Union Properties PJSC — Interim / Quarterly Report 2021

Aug 15, 2021

Detailed analysis of accumulated losses

Date: 14 August 2021 Listed Company Name: Union Properties PJSC (the “Group”) Financial statements Period Q2: Six months ended 30[th] June 2021 Accumulated losses: AED 1,928.7 Million

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Accumulated losses to 44.96% capital ratio:

The main reasons leading to these accumulated losses and their history:

The Group’s total accumulated losses of AED 1,928 Million for the six months period ending 30[th] June 2021 is mainly due to the following elements:

• fair value loss of 2,076 AED related to investment properties recorded in the fiscal year 2017 (correction of gross floor area and decline in the fair value of real estate portfolio)

• Impairment of AED 503 million recorded on the fiscal year 2017 (details given in previous disclosures by the Group)

• General decline of the real estate sector in the UAE

• Material adverse impact of the Covid-19 pandemic on the overall UAE economy and consequently on the activities of the Group

Measures to be taken to address accumulated losses:

The Group is seriously addressing its accumulated losses issue through different measures

• Restructuring of its outstanding debt to reduce the finance cost

• Recovering its outstanding receivables (notably through court and arbitration)

• Continued reduction of its operating costs

• Development of its extensive landbank

• Development of assets with recurring cash flow

• Strong focus on the Group operating subsidiaries

• Potential listing for certain subsidiaries

• Focus on cash generating activities

The Group would like to highlight that these accumulated losses are predominantly due to variations in the valuations of its real estate portfolio (marked to market). These accumulated losses could potentially be recouped in the event of an increase in the prices of lands in Dubai.

Asem Al Jazzazi Company Secretary

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