; or
1. The Group's performance does not create an asset with an alternative use to the Group and the entity has an enforceable right to payment for performance completed to date.

For performance obligations where one of the above conditions are not met, revenue ts recognised at the point in time at which performance obligation is satisfied.

When the Group satisfies a performance obligation by delivering the promised goods or services, it creates a contract asset based on the amount of consideration earned by the perfonnance. Where the amount of consideration received from a customer exceeds the amount of revenue recognised, this gives rise to a contract liability.

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2 Summary of significant accounting policies (continued)

2.20 Revenue recognition (continued)

(b) F01feiture income

Fo1feiture income is recognised in the consolidated statement of profit or loss when, in the case of prope11ies sold and not yet recognised as revenue, a customer does not fulfil to the contractual payment terms. This is deemed to take place when, despite rigorous follow-up with the defaulted customer, as per the procedures set out by the Dubai Real Estate Regulatory Authority, the customer continues to default on the contractual terms.

(c) Service revenue

Revenue from services such as prope11y management and facilities management is recognised in the accounting period in which the services are rendered.

(d) Leasing income

Leasing income from operating leases is recognised on a straight-line basis over the lease term. When the Group provides operating lease incentives to its customers, the aggregate cost of incentives are recognised as a reduction of rental income over the lease term on a straight-line basis.

(e) Finance income

Finance income is recognised in the consolidated statement of profit or loss on a time-propotiion basis using the effective yield method.

(/) Dividend income

Dividend income is recognised when the right to receive the dividend is established.

2.21 Dividend distribution

Dividend distribution to the Company's shareholders is i·ecognised as a liability in the Group's consolidated financial statements in the period in which the dividends are approved by the Company's shareholders.

2.22 Leases

Leases in which a significant portion of the risks and rewards of ownership are retained by the lessor are classified as operating leases. Payments made under operating leases (net of any incentives received from the lessor) are charged to the consolidated statement of profit or loss on a straight-line basis over the period of the lease.

2 Summary of significant accounting policies (continued)

2.23 Offsetting financial instruments

Financial assets and liabilities are ,offset and the net amount is repo1ted in the statement of financial position when there is a legally enforceable right to offset the recognised amounts and l there is an intention to settle on a net basis or realise the asset and settle the liability ] simultaneously.

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3 Financial risk management

3.1 Financial risk factors

The Group's activities expose it to a variety of financial risks: market risk (including currency risk, cash flow and fair value interest rate risk and other price risk), credit risk and liquidity risk. The Group's overall risk management programme focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the Group's financial performance.

Risk management is carried out by the senior management under policies approved by the Board of Directors. Management evaluates financial risks in close co-ordination with the Group's operating units.

Market risk

Currency risk

Foreign exchange risk arises from future commercial transactions, recognised assets and liabilities and net investments in foreign operations.

The Group does not have any significant exposure to foreign currency risk since the majority of transactions are denominated in AED, US Dollars or other currencies, whereby the AED or other currencies are pegged to the US Dollar.

Price risk

The Group is exposed to equity securities price risk through investments held by the Group and classified as available-for-sale.

Cash.flow and fair value interest rate risk

The Group has an insignificant interest rate risk arising from interest bearing bank deposits. Bank deposits are placed with banks offering favourable rates. The Group's interest rate risk arises from its interest bearing liabilities.

At 31 December 2015, if profit rates on borrowings had been I% higher/lower with all other variables held constant, profit for the year would have been AED 5,089,000 lower/higher (2014: profit for the year would have been 7,015,000 lower/higher), mainly as a result of higher/lower interest expense on floating rate borrowings.

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3 Financial risk management (continued)

3.1 Financial risk factors (continued)

Credit risk

The Group is exposed to credit risk in relation to its monetary assets, mainly trade receivables, due from related patties, and bank deposits. Trade receivables are made to customers with an appropriate credit history. The Group has no other significant concentrations of credit risk. Bank deposits are limited to high-credit-quality financial institutions. The carrying amount of financial assets represents the maximum credit exposure at the reporting date. The maximum exposure to credit risk at the repo1ting date was:

	2015	2014
	AED'OOO	AED'OOO
Long term fixed deposits	51,650	53,559
Trade and other receivables	102,080	173,912
Due from related parties	1,951,333	1,959,974
Bank balances	821,493	993, 113
	2,926,556	3,180,558

Liquidity risk

The Group monitors its risk of a possible shortage of funds using cash flow forecasts. These forecasts consider the maturity of both its financial investments and financial assets (e.g. accounts receivable, other financial assets) and projected cash flows from operations.

The Group's objective is to maintain a balance between continuity of funding and flexibility through the use of bank facilities. The Group manages liquidity risk by maintaining adequate reserves and banking facilities, by continuously monitoring forecasted and actual cash flows and matching the maturity profiles of financial assets and liabilities. The table below analyses the Group's financial liabilities into relevant maturity groupings based on the remaining period at the statement of financial position to the contractual maturity date. The amounts disclosed in the table are the contractual undiscounted cash flows.

	------- Contractual cash flows -------
	Carrying	Contractual	Within 1	2 to 5	More than 5
	amount AED'OOO	cash flows AED'OOO	year AED'OOO	years AED'OOO	years AED'OOO

As at 31December2015
Islamic finance facilities	478,848	535,211	157,855	317,791	59,565
Trade and other payables	771,392	771,392	771,392
Retentions payable	27,867	27,867	17,499	10,368
Due to related patties	14,013	14,013	14,013
	1,292,120	1,348,483	960,759	328,159	59,565

As at 31 December 2014
Islamic finance facilities	544,588	572,547	156,153	381,888	34,506
Other borrowings	105,574	119,254	24,270	94,984
Trade and other payables	660,415	660,415	660,415
Retentions payable	26,974	26,974	25,733	1,241
Due to related parties	14,174	14,174	14,174
	1,351,725	1,393,364	880,745	478,113	34,506

3 Financial risk management (continued)

3.2 Capital risk management

The Group's objectives when managing capital are to safeguard the Group's ability to continue as a going concern in oi·der to maximise returns to shareholders and benefits for other stakeholders and to maintain an optimal capital structure to reduce the cost of capital.

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In order to maintain or adjust the capital structure, the Group may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt.

There were no changes in the Group's approach to capital management during the year. Except for complying with certain provisions of the UAE Federal Law No. 2 of 2015, the Group is not subject to any externally imposed capital requirements.

3.3 Fair value estimation

The Group has an established control framework with respect to the measurement of fair values, and management has overall responsibility for overseeing all significant fair value measurements, including Level 3 fair values.

The management regularly reviews significant unobservable inputs and valuation adjustments. If third party information, such as broker quotes or pricing services, is used to measure fair values, then the management assesses the evidence obtained from the third parties to suppo1t the conclusion that such valuations meet the requirements ofIFRS, including the level in the fair value hierarchy in which such valuations should be classified.

When measuring the fair value of an asset or a liability, the Group uses market observable data as far as possible. Fair values are categorised into different levels in a fair value hierarchy based on the inputs used in the valuation techniques as follows.

Level I: quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2: inputs other than quoted prices included in Level l that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).
Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs).

The following table presents the Group's financial assets that are measured at fair value:

	Level 1 AED'OOO	Total AED'OOO

As at 31December2015
Available-for-sale financial assets	23,893	23,893
As at 31 December 2014
Available-for-sale financial assets	24,841	24,841

The canying value less impairment provision of trade receivables and payables are assumed to approximate their fair values due to the shmi-term nature of trade receivables. The fair value of financial liabilities for disclosure purposes is estimated by discounting the future contractual cash flows at the current market interest rate that is available to the Group for similar financial instruments. Other receivables and payables approximate their fair values.

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4 Critical accounting estimates andjudgements

Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.

The Group makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, seldom equal the related actual results. The estimates and assumptions that have a significant risk of causing a material adjustment to the canying amounts of assets and liabilities within the next financial year are discussed below.

(a) Valuation of investment properties

The Group follows the fair value model under IAS 40 where investment property owned for the purpose of generating rental income or capital appreciation, or both, are fair valued based on valuation carried out by an independent registered valuer, who carried out the valuation in accordance with RICS Appraisal and Valuation Manual issued by the Royal Institute of Chartered Surveyors and the internal valuation by the Group's finance depaitment.

The fair values have been detennined by taking into consideration market comparables and I or the discounted cash flows where the Company has on-going lease airnngements. In this regard, the Group's current lease arrangements, which are entered into on an arm's length basis and which are comparable to those for similar prope1ties in the same location, have been taken into account.

In case where the Company does not have any on-going lease arrangements, fair values have been determined, where relevant, having regard to recent market transactions for similar prope1ties in the same location as the Group's investment prope1ties. These values are adjusted for differences in key attributes such as prope1ty size.

Management of the Company has reviewed the assumption and methodology used by the independent registered valuer and in their opinion these assumptions and methodology seems reasonable as at the reporting date considering the current economic and real estate outlook in UAE.

(b) Recoverability of investment in a joint venture

Recoverability of investment in a joint venture is an area involving significant management judgement, requiring assessment as to whether the carrying value of assets can be supported by the fair value of investment prope1ty and property held for development and sale in the joint venture.

For investment property under construction, management uses a valuation technique based on a discounted cash flow model. In calculating the net present value of the future cash flows, certain assumptions are required to be made in respect of the impairment reviews. The key assumptions on which management has based its cash flow projections when determining the recoverable amount of the assets are as follows:

The discount rate of 10.87% based on the Group's weighted average cost of capital with a risk premium reflecting the relative risks in the markets in which the businesses operate.
Growth rate of3.3% based on a conservative view of the long-term rate of growth.

Management assesses the impairment for property held for development and sale in the joint venture whenever events or changes in circumstances indicate that the canying value may not be recoverable. Factors that are considered important which could trigger an impairment review include evidence that no profits or cash flows will be generated from the related asset.

N ates (continued)

4 Critical accounting estimates and judgements (continued)

(c) IFRS 15 Revenue.from contracts with customers

The application of revenue recognition policy 111 accordance with IFRS 15 has required management to make the following judgements:

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Satisfaction of pe1formance obligation

The Group is required to assess each of its contracts with customers to determine whether performance obligations are satisfied over time or at a point in time in order to determine the appropriate method of recognising revenue. The Group has assessed that based on the sale and purchase agreements entered into with customers and the provisions of relevant laws and regulations, where contracts are entered into to provide real estate assets to customer, the Group does not create an asset with an alternative use to the Group and usually has an enforceable right to payment for performance completed to date. In these circumstances the Group recognises revenue over time and in other cases, revenue is recognised at a point in time.

Determination of transaction prices

The Group is required to determine the transaction prices in respect of each of its contracts with customers. In making such judgement the Group assesses the impact of any variable consideration in the contract, due to discounts or penalties, the existence of any significant financing component in the contract and any non-cash consideration in the contract.

Transfer of control in contracts with customers

In cases where the Group determines that performance obligations are satisfied at a point in time, revenue is recognised when control over the asset that is subject of the contract is transferred to the customer. In the case of contracts to sell real estate assets this is generally when the unit has been handed over to the customer.

Allocation of transaction price to pe1formance obligation in contracts with customers

The Group has elected to apply the input method in allocating the transaction price to performance obligations where revenue is recognised over time. The Group considers that the use of input method which requires revenue recognition on the basis of the Group's efforts to the satisfaction of the performance obligation provides the best reference of revenue actually earned. In applying the input method, the Group estimates the cost to complete the projects in order to determine the amount of revenue to be recognised.

Cost to complete the projects

The Group estimates the cost to complete the projects in order to determine the cost attributable to revenue being recognised. These estimates include the cost of design and consultancy, construction, potential claims by contractors as evaluated by the project consultant and the cost of meeting other contractual obligations to the customers.

Notes (continued)

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5 Property and equipment

	Ca ita l p k in wo r p ro g re ss A E D 'O O O	i l d ing Bu s A E D 'O O O	Le ho l d as e im nt p ro ve me s A E D 'O O O	Fu itu rn re d f ixt an ur es A 'O O O E D	O f f ice ip nt eq u me A 'O O O E D	M ot or h ic les ve A 'O O O E D	l To ta A E D 'O O O
Co st
At 1 Ja 2 0 1 4 nu ary	-	2 9, 1 0 1	7 1 4	0 3 0 7,	1 1 1 9, 7	7 9 3	5 3 4 7, 9
d d it ion A s	-	-	2, 6 0 4	5 2 6	1, 3 5 7	5 0 0	1 5, 4 6 7
fer Tr ( No 9 ) te an s s	-	1 0, 6 4 2	-	-	-	-	1 0, 4 2 6
D is ls os a	-	-	-	-	-	( 3 8 0 )	( 3 8 0 )
At 3 1 De be 2 0 1 4 ce m r	-	3 9, 7 4 3	3, 3 1 8	7, 5 5 6	2 1, 0 8 6	9 1 3	7 2, 1 6 6
At 1 Ja 2 0 1 5 nu ary	-	3 9, 7 4 3	3, 3 1 8	7, 5 5 6	2 1, 0 8 6	9 1 3	7 2, 1 6 6
Tr fer ( No d No 9 ) 6 a te te an s s n	1 9 9, 8 9 1	-	-	-	-	-	1 9 9, 8 9 1
A d d it ion s	2 2, 3 5 3	-	1, 8 3 8	2 7 0	6, 1 6 0	-	3 0, 6 2 1
D is ls os a	-	-	-	-	( 5 0 3 )	-	( 5 0 3 )
At 3 1 De be 2 0 1 5 ce m r	2 2 2, 2 4 4	3 4 3 9, 7	5, 1 5 6	8 2 7, 6	2 4 3 6, 7	1 3 9	3 0 2, 2 5 6
De iat io p re c n
At 1 Ja 2 0 1 4 nu ar y	-	3, 8 8 9	6 1 0	6, 9 0 2	1 8, 0 4 9	3 7 9	3 0, 2 4 3
C ha for he ( No 2 3 ) t te rg e ea r y	-	1, 5 5 7	2 6 7	9 8	9 0 4	6 2	2, 8 8 8
is ls D Eo sa	-	-	-	-	-	( 3 8 0 2	( 3 8 0 )
be At 3 1 De 2 0 1 4 ce m r	-	5, 4 4 6	8 7 7	7, 0 0 0	1 8, 9 5 3	4 7 5	3 2, 7 5 1
At 1 Ja 2 0 1 5 nu ary	-	5, 4 4 6	8 7 7	7, 0 0 0	1 8, 9 5 3	4 7 5	3 2, 5 1 7
C ha for he ( No 2 3 ) t te rg e y ea r	-	1, 4 2 7	2, 0 1 7	2 2 8	1, 0 9 6	1 2 5	5, 4 0 6
D isp ls os a	-	-	-	-	( 4 5 9 )	-	( 4 5 9 )
At 3 1 De be 2 0 1 5 ce m r	-	8 7 3 6,	2, 8 9 4	7, 2 2 8	2 0, 1 0 3	6 0 0 -.	3 7, 6 9 8
bo k v lue 3 1 be 2 0 1 5 Ne De t o a ce m r	2 2 2, 2 4 4	3 2, 8 0 7	2, 2 2 6	5 9 8	6, 6 4 0	3 1 3	2 6 4, 9 2 7
- Ne bo k v lue 3 1 De be 2 0 1 4 t o a ce m r -	-	3 4, 2 9 7	2, 4 4 1	5 5 6	2, 1 3 3	4 3 8	3 9, 8 6 5

____]

Buildings with a carrying value of AED 19,364,527 (2014: AED 20,655,496) are mortgaged under Islamic finance obligations (Note 15).

Capital work-in-progress represents expenditure incurred on properties and development of properties which are intended to be used according to Company's relevant business model.

Notes (continued)

6 Investment property

	UAE		UAE
	Office	UAE	Retail	2015	2014
	Building	Land	Units	Total	Total
	AED'OOO	AED'OOO	AED'OOO	AED'OOO	AED'OOO
Fair value hierarchy	3	3	3
Fair value at l January	68,560	92,055	168,705	329,320	265,521
Additions		3,247	115	3,362	15
Disposal					(104,921)
Transfer from properties held for sale
(Note 9 and Note i below)					118,588
Transfer to property and equipment (Note
5 and Note ii below)		(95,302)		(95,302)
Net gain from fair value adjustments on
investment 2ro2erty	17,173		{997}	16,176	50,117
Fair value at 31 December	85,733		167,823	253,556	329,320

1. During 2014, the Company reclassified its portfolio of retail units with a carrying value of AED 118 million from property held for sale to investment properties as a result of change in management's intention for use of these units as reflected in the Company's relevant business model. The units were reclassified to investment prope1ties at their fair value on the date of transfer resulting in a fair value gain of AED 50 million. The gain was recognised in the consolidated statement of profit or loss in accordance with the accounting policy adopted for the measurement of investment prope1ties.
ii. In the current year, the Company has reclassified a plot of land from investment properties to property and equipment. This prope1ty was earlier recognized in the consolidated financial statements of the Company in accordance with the fair value accounting policy adopted for the measurement of investment properties and upon reclassification, the carrying value of AED 95.3 million was deemed to be the cost of the property in accordance with the accounting policy adopted for recognition and measurement of prope1ty and equipment. This reclassification was a result of the change in management's intention to use the property as reflected by the Company's relevant business model. Based on the management's assessment of the fair value of the property reclassified, there is no material difference between the can-ying value of the plot of land and its fair value on the transfer date and accordingly no gain or loss has been recognised in the Company's consolidated profit or loss upon transfer.

Investment prope1ty is recognised at fair value and categorised within the level of the fair value hierarchy based on the lowest level input that is significant to fair value measurement in their entirety. The different levels have been defined as follows:

Quoted prices (unadjusted) in active markets for identical assets or liabilities (level l);
e Inputs other than quoted prices included within level l that are observable for the asset or liability, either directly (that is, as prices) or indirectly (that is, derived from prices) (level 2); and
Inputs for the asset or liability that are not based on observable market data (that is, unobservable inputs) (level 3).

The Group's policy is to recognise transfers into and out of fair value hierarchy levels as of the date of the event or change in circumstances that caused the transfer.

Direct operating expenses recognised in the consolidated statement of profit or loss include AED 2,749,678 (2014: AED 2,773,726) and rental income recognised in consolidated statement of profit or loss incl.udes AED 30,265,347 (2014: AED 25,266,159) from investment property (Note 20).

Bank borrowings are secured on investment prope1ty to the value of AED 80,000,000 (2014: AED 158,500,000) (Note 15).

Notes (continued)

1 J

]

6 Investment property (continued)

Valuation processes

Retail units included in the Group's investment properties are valued by independent professionally qualified valuers who hold a recognised relevant professional qualification and have experience in the locations and segments of the investment properties valued. For all investment prope1ties, their cmTent use equates to the highest and best use. Valuation of UAE office building is valued by the Groups' finance depa1tment. The Group's finance department includes a team that also reviews the val.uations performed by the independent valuers for financial rep01ting purposes. Discussions of valuation processes and results are held between management and the independent valuers at least once in eve1y six months.

At each financial year end, the finance depaitment:

verifies all major inputs to the independent valuation report;
assesses property valuation movements when compared to the prior year valuation rep01t; and
holds discussions with the independent valuers.

Information about fair value measurements using significant unobservable inputs (Level 3) are as follows:

						Sensitivity of management estimates
Country	Segment	Valuation	Estimate	Range of inputs	Impact lower AED'OOO	Impact higher AED'OOO
UAE	Office	Income	Estimated rental value	AED I 00 to AED 230 per sqft per annum	(913)	913
	building	capitalisation	Discount rate	12.29%	10,567	(8,437)

A change of 100 basis points in management's estimate at the reporting date would have increased/( decreased) equity and profit or loss by the amounts shown above.

Valuation techniques underlying management's estimation of fair value:

For office building, the valuation was dete1mined using the income capitalisation method based on following significant unobservable inputs:

Estimated rental value (per sqft p.a.) based on the actual location, type and quality of the properties and supported by the terms of any existing lease, other contracts or external evidence such as current market rents for similar properties;

Cash flow discount rate reflecting current market assessments of the uncertainty in the amount and timing of cash flows;

For retail units, the valuation was determined using the indicative fair values of these investment properties as at 31 December 2015 provided by an independent firm of surveyors and prope1ty consultant. The surveyor has used sales comparison method to determine the fair values of retail units.

Notes (continued)

7 Investments in joint ventures and associates

		Joint Ventures		Associates		Total
	2015	-2014	2015	2014	2015	2014
	AED'OOO	AED'OOO	AED'ooo	AED'OOO	AED'OOO	AED'OOO

At l January, as previously reported	740,285	684,900	292,294	274,662	1,032,579	959,562
Effect of change in accounting policy (Note 2.3)	(17,757)				(17,757)
Adjusted balance at 1 January 2015	722,528	684,900	292,294	274,662	1,014,822	959,562
Share of profit	159,875	55,385	6,943	20,586	166,818	75,971
Repurchase of share by associate				(2,954)		(2,954)
At 31 December	882,403	740,285	299,237	292,294	1,181,640	1,032,579

· 1

]

Illvestmellt in associates

The Group has a 22.72% interest in Solidere International Al Zorah Equity Investments Inc ("Al Zorah"), a company registered in the Cayman Islands. The associate is a holding company investing in companies engaged in property development.

Summarised financial information relating to the Group's share of its associates is as follows:

Name	% interest held	Assets AED'OOO	Liabilities AED'OOO	Revenue AED'OOO	Net profit AED'OOO
31 December 2015
Al Zorah	22.72	315,059	(84,577)	11,223	6,943
		315,059	(84,577)	11,223	6,943
3 1 December 2014
Al Zorah	22.72	304,124	(80,586)	19,827	20,586
		304,124	(80,586)	19,827	20,586

The Group's share of its associates' commitments amounts to AED 46,517,000 (2014: AED 44,729,000).

Notes (continued)

J·

7 Investments in joint ventures and associates (continued)

Investment in joint ventures

The Group has a 50% interest in the following joint ventures, which are engaged in property development. The following amounts represent the Group's 50% share of the assets, liabilities, revenue and results of the joint ventures. They also include consolidation adjustments made at the Group's level to ensure uniform accounting policies. These are included in the Group's consolidated statement of financial position and statement of profit or loss:

Name	% held	Country of interest incorporation	Non- current assets AED'OOO	AED'OOO AED'OOO	Current liabilities AED'OOO	Net profit AED'OOO

31December2015
Arady Development LLC	50	U.A.E	825,689	145,574	60,542	159,875
Dubai International
Development Co. LLC (*)	50	U.A.E		150
			825,689	145,724	60,542	159,875

Name	% held	Country of interest incorporation	Non- current assets	Current Assets AED'OOO AED'OOO	Non- current	Current liabilities liabilities l!et profit AED'OOO AED'OOO	AED'OOO
3 1 December 2014
Arady Development LLC Dubai International	50	U.A.E		638,470 . 551,346	89,561	360,088	55,385
Development Co. LLC (*)	50	U.A.E	638,470	150 551,496	89,561	360,088	55,385

The Group's propo1tionate share m joint ventures commitments 1s AED Nil (2014: AED 133,626,000).

* This joint venture did not commence its commercial activities.

8 Available-for-sale financial assets

	2015	2014
	AED'OOO	AED'OOO

I January	24,841	25,381
Change in fair value	(948)	(540)
31 December	23,893	24,841

Notes (continued)

9 Properties held for development and sale

	Properties held for sale AED'OOO	Properties construction AED'OOO	Land held for future under development and sale AED'OOO	Total AED'OOO
l January 2014	1,165,409	261,157	244,396	1,670,962
Additions (Note 11 (c)) Transfer due to completion of	32,531	401,775	308,783	743,089
prope1ties Adjustment (Note 17) /reclassification	161,434	(161,434)
to advances (Note 10 (ii)) Reversal of impairment (Note 21) Transfer to investment property	(45,661) 158,949	(114,375)		(160,036) 158,949
(Note 6) Transfer to property and equipment	(118,588)			(118,588)
(Note 5) Sales (Note 21)	(10,642) (880,600)			(10,642) (880,600)
31 December 2014	462,832	387,123	553, 179	1,403, 134
1January2015 (as previously reported)	462,832	387,123	553,179	1,403,134
Effect of change in accounting policy (Note 2.3)	(158,626)	(19,058)		(177,684)
Adjusted balance at 1 January 2015	304,206	368,065	553,179	1,225,450
Additions (Note 26) Transfer due to development of		111,707	233,633	345,340
properties (Note (i) below)		309,183	(309,183)
Provision for impairment (Note 26) Reversal of impairment (Note 21)	9,102		(53,113)	(53,113) 9,102
Transfer to prope1ty and equipment (Note 5)		(104,589)		(104,589)
Sales (Note 21)	(16,197)	(93,553)		(109,750)
31 December 2015	297,111	590,813	424,516	1,312,440
			2015 AED'OOO	2014 AED'OOO
Non-current p01tion Current Eortion			313,543 998,897	695,906 707,228
As at 31 December			1,312,440	1,403,134

(i) During the year, the Company launched a project for construction of properties on a certain land held for future development. Accordingly, the land was transferred to properties under J construction.

Notes (continued)

]

9 Properties held for development and sale (continued)

Management's assessment of the net realisable value of the properties held for development and sale resulted in a net reversal of impairment amounting to AED 9,102,000 (2014: AED 158,949,000), which was recognized in the consolidated statement of profit or loss under "direct I operating costs" (Note 21).

Net realisable value has been determined on the basis of committed sale price if the remaining receivable amount is lower than the current market value of the units booked by customers. For units not yet booked by customers, net realisable value takes into consideration the current market.

In the cun·ent year, the Company reclassified properties under construction of the value of AED 104.5 million (2014: AED 10.6 million) to propeity and equipment based on change in management's intention to use the prope1ties as reflected by the Company's relevant business model.

Residential units in a building and a plot of a land with a total carrying value of AED 290,687,000 (2014: AED 292,756,000) are mortgaged under Islamic finance obligations (Note 15).

For land held for future development and use, management is currently evaluating feasibility of the projects and considering alternative viable and profitable options.

	2015	2014
	AED'OOO	AED'OOO
Trade receivables (refer (i) below)	212,292	273,638
Less: provision for impairment of trade receivables	(119,852)	(118,507)
	92,440	155,131

Advance for purchase of properties (refer (ii) below)	153,455	45,750
Receivable on cancelled purchase agreement		11,625
Advances to contractors	67,892	541
Advances to suppliers	17,192	33,560
Prepayments	1,153	5,850
Other receivables	9,640	7,156
	249,332	104,482
	341,772	259,613

Less: current portion	(336,607)	(224,608)
Non-current p01tion	5,165	35,005

10 Trade and other receivables

Notes (continued)

10 Trade and other receivables (continued)

i. Contract balances

Contract assets primarily relate to the Group's right to consideration for work completed but not yet received at the repmting date. Contract liabilities primarily relate to the advance consideration received from customers for sale of prope1ties.

. ]

. l

The following table provides information about contract assets and contract liabilities from contracts with customers.

	2015 AED'OOO

Contract assets (included in trade receivables)	92,440
Contract liabilities (Advances from customers - Note 16)	175,148
Significant changes in the contract balances during the year are as follows:
	Contract liabilities AED'OOO

Revenue recognised that was included in the contract liability balance at
the beginning of the year (after restatement on 1 January 2015 - Note 2.3)	82,259
Increases due to cash received, excluding amounts recognised as revenue
during the year	79,169

ii. Advance for purchase of properties

	2015 AED'OOO	2014 AED'OOO

Advance for purchase of share in real estate projects (Note 25)	295,088	187,510
Advance for purchase of properties (Note 9)		114,375
	295,088	301,885
Less: provision for impairment against
advance for purchase of share in real estate projects (Note 25)	(141,633)	(187,510)
Less: provision for impairment against advance for purchase of
properties (Note 26)		(68,625)
	153,455	45,750

Notes (continued)

10 Trade and other receivables (continued)

As at 31 December 2015, trade receivables of AED 61,858,000 (2014: AED 124,430,000) were receivable from sale of properties but not impaired.

As at 31 December 2015, trade receivables of AED 30,5 82,000 (2014: AED 30, 702,000) were receivable from other streams of revenue but not impaired. The ageing analysis of these trade receivables is as follows:

	2015 AED'OOO	2014 AED'OOO
Not due	4,370	5,231
U pto 3 months	7,293	14,605
Over 3 months	18,919	10,866
	30,582	30,702

As at 31December2015, trade receivables of AED 119,852,000 (2014: AED 118,507,000) were impaired and fully provided for. The individually impaired receivables mainly relate to customers who are in difficult economic situations. The ageing analysis of these trade receivables is as follows:

	2015	2014
	AED'OOO	AED'OOO

Over 6 months	119,852	118,507

Movements of the Group's provision for impairment of trade receivables are as follows:

	2015 AED'OOO	2014 AED'OOO
At 1 January Provision for I (reversal of) impairment of trade receivables	118,507 1,345	125,047 (6,540)
At 31 December	119,852	118,507

The maximum exposure to credit risk at the reporting date is the carrying value of each class of receivable. The Group holds title deeds of the assets sold or post-dated cheques as security.

N ates (continued)

(b)

(c)

11 Transactions and balances with related parties

Related patties include the significant shareholders, key management personnel, associates, joint ventures, directors and businesses which are controlled directly or indirectly by the significant shareholders or directors or·over which they exercise significant management influence.

l l

(a) Related party transactions

During the year, the Group entered into the following significant transactions with related parties in l the normal course of business and at prices and terms agreed by the Group's management.

	2015	2014
	AED'OOO	AED'OOO
A significant shareholder
Other operating income/finance income	4,770	3,522
Finance cost	13,009	21,110
Remuneration of key management personnel
	2015	2014
	AED'OOO	AED'OOO
Salaries and other short term employee benefits	32,564	26,506
Termination and post-employment benefits	1,061	1,287
Directors' fees	1,500	1,500
	35,125	29,293
Due from related parties comprises:
	2015	2014
	AED'OOO	AED'OOO
Current
Due from joint ventures	16,075	131,976
Due from other related eaities	1,935,258	1,827,998
	1,951,333	1,959,974

Cash and bank balances include fixed deposits of AED 330,000,000 (2014: AED 455,000,000) deposited with Dubai Islamic Bank, a significant shareholder of the Company, at market prevailing profit rates.

At 31 December 2015, the Group had bank borrowings from Dubai Islamic Bank of AED 264,119,000 (2014: AED 303,355,000) with a profit rate of EIBOR + 2.75% with a minimum of 4% (2014: EIBOR + 3% with a minimum of 5%).

In 2010, the Group entered into a sale and purchase agreement with a related party to sell properties with a carrying value of AED 1,337,846,000 and rights to purchase plots amounting to AED 899,589,000. The sale consideration agreed on by both patties as per the initial agreement was AED 3,647,483,730.

Notes (continued)

11 Transactions and balances with related parties (continued)

(c) Due from related parties (continued)

The salient terms and conditions of the transaction were as follows:

t. The sale consideration is receivable on or before 1 June 2016;
1. The sale consideration can be settled in cash or kind or a combination of both, at the discretion of the purchaser. Where settlement is in kind, the fair value of the assets transferred will be dete1mined by an independent valuation expert, to be selected by the seller and purchaser; and
1. The commitment on the remaining purchase price of the land held for development remains with the Group.

Following the amendments to the original agreement, the sale consideration was reduced by approximately AED 731 million, as a result of the purchaser's commitment to settle this balance on demand, on or before 31 December 2016, in cash or in kind, or a combination of both.

During 2014, pursuant to the addendum to original sale and purchase agreement for a plot of land with the master developer, the Group had entered into an amendment agreement with the related party, which resulted in a fu1ther reduction of the sale consideration by AED 141 million. Further, the related patty had also transferred plots of land thereby settling receivable balance of AED 669,307,510 against the outstanding receivable (Note 9).

In the cun-ent year, the Company settled an amount of AED 108 million relating to certain plots on behalf of the related patty resulting in reduction of the Company's commitments. The receivable amount is reflected in the books of the Company after deducting the future committed payments of AED 170 million (Note 30) relating to rights to purchase plots from the sale consideration as per the sale and purchase agreement. Management is currently evaluating various options and expects that the balance will be settled during 2016.

(d) Due to related parties comprises:

	2015 AED'OOO	2014 AED'OOO
Current
Due to a significant shareholder	1,714	1,875
Due to a joint venture eartner	12,299	12,299
	14,013	14,174

12 Cash and bank balances

	2015 AED'OOO	2014 AED'OOO

Cash and .bank balances including call deposits	161,493	158,066
Fixed deposits	711,650	888,606
Cash in hand	1,847	1,179
	874,990	1,047,851
Less: long term fixed deposits with a financial
institution - net (i)	{51,650}	(53,559)
	823,340	994,292

Notes (continued)

12 Cash and bank balances (continued)

i. Long term fixed deposits

During 2014, the Company had signed a financi"al restructuring plan with a financial institution for settling its Wakala deposit amounting to AED I 0 I million. Key terms of the financial restructuring plan were as follows:

The financial institution will make a 20% of the outstanding amount as a down payment upon signing the restructuring plan;
65% of the amount will be paid in monthly predetermined instalments, over a period of 12 years and will carry interest rate of2% per annum; and
15% of the remaining amount will be converted into conve1tible contingent instruments and will be settled in cash or the financial institution's equity shares or combination of both after a period of 12 years. This will carry a profit rate of I% payment in kind.

In 2014, upon signing the restructuring plan, and considering the key terms of the same, management had recognized an impairment charge of AED 15.3 million (Note 23) and present value impact of AED 6.7 million on the non-current fixed deposit. In 2015, the Company received AED 2.3 million against convertible contingent instruments and has accordingly written back the impairment charge by that amount.

As at 31 December 2015, the Company has cumulatively received AED 30.3 million (2014: AED 25 million) from the financial institution towards the repayment of deposit including early repayment of some of the instalments. The balance outstanding amount has been classified as noncurrerit in accordance with the agreement.

Cash and cash equivalents include the following for the purposes of the consolidated statement of cash flows:

	2015 AED'OOO	2014 AED'OOO
Cash and bank balances	874,990	1,047,851
Less: deposits with original maturity more than three months	(421,650)	(608,559)
Cash and cash equivalents	453,340	439,292

Short-term fixed deposits have original maturities of three months or less. Short-term fixed and call deposits bear profit at market rates.

13 Share capital

At 31 December 2015 and 31 December 2014, share capital comprised of 5,778,000,000 shares of AED 1 each. All shares are authorised, issued and fully paid up.

14 Legal reserve

In accordance with the UAE Federal Law No.(2) of 2015 and the Company's Articles of Association, 10% of the profit for the year is transferred to a legal reserve, which is not distributable. Transfers to this reserve are required to be made until such time as it equals at least 50% of the paid up share capital.

N ates (continued)

15 Borrowings

		2015 AED'OOO	2014 AED'OOO

Non-current
Islamic finance obligations		342,308	397,305
Other Islamic borrowings			85,565
		342,308	482,870
Current
Islamic finance obligations		136,540	147,283
Other Islamic borrowings			20,009
		136,540	167,292
Total borrowings		478,848	650, 162
	Islamic finance	Other Islamic
	obligations	borrowings	Total
	AED'OOO	AED'OOO	AED'OOO

1 January 2014	701,870	124,519	826,389
Repayments	(157,283)	(18,945)	(l 76,228)
31 December 2014	544,587	105,574	650,161
Repayments	(151,304)	(20,009)	(171,313)
Transfers	85,565	(85,565)
31December2015	478,848		478,848

The Islamic finance obligations represent Ijarah, Murabaha and Mudarabah facilities obtained from Dubai Islamic Bank PJSC (a significant shareholder), and from other local Islamic banks and financial institutions. The facilities were availed to finance the properties under construction. The Islamic finance obligations carried an effective profit rate of EIBOR + 3%, with a minimum of 3.75%, to 5.5% per annum (2014: EIBOR + 3%, with a minimum of 5%, to 5.5% per annum), and were repayable in monthly or quarterly instalments over a period of five to eight years from the reporting date (2014: five to ten years).

During the current year, the Group has signed restructuring agreements of Ijarah and Murabaha facilities with the banks, whereby these facilities have been restructured into finance obligations repayable over five to eight years from the reporting date, with a revised profit rates of EIBOR + 2.5% and 3%, with a minimum of3.75% and 4% respectively.

The Islamic finance obligations are secured by m01tgages over properties classified under properties held for development and sale (Note 9), property and equipment (Note 5) and investment property (Note 6).

In 2014, the Company entered into a settlement agreement with a financial institution to repay the Islamic financial obligation. In accordance with the settlement agreement, the balance amount payable was classified between current and non-current portion after recognizing the present value impact on non-current portion. The terms of settlement agreement resulted in a reduction of principal amount by AED 60 million and a waiver of accrued profit by AED 87 .92 million. Accordingly, an amount of AED 147.9 million was recognized as an income in the previous year. As at the repo1ting date, the Islamic finance obligations included facility obtained from that financial institution amounting to AED 45 million (2014: AED 145 million), which does not carry any profit rate and is repayable within one year from the rep01ting date.

Notes (continued)

15 Borrowings (continued)

The borrowings include an amount of AED 264,119,000 (2014: AED 303,355,000) obtained from the significant shareholder.

r l

16 Advances from customers

Advances from customers represent instalments received from customers towards purchases of i) properties held for development and sale of AED 175, 148,000 (2014: AED 288,285,000). 1 J

17 Trade and other payables

	2015	2014
	AED'OOO	AED'OOO

Trade payables	104,193	33,377
Payables for purchase of land	391,888	396,888
. Accrued Islamic facilities charges (Note 15)	29	1,778
Project cost accruals (Note 9)	44,846	27,477
Other ea~ables and accrued exeenses	230,436	200,895
	771,392	660,415

18 Retentions payable

	2015	2014
	AED'OOO	AED'OOO
Non-current portion	10,368	1,241
Current e01tion	17,499	25,733
Retentions payable	27,867	26,974

Non-current retentions are due to be paid to contractors within 1 to 5 years from the reporting date. The fair value of non-current retentions payable approximate to their carrying amounts as the impact of discounting is not significant.

19 Provision for employees' end of service benefits

	2015	2014
	AED'OOO	AED'OOO

At 1 January	9,350	7,769
Charge for the year	2,503	2,095
Payments	(863)	(514)
At 31 December	10,990	9,350

The provision for employees' end of service benefits, disclosed as non-current liability, is calculated in accordance with the UAE Federal Labour Law.

N ates (continued)

20 Revenue

	2015 AED'OOO	2014 AED'OOO

Sale of prope1iies	147,089	948,959
Forfeiture income	2,171	2,852
Prope1iy management	38,198	37,918
Leasing income	32,578	25,266
Facilities management	37,066	30,342
	257,102	1,045,337

Transaction price allocated to the remaining performance obligations

The following table includes revenue expected to be recognised in the future related to performance obligations that are unsatisfied (or patiially unsatisfied) at the repotiing date.

	2016	2017	Total
	AED'OOO	AED'OOO	AED'OOO
Sale of prope1iies	466,867	315,053	781,920

The Group applies the practical expedient as per IFRS 15 and does not disclose information about remaining pe1formance obligations that have original expected durations of one year or less.

21 Direct I operating costs

	2015	2014
	AED'OOO	AED'OOO
Cost of properties sold (Note 9) Reversal of impairment of properties held for development	109,750	880,600
and sale, net (Note 9)	(9,102)	(158,949)
Facilities management	20,752	16,055
Leasing cost	3,085	4,317
	124,485	742,023

Applying the practical expedient as per IFRS 15, the Group recognises the incremental costs of obtaining contracts as an expense when inc:urred if the amo1iisation period of the assets that the Group otherwise would have recognised in one year or less. ·

22 Other operating income

	2015	2014
	AED'OOO	AED'OOO

Sales management fee	1,962	4,209
Others	13,207	15,274
	15,169	19,483

Notes (continued) l

23 General and administrative expenses

	2015 AED'OOO	2014 AED'OOO
Staff costs (Note 24)	90,942	78,058
Legal and professional charges	14,945	6,734
Marketing and selling expenses	20,840	25,182
Depreciation (Note 5)	5,406	2,888
Provision for impairment of trade and other
receivables, net (Note l 0)	1,345
Rent	1,177	972
Provision for impairment on long term deposits (Note 12 (i))		15,361
Social contributions	132	224
Others	23,413	26,555
	158,200	155,974
Staff costs
	2015	2014
	AED'OOO	AED'OOO
Salaries and wages	60,245	56,249
End of service benefits	2,503	2,778
Pension and social security contributions	831	805
Other benefits	27,363	18,226
	90,942	78,058

' _I

25 Provision for claims

Provision for claims includes the following:

Provision relating to legal claims made by a third party against the Company related to a 1 facility to finance the purchase of a share in a real estate project. In the current year, a · judgment was issued against the Company in relation to the claim. Subsequently, the Company entered into a settlement agreement with the third party for full and final settlement of the r J judgement issued against the Company except for a certain portion of the Court order which is - still under appeal. Pursuant to signing of the settlement, the Company recorded the share of the real estate project at the fair value based on management assessment of the value of the ] project, and accordingly has reversed an impairment provision of AED 46 million in the ^~ current year (Note 10 (ii)).

Provision of AED 66 million relating to the portion under appeal is reflective of the management's best estimate of the liability that the Company may incur on these claims. Cunently the proceedings are ongoing in the Comt.

ii. Provision relating to claims made by the contractors against the Company for project delays. During the year, management has reversed provision made during the previous year relating to claims made by contractors against the Company for project delays. The reversal of provision is based on the assessment by independent consultant and management's best estimate of the liability that the Company may incur on these claims.

The Company has elected not to present the complete disclosures as required by IAS 3 7 "Provision and Contingent Liabilities and Contingent Assets" as management is of the view that since the legal claims are sub-judice and contractors claims are disputed, this information may be prejudicial to their position on these matters.

Notes (continued)

1 -'

26 Write back of provision I (provision for impairment) against advance for purchase of properties

In 2014, the Company recorded an impairment provision of AED 68.6 million against advance paid for purchase of prope11ies of AED 114 million (Note 10 (ii)), which was expected to be swapped with other plots of land and cash payment due to changes in the master development plan. The provision was reflective of the initial assessment which was determined on the basis of management's best estimate of the value of the new land expected to be received by the Company. In 2015, the Company signed a sale and purchase agreement for a new plot of land with the master developer and recognized this land including expected legal I registration charges (Note 9). The Company therefore recorded an impaiiment provision based on the net realisable value of the property as assessed and valued by an independent and professionally qualified valuer (Note 9). On the basis of the fair value of land, cash received and registration charges for land, the Company has written back a net provision of AED 157.8 million during the year. The legal formalities to complete the transfer of land are under progress as at the rep011ing date.

27 Finance ( cost)/income

	2015	2014
	AED'OOO	AED'OOO
Finance cost on bank borrowings	26,775	39,359
Finance income from short-term bank deposits Finance income from unwinding of discount on trade	8,410	6,397
receivables	1,482	I, 100
Total finance income	9,892	7,497
Net finance cost	(16,883)	(31,862)

28 Earnings per share

Basic

Basic earnings per share is calculated by dividing the profit attributable to equity holders of the Company by the weighted average number of ordinary shares in issue during the year excluding ordinary shares purchased by the Company and held as treasury shares, if any.

	2015	2014
	AED'OOO	AED'OOO
Profit attributable to equity holders of the Company (AED'OOO)	291,354	281,850
Weighted average number of ordinary shares in issue (thousands)	5,778,000	5,778,000
Earnings per share (fils)	5.04	4.88

Diluted

The Company has not issued any instruments which would have a dilutive impact on earnings per share when exercised.

Notes (continued)

29 Cash flow from operating activities

	2015 AED'OOO	2014 AED'OOO

Profit for the year	291,354	281,850
Adjustment for
Depreciation (Note 5)	5,406	2,888
Provision for employees' end of service benefits (Note 19)	2,503	2,095
Provision for doubtful debts (Note 23)	1,345
Reversal of impairment of properties held for development
and sale, net (Note 21)	(9,102)	(158,949)
Write back of provision against advance for purchase of properties	(157,877)
Provision for I (reversal of) claims	22,220	(2,803)
Finance income (Note 27)	(9,892)	(7,497)
Finance cost (Note 27)	26,775	39,359
Share of results from associates and joint ventures (Note 7)	(166,818)	(75,971)
Gain on fair valuation of investment property (Note 6)	(16,176)	(50,117)
Gain on disposal of investment in joint venture (Note 7)		(1,017)
Gain on disposal of property and equipment		(87)
Operating cash flows before payment of employees' end of
service benefits and changes in working capital	(10,262)	29,751
Payment of employees' end of service benefits (Note 19)	(863)	(514)
Changes in working capital:
Decrease in non-current trade and other receivables	29,840	9,335
Increase/( decrease) in non-current retentions payable	9,127	(5,229)
Decrease in non-current advances from customers	(89,230)	(13,088)
Prope1ties held for development and sale net of project cost
accruals	15,412	416,135
Trade and other receivables	(22,491)	(78,889)
Inventories	(485)	(150)
Due from related parties	8,641	673,699
Retentions payable	(8,234)	(25,886)
Advances from customers	117,710	(252,566)
Trade and other payables	3,244	(40,871)
Due to related parties	(161)	(1,483)
Net cash generated from operating activities	52,248	710,244

]

; I

30 Commitments

At 31 December 2015, the Group had total commitments of AED 643,676,951 (31 December 2014: AED 25,175,000) with respect to project related contracts issued net of invoices received and accruals made at that date. The Group also had commitments with respect to purchase of land of AED 170,416,500 (31 December 2014: AED 278,604,000) (Note 11( c) and Note 32).

31 Contingent liabilities

At 31 December 2015, the Group had contingent liabilities in respect of performance and other guarantees issued by a bank on behalf of a subsidiary (2014: a joint venture and a subsidiary), in the ordinary course of business, from which it is anticipated that no material liabilities will arise, amounting to AED 26,106,660 (31 December 2014:. AED 12?,881,000).

Notes (continued)

l J

31 Contingent liabilities (continued)

The Company is also a party to certain legal cases wherein the Company did not accept the handover due to the status of infrastructure of certain plots of land. Based on review of opinion provided by the legal advisors, management is of the opinion that no cash outflow is expected against penalty charges claimed against the Company in the legal cases. Considering the circumstances and merits of each of the cases, the Company has not recognized any provision in respect of these penalty charges. The Company has elected not to present the complete disclosures as required by IAS 37 "Provision and Contingent Liabilities and Contingent Assets" as management is ofthe view that since the legal claims are sub-judice and are disputed, therefore this information may be prejudicial to their position on these matters. Also refer Note 30.

Ce1tain other contingent liabilities may arise during the normal course of business, which based on the information presently available, either cannot be quantified at this stage or in the opinion of the management is without any merit. However, in the opinion of management, these contingent liabilities are not likely to result in any cash outflows for the Group.

32 Segmental information

Operating segment

The Board of Directors are the Group's chief operating decision maker. The Board considers the business of the Group as a whole for the purpose of decision making.

Management has determined the operating segments based on the purpose of allocating resources and assessing perfonnance. The Group is organised into two major operating segments: Prope1iy development and prope1ties and facilities management.

Management monitors the operating results of its operating segments for the purpose of making strategic decisions about performance assessment. Segment performance is evaluated based on operating profit or Joss.

	Property development activities AED'OOO	Properties and facilities management AED'OOO	Total AED'OOO

31December2015
Segment revenues - external	181,838	75,264	257,102
Segment profit	265,949	25,405	291,354
Segment assets	6,062,466	144,312	6,206,778
31December2014
Segment revenues - external	977,077	68,260	1,045,337
Segment profit	253,032	28,818	281,850
Segment assets	5,977,758	121,161	6,098,919

Geographic information

In the previous year, the Group disposed a plot of land in USA which was classified under investment property at a carrying value of AED 104,921,000 (Note 6), resulting in a gain of AED 16,981,786.

The carrying amount of the total assets located outside the United Arab Emirates as at 31 December 2015 is AED 3,280,000 (31December2014: AED 3,280,000).

Notes (continued) r·

33 Financial instruments by category

The accounting policies for financial instruments have been applied to the line items below:

	Loans and	Available-
	receivables	for-sale	Total
31December2015	AED'OOO	AED'OOO	AED'OOO
Assets as per statement of financial position
Available-for-sale financial assets		23,893	23,893
Trade and other receivables	102,080		102,080
Due from related patties	1,951,333		l,951,333
Long term fixed deposits	51,650		51,650
Bank balances	821,493		821,493
	2,926,556	23,893	2,950,449

		Amortised
		cost AED'OOO	Total AED'OOO

Liabilities as per statement of financial position
Trade and other payables		771,392	771,392
Retentions payable Borrowings		27,867 478,848	27,867 478,848
Due to related parties		14,013	14,013
		1,292,120	1,292,120

	Loans and	Available-
	receivables	for-sale	Total
3 I December 20 l 4	AED'OOO	AED'OOO	AED'OOO
Assets as per statement of financial position
Available-for-sale financial assets		24,841	24,841
Trade and other receivables	173,912		l 73,912
Due from related parties	1,959,974		1,959,974
Long term fixed deposits	53,559		53,559
Bank balances	993,113		993,113
	3,180,558	24,841	3,205,399
		Amottised
		cost	Total
		AED'OOO	AED'OOO
Liabilities as per statement of financial position
Trade and other payables		660,415	660,415
Retentions payable		26,974	26,974
Borrowings		650,162	650,162
Due to related parties		14,174	14,174
		1,351,725	1,351,725

i 1

I l

-J N ates (continued)

-1

34 Subsidiaries and equity accounted investees entities

I I _J	Name of entity	Country of incorporation	Effective ownership	Principal activities
	Su hsidiaries
l J	Deyaar Facilities Management LLC	UAE	100%	Facility management services Brokerage and other
l	Nationwide Realtors LLC	UAE	100%	related services Property Investment
	Deyaar Hospitality LLC	UAE	100%	and Development Real Estate
l J	Deyaar International LLC	UAE	100%	Consultancy Property Investment
	Deyaar Ventures LLC	UAE	100%	and Development Property Investment
J	Flamingo Creek LLC	UAE	100%	and Development Prope1iy Investment
J	Beirut Bay Sal	Lebanon	100%	and Development Investment Holding
	Deyaar West Asia CooperatiefU.A.	Netherlands	100%	Company Property Investment
J	Deyaar Development Cooperation	USA	100%	and Development Property Investment
J	Deyaar Al Emarat Holding WLL	Bahrain	100%	and Development
	Deyaar AL Tawassol Lil Tatweer Aleqare Co.	KSA	100%	Property Investment and Development
J	Deyaar Limited LLC	I UAE	100%	Property Investment . and Development
J	Deyaar Owners Association Management LLC	UAE	100%	Owners Association Management
J	Joint Ventures
]	Dubai International Development Co.	UAE	50%	Property Investment and Development
	Arady Developments LLC	UAE	50%	Property Investment and Development
J	Associates
J	SI AI Zorah Equity Investments Inc.	UAE	22.72%	Property Investment and Development

35 Investment in shares

J During the year, the Group has not purchased or invested in any shares.

J ³⁶Comparative figures

Certain comparative figures have been regrouped I reclassified to conform to the presentation adopted in these consolidated financial statements.

AI assistant

Deyaar Development PJSC — Regulatory Filings 2016

66353_rns_2016-03-31_97ca7ea8-cd1c-4724-a796-8c58fed19529.pdf

Consolidated financial statements for the year ended 31 December 2015

Directors' report

Principal activities

Financial Results

Directors

Auditors

Independent auditors' report

Report on the Consolidated Financial Statements

Management's Responsibility for the Consolidated Financial Statements

Auditors' Responsibility

Opinion

Independent auditors' report (continued)

Report on Other Legal and Regulatory Requirements

Consolidated statement of financial position

Consolidated statement of profit or loss for the year ended 31December2015

Consolidated statement of changes in equity for the year ended 31December2015

Consolidated statement of cash flows

Notes

1 Legal status and activities

2 Summary of significant accounting policies

2.1 Basis of preparation

2 Summary of significant accounting policies (continued)

2.1 Basis of preparation (continued)

IFRS 9 Financial Instruments

2.2 Basis of consolidation

(a) Subsidiaries

Notes (continued)

2 Summary of significant accounting policies (continued)

2.2 Basis of consolidation (continued)

(a) Subsidiaries (continued)

(b) Eliminations on consolidation

(c) Associates

Notes (continued)

2 Summary of significant accounting policies (continued)

2.2 Basis of consolidation (continued)

(d) Joint ventures

2.3 Change in accounting policy

IFRS 15 Revenue from contracts with customers

Revenue from sale of properties

Notes (continued)

2 Summary of significant accounting policies (continued)

2.3 Change in accounting policy (continued)

Sales commission

Impacts on consolidated financial statements

Consolidated statement of financial position

i. Consolidated statement of profit or loss

Notes (continued) r-

iii. Consolidated statement of financial position

2 Summary of significant accounting policies (continued)

2.4 Segment reporting

2.5 Foreign currency translation

(a) Functional and presentation currency

(b) Transactions and balances

(c) Group entities

2 Summary of significant accounting policies (continued)

2.6 Property and equipment

2.7 ,Investment property

Recognition

Measurement

2 Summary of significant accounting policies (continued)

2.7 Investment property (continued)

Measurement (continued)

Transferfrom properties held for sale to investment properties

Transferfrom investment properties to properties held for sale

Transfer from investment properties to owner-occupied property

Sale of investment properties

2.8 Impairment of non-financial assets

2 Summary of significant accounting policies (continued)

2.8 Impairment of non-financial assets (continued) .-

2.9 Financial assets

2.9.1 Classification

(a) Loans and receivables

(b) Available-for-sale financial assets

2.9.2 Recognition and measurement

Notes (continued)

2 Summary of significant accounting policies (continued)

2.10 Impairment of financial assets

Deyaar Development PJSC Regulatory Filings 2016

2.16 Trade payables ⁰