EMAAR DEVELOPMENT PJSC — Interim / Quarterly Report 2023

Aug 14, 2023

Emaar Development PJSC and its Subsidiaries

UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE PERIOD ENDED 30 JUNE 2023

Emaar Development PJSC and its Subsidiaries

Unaudited Interim Condensed Consolidated Financial Statements For the period ended 30 June 2023

Table of Contents

Report on Review of Interim Condensed Consolidated Financial Statements Interim Condensed Consolidated Statement of Comprehensive Income Interim Condensed Consolidated Statement of Financial Position Interim Condensed Consolidated Statement of Changes in Equity Interim Condensed Consolidated Statement of Cash Flows Notes to the Interim Condensed Consolidated Financial Statements	Pages 1 – 2 3 4 5 – 6 7 8 – 28

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KPMG Lower Gulf Limited The Offices 5 at One Central Level 4, Office No: 04.01 Sheikh Zayed Road, P.O. Box 3800 Dubai, United Arab Emirates Tel. +971 (4) 4030300, www.kpmg.com/ae

Independent Auditors’ Report on Review of Interim Condensed Consolidated Financial Statements

To the Shareholders of Emaar Development PJSC

Introduction

We have reviewed the accompanying 30 June 2023 interim condensed consolidated financial statements of Emaar Development PJSC (“the Company”) and its subsidiaries (collectively referred to as “the Group”), which comprises:

• the interim condensed consolidated statement of financial position as at 30 June 2023;

• the interim condensed consolidated statements of comprehensive income for the three-month and six-month periods ended 30 June 2023;

• the interim condensed consolidated statement of changes in equity for the sixmonth period ended 30 June 2023;

• the interim condensed consolidated statement of cash flows for the six-month period ended 30 June 2023; and

• notes to the interim condensed consolidated financial statements.

Management is responsible for the preparation and presentation of these interim condensed consolidated financial statements in accordance with IAS 34, ‘Interim Financial Reporting’. Our responsibility is to express a conclusion on these interim condensed consolidated financial statements based on our review.

1

KPMG Lower Gulf Limited, licensed in the United Arab Emirates, and a member firm of the KPMG global organization of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved. KPMG Lower Gulf Limited (Dubai Branch) is registered and licensed under the laws of the United Arab Emirates.

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Emaar Development PJSC Independent Auditors’ Report on Review of Interim Condensed Consolidated Financial Statements 30 June 2023

Scope of Review

We conducted our review in accordance with the International Standard on Review Engagements 2410, “Review of Interim Financial Information Performed by the Independent Auditor of the Entity”. A review of interim condensed consolidated financial statements consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the accompanying 30 June 2023 interim condensed consolidated financial statements are not prepared, in all material respects, in accordance with IAS 34, ‘Interim Financial Reporting’.

KPMG Lower Gulf Limited

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Fawzi AbuRass Registration No.: 968 Dubai, United Arab Emirates Date: 14 August 2023

2

KPMG Lower Gulf Limited, licensed in the United Arab Emirates, and a member firm of the KPMG global organization of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved. KPMG Lower Gulf Limited (Dubai Branch) is registered and licensed under the laws of the United Arab Emirates.

Emaar Development PJSC and its Subsidiaries

INTERIM CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME For the period ended 30 June 2023 (Unaudited)

Notes Revenue 4 Cost of revenue 4 GROSS PROFIT Selling, general and administrative expenses 5 Finance income 6(i) Finance cost 6(ii) Other income 7 Share of results of joint ventures PROFIT FOR THE PERIOD Other comprehensive income TOTAL COMPREHENSIVE INCOME FOR THE PERIOD ATTRIBUTABLE TO: Owners of the Company Non-controlling interest Earnings per share attributable to the owners of the Company: -basic and diluted earnings per share (AED)	Six-month period ended 30 June 2023 AED’000 30 June 2022 AED’000 4,455,152 7,282,520 (2,152,821) (4,173,610) __ _ 2,302,331 3,108,910 (457,273) (668,254) 352,093 83,996 (168,612) (136,566) 410,897 38,378 42,790 80,686 __ _ 2,482,226 2,507,150 - - __ __ 2,482,226 2,507,150 ═══════ ═══════ 2,177,081 2,190,454 305,145 316,696 ─────── ─────── 2,482,226 2,507,150 ═══════ ═══════ 0.54 0.55 ═══════ ═══════	Three-month period ended
		30 June 2023 AED’000 30 June 2022 AED’000 2,080,324 3,714,379 (1,106,781) (2,122,117) __ _ 973,543 1,592,262 (209,503) (332,482) 202,413 43,352 (92,772) (65,245) 371,892 18,366 24,194 24,658 __ _ 1,269,767 1,280,911 - - __ __ 1,269,767 1,280,911 ═══════ ═══════ 1,118,697 1,140,076 151,070 140,835 ────── ────── 1,269,767 1,280,911 ═══════ ═══════ 0.28 0.29 ══════ ══════

The accompanying notes 1 to 20 form an integral part of these interim condensed consolidated financial statements.

3

Emaar Development PJSC and its Subsidiaries

INTERIM CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION As at 30 June 2023

ASSETS Bank balances and cash Trade and unbilled receivables Other assets, receivables, deposits and prepayments Development properties Loan to joint ventures Investments in joint ventures Property, plant and equipment TOT AL ASSETS LIABILITIES AND EQUITY Liabilities Trade and other payables Advances fom customers Retentions payable Interest-bearing loans and borrowings Provision fr employees' end-of-service benefts TOT AL LIABILITIES EQUITY Equity attributabletoowners of the Company Share capital Legal reserve Retained earings Non-controlling interests TOTAL EQUITY TOTAL LIABILITIES AND EQUITY Notes 8 9 10 11 12 13 14 15

30June 31 December 2023 2022 AED'000 AED'000 (Unaudited) (udited) 15,210,096 11,362,760 14,274,612 15,445,904 2,770,318 2,956,661 10,533,004 I 0,850,819 744,486 912,518 791,687 925,620 17,078 20,156 44,341,281 42,474,438 10,424,405 10,939,604 12,491,215 9,627,012 931,189 920,583 630 892,076 24,962 23,609 23,872,401 22,402,884 4,000,000 4,000,000 1,560,615 1,560,615 12,828,719 12,736,538 18,389,334 18,297,153 2,079,546 1,774,401 20,468,880 20,071,554 44,341,281 42,474,438

To the best of our knowledge, the interim condensed consolidated financial statements fairly present, in all material respects, the interim condensed consolidated financial position, results of operation and interim condensed consolidated cash flows of the Group as of, and for the period ended 30 June 2023.

The interim condensed consolidated financial statements were authorised for issue by Board of Directors and signed on their behalf by:

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Director

Director

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The accompanying notes I to 20 form an integral part of these interim condensed consolidated financial statements.

JI

4

Emaar Development PJSC and its Subsidiaries

INTERIM CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY For the period ended 30 June 2023 (Unaudited)

For the period ended 30 June 2023 (Unaudited)
		Attributable to the owners of the		Company
	───────────────────────────────────────────────
					Non-
	Share	Legal	Retained		controlling	Total
	capital	reserve	earnings	Total	interests	equity
	AED’000	AED’000	AED’000	AED’000	AED’000	AED’000
Balance at 1 January 2023 (Audited)	4,000,000	1,560,615	12,736,538	18,297,153	1,774,401	20,071,554
Profit for the period	-	-	2,177,081	2,177,081	305,145	2,482,226
	───────	───────	───────	───────	───────	───────
Total comprehensive income for the period	-	-	2,177,081	2,177,081	305,145	2,482,226
Director’s bonus	-	-	(3,900)	(3,900)	-	(3,900)
Dividend paid to shareholders (note 20)	-	-	(2,081,000)	(2,081,000)	-	(2,081,000)
	───────	───────	───────	───────	───────	───────
Balance at 30 June 2023 (Unaudited)	4,000,000	1,560,615	12,828,719	18,389,334	2,079,546	**20,468,880 **
	════════	════════	════════	════════	════════	════════

The accompanying notes 1 to 20 form an integral part of these interim condensed consolidated financial statements.

5

Emaar Development PJSC and its Subsidiaries

INTERIM CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (continued) For the period ended 30 June 2023 (Unaudited)

For the period ended 30 June 2023 (Unaudited)
		Attributable to the owners of the		Company
	───────────────────────────────────────────────
					Non-
	Share	Legal	Retained		controlling	Total
	capital	reserve	earnings	Total	interests	equity
	AED’000	AED’000	AED’000	AED’000	AED’000	AED’000
Balance at 1 January 2022_(Audited)_	4,000,000	1,179,790	9,313,015	14,492,805	1,922,571	16,415,376
Profit for the period	-	2,190,454		2,190,454	316,696	2,507,150
	───────	───────	───────	───────	───────	───────
Total comprehensive income for the period	-	2,190,454	2,190,454	316,696	2,507,150
Director’s bonus	-	(3,900)		(3,900)	-	(3,900)
Dividend declared by a subsidiary	-		-	-	(470,000)	(470,000)
	───────	───────	───────	───────	───────	───────
Balance at 30 June 2022_(Unaudited)_	4,000,000	1,179,790	11,499,569	16,679,359	1,769,267	18,448,626
	════════	════════	════════	════════	════════	════════

The accompanying notes 1 to 20 form an integral part of these interim condensed consolidated financial statements.

6

INTERIM CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS For the period ended 30 June 2023 (Unaudited)

Emaar Development PJSC and its Subsidiaries

		(US$ 1.00 = AED 3.673)	(US$ 1.00 = AED 3.673)
		────────────────────
		1 January	1 January
		2023 to	2022 to
		30 June	30 June
		2023	2022
	Notes	AED’000	AED’000
		(Unaudited)	(Unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES
Profit for the period		2,482,226	2,507,150
Adjustments for:
Share of results of joint ventures		(42,790)	(80,686)
Depreciation (including right-of use assets)	5	5,263	4,658
Provision for employees’ end-of-service benefits, net		1,353	2,160
Finance costs	6(i)	168,612	136,566
Finance income	6(ii)	(352,093)	(83,996)
		───────	────────
Cash from operations before working capital changes		2,262,571	2,485,852
Trade and unbilled receivables		1,249,990	(982,675)
Other assets, receivables, deposits and prepayments		397,710	(639,389)
Development properties		317,815	1,568,123
Advances from customers		2,864,203	2,355,906
Trade and other payables		(191,523)	73,079
Retentions payable		10,606	78,656
		───────	────────
Net cash from operating activities		6,911,372	4,939,552
		───────	────────
CASH FLOWS FROM INVESTING ACTIVITIES
Finance income received		62,028	19,852
Repayment of loan from joint ventures		179,340	21,404
Dividend received from joint ventures		176,723	-
Amounts incurred on property, plant and equipment		(2,185)	(724)
		───────	────────
Net cash from investing activities		415,906	40,532
		───────	────────
CASH FLOWS FROM FINANCING ACTIVITIES
Finance costs paid		(118,896)	(79,956)
Borrowings from financial institutions		850,090	1,649,180
Repayment of borrowings to financial institutions		(1,700,000)	(1,914,320)
Directors’ bonus		(3,900)	(3,900)
Dividend paid to shareholders/ non-controlling shareholder of a subsidiary		(2,081,000)	(470,000)
Repayment of funding from Parent (net)		(384,000)	-
		───────	────────
Net cash used in financing activities		(3,437,706)	(818,996)
		───────	────────
INCREASE IN CASH AND CASH EQUIVALENTS		3,889,572	4,161,088
Cash and cash equivalents at the beginning of the period		11,320,524	5,605,285
		───────	────────
CASH AND CASH EQUIVALENTS AT THE END
OF THE PERIOD	8	15,210,096	9,766,373
		════════	════════

The accompanying notes 1 to 20 form an integral part of these interim condensed consolidated financial statements.

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Emaar Development PJSC and its Subsidiaries

NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS At 30 June 2023 (Unaudited)

1 CORPORATE INFORMATION

The incorporation of Emaar Development PJSC (the “Company”) as a Public Joint Stock Company was approved by the Securities and Commodities Authority according to Federal Law No.4 of 2000 on 20 November 2017 and the registration certificate was issued on 21 November 2017. The Company’s registered office is at P.O. Box 9440, Dubai, United Arab Emirates (“UAE”).

The Company is a subsidiary of Emaar Properties PJSC (the “Parent Company” or “Parent”), a company incorporated in the UAE and listed on the Dubai Financial Market. The Company is also listed on the Dubai Financial Market. The Company and its subsidiaries constitute the Group (the “Group”).

The principal activities of the Group are property development and development management services in the UAE.

The interim condensed consolidated financial statements were authorised for issue on 14 August 2023.

2.1 BASIS OF PREPARATION

The interim condensed consolidated financial statements of the Group for the period ended 30 June 2023 have been prepared in accordance with International Accounting Standard (IAS) 34: Interim Financial Reporting and UAE Federal Decree Law No. (32) of 2021.

The interim condensed consolidated financial statements do not contain all information and disclosures required for full financial statements prepared in accordance with International Financial Reporting Standards (IFRS) and should be read in conjunction with the Group’s annual consolidated financial statements for the year ended 31 December 2022. The same accounting policies, methods of computation, significant accounting judgments and estimates and assumptions are followed in these interim condensed consolidated financial statements as compared with the most recent annual consolidated financial statements, except for the new standards, amendments and significant estimates and judgements adopted during the current period as explained below in notes 2.2 and 2.3.

The interim condensed consolidated financial statements have been prepared in United Arab Emirates Dirhams (AED), which is the Company's functional and presentation currency, and all values are rounded to the nearest thousand except where otherwise indicated. Each entity in the Group determines its own functional currency and items included in the financial statements of each entity are measured using that functional currency.

The interim condensed consolidated financial statements have been prepared on a historical cost basis. Historical cost is generally based on the fair value of the consideration given in exchange for assets.

The preparation of interim condensed consolidated financial statements on the basis described above requires management to make judgements, estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities, income and expenses. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which for the basis of making the judgements about carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates.

Certain comparative amounts have been reclassified to conform to the presentation used in this interim condensed consolidated financial statements.

Results for the period ended 30 June 2023 are not necessarily indicative of the results that may be expected for the financial year ending 31 December 2023.

Basis of consolidation

The interim condensed consolidated financial statements comprise the financial statements of the Company and the entities controlled by the Company as at 30 June 2023. Control is achieved where all the following criteria are met:

• (a) the Group has power over an entity (i.e., existing rights that give it the current ability to direct the relevant activities of the investee);

• (b) the Group has exposure, or rights, to variable returns from its involvement with the entity; and

• (c) the Group has the ability to use its power over the entity to affect the amount of the Company’s returns.

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Emaar Development PJSC and its Subsidiaries

NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS At 30 June 2023 (Unaudited) (continued)

2.1 BASIS OF PREPARATION (continued)

Basis of consolidation (continued)

When the Group has less than a majority of the voting or similar rights of an investee, the Group considers all relevant facts and circumstances in assessing whether it has power over an investee, including:

• The contractual arrangement with the other vote holders of the investee;

• Rights arising from other contractual arrangements; and

• The Group’s voting rights and potential voting rights.

The Group re-assesses whether or not it controls an investee if facts and circumstances indicate that there are changes to one or more of the three elements of control. Consolidation of a subsidiary begins when the Group obtains control over the subsidiary and ceases when the Group loses control of the subsidiary. Assets, liabilities, income and expenses of a subsidiary acquired or disposed off during the period are included in the interim condensed consolidated financial statements from the date the Group gains control until the date the Group ceases to control the subsidiary.

Subsidiaries

Subsidiaries are fully consolidated from the date of acquisition or incorporation, being the date on which the Group obtains control (irrespective of percentage of shareholding), and continue to be consolidated until the date when such control ceases. The financial statements of the subsidiaries are prepared for the same reporting period as the Company, using consistent accounting policies. When necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies in line with the Group’s accounting policies. All intra-group balances, transactions, unrealised gains and losses resulting from intra-group transactions and dividends are eliminated in full.

Non-controlling interest (NCI) are measured initially at their proportionate share of the acquiree’s identifiable net assets at the date of acquisition. Changes in the Group’s interest in a subsidiary that do not result in a loss of control are accounted for as equity transactions.

Share of comprehensive income/loss within a subsidiary is attributed to the non-controlling interest even if that results in a deficit balance.

A change in the ownership interest of a subsidiary, without a loss of control, is accounted for as an equity transaction. If the Group losses control over a subsidiary, it:

• Derecognises the assets (including goodwill) and liabilities of the subsidiary;

• Derecognises the carrying amount of any non-controlling interest;

• Derecognises the cumulative translation differences, recorded in equity;

• Recognises the fair value of the consideration received;

• Recognises the fair value of any investment retained;

• Recognises any surplus or deficit in the interim condensed consolidated statement of comprehensive income; and

• • Reclassifies the Group’s share of components previously recognised in other comprehensive income to the interim condensed consolidated statement of comprehensive income or retained earnings, as appropriate.

Details of the Company’s subsidiaries are as follows:

Subsidiaries	Place of incorporation	Principal activities	Percentage of effective holding
Dubai Hills Estate LLC	UAE	Propertydevelopment	50%
Emaar Mina Rashid Development Owned By Emaar Development L.L.C	UAE	Buying, selling and development of real estate and leasing and management of self-owned property	100%
Mina Rashid Properties LLC*	UAE	Buying, selling and development of real estate	100%
Emaar Gardens LLC	UAE	Real Estate Development, Investment in Commercial Enterprises & Management	100%

*Also refer note 17.

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Emaar Development PJSC and its Subsidiaries

NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS At 30 June 2023 (Unaudited) (continued)

2.1 BASIS OF PREPARATION (continued)

Basis of consolidation (continued)

Joint ventures

Joint ventures are those entities over whose activities the Group has joint control, established by contractual agreement and requiring unanimous consent for strategic financial and operating decisions whereby the Group has rights to the net assets of the arrangement, rather than rights to its assets and obligations for its liabilities even if the shareholding is 50% or more.

The Group’s investment in joint ventures are accounted for using the equity method of accounting. Under the equity method of accounting, investments in joint ventures are carried in the interim condensed consolidated statement of financial position at cost, plus post-acquisition changes in the Group’s share of net assets of the joint venture companies, less any impairment in value.

The interim condensed consolidated statement of comprehensive income reflects the Group’s share of results of its joint ventures. Unrealised profits and losses resulting from transactions between the Group and its joint ventures are eliminated to the extent of the Group’s interest in the joint ventures. Unrealised losses are eliminated in the same way as unrealised gains, but only to the extent that there is no evidence of impairment.

2.2 SIGNIFICANT ACCOUNTING JUDGMENTS, ESTIMATES AND ASSUMPTIONS

The preparation of these interim condensed consolidated financial statements requires management to make judgments, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the accompanying disclosures and the disclosure of contingent liabilities at the reporting date. Uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of the assets or liabilities affected in future periods.

Estimates and their underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimates are revised.

The key judgments and estimates and assumptions that have a significant impact on the interim condensed consolidated financial statements of the Group are discussed below:

Judgments

Timing of satisfaction of performance obligations

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 customers, 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. Where this is not the case, revenue is recognised at a point in time.

Determination of transaction prices

The Group is required to determine the transaction price in respect of each of its contracts with customers. In making such judgment, the Group assess 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. In determining the impact of variable consideration, the Group uses the “most-likely amount” method in IFRS 15 Revenue from Contracts with Customers whereby the transaction price is determined by reference to the single most likely amount in a range of possible consideration amounts.

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 the subject of the contract, is transferred to the customer. In the case of contracts to sell real estate assets, this is generally when the consideration for the unit has been substantially received and there are no impediments in the handing over of the unit to the customer. The title will be transferred to the customer only upon 100% collection, resulting in a low risk of default and loss thereof.

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Emaar Development PJSC and its Subsidiaries

NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS At 30 June 2023 (Unaudited) (continued)

2.2 SIGNIFICANT ACCOUNTING JUDGMENTS, ESTIMATES AND ASSUMPTIONS (continued)

Estimations and assumptions

Consolidation of a subsidiary

The Group has evaluated all the investee entities including special purpose entities to determine whether it controls the investee as per the criteria laid out by IFRS 10: Consolidated Financial Statements . The Group has evaluated, amongst other things, its ownership interest, the contractual arrangements in place and its ability and the extent of its involvement with the relevant activities of the investee entities to determine whether it controls the investee.

Split of real estate components

The interim condensed consolidated financial statements of the Group include certain assets, liabilities, income, expenses and cash flows which are allocated to the Group based on management assumptions and estimates. This mainly includes development properties, trade and other payables, retention payable, advance from customers and selling, general and administrative expenses. These are allocated based on evaluation by project consultant and management’s best estimate of use of corporate resources by the Group.

Impairment of trade, unbilled receivables and other receivables

An estimate of the collectible amount of trade, unbilled and other receivables is made when collection of the full amount is no longer probable. For individually significant amounts, this estimation is performed on an individual basis. Amounts which are not individually significant, but which are past due, are assessed collectively and a provision is applied based on expected credit losses on such receivables.

Useful lives of property, plant and equipment

The Group’s management determines the estimated useful lives of its property, plant and equipment for calculating depreciation. This estimate is determined after considering the expected usage of the asset or physical wear and tear. The management periodically reviews estimated useful lives and the depreciation method to ensure that the method and period of depreciation are consistent with the expected pattern of economic benefits from these assets.

Recognition of forfeiture income from sales cancellations

Upon termination or cancellation of contracts with customers, amounts received from customers become refundable subject to forfeiture clauses contained in the original sale contract documents and as per local real estate regulations. Forfeited amounts are carried as liability on the consolidated statement of financial position upon cancellation/ termination of the contract. Amounts forfeited on cancelled/terminated property units (net of customer refunds, where applicable) are subsequently recognised in the consolidated statement of comprehensive income based on management’s judgment on whether the Group expects any future association with the customer.

Measurement of progress when revenue is recognised over time

The Group has elected to apply the input method to measure the progress of performance obligations where revenue is recognised over time. The Group considers that the use of the 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 providing infrastructure, potential claims by contractors as evaluated by the project consultant and the cost of meeting other contractual obligations to the customers.

Impairment of non-financial assets

The Group assesses whether there are any indicators of impairment for all non-financial assets at each reporting date. The non-financial assets are tested for impairment when there are indicators that the carrying amounts may not be recoverable. When value in use calculations are undertaken, management estimates the expected future cash flows from the asset or cash-generating a unit and chooses a suitable discount rate in order to calculate the present value of those cash flows.

Development properties 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.

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Emaar Development PJSC and its Subsidiaries

NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS At 30 June 2023 (Unaudited) (continued)

2.2 SIGNIFICANT ACCOUNTING JUDGMENTS, ESTIMATES AND ASSUMPTIONS (continued)

Estimations and assumptions (continued)

Fair value measurement of financial instruments

When the fair values of financial assets and financial liabilities recorded in the interim condensed consolidated financial statements cannot be measured based on quoted prices in active markets, their fair value is measured using valuation techniques including the discounted cash flow (DCF) model. The inputs to these models are taken from observable markets where possible, but where this is not feasible, a degree of judgement is required in establishing fair values. Judgements include considerations of inputs such as liquidity risk, credit risk and volatility.

External valuers report to assess net realizable value of development properties

As at 31 December 2022, valuations performed by certain external valuers on the Group's development properties has drawn attention to the fact that a combination of global inflationary pressures, higher interest rates and recent geopolitical events have heightened the potential for greater volatility in property markets over the short-to-medium term, requiring management to closely monitor the valuation and track how market participants respond to current market volatility. Management has critically assessed asset valuations as at the reporting date and, in the current environment, are satisfied with the assumptions adopted and valuations reported. Management will continue to closely monitor the impact of this evolving situation to assess its impact to the Group, if any.

2.3 CHANGES IN THE ACCOUNTING POLICIES AND DISCLOSURES

A number of new standards are effective for annual periods beginning after 1 January 2023 and earlier application is permitted, however, the Group has not early adopted the new or amended standards in preparing these interim condensed consolidated financial statements.

The following new or amended standards that are adopted in annual periods beginning on 1 January 2023:

a) New standards, interpretations and amendments adopted by the Group	Effective date
Definition of Accounting Estimate, Amendments to IAS 8	1 January 2023
IFRS 17 Insurance Contracts	1 January 2023
Disclosure of Accounting Policies (Amendments to IAS 1 ad IFRS Practice Statement 2)	1 January 2023
Deferred Tax related to Assets and Liabilities arising from a Single Transaction
(Amendments to IAS 12)	1 January 2023

a) New standards, interpretations and amendments adopted by the Group

These amendments / improvements had no impact on the interim condensed consolidated financial statements of the Group.

b) Standards, amendments and interpretations in issue but not effective

The following amended standards and interpretations are not expected to have a significant impact on the Group's consolidated financial statements:

Forthcoming requirements	Effective date
Lease Liability in a Sale and Leaseback (Amendments to IFRS 16)	1 January 2024
Non-current liability with covenants – Amendments to IAS 1 and
Classification of Liabilities as Current and Non-current (Amendments to IAS 1)	1 January 2024
IFRS S1 General Requirements for Disclosure of Sustainability-related Financial
Information and IFRS S2 Climate-related Disclosures	1 January 2024
Sale or Contribution of Assets between an Investor its Associates or Joint Venture	Effective date deferred
(Amendments to IFRS 10 and IAS 28)	indefinitely

The Group does not expect the adoption of the above new standards, amendments and interpretations to have a material impact on the future consolidated financial statements of the Group.

12

Emaar Development PJSC and its Subsidiaries

NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS At 30 June 2023 (Unaudited) (continued)

2.4 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The same accounting policies, methods of computation, significant accounting judgments and estimates and assumptions are followed in these interim condensed consolidated financial statements as compared with the most recent annual consolidated financial statements for the year ended 31 December 2022, except for the new standards and amendments adopted during the current period as explained in note 2.3.

Revenue recognition

Revenue from contracts with customers

The Group recognises revenue from contracts with customers 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 parties 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 services to a customer, excluding amounts collected on behalf of third parties.

• Step 4. Allocate the transaction 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 performance 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

2. The Group’s performance creates or enhances an asset that the customer controls as the asset is created or enhanced; or

3. 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 is recognised at the point in time at which the 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 performance. Where the amount of consideration received from a customer exceeds the amount of revenue recognised, this gives rise to a contract liability.

Revenue is measured at the fair value of the consideration received or receivable, taking into account contractually defined terms of payment and excluding taxes and duty. The Group assesses its revenue arrangements against specific criteria to determine if it is acting as principal or agent. The Group has concluded that it is acting as a principal in all of its revenue arrangements. Revenue is recognised in the interim condensed consolidated statement of comprehensive income to the extent that it is probable that the economic benefits will flow to the Group and the revenue and costs, if applicable, can be measured reliably.

Revenue from sale of land

The performance obligation with regards to sale of land is satisfied at a point in time when customer has access to the plot. Upon recognition of revenue against a certain plot, the infrastructure cost allocated to the plot of land is released to the statement of comprehensive income, as cost of revenue.

Development services

Revenue from rendering of development management services is recognised when the outcome of the transaction can be estimated reliably, by reference to the stage of completion of the development obligation at the reporting date. Where the outcome cannot be measured reliably, revenue is recognised only to the extent that the expenses incurred are eligible to be recovered.

13

Emaar Development PJSC and its Subsidiaries

NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS At 30 June 2023 (Unaudited) (continued)

2.4 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Interest income

Interest income is recognised as the interest accrues using the effective interest method, under which the rate used exactly discounts estimated future cash receipts through the expected life of the financial asset to the net carrying amount of the financial asset.

Borrowing costs

Borrowing costs directly attributable to the acquisition or construction 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. Borrowing costs consist of interest and other costs that an entity incurs in connection with the borrowing of funds.

All other borrowing costs are recognised in the interim condensed consolidated income statement in the year in which they are incurred.

Income tax

Corporate Tax

On 9 December 2022, the UAE Ministry of Finance released the Federal Decree-Law No. 47 of 2022 on the Taxation of Corporations and Businesses (‘the CT Law’) to enact a Federal corporate tax (‘CT’) regime in the UAE. The CT Law will be effective for financial years beginning on or after 1 June 2023 and therefore applicable to the Group from FY 2024 onwards. The Cabinet Decision No. 116 of 2022 specifies the threshold of income (as AED 375,000) over which a corporate tax of 9% would apply and accordingly, the CT Law is now considered to be substantively enacted.

Considering the facts and circumstances as at reporting date, based on the management’s assessment, no significant deferred tax implications have been identified that have any significant impact on the interim consolidated financial statements for the period ended 30 June 2023.

Furthermore, the UAE as a member of the OECD BEPS Inclusive Framework has committed to adopt the OECD BEPS Pillar Two rules (Pillar Two Rules) in the domestic tax law. The Pillar Two rules will apply to all Multinational Enterprises (MNEs) with consolidated group revenue exceeding EUR 750 million. Considering that the Company and its subsidiaries (collectively ‘ED Group’) is a part of the Emaar Group (comprising of Emaar Properties PJSC and all its subsidiaries) which is subject to the Pillar Two rules, ED Group would also be subject to these rules. The Pillar Two rules are yet to be adopted in the UAE.

Considering that the key cabinet decisions on various aspects of the tax law including the manner of adoption of Pillar Two rules have not yet been issued, the Group will continue to monitor the developments and impact as per the CT law and implementation of Pillar Two rules on the financial statements.

Property, plant and equipment

Property, plant and equipment are measured at cost (which includes capitalised borrowing costs) less accumulated depreciation and any impairment in value. Depreciation is calculated on a straight-line basis over the estimated useful lives as follows:

lives as follows:
Sales centers (included in land and buildings)	1 - 10 years
Computers and office equipment	2 - 5 years
Motor vehicles	3 - 5 years
Furniture and fixtures	2 - 5 years

No depreciation is charged on land and capital work-in-progress. The useful lives, depreciation method and residual values are reviewed periodically to ensure that the method and period of depreciation are consistent with the expected pattern of economic benefits from these assets.

14

Emaar Development PJSC and its Subsidiaries

NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS At 30 June 2023 (Unaudited) (continued)

2.4 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Property, plant and equipment (continued)

Expenditure incurred to replace a component of an item of property, plant and equipment that is accounted for separately is capitalised and the carrying amount of the component that is replaced is written off. Other subsequent expenditure is capitalised only when it increases future economic benefits of the related item of property, plant and equipment. All other expenditure is recognised in the interim condensed consolidated statement of comprehensive income as the expense is incurred.

Property, plant and equipment are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of property, plant and equipment may not be recoverable. Whenever the carrying amount of property, plant and equipment exceeds their recoverable amount, an impairment loss is recognised in the condensed consolidated statement of comprehensive income. The recoverable amount is the higher of fair value less costs to sell of property, plant and equipment and the value in use. The fair value less costs to sell is the amount obtainable from the sale of property, plant and equipment in an arm’s length transaction while value in use is the present value of estimated future cash flows expected to arise from the continuing use of property, plant and equipment and from its disposal at the end of its useful life.

Reversal of impairment losses other than goodwill impairment recognised in the prior years are recorded when there is an indication that the impairment losses recognised for the property, plant and equipment no longer exist or have reduced.

Development properties

Properties acquired, constructed or in the course of construction for sale in the ordinary course of business are classified as development properties and are stated at the lower of cost or net realisable value. Cost includes:

• Freehold and leasehold rights for land;

• Amounts paid to contractors for construction; and

• Planning and design costs, costs of site preparation, professional fees for legal services, property transfer taxes, construction overheads and other directly attributable costs.

Net realisable value is the estimated selling price in the ordinary course of the business, based on market prices at the reporting date and discounted for the time value of money if material, less costs to completion and the estimated costs of sale.

The cost of development properties recognised in the interim condensed consolidated statement of comprehensive income on sale is determined with reference to the specific costs incurred on the property sold and an allocation of any non-specific costs based on the relative size of the property sold.

The management reviews the carrying values of the development properties on an annual basis.

Right-of-use assets

The Group recognises right-of-use assets at the commencement date of the lease (i.e., the date the underlying asset is available for use). Right-of-use assets are measured at cost, less any accumulated depreciation and impairment losses, and adjusted for any remeasurement of lease liabilities. The cost of right-of-use assets includes the amount of lease liabilities recognised, initial direct costs incurred, and lease payments made at or before the commencement date less any lease incentives received. Unless the Group is reasonably certain to obtain ownership of the leased asset at the end of the lease term, the recognised right-of-use assets are depreciated on a straight-line basis over the shorter of its estimated useful life and the lease term. Right-of-use assets are subject to impairment.

Financial assets

All financial assets are recognised and derecognised on trade date when the purchase or sale of a financial asset is made under a contract whose terms require delivery of the financial asset within the timeframe established by the market concerned. Financial assets are initially measured at cost, plus transaction costs, except for those financial assets classified as at fair value through other comprehensive income or profit or loss, which are initially measured at fair value. Trade receivables are initially recognised when they are originated. Trade and unbilled receivables that do not contain a significant financing component or for which the Group has applied the practical expedient are measured at the transaction price determined under IFRS 15. All recognised financial assets are subsequently measured in their entirety at either amortised cost or fair value.

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Emaar Development PJSC and its Subsidiaries

NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS At 30 June 2023 (Unaudited) (continued)

2.4 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Financial assets (continued)

The fair value of financial instruments that are actively traded in organised financial markets is determined by reference to quoted market bid prices for assets and offer prices for liabilities, at the close of business on the reporting date. If quoted market prices are not available, reference can also be made to broker or dealer price quotations.

The fair value of floating rate and overnight deposits with credit institutions is their carrying value. The carrying value is the cost of the deposit and accrued interest. The fair value of fixed interest-bearing deposits is estimated using discounted cash flow techniques. Expected cash flows are discounted at current market rates for similar instruments at the reporting date.

Classification of financial assets

The classification of financial assets at initial recognition depends on the financial asset’s contractual cash flow characteristics and the Group’s business model for managing them. In order for a financial asset to be classified and measured at amortised cost or fair value through OCI, it needs to give rise to cash flows that are ‘solely payments of principal and interest (SPPI)’ on the principal amount outstanding. This assessment is referred to as the SPPI test and is performed at an instrument level.

For the purposes of classifying financial assets, an instrument is an ‘equity instrument’ if it is a non-derivative and meets the definition of ‘equity’ for the issuer (under IAS 32: Financial Instruments: Presentation) except for certain nonderivative puttable instruments presented as equity by the issuer. All other non-derivative financial assets are ‘debt instruments’.

Equity investments

All financial assets that are equity investments are measured at fair value either through other comprehensive income or through profit or loss. This is an irrevocable choice that the Group has made on adoption of IFRS 9 or will make on subsequent acquisition of equity investments unless the equity investments are held for trading, in which case, they must be measured at fair value through profit or loss. Gain or loss on disposal of equity investments is not recycled. Dividend income for all equity investments is recorded through the interim condensed consolidated income statement when the right of payment has been established, except when the Group benefits from such proceeds as a recovery of part of the cost of the financial asset, in which case, such gains are recorded in OCI. Equity instruments designated at fair value through P&L and OCI are not subject to impairment assessment.

The Group elected to classify irrevocably its non-listed equity investments as financial assets measured at fair value through other comprehensive income.

Debt instruments

Debt instruments are also measured at fair value through other comprehensive income (OCI) unless they are classified at amortised cost. They are classified at amortised cost only if:

• the asset is held within a business model whose objective is to hold the asset to collect the contractual cash flows; and

• the contractual terms of the debt instrument give rise, on specified dates, to cash flows that are solely payments of principal and interest on the principal outstanding.

Cash and cash equivalents

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

Trade and unbilled receivables

Trade receivables are stated at original invoice amount (unless there is a significant financing component) less expected credit losses. When a trade receivable is uncollectible, it is written off against provision for doubtful debts. Subsequent recoveries of amounts previously written off are credited to the interim condensed consolidated income statement.

Services rendered but not billed at the reporting date are accrued as per the terms of the agreements as unbilled receivables.

16

Emaar Development PJSC and its Subsidiaries

NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS At 30 June 2023 (Unaudited) (continued)

2.4 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Financial assets (continued)

Foreign exchange gains and losses

The fair value of financial assets denominated in a foreign currency is determined in that foreign currency and translated at the spot rate at the end of the reporting period. The foreign exchange component forms part of its fair value gain or loss. For financial assets classified as at fair value through profit or loss, the foreign exchange component is recognised in the interim condensed consolidated statement of comprehensive income.

For financial assets designated at fair value through other comprehensive income any foreign exchange component is recognised in the interim condensed consolidated statement of comprehensive income. For foreign currency denominated debt instruments classified at amortised cost, the foreign exchange gains and losses are determined based on the amortised cost of the asset and are recognised in the ‘other gains and losses’ line item in the interim condensed consolidated statement of comprehensive income.

Derecognition of financial assets

A financial asset (or, when applicable, a part of a financial asset or part of a group of similar financial assets) is derecognised when:

• The rights to receive cash flows from the asset have expired; or

• The Group retains the right to receive cash flows from the asset, but has assumed an obligation to pay them in full without material delay to a third party under a ‘pass-through’ arrangement, and

• The Group has transferred its rights to receive cash flows from the asset and either:

• has transferred substantially all the risks and rewards of the asset, or

• has neither transferred nor retained substantially all the risks and rewards of the asset but has transferred control of the asset.

When the Group has transferred its right to receive cash flows from an asset or has entered into a pass-through arrangement, it evaluates if and to what extent it has retained the risks and rewards of ownership. When it has neither transferred nor retained substantially all the risks and rewards of the asset nor transferred control of the asset, the asset is recognised to the extent of the Group’s continuing involvement in the asset. Continuing involvement that takes the form of a guarantee over the transferred asset is measured at the lower of the original carrying amount of the asset and the maximum amount of consideration that the Group could be required to repay.

Impairment of financial assets

The Group recognises an allowance for expected credit losses ("ECL") for all debt instruments and contract assets not held at fair value through profit or loss. ECLs are based on the difference between the contractual cash flows due in accordance with the contract and all the cash flows that the Group expects to receive. The shortfall is then discounted at an approximation to the asset’s original effective interest rate.

ECLs are recognised in two stages. For credit exposures for which there has not been a significant increase in credit risk since initial recognition, ECLs are provided for credit losses that result from default events that are possible within the next 12-months (a 12-month ECL). For those credit exposures for which there has been a significant increase in credit risk since initial recognition, a loss allowance is required for credit losses expected over the remaining life of the exposure, irrespective of the timing of the default (a lifetime ECL).

When determining whether the credit risk of a financial asset has increased significantly since initial recognition and when estimating ECLs, the Group considers reasonable and supportable information that is relevant and available without undue cost or effort. This includes both quantitative and qualitative information and analysis, based on the Group’s historical experience and informed credit assessment, that includes forward-looking information.

For trade and unbilled receivables and other receivables, the Group applies a simplified approach in calculating ECLs based on lifetime expected credit losses. The Group has established a provision matrix that is based on the Group’s historical credit loss experience, adjusted for forward-looking factors specific to the debtors and the economic environment. The expected credit losses are recognised in the interim condensed consolidated statement of comprehensive income.

17

Emaar Development PJSC and its Subsidiaries

NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS At 30 June 2023 (Unaudited) (continued)

2.4 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Financial assets (continued)

The Group consider a financial asset to be in default when internal or external information indicates that the Group is unlikely to receive the outstanding contractual amounts in full before taking into account any credit enhancements held by the Group. A financial asset is written off when there is no reasonable expectation of recovering the contractual cash flows.

At each reporting date, the Group assesses whether financial assets carried at amortised cost and debt securities at FVOCI are credit impaired. A financial asset is ‘credit-impaired’ when one or more events that have a detrimental impact on the estimated future cash flows of the financial asset have occurred.

Evidence that a financial asset is credit impaired includes the following observable data:

• –– significant financial difficulty of the debtor;

• –– a breach of contract such as a default or being more than 90 days past due;

• –– the restructuring of a loan or advance by the Group on terms that the Group would not consider otherwise;

• –– it is probable that the debtor will enter bankruptcy or other financial reorganisation; or

• –– the disappearance of an active market for a security because of financial difficulties.

Impairment of non-financial assets

The Group assesses at each reporting date whether there is an indication that a non-financial asset (other than inventories, contract assets and deferred tax assets) may be impaired. If any indication exists, or when annual impairment testing for an asset is required, the Group estimates the asset's recoverable amount. An asset's recoverable amount is the higher of an asset's or cash-generating unit's (CGU) fair value less costs to sell and its value in use and is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or groups of assets. Where the carrying amount of an asset or CGU exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount. In assessing value in use, the estimated future cash flows are 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. In determining fair value less costs to sell, an appropriate valuation model is used. These calculations are corroborated by valuation multiples, quoted share prices for publicly traded entities or other available fair value indicators.

Impairment losses are recognised in the interim condensed consolidated statement of comprehensive income in those expense categories consistent with the function of the impaired asset. They are allocated first to reduce the carrying amount of any goodwill allocated to the CGU, and then to reduce the carrying amounts of the other assets in the CGU on a pro rata basis.

For assets excluding goodwill, an assessment is made at each reporting date as to whether there is any indication that previously recognised impairment losses may no longer exist or may have decreased. If such indication exists, the Group estimates the asset's or cash-generating unit's recoverable amount. A previously recognised impairment loss is reversed only if there has been a change in the assumptions used to determine the asset's recoverable amount since the last impairment loss was recognised. The reversal is limited so that the carrying amount of the asset does not exceed its recoverable amount, nor exceed the carrying amount that would have been determined, net of depreciation, had no impairment loss been recognised for the asset in prior years. Such reversal is recognised in the interim condensed consolidated statement of comprehensive income.

Financial liabilities and equity instruments issued by the Group

Debt and equity instruments are classified as either financial liabilities or as equity instruments in accordance with the substance of the contractual agreements. Financial liabilities within the scope of IFRS 9 are classified as financial liabilities at fair value through profit or loss, loans and borrowings, or as derivative instrument as appropriate. The Group determines the classification of its financial liabilities at the initial recognition.

Trade and other payables

Liabilities are recognised for amounts to be paid in the future for goods or services received, whether billed by the supplier or not.

18

Emaar Development PJSC and its Subsidiaries

NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS At 30 June 2023 (Unaudited) (continued)

2.4 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Financial liabilities and equity instruments issued by the Group (continued)

Lease liabilities

At the commencement date of the lease, the Group recognises lease liabilities measured at the present value of lease payments to be made over the lease term. The lease payments include fixed payments (including in substance fixed payments) less any lease incentives receivable, variable lease payments that depend on an index or a rate, and amounts expected to be paid under residual value guarantees. The lease payments also include the exercise price of a purchase option reasonably certain to be exercised by the Group and payments of penalties for terminating a lease, if the lease term reflects the Group exercising the option to terminate. The variable lease payments that do not depend on an index or a rate are recognised as expense in the period on which the event or condition that triggers the payment occurs. In calculating the present value of lease payments, the Group uses the incremental borrowing rate at the lease commencement date if the interest rate implicit in the lease is not readily determinable. After the commencement date, the amount of lease liabilities is increased to reflect the accretion of interest and reduced for the lease payments made.

In addition, the carrying amount of lease liabilities is remeasured if there is a modification, a change in the lease term, a change in the in-substance fixed lease payments or a change in the assessment to purchase the underlying asset .

Loans and borrowings

Term loans are initially recognised at the fair value of the consideration received less directly attributable transaction costs.

After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortised cost using the effective interest rate method. Gains and losses are recognised in the interim condensed consolidated statement of comprehensive income when the liabilities are derecognised as well as through the amortisation process.

Other financial liabilities

Other financial liabilities are initially measured at fair value, net of transaction costs and are subsequently measured at amortised cost using the effective interest method, with interest expense recognised on an effective yield basis.

The effective interest method is a method of calculating the amortised cost of a financial liability and of allocating interest expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash payments through the expected life of the financial liability, or, where appropriate, a shorter period.

Derecognition of financial liabilities

The Group derecognises financial liabilities when, and only when, the Group’s obligations are discharged, cancelled or they expire. The Group also derecognises a financial liability when its terms are modified, and the cash flows of the modified liability are substantially different, in which case a new financial liability based on the modified terms is recognised at fair value. On derecognition of a financial liability, the difference between the carrying amount extinguished and the consideration paid (including any non-cash assets transferred or liabilities assumed) is recognised in interim condensed consolidated statement of comprehensive income.

Offsetting of financial instruments

Financial assets and financial liabilities are offset, and the net amount is reported in the interim condensed consolidated statement of financial position if there is a currently enforceable legal right to offset the recognised amounts and there is an intention to settle on a net basis, to realise the assets and settle the liabilities simultaneously.

End-of-service benefits

The Group provides end-of-service benefits to its employees. The entitlement to these benefits is usually based upon the employees’ final salary and length of service, subject to the completion of a minimum service period. The expected costs of these benefits are accrued over the period of employment.

With respect to its eligible UAE and GCC national employees, the Group makes contributions to a pension fund established by the UAE General Pension and Social Security Authority calculated as a percentage of the employees’ salaries. The Group’s obligations are limited to these contributions, which are expensed when due.

19

Emaar Development PJSC and its Subsidiaries

NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS At 30 June 2023 (Unaudited) (continued)

2.4 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Financial liabilities and equity instruments issued by the Group (continued)

Provisions

Provisions are recognised when the Group has a legal or constructive obligation as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation, and the amount can be reliably estimated. When the Group expects some or all of a provision to be reimbursed, the reimbursement is recognised as a separate asset but only when the reimbursement is virtually certain. The expense relating to any provision is presented in the interim condensed consolidated statement of comprehensive income net of any reimbursement.

Provisions are measured at the present value of the expenditures expected to be required to settle the obligation at the end of the reporting period, using a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the obligation.

Provisions are reviewed at each statement of financial position date and adjusted to reflect the current best estimate. If it is no longer probable that an outflow of resources embodying economic benefits will be required to settle the obligation, the provision is reversed.

Fair value measurement

The Group measures financial instruments, such as investment in securities and hedges, at fair value at each reporting date.

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either in the principal market for the asset or liability or the most advantageous market for the asset or liability.

The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the asset or liability, assuming that market participants act in their economic best interest.

A fair value measurement of a non-financial asset takes into account a market participant’s ability to generate economic benefits by using the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and best use.

For investments traded in an active market, fair value is determined by reference to quoted market bid prices.

The fair value of interest-bearing items is estimated based on discounted cash flows using interest rates for items with similar terms and risk characteristics.

For unquoted equity investments, fair value is determined by reference to the market value of a similar investment or is based on the expected discounted cash flows.

The fair value of forward foreign exchange contracts is calculated by reference to current forward exchange rates with the same maturity.

Fair value of interest rate swap contract is determined by reference to market value for similar instruments.

The Group uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximising the use of relevant observable inputs and minimising the use of unobservable inputs.

All assets and liabilities for which fair value is measured or disclosed in the interim condensed consolidated financial statements are categorised within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole:

• Level 1 – Fair value measurements are those derived from quoted prices in an active market (that are unadjusted) for identical assets or liabilities.

• Level 2 – Fair value measurements are those derived from inputs other than quoted prices included within Level 1 that are observable for the asset or liability either directly (i.e. as prices) or indirectly (i.e. derived from prices).

• Level 3 – Fair value measurements are those derived from valuation techniques that include inputs for the asset or liability that are not based on observable market data (unobservable inputs).

20

Emaar Development PJSC and its Subsidiaries

NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS At 30 June 2023 (Unaudited) (continued)

2.4 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Fair value measurement (continued)

For assets and liabilities that are recognised in the interim condensed consolidated financial statementson a recurring basis, the Group determines whether transfers have occurred between Levels in the hierarchy by re-assessing categorisation at the end of each reporting period.

For the purpose of fair value disclosures, the Group has determined classes of assets and liabilities on the basis of the nature, characteristics and risks of the asset or liability and the level of the fair value hierarchy as explained above.

3 SEGMENT INFORMATION

For management purposes, the Group is organised into one segment based on its products and services, which is the real estate development business. Accordingly, the Group only has one reportable segment. Management monitors the operating results of the business as a single unit for the purpose of making decisions about resource allocation and performance assessment.

Business segments

Revenue, operating results, assets and liabilities presented in the interim condensed interim condensed consolidated financial statements relates to the real estate development business of the Group.

Geographic segment

The Group is currently operating only in the UAE, hence the operating results, assets and liabilities presented it the interim condensed interim condensed consolidated financial statements relates to its operation in the UAE.

4 REVENUE AND COST OF REVENUE

Revenue Sale of residential units Sale of commercial units, plots of land and income from development services Cost of revenue Cost of residential units Cost of commercial units and plots of land	Six-month period ended 30 June 2023 AED’000 30 June 2022 AED’000 3,860,984 6,539,827 594,168 742,693 ─────── ─────── 4,455,152 7,282,520 ═══════ ═══════ 2,123,698 4,074,037 29,123 99,573 ─────── ─────── 2,152,821 4,173,610 ═══════ ═══════	Three-month period ended
		30 June 2023 AED’000 30 June 2022 AED’000 1,875,523 3,372,537 204,801 341,842 ─────── ─────── 2,080,324 3,714,379 ═══════ ═══════ 1,105,334 2,064,752 1,447 57,365 ─────── ─────── 1,106,781 2,122,117 ═══════ ═══════

Below is the split of revenue recognised over a period of time and single point in time:

-Over a period of time -Single point in time	Six-month period ended 30 June 2023 AED’000 30 June 2022 AED’000 4,447,024 7,019,188 8,128 263,332 ─────── ─────── 4,455,152 7,282,520 ═══════ ═══════	Three-month period ended
		30 June 2023 AED’000 30 June 2022 AED’000 2,080,324 3,603,251 - 111,128 ─────── ─────── 2,080,324 3,714,379 ═══════ ═══════

21

Emaar Development PJSC and its Subsidiaries

NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS At 30 June 2023 (Unaudited) (continued)

5 SELLING, GENERAL AND ADMINISTRATIVE EXPENSES

Sales and marketing expenses Payroll and related expenses Property management expenses Depreciation (including right-of use assets) Other expenses	Six-month period ended 30 June 2023 AED’000 30 June 2022 AED’000 139,725 286,312 76,930 67,252 46,332 38,748 5,263 4,658 189,023 271,284 ─────── ─────── 457,273 668,254 ══════ ══════	Three-month period ended
		30 June 2023 AED’000 30 June 2022 AED’000 52,791 134,140 40,387 36,091 26,593 24,147 3,156 2,233 86,576 135,871 ────── ────── 209,503 332,482 ══════ ══════

6(i) FINANCE INCOME

6(i) FINANCE INCOME	457,273 668,254 ══════ ══════	209,503 332,482 ══════ ══════
Finance income on fixed and call deposits with banks Other finance income (i)	Six-month period ended 30 June 2023 AED’000 30 June 2022 AED’000 273,395 19,852 78,698 64,144 ────── ────── 352,093 83,996 ══════ ══════	Three-month period ended
		30 June 2023 AED’000 30 June 2022 AED’000 166,830 15,488 35,583 27,864 ────── ────── 202,413 43,352 ══════ ══════

• (i) During the period, the Group has recorded finance income on unwinding of long-term receivable amounting to AED 78,698 thousands (30 June 2022: AED 64,144 thousands).

6(ii) FINANCE COST

6(ii) FINANCE COST
Finance costs - bank and related party borrowings Other finance costs (i)	Six-month period ended 30 June 2023 AED’000 30 June 2022 AED’000 97,165 53,375 71,447 83,191 ────── ────── 168,612 136,566 ══════ ══════	Three-month period ended
		30 June 2023 AED’000 30 June 2022 AED’000 53,940 29,530 38,832 35,715 ────── ────── 92,772 65,245 ══════ ══════

• (i) During the period, the Group has recorded finance cost on unwinding of long-term payable amounting to AED 51,726 thousands (30 June 2022: AED 68,520 thousands).

7 OTHER INCOME

7 OTHER INCOME
Forfeiture income from sales cancellations, net Other income	Six-month period ended 30 June 2023 AED’000 30 June 2022 AED’000 338,525 - 72,372 38,378 ────── ────── 410,897 38,378 ══════ ══════	Three-month period ended
		30 June 2023 AED’000 30 June 2022 AED’000 338,525 - 33,367 18,366 ────── ────── 371,892 18,366 ══════ ══════

22

Emaar Development PJSC and its Subsidiaries

NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS At 30 June 2023 (Unaudited) (continued)

8 BANK BALANCES AND CASH

8 BANK BALANCES AND CASH
	30 June	31 December
	2023	2022
	AED’000	AED’000
	(Unaudited)	(Audited)
Cash in hand	1,086	788
Current and call bank deposit accounts	12,915,730	10,591,523
Fixed deposits maturing within three months	2,293,280	770,449
	───────	────────
	15,210,096	11,362,760
	════════	════════

As at 30 June 2023, cash and cash equivalents amounts to AED 15,210,096 thousands (31 December 2022: AED 11,320,524 thousands), net of facilities availed from various commercial banks in the UAE which are repayable on demand.

Cash at banks earn interest at fixed rates based on prevailing bank deposit rates. Short-term fixed deposits are made for varying periods between one day and three months, depending on the immediate cash requirements of the Group, and earn interest at the respective short-term deposit rates.

As at 30 June 2023, an amount of AED 12,498,300 thousands (31 December 2022: AED 10,567,498 thousands) are with banks against advances received from customers on sale of development properties which are deposited into escrow accounts. These deposits/balances are not under lien.

9 TRADE AND UNBILLED RECEIVABLES

9 TRADE AND UNBILLED RECEIVABLES
	30 June	31 December
	2023	2022
	AED’000	AED’000
	(Unaudited)	(Audited)
Trade receivables
Amounts receivables within 12 months	506,648	568,847
	───────	───────
Unbilled receivables
Unbilled receivables within 12 months	5,960,393	5,207,495
Unbilled receivables after 12 months	7,807,571	9,669,562
	───────	───────
	13,767,964	14,877,057
	───────	───────
Total trade and unbilled receivables	14,274,612	15,445,904
	════════	════════

The above trade and unbilled receivables are net of AED 20,977 thousands (31 December 2022: AED 20,977 thousands) relating to provision for doubtful debts representing management’s best estimate of loss based on expected credit loss model. All other receivables are considered fully recoverable.

10 OTHER ASSETS, RECEIVABLES, DEPOSITS AND PREPAYMENTS

	30 June	31 December
	2023	2022
	AED’000	AED’000
	(Unaudited)	(Audited)
Deferred sales commission (i)	1,117,732	934,159
Due from related parties (note 18)	878,644	1,417,559
Advances to contractors and others	652,253	497,418
Value added tax recoverable (net)	44,601	60,202
Prepayments	13,604	5,208
Other receivables and deposits	63,484	42,115
	───────	────────
	2,770,318	2,956,661
	════════	════════

Other assets, receivables, deposits and prepayments are due within 12 months from the reporting date.

23

NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS At 30 June 2023 (Unaudited) (continued)

Emaar Development PJSC and its Subsidiaries

10 OTHER ASSETS, RECEIVABLES, DEPOSITS AND PREPAYMENTS (continued)

• (i) The deferred sales commission expense incurred to obtain or fulfil a contract with the customers is amortised over the period of satisfying performance obligations where applicable.

11 DEVELOPMENT PROPERTIES

		30 June	31 December
		2023	2022
		AED’000	AED’000
		(Unaudited)	(Audited)
Balance at the beginning of the period/year		10,850,819	11,179,609
Add:	Costs incurred during the period/year	1,834,179	6,026,296
Less: Costs transferred to cost of revenue during the period/year		(2,151,994)	(6,355,086)
		───────	────────
Balance at the end of the period/year		10,533,004	10,850,819
		════════	════════
12	LOAN TO JOINT VENTURES
		30 June	31 December
		2023	2022
		AED’000	AED’000
		(Unaudited)	(Audited)
Emaar Dubai South DWC LLC*		744,486	837,483
Old Town Views LLC		-	75,035
		───────	───────
		744,486	912,518
		════════	═══════

12 LOAN TO JOINT VENTURES

Loans to joint ventures are unsecured and are repayable as per the terms of the agreement and do not carry any interest.

• This includes AED 694,540 thousands (31 December 2022: AED 769,483 thousands) which is expected to be recovered after 12 months from the reporting date.

13 INVESTMENT IN JOINT VENTURES

13 INVESTMENT IN JOINT VENTURES
	30 June	31 December
	2023	2022
	AED’000	AED’000
	(Unaudited)	(Audited)
Emaar Dubai South DWC LLC	444,846	406,302
Zabeel Square LLC	234,538	234,538
Old Town Views LLC	112,303	284,780
	───────	────────
Net investment in joint ventures as at period/year end	791,687	925,620
	════════	════════

The Group has the following effective ownership interest in its joint ventures:

	Country of		Ownership
	Incorporation	2023		2022
Emaar Dubai South DWC LLC	UAE	50.00%		50.00%
Zabeel Square LLC	UAE	50.00%		50.00%
Old Town Views LLC	UAE	61.25%		61.25%

24

Emaar Development PJSC and its Subsidiaries

NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS At 30 June 2023 (Unaudited) (continued)

14 TRADE AND OTHER PAYABLES

14 TRADE AND OTHER PAYABLES
	30 June	31 December
	2023	2022
	AED’000	AED’000
	(Unaudited)	(Audited)
Project contract cost accruals and provisions	3,991,398	4,277,366
Payable to related parties (note 18)	2,822,966	3,088,913
Creditors for land purchase	2,283,874	2,241,891
Trade payables (i)	585,914	647,014
Payable to authorities	182,707	115,542
Sales commission payable	136,906	113,339
Other payables and accruals	420,640	455,539
	───────	────────
	10,424,405	10,939,604
	════════	════════

• (i) Trade payables include Supplier factoring facility of AED 17,958 thousands (31 December 2022: AED 71,516 thousands) under which its suppliers elect to receive early payment of their invoice from a bank by factoring their receivable from the Group. Under the arrangement, a bank agrees to pay amounts to participating supplier in respect of invoices owed by the Group and receives settlement from the Group at a later date.

15 INTEREST-BEARING LOANS AND BORROWINGS

15 INTEREST-BEARING LOANS AND BORROWINGS
	30 June	31 December
	2023	2022
	AED’000	AED’000
	(Unaudited)	(Audited)
Balance at the beginning of the period/year	895,819	3,260,508
Add: Borrowings drawn down during the period/year	850,090	4,598,904
Less: Repaid during the period/year	(1,742,236)	(6,963,593)
	──────	──────
Balance at the end of the period/year	3,673	895,819
Less: Unamortised portion of directly attributable costs	(3,043)	(3,743)
	──────	──────
Net interest-bearing loans and borrowings at the end of the period/year	630	892,076
	═══════	═══════
Interest-bearing loans and borrowings maturity profile:
Within 12 months	-	42,236
After 12 months	630	849,840
	──────	──────
	630	892,076
	═══════	═══════

During 2019, the Group had availed 6-year Revolving credit facility (“RCF facility” or “old facility”) of USD 1,000,000 thousands (AED 3,673,000 thousands) . This unsecured RCF facility carried interest rate at 3 months LIBOR plus 1.25% per annum. During the year 2022, the outstanding amount from old facility was settled in full.

During 2022, the Group had obtained two new facilities aggregating to AED 3,673,000 thousands. The tenure of these new facilities is for a period of six years from the date of the agreements and carry profit rates of 1 or 3 month EIBOR plus a margin of 1%. These facilities are guaranteed by the Parent Company. The outstanding amount from these facilities as at 30 June 2023 is AED 3,673 thousand (31 December 2022: AED 853,583 thousand).

During 2022, the Group also executed short term facility of AED 600,000 thousands. This facility carries interest of EIBOR plus 1% per annum and is secured by a corporate guarantee from the Parent Company. As at 30 June 2023 and as at 31 December 2022, the Group has neither drawn down nor availed any amount from the facility.

As at 30 June 2023, included under interest-bearing loans and borrowings is Nil (31 December 2022: AED 42,236 thousands) which represents facilities obtained from various commercial banks in the UAE and is repayable on demand.

25

Emaar Development PJSC and its Subsidiaries

NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS At 30 June 2023 (Unaudited) (continued)

16 GUARANTEES AND CONTINGENCIES

The Group has provided a performance guarantee of AED 5,498,902 thousands (31 December 2022: AED 5,587,887 thousands) to the Real Estate Regulatory Authority (RERA), Dubai for its projects as per RERA regulations.

17 COMMITMENTS

At 30 June 2023, the Group had commitments of AED 7,591,788 thousands (31 December 2022: AED 5,997,623 thousands) . This represents the value of contracts entered into by the Group including contracts entered into for purchase of plots of land at period/year end, net of invoices received and accruals made at that date.

Furthermore, in accordance with the Development Agreement entered by the Group with Mina Rashid Properties LLC, the Group has a commitment to pay 30% of future profits over the project life cycle of Mina Rashid Properties LLC Project.

There were certain claims submitted by contractors relating to various projects of the Group in the ordinary course of business from which it is anticipated that no material unprovided liabilities will arise.

18 RELATED PARTY DISCLOSURES

For the purpose of these interim condensed consolidated financial statements, parties are considered to be related to the Group, if the Group has the ability, directly or indirectly, to control the party or exercise significant influence over the party in making financial and operating decisions, or vice versa, or where the Group and the party are subject to common control or common significant influence. Related parties may be individuals or other entities.

Related party transactions

During the period, the following were the significant related party transactions, which were carried out in the normal course of business on terms agreed between the parties:

course of business on terms agreed between the parties:
	Six-month	period ended
	──────────────────
	30 June	30 June
	2023	2022
	AED’000	AED’000
	(Unaudited)	(Unaudited)
Parent:
Revenue (refer (ii) below)	509,316	415,542
Selling, general and administrative expenses (refer (i) below)	144,676	229,420
Finance cost (refer (iii) below)	67,561	27,327
	═══════	═══════
Affiliated entities:
Selling, general and administrative expenses	35,298	17,670
Property development expenses	94,916	39,661
	═══════	═══════
Joint Venture:
Revenue	6,542	9,699
	═══════	═══════

26

NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS At 30 June 2023 (Unaudited) (continued)

Emaar Development PJSC and its Subsidiaries

18 RELATED PARTY DISCLOSURES (continued)

Related party balances

Significant related party balances (and the interim condensed consolidated statement of financial position captions within which these are included) are as follows:

which these are included) are as follows:
	30 June	31 December
	2023	2022
	AED’000	AED’000
	(Unaudited)	(Audited)
Parent:
Other assets, receivables, deposits and prepayments (refer (ii) below)	791,820	1,299,008
Trade and other payables (refer (iii) below)	2,799,746	3,057,228
	═══════	═══════
Affiliated entities:
Other assets, receivables, deposits and prepayments	86,824	118,551
Trade and other payables	23,220	31,685
	═══════	═══════

(i) Allocation of corporate expenses:

The Parent Company has provided certain corporate functions to the Group and costs associated with these functions were allocated to the Group. These functions included human resources, treasury, investor relations, finance and accounting, compliance, information technology, corporate and legal compliance, business development and marketing. As per Relationship Agreement, corporate expenses are allocated by the Parent on the basis of 3% of revenue of the Group. This net balance is recoverable on demand.

(ii) Recoverable from the Parent Company:

This mainly represents balances recoverable from the Parent with respect to the development costs incurred for the Build-to-sell (BTS) developments in Dubai Creek Harbour project. As agreed in the Master Transfer Agreement (MTA), the Parent has transferred the development services and profit relating to the BTS development in Dubai Creek Harbour project to the Company, for which the development costs including infrastructure costs are incurred by the Company.

(iii) Payable to the Parent Company:

Amount due to the Parent Company is unsecured and is repayable on demand. This includes AED 2,200,750 thousands (31 December 2022: AED 2,584,750 thousands) which carries interest rate at EIBOR plus 1% per annum (31 December 2022: LIBOR plus 1.4% per annum). Also refer Note 14. The Group has total credit facility of USD 1,350,000 thousands (AED 4,958,550 thousands).

Compensation of key management personnel

The remuneration of key management personnel during the period was as follows:

	30 June	30 June
	2023	2022
	AED’000	AED’000
	(Unaudited)	(Unaudited)
Short-term benefits	28,617	21,162
Employees’ end-of-service benefits	1,110	1,610
	─────	─────
	29,727	22,772
	══════	═════

27

Emaar Development PJSC and its Subsidiaries

NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS At 30 June 2023 (Unaudited) (continued)

19 FAIR VALUES OF FINANCIAL INSTRUMENTS

Financial instruments comprise financial assets and financial liabilities.

Financial assets of the Group include bank balances and cash, trade and unbilled receivables, loans to joint ventures, other receivables, deposits and due from related parties. Financial liabilities of the Group include interest-bearing loans and borrowings, customer deposits, accounts payable, retentions payable, payable to related parties and other payables.

Fair value of the financial instruments is included at the amounts at which the instruments could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale.

The fair value of the financial assets and liabilities approximate same as their carrying values, largely due to short term maturities of these instruments.

20 DIVIDEND

The Company has paid cash dividend of AED 2,081,000 thousands (AED 0.52025 per share) for the year ended 31 December 2022 as approved by the shareholders of the Company at the Annual General Meeting held on 18 April 2023.

28