Union Properties PJSC — Interim / Quarterly Report 2021

May 16, 2021

Union Properties P.J.S.C and its Subsidiaries

Unaudited interim condensed consolidated financial statements 31 March 2021

Union Properties Public Joint Stock Company and its subsidiaries Unaudited interim condensed consolidated financial statements

31 March 2021
Contents Page(s)
Report on review of interim condensed consolidated financial statements ........................................... 1
Interim condensed consolidated statement of profit or loss and other comprehensive income ........... 2
Interim condensed consolidated statement of financial position ........................................................... 3
Interim condensed consolidated statement of cash flows ...................................................................... 4
Interim condensed consolidated statement of changes in equity .......................................................... 5
Notes to the interim condensed consolidated financial statements ................................................ 6 - 16

P.O. Box 5713 Abu Dhabi - UAE auh@mazars.ae Tel: +971 2 665 5035 www.mazars.com

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REPORT ON REVIEW OF INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS TO THE SHAREHOLDERS OF UNION PROPERTIES P.J.S.C

Introduction

We have reviewed the accompanying interim condensed consolidated financial statements of Union Properties P.J.S.C (the “Company” ) and its subsidiaries (together referred to as the “Group” ) which comprise the interim condensed consolidated statement of financial position as at March 31, 2021, the related interim condensed consolidated statement of profit or loss and other comprehensive income, the interim condensed consolidated statement of changes in equity and interim condensed consolidated statement of cash flows for the three months period then ended and a summary of significant accounting policies and other explanatory notes. Management is responsible for the preparation and fair presentation of these interim condensed consolidated financial statements in accordance with International Accounting Standard 34 – Interim Financial Reporting (IAS 34) as issued by International Accounting Standard Board (IASB). Our responsibility is to express a conclusion of these interim condensed consolidated financial statements based on our review.

Scope of review

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

Basis for qualified conclusion

The Group had attempted a review of the Masterplan for Dubai Motorcity in the years 2019 and 2020 and had submitted it for approval to the concerned regulatory authorities, a formal request for the issuance of revised affection plans with amended gross floor areas (GFA’s). The Group had expected to receive the regulatory approval on the revised affection plans in near future and accordingly had assumed such approval in the inclusion of the GFAs in the valuation of Motorcity land bank. These treatments are departure from IFRS 13 - Fair Value Measurement. Consequently, the investment properties and equity are overstated by an amount of AED 1,249 million as of January 1, 2021 and March 31, 2021.

Qualified conclusion

Based on our review, except for the possible effects of the matter described in the basis of qualified conclusion paragraph section in our report, nothing has come to our attention that causes us to believe that the accompanying interim condensed consolidated financial statements are not prepared, in all material respects, in accordance with IAS 34.

For: MAZARS Chartered Accountants LLC (Abu Dhabi Br.1)

By: Jaffer A. Rupawala Registered Auditor Number: 852 Abu Dhabi, May 15, 2021

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Mazars Chartered Accountants LLC Registered with the Department of Economic Development, License No. CN 1554165

Union Properties Public Joint Stock Company and its subsidiaries

Interim condensed consolidated statement of profit or loss and other comprehensive income (unaudited)

For the three-month period ended 31 March 2021

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Three-month period ended 31
March
2021 2020
Notes AED’000 AED’000
Revenue from contracts with customers 16 98,259 112,532
Net gain/(loss) on financial instruments at FVTPL 9 2,780 (63,980)
Gain/(loss) on disposal of investment properties 6 6,966 (19,500)
Finance income 512 58
Other income 5 22,850 984
Direct costs 16 (77,742) (83,091)
Administrative and general expenses 16 (25,392) (29,726)
Finance cost 16 (22,680) (39,145)
Profit/(loss) for the period 5,553 (121,868)
- -
Other comprehensive income for the period
Total comprehensive income/(loss) for the period 5,553 (121,868)
Basic and diluted earnings per share (AED) 11 0.0013 (0.0284)
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The notes from 1 to 18 form an integral part of these interim condensed consolidated financial statements.

2

Union Properties Public Joint Stock Company and its subsidiaries Interim condensed consolidated statement of financial position

As at 31 March 2021

Notes ASSETS Non-current assets Property, plant and equipment Right-of-use assets Investment properties 6 Development properties Investments in an associate Investments at fair value through profit or loss 9 Non-current receivables 7 Total non-current assets Current assets Investments at fair value through profit or loss 9 Inventories Contract assets Trade and other receivables 7 Due from related parties 8 Cash and cash equivalents 10 Total current assets Total assets EQUITY AND LIABILITIES Equity Share capital Statutory reserve Asset revaluation surplus Accumulated losses Total equity attributable to the shareholders of the Company Non-current liabilities Non-current portion of bank loans 12 Contract liabilities Lease liabilities Provision for staff terminal benefits Total non-current liabilities Current liabilities Trade and other payables 13 Contract liabilities Lease liabilities Bank overdrafts 14 Current portion of bank loans 12 Total current liabilities Total liabilities Total equity and liabilities	Unaudited 31 March 2021 AED’000 347,848 25,201 4,598,904 7,504 87,368 117,282 5,167 5,189,274 35,595 7,631 216,274 440,383 7,648 49,992 757,523 5,946,797 4,289,540 352,978 212,689 (1,955,520) 2,899,687 425,741 8,118 18,843 34,691 487,393 1,240,340 86,788 4,711 195,205 1,032,673 2,559,717 3,047,110 5,946,797	Audited 31 December 2020 AED’000 348,076 26,371 4,612,744 7,504 87,368 114,608 33,194
		5,229,865
		37,276 7,913 218,864 394,888 7,648 45,400
		711,989
		5,941,854
		4,289,540 352,978 212,689 (1,961,073)
		2,894,134
		463,056 8,118 20,333 32,935
		524,442
		1,237,010 88,692 5,084 192,235 1,000,257
		2,523,278
		3,047,720
		5,941,854

.

The interim condensed consolidated financial statements were authorised for issue on 15 May 2021 by the Board of Directors and signed on its behalf by:

____ ______ Board Member General Manager

The notes from 1 to 18 form an integral part of these interim condensed consolidated financial statements.

3

Union Properties Public Joint Stock Company and its subsidiaries Interim condensed consolidated statement of cash flows (unaudited)

For the three-month period ended 31 March 2021

Note Operating activities Profit/(loss) for the period Adjustments for: Depreciation of property, plant and equipment Depreciation of right of use assets (Profit)/loss on sale of investment properties (Gain)/loss on financial instruments at FVTPL, net Finance income Finance cost Operating profit before working capital changes Change in inventories Change in contract assets Change in trade and other receivables Change in non-current payables Change in trade and other payables and contract liabilities Change in staff terminal benefits (net) Net cash from operating activities Investing activities Additions to property, plant and equipment Proceeds from/investments in financial instruments at FVTPL, net Proceeds from disposal of property, plant and equipment Proceeds from sale of investment properties Interest income received Changes in deposits with banks Net cash from investing activities Financing activities Proceed from long-term bank loans Repayment of long-term bank loans Interest paid Net cash used in financing activities Net increase in cash and cash equivalents Cash and cash equivalents at the beginning of the period Cash and cash equivalents at the end of the period 10	Three-month period ended 31 March	Three-month period ended 31 March
	2021 AED’000 5,553 2,635 1,169 (6,966) (2,780) (512) 22,680 21,779 282 19,373 (25,435) 270 (3,706) 1,756 14,319 (3,216) 1,787 1,300 - 19 3,646 3,536 14,779 (19,678) (4,203) (9,102) 8,753 (172,765) (164,012)	2020 AED’000 (121,868) 3,453 1,233 19,500 63,980 (58) 39,145
		5,385 (1,564) 19,159 (3,891) 16,628 (26,951) 825
		9,591
		(1,385) 2,099 - 30,000 - (1,729)
		28,985
		22,061 (47,583) (11,888)
		(37,410)
		1,166 (247,895)
		(246,729)

The notes from 1 to 18 form an integral part of these interim condensed consolidated financial statements.

4

Union Properties Public Joint Stock Company and its subsidiaries

Interim condensed consolidated statement of changes in equity (unaudited)

For the three-month period ended 31 March 2021

At 1 January 2020 (audited) Total comprehensive loss for the period At 31 March 2020 (unaudited) At 1 January 2021 (audited) Total comprehensive income for the period At 31 March 2021 (unaudited)	Share capital AED’000 4,289,540 - 4,289,540 4,289,540 - 4,289,540	Statutory reserve AED’000 332,880 - 332,880 352,978 - 352,978	Currency translation reserve AED’000 15,508 - 15,508 - - -	Asset revaluation surplus (Restated) AED’000 212,689 - 212,689 212,689 - 212,689	Accumlated losses AED’000 (2,141,959) (121,868) (2,263,827) (1,961,073) 5,553 (1,955,520)	Total AED’000 2,708,658 (121,868)
						2,586,790
						2,894,134 5,553
						2,899,687

The notes from 1 to 18 form an integral part of these interim condensed consolidated financial statements.

5

Union Properties Public Joint Stock Company and its subsidiaries Notes to the interim condensed consolidated financial statements

1 LEGAL STATUS AND PRINCIPAL ACTIVITIES

Union Properties Public Joint Stock Company (“the Company”) was incorporated on 28 October 1993 as a public joint stock company by a United Arab Emirates Ministerial decree. The Company’s registered office address is P.O. Box 24649, Dubai, United Arab Emirates (“UAE”).

The principal activities of the Company are investment in and development of properties, the management and maintenance of owned properties including the operation of cold stores, the undertaking of property related services on behalf of other parties (including related parties) and acting as the holding company of its subsidiaries and investing in other entities.

The Company and its subsidiaries are collectively referred to as “the Group”.

2 NEW STANDARDS, AMENDMENT TO STANDARDS AND INTERPRETATIONS

There are no new standards issued, however, there are number of amendments to standards which are effective from January 1, 2021 and has been explained in Group annual consolidated financial statements as at year ended December 31, 2020 but they do not have a material impact on the Group’s interim condensed consolidated financial statements.

3 BASIS OF PREPARATION AND SIGNIFICANT ACCOUNTING POLICIES

The interim condensed consolidated financial statements of the Group are prepared in accordance with International Accounting Standard 34: Interim Financial Reporting and applicable requirements of the United Arab Emirates laws.

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 2020. 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.

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.

The interim condensed consolidated financial statements have been prepared on a historical cost basis except for financial assets at fair value through profit and loss and investment properties that have been measured at fair value. Historical cost is generally based on the fair value of the consideration given in exchange for assets.

The results for the three-month period ended 31 March 2021 are not necessarily indicative of the results that may be expected for the financial year ending 31 December 2020.

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Union Properties Public Joint Stock Company and its subsidiaries Notes to the interim condensed consolidated financial statements (continued)

4 SIGNIFICANT ACCOUNTING ESTIMATES AND JUDGEMENTS

The preparation of interim condensed consolidated financial statements requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expense. Actual results may differ from these estimates.

In preparing these interim condensed consolidated financial statements, the significant judgements made by the management in applying the Group’s accounting policies and the key sources of estimation uncertainty were the same as those that applied to the consolidated financial statements for the year ended 31 December 2020.

5 OTHER INCOME

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Unaudited Audited
31 March 2021 31 March 2020
-
Reversals of liabilities (refer note below) 20,298
Miscellaneous income 2,552 984
22,850 984
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The reversals of liabilities are mainly related to payables and accruals in relation to completed projects and cancelation of contracts for which management assessed that no settlement will be required against.

6 INVESTMENT PROPERTIES

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Unaudited Audited
31 March 2021 31 December 2020
AED’000 AED’000
At 1 January 4,612,744 4,111,636
-
Transfer from property, plant and equipment 8,570
Gain on fair valuation - 743,549
Sale of investment properties (13,840) (251,011)
Closing balance 4,598,904 4,612,744
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The Group follows the fair value model under IAS 40 (Revised 2003) where investment property defined as land and buildings owned for the purpose of generating rental income or capital appreciation, or both, are fair valued based on an open market valuation. The most recent valuation was carried out on 31 December 2020 by an independent registered valuer, ValuStrat Consulting FZCO, who carried out the valuation in accordance with RICS Appraisal and the Valuation Manual issued by the Royal Institute of Chartered Surveyors.

During the three-month period ended 31 March 2021, investment properties with a carrying value of AED 13.8 million were disposed of for a consideration of AED 20.8 million resulting in a profit of AED 7 million.

During the previous year, the Company had undertaken a full review of the Masterplan for Dubai Motorcity. The Company had submitted a formal request to the concerned regulatory authorities for the issuance of revised affection plans with amended Gross Floor Areas (the “GFA’s”). The Company expected to receive the necessary approvals on the revised affection plans in the near future and accordingly adopted the inclusion of this GFA to the value of AED 1,249 Million in the valuation of the Motorcity land bank for the Group financial statements as at 31 December 2020.

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Union Properties Public Joint Stock Company and its subsidiaries Notes to the interim condensed consolidated financial statements (continued)

6 INVESTMENT PROPERTIES (CONTINUED)

In accordance with the directions of Dubai Development Authority, the company had appointed independent third party surveyors to perform a detailed survey of the entire land bank at Dubai Motorcity. Based on the official third party surveyor report that was issued and received during the current year, the Company has got an attestation from Dubai Land for an additional GFA and accordingly adopted the inclusion of this additional GFA to the value of AED 1,249 Million in the valuation of the Motorcity land bank for the Group financial statements as at 31 March 2021 (31 December 2020: AED 1,249 million).

7 TRADE AND OTHER RECEIVABLES

Financial instruments Trade receivables Retention receivables Property sales receivables Less: allowance for expected credit losses Other receivables Total (A) Non-financial instruments Advances to contractors Advances to banks against loan principal and interest Prepayments and advances Total (B) Total (A+B)	Unaudited 31 March 2021 AED’000 2,019,657 52,860 38,520 2,111,037 (1,837,944) 273,093 46,808 319,901 23,724 70,000 26,758 120,482 440,383	Audited 31 December 2020 AED’000 1,955,931 52,059 46,104
		2,054,094 (1,837,352)
		216,742 64,441
		281,183
		26,241 70,000 17,464
		113,705
		394,888
Non-current receivables

Non-current receivables
Retention receivables Property sales receivables	Unaudited 31 March 2021 AED’000 5,167 - 5,167	Audited 31 December 2020 AED’000 5,167 28,027
		33,194

Impairment losses

Set out below is the information about the credit risk exposure on the Group’s trade and retention receivables using a provision matrix:

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Union Properties Public Joint Stock Company and its subsidiaries Notes to the interim condensed consolidated financial statements (continued)

7 TRADE AND OTHER RECEIVABLES (CONTINUED)

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Trade receivables
Past due
Retentions 1-90 91-365 >365
receivable Current days days days Total
AED’000 AED’000 AED’000 AED’000 AED’000 AED’000
31 March 2021
Expected credit loss rate 69.72% 0.00% 0.00% 0.00% 99.35%
Gross amount 58,027 114,748 28,090 106,044 1,809,295 2,116,204
Expected credit loss 40,456 - - - 1,797,488 1,837,944
31 December 2020
Expected credit loss rate 81.76% 3.59% 14.79% 7.75% 98.51%
Gross amount 57,226 72,981 58,632 100,900 1,787,549 2,077,288
Expected credit loss 40,456 - 11,094 11,095 1,774,707 1,837,352
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The movement in the allowance for expected credit losses in respect of trade and retention receivables during the period/year is as follows:

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Unaudited Audited
31 March 2021 31 December 2020
AED’000 AED’000
At 1 January 1,837,352 1,831,650
Addition for the period/year 592 7,991
Amounts written off - (2,289)
Closing balance 1,837,944 1,837,352
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8 TRANSACTIONS WITH RELATED PARTIES

The Group, in the normal course of business, enters into transactions with other enterprises, which fall within the definition of a related party contained in IAS 24. Such transactions are carried out at agreed rates. The significant transactions with related parties, other than those already disclosed separately elsewhere in the interim condensed consolidated financial statements are as follows:

Compensation to key management personnel are as follows : - Salaries and other short-term employee benefits - Provision towards staff terminal benefits	Unaudited 31 March 2021 AED’000 2,649 188	Unaudited 31 March 2020 AED’000 2,567 161

Balances with related parties in the consolidated statement of financial position represent balances due from an equity accounted investee of AED 7.6 million (31 December 2020: AED 7.6 million) and during the three-month period ended 31 March 2021, other related parties amounting to 31.5 million were classified as trade receivables.

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Union Properties Public Joint Stock Company and its subsidiaries Notes to the interim condensed consolidated financial statements (continued)

9 INVESTMENTS AT FAIR VALUE THROUGH PROFIT OR LOSS

The Group holds investment securities which are classified as investments at fair value through profit or loss in accordance with IFRS 9.

During the three-month period ended 31 March 2021, the Group sold investments in funds and invested in various listed equity investments, having a fair value of AED 152.9 million at the reporting date (31 December 2020: AED 151.9 million), which resulted in a net profit on change in fair value of AED 2.8 million during the month period ended 31 March 2021 (2020: net loss of AED 64 million) .

The Group also has an investment in a real estate fund valued at AED 0.8 million at end of the period (2020: AED 0.8 million) .

As at 31 March 2021, investments amounting to AED 117.3 million were classified as non-current assets in the interim consolidated statement of financial position as the management intends to hold those investments for a period exceeding 12 months from the reporting date.

10 CASH AND CASH EQUIVALENTS

Cash in hand Cash at bank –in deposit accounts held under lien –in current accounts – in other deposit accounts	Unaudited 31 March 2021 AED’000 1,683 18,799 21,109 8,401 49,992	Audited 31 December 2020 AED’000 889 14,781 18,581 11,149 45,400 Audited 31 December 2020 AED’000 19,470 (192,235)
Cash and cash equivalents comprise: Cash in hand and at banks (excluding deposits under lien) Bank overdrafts	Unaudited 31 March 2021 AED’000 31,193 (195,205) (164,012)
		(172,765)

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Union Properties Public Joint Stock Company and its subsidiaries Notes to the interim condensed consolidated financial statements (continued)

11 BASIC AND DILUTED EARNINGS PER SHARE

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Unaudited
Three month period ended 31 March
2021 2020
Profit/(loss) attributable to shareholders (AED’000) 5,553 (121,868)
Weighted average number of shares 4,289,540,134 4,289,540,134
Basic and diluted earnings per share (AED) 0.0013 (0.0284)
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12 BANK LOANS
Unaudited Audited
31 March 2021 31 December 2020
AED’000 AED’000
Balance 1,458,414 1,463,313
Less: Current portion (1,032,673) (1,000,257)
Non-current portion 425,741 463,056
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The bank loans carry interest at commercial rates.

The movement in bank loans during the period/year was as follows:

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Unaudited Audited
31 March 2021 31 December 2020
AED’000 AED’000
At 1 January 1,463,313 1,518,304
Availed during the period/year 14,779 47,697
Repayments during the period/year (19,678) (102,688)
At the end of the period/year 1,458,414 1,463,313
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At 31 March 2021, the two loans that have been classified as current liabilities at year-ended 2020 due to breach in contractual payments continue to be classified as current liabilities. Subsequent to 31 March 2021, the Group is in advanced discussions with the bank to rectify the breach.

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Union Properties Public Joint Stock Company and its subsidiaries Notes to the interim condensed consolidated financial statements (continued)

13 TRADE AND OTHER PAYABLES

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Unaudited Audited
31 March 2021 31 December 2020
AED’000 AED’000
Financial instruments
Trade payables 317,311 323,471
Retention payables 39,494 39,355
Other payables and accruals 883,535 874,184
Total 1,240,340 1,237,010
Unaudited Audited
31 March 2021 31 December 2020
AED’000 AED’000
Provisions and accruals against contracting business 563,558 518,870
Provision for staff related payables 35,821 36,504
Provisions and accruals for payment to contractors cost 36,763 36,504
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14 BANK OVERDRAFTS

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Unaudited Audited
31 March 2021 31 December 2020
AED’000 AED’000
Bank overdrafts 195,205 192,235
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Significant terms and conditions

Bank overdrafts have been obtained from local and foreign banks to finance the working capital requirements of the Group, which carry interest at commercial rates.

Securities

Bank overdrafts are secured by:

• Promissory notes;

• Joint and several guarantees of the Company;

• A letter of undertaking by the Company not to reduce its shareholding in Thermo LLC (“a subsidiary”) as long as the banking facilities are outstanding; and

• Assignment of certain contract and retention receivables.

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Union Properties Public Joint Stock Company and its subsidiaries Notes to the interim condensed consolidated financial statements (continued)

15 FINANCIAL INSTRUMENTS

Financial assets of the Group include non-current receivables, investments at FVTPL, trade and other receivables, amounts due from related parties and cash in hand and at banks. Financial liabilities of the Group include trade and other payables, security deposits, lease liabilities, short-term bank borrowings, long-term bank loans and non-current payables. The table below sets out the Group’s classification of each class of financial assets and financial liabilities and their fair values for the current and the comparative periods:

31 March 2021 (unaudited) Financial assets Non-current receivables Investments at FVTPL Trade and other receivables Due from related parties Cash in hand and at banks Total Financial liabilities Trade and other payables Lease liabilities Bank overdrafts Bank loans Total	At fair value through profit or loss AED’000 - 152,877 - - - 152,877 - - - - -	At amorized cost AED’000 5,167 - 319,901 7,648 49,992 382,708 1,240,340 23,554 195,205 1,458,414 2,917,513	Carrying amount AED’000 5,167 152,877 319,901 7,648 49,992 535,585 1,240,340 23,554 195,205 1,458,414 2,917,513	Fair value AED’000 5,167 152,877 319,901 7,648 49,992
				535,585
				1,240,340 23,554 195,205 1,458,414
				2,917,513
31 December 2020 (audited) Financial assets Non-current receivables Investments at FVTPL Trade and other receivables Due from related parties Cash in hand and at banks Total Financial liabilities Trade and other payables Bank overdrafts Bank loans Lease liabilities Total	At fair value through profit or loss AED’000 - 151,884 - - - 151,884 - - - - -	At amorized cost AED’000 33,194 - 281,183 7,648 45,400 367,425 1,237,010 192,235 1,463,313 25,417 2,917,975	Carrying amount AED’000 33,194 151,884 281,183 7,648 45,400 519,309 1,237,010 192,235 1,463,313 25,417 2,917,975	Fair value AED’000 33,194 151,884 281,183 7,648 45,400
				519,309
				1,237,010 192,235 1,463,313 25,417
				2,917,975

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Union Properties Public Joint Stock Company and its subsidiaries Notes to the interim condensed consolidated financial statements (continued)

15 FINANCIAL INSTRUMENTS (CONTINUED)

Fair value hierarchy

The table below analyses financial instruments carried at fair value, by valuation method. The different levels have been defined as follows:

• Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities;

• Level 2: 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); and

• Level 3: Inputs for the asset or liability that are not based on observable market data (unobservable inputs).

The Group holds investments at fair value through profit or loss. The fair value of quoted securities is determined by reference to their quoted bid prices as at the reporting date. Investments in marketable securities are stated at cost where no observable market data is available. Accordingly, the fair value hierarchy is set out as below:

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Level 1 Level 3 Total
AED'000 AED'000 AED'000
31 March 2021 (unaudited)
Investments at fair value through profit or loss 152,121 756 152,877
31 December 2020 (audited)
Investments at fair value through profit or loss 151,128 756 151,884
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There have been no reclassifications made during the current period or in the previous year/period.

Level 1:

Opening balance Additions Disposals Transfer from investment in associate Total gains or losses – net: Closing balance	Unaudited 31 March 2021 AED’000 151,128 112,000 (113,787) - 2,780 152,121	Audited 31 December 2020 AED’000 196,164 830,395 (833,313) 1,213 (43,331) 151,128	Unaudited 31 March 2020 AED’000 197,512 238,738 (240,837) - (63,980)
			131,433

16 SEGMENT REPORTING

Business segments

The Group’s activities include four main business segments, namely, real estate property management, contracting activities, investing activities, and sales of goods and services. The details of segment revenue, segment result, segment assets and segment liabilities are as follows:

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Union Properties Public Joint Stock Company and its subsidiaries Notes to the interim condensed consolidated financial statements (continued)

16 SEGMENT REPORTING (CONTINUED)

Three months period ended 31 March 2021 (unaudited) Segment revenue Gain on financial instruments at FVTPL Gain on sale of investment properties Finance income Other income Direct cost Administrative and general expenses Finance cost Profit/(loss) for the period Capital expenditure Depreciation of property, plant and equipment Depreciation of right of use assets As at 31 March 2021 (unaudited) Segment assets Investments in associates Total assets Segment liabilities Three months period ended 31 March 2020 (unaudited) Segment revenue Loss on financial instruments at FVTPL Loss on sale of investment properties Finance income Other income Direct cost Administrative and general expenses Finance cost Profit/(loss) for the period Capital expenditure Depreciation of property, plant and equipment Depreciation of right of use assets As at 31 December 2020 (audited) Segment assets Investment in associates Total assets Segment liabilities	Real estate AED’000 11,145 - 6,966 493 21,315 (8,682) (13,196) (10,760) 7,281 1,224 1,004 940 4,868,250 - 4,868,250 1,155,430 18,478 - (19,500) 40 779 (9,677) (17,018) (15,980) (42,878) 584 1,953 1,007 4,865,732 - 4,865,732 1,212,680 ~~1212680~~	Contracting AED’000 12,747 - - 19 114 (10,439) (2,184) (9,243) (8,986) 215 517 - 284,614 - 284,614 1,592,349 21,208 - - 18 2 (17,470) (1,976) (11,183) (9,401) 524 808 - 285,016 - 285,016 1,536,599 ~~1536599~~	Goods and services AED’000 74,367 - - - 1,415 (58,621) (8,810) (1,394) 6,957 1,777 1,078 229 554,079 - 554,079 191,319 72,846 - - - 194 (55,944) (8,489) (759) 7,848 277 672 226 552,222 - 552,222 191,024 ~~191024~~	Investments AED’000 - 2,780 - - 6 - (1,202) (1,283) 301 - 36 - 152,486 87,368 239,854 108,012 - (63,980) - - 9 - (2,243) (11,223) (77,437) - 20 - 151,516 87,368 238,884 107,417 ~~107417~~	Total
					AED’000 98,259 2,780 6,966 512 22,850 (77,742) (25,392) (22,680)
					5,553
					3,216 2,635 1,169
					5,859,429 87,368
					5,946,797
					3,047,110
					112,532 (63,980) (19,500) 58 984 (83,091) (29,726) (39,145)
					(121,868)
					1,385 3,453 1,233
					5,854,486 87,368
					5,941,854
					3,047,720

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Union Properties Public Joint Stock Company and its subsidiaries Notes to the interim condensed consolidated financial statements (continued)

17 CAPITAL COMMITMENTS AND CONTINGENT LIABILITIES

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Unaudited Audited
31 March 2021 31 December 2020
AED’000 AED’000
Company and its subsidiaries
Commitments:
Capital commitments 9,415 12,015
Contingent liabilities:
Letters of guarantee 305,673 309,960
Associate
Contingent liabilities:
Letters of guarantee 252,500 252,500
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18 COVID-19 IMPACT

The existence of novel coronavirus (Covid-19) was confirmed in early 2020 and its spread across the globe is causing disruptions to businesses and economic activity. During the current period, the Group has not witnessed any material impact on overall business, therefore, management is not anticipating any steep reduction in gross turnover during the rest of the year.

The Group has implemented procedures and protocols during the situation. Remote working plans have been initiated and measures were taken to ensure uninterrupted business.

The Group will continue to monitor impact on its operations and will take necessary actions as needed.

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