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Aldar Properties PJSCINTERIM CONDENSED CONSOLIDATED

FINANCIAL STATEMENTS

30 JUNE 2016

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Aldar Properties PJSC

INTERIM CONSOLIDATED INCOME STATEMENTFor the period ended 30 June 2016 (Unaudited)

Three months ended 30 June Six months ended 30 June

2016 2015 2016 2015Notes AED’000 AED’000 AED’000 AED’000

Revenue 1,695,915 1,105,633 2,927,912 2,284,773Direct costs (1,003,391) (612,023) (1,693,742) (1,193,257)

GROSS PROFIT 692,524 493,610 1,234,170 1,091,516

Selling and marketing expenses (6,171) (9,584) (29,258) (16,701)

General and administrative expenses Staff costs (57,810) (60,406) (117,871) (117,107) Depreciation and amortisation (52,355) (50,801) (100,642) (101,841) (Provisions, impairments and write downs) / reversal - net 16 (26,040) (34,327) 21,819 (32,302) Others (26,145) (24,395) (45,274) (48,247)

Share of profit from associates and joint ventures 7 16,278 20,868 34,042 40,012Fair value loss on investment properties 6 (29,900) (30,031) (69,525) (51,384)Gain on disposal of investment properties 565 6,113 15,119 14,493Finance income 29,590 21,194 58,096 39,064Finance costs 17 (58,828) (61,533) (117,918) (123,689)Other income 18 172,493 330,350 425,605 477,951

PROFIT FOR THE PERIOD 654,201 601,058 1,308,363 1,171,765

Attributable to:Owners of the Company 657,380 599,171 1,306,640 1,167,895Non-controlling interests (3,179) 1,887 1,723 3,870

654,201 601,058 1,308,363 1,171,765

Basic and diluted earnings per share attributable to owners of the Company in AED 19 0.084 0.076 0.166 0.149

The attached notes 1 to 24 form part of these interim condensed consolidated financial statements.

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INTERIM STATEMENT OF COMPREHENSIVE INCOMEFor the period ended 30 June 2016 (Unaudited)

Three months ended 30 June Six months ended 30 June2016 2015 2016 2015

AED’000 AED’000 AED’000 AED’000

Profit for the period 654,201 601,058 1,308,363 1,171,765

Other comprehensive (expense) / income to be reclassified to profit or loss in subsequent periods: (Loss) / gain on revaluation of available-for-sale

financial assets (555) 1,158 975 649 Increase in fair value of cash flow hedges 2,542 2,033 811 8,989

Other comprehensive income 1,987 3,191 1,786 9,638

TOTAL COMPREHENSIVE INCOME FOR THE PERIOD 656,188 604,249 1,310,149 1,181,403

Total comprehensive income attributable to:Owners of the Company 659,367 602,362 1,308,426 1,177,533Non-controlling interests (3,179) 1,887 1,723 3,870

656,188 604,249 1,310,149 1,181,403

The attached notes 1 to 24 form part of these interim condensed consolidated financial statements.

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INTERIM CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWSFor the period ended 30 June 2016 (Unaudited)

Six months ended 30 June

2016 2015Note AED’000 AED’000

Net cash generated from operating activities 323,239 3,544,842

INVESTING ACTIVITIESPayments for purchase of property, plant and equipment (132,608) (31,176)Payments for purchase of intangible assets (1,342) (1,880)Additions to investment properties (27,199) (5,216)Proceeds from disposal of available-for-sale financial instruments, net - 3,417Movement in term deposits with original maturities above three months 287,785 (2,347,673)Movement in restricted bank balances 42,410 248,547Proceeds from disposal of investment properties 49,713 11,946Finance income received 30,220 14,055Capital call contributions made against available for sale financial assets (1,067) - Capital repayments received against available for sales financial assets 2,685 -Dividend received 42,037 29,500

Net cash generated from / (used in) investing activities 292,634 (2,078,480)

FINANCING ACTIVITIESDividend paid (838,540) (753,001)Directors' remuneration payments (23,000) (25,000)Repayment of operating lease liability (13,000) -Repayment of borrowings - (2,076,049)Finance costs paid (100,375) (126,138)

Net cash used in financing activities (974,915) (2,980,188)

NET DECREASE IN CASH AND CASH EQUIVALENTS (359,042) (1,513,826)

Cash and cash equivalents at the beginning of the period 1,604,167 3,125,987

CASH AND CASH EQUIVALENTS AT THE END OF THE PERIOD 12 1,245,125 1,612,161

The attached notes 1 to 24 form part of these condensed consolidated financial statements.

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NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTSFor the period ended 30 June 2016 (Unaudited)

1 CORPORATE INFORMATION

The establishment of Aldar Properties PJSC (“the Company”) was approved by Decision No. (16) of 2004 of theAbu Dhabi Department of Planning and Economy dated 12 October 2004. The Company’s incorporation wasdeclared by Ministerial Resolution No. (59) of 2005 issued by the UAE Minister of Economy dated 23 February2005.

The Company is domiciled in the United Arab Emirates and its registered office address is P O Box 51133,Abu Dhabi.

The Company’s ordinary shares are listed on the Abu Dhabi Securities Exchange.

The Company and its subsidiaries (together referred to as “the Group”) are engaged in various businesses primarilythe development, sales, investment, construction, management and associated services for real estate. In addition, theGroup is also engaged in development, construction, management and operation of hotels, schools, marinas and golfcourses.

2 NEW AND REVISED INTERNATIONAL FINANCIAL REPORTING STANDARDS (IFRS)

2.1 Standards issued and adopted

IFRS 16 Leases

The Group has opted for the early adoption of IFRS 16 ‘Leases’ resulting in a change in the policy of the Group inrelation to its lease contracts as lessee (refer note 3 for new accounting policy).

IFRS 16 ‘Leases’ was issued in January 2016 and is effective for annual periods commencing on or after 1 January2019, with early adoption permitted.

IFRS 16 introduces a single lessee accounting model and requires a lessee to recognise assets and liabilities for allleases with a term of more than twelve months, unless the underlying asset is of low value. A lessee is required torecognise a right-of-use asset representing its right to use the underlying leased asset and a lease liabilityrepresenting its obligation to make lease payments. A lessee measures right-of-use assets similarly to other non-financial assets (such as property, plant and equipment) and lease liabilities similarly to other financial liabilities. Asa consequence, a lessee recognises depreciation of the right-of-use asset and interest on the lease liability, and alsoclassifies cash repayments of the lease liability into a principal portion and an interest portion and presents them inthe statement of cash flows applying IAS 7 ‘Statement of Cash Flows’.

IFRS 16 substantially carries forward the lessor accounting requirements of the superseded IAS 17. Accordingly, alessor continues to classify its leases as operating leases or finance leases, and to account for those two types ofleases differently.

The Group has reviewed the impact of IFRS 16 on all its contracts that are, or that contain leases and has elected toearly adopt IFRS 16, with effect from 1 January 2016. The Group has opted for the modified retrospectiveapplication permitted by IFRS 16 upon adoption of the new standard. Accordingly, the standard has been applied forthe period from 1 January 2016 to 30 June 2016 only (i.e. the initial application period). Modified retrospectiveapplication requires the recognition of the cumulative impact of adoption of IFRS 16 on all contracts as at 1 January2016 in equity.

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2 NEW AND REVISED INTERNATIONAL FINANCIAL REPORTING STANDARDS (IFRS)continued

2.1 Standards issued and adopted continued

The details of adjustments to opening retained earnings and other account balances as at 1 January 2016 is detailedbelow.

Consolidated statement of financial position31 December 1 January

2015 Adjustments 2016AED’000 AED’000 AED’000

AssetsInvestment properties (note 6) 15,570,304 331,434 15,901,738

LiabilitiesTrade and other payables 8,291,875 460,071 8,751,946

EquityRetained earnings 8,202,469 (128,637) 8,073,832

Consolidated statement of income statementAs per As per Impact due

IFRS 16 old policy to changeAED’000 AED’000 AED’000

Direct costs for the six months period ended 30 June 2016 (1,693,742) (1,723,037) 29,295

Fair value loss for the six months period ended 30 June 2016 (69,525) (49,567) (19,958)

Finance cost for the six months period ended 30 June 2016 (117,918) (108,310) (9,608)

Profit for the six months period ended 30 June 2016 1,308,092 1,308,363 (271)

Modified retrospective application of IFRS 16 also requires the Group to recognise a lease liability at the date ofinitial application for leases previously classified as an operating lease under the superseded IAS 17 measured at thepresent value of the remaining lease payments, discounted using the Group's incremental borrowing rate at the dateof initial application. The Group has used a 4.5% weighted average incremental borrowing rate for determination ofpresent value of the remaining lease payments. The right-of-use assets have been recognised at an amount equal tothe lease liability, adjusted by the amount of any prepaid or accrued lease payments relating to that lease recognisedin the statement of financial position immediately before the date of initial application.

Based on the allowed practical expedients under IFRS 16, the Group has elected not to apply the requirements ofIFRS 16 in respect of recognition of lease liability and right-of-use asset to leases for which the lease term endswithin twelve months of initial application.

The application of the new policy has required the management to make, amongst others, the following judgments:

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2 NEW AND REVISED INTERNATIONAL FINANCIAL REPORTING STANDARDS (IFRS)continued

2.1 Standards issued and adopted continued

Discount rate used for initial measurement of lease liabilityThe Group, as a lessee, measures the lease liability at the present value of the unpaid lease payments at thecommencement date. The lease payments are discounted using the interest rate implicit in the lease, if that rate canbe readily determined. If that rate cannot be readily determined, the Group uses its incremental borrowing rate.

Incremental borrowing rate is the rate of interest that the Group would have to pay to borrow over a similar term, andwith a similar security, the funds necessary to obtain an asset of a similar value to the right-of-use assets in similareconomic environment.

The Group determines its incremental borrowing rate with reference to its existing and historical cost of borrowingadjusted for the term and security against such borrowing.

2.2 Standards issued but not yet effective

Management anticipates that the adoption of other standards issued but not yet adopted will have no material impacton the consolidated financial statements of the Group.

3 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

3.1 Statement of compliance

The interim condensed consolidated financial statements have been prepared in accordance with InternationalAccounting Standard 34 Interim Financial Reporting and also comply with the applicable requirements of the lawsin the UAE.

The interim condensed consolidated financial statements do not include all the information and disclosures requiredin the annual financial statements, and should be read in conjunction with the Group's consolidated financialstatements for the year ended 31 December 2015. In addition, results for the six-months period ended 30 June 2016are not necessarily indicative of the results that may be expected for the financial year ending 31 December 2016.3.2 Basis of preparation

The interim condensed consolidated financial statements are presented in UAE Dirhams (AED) since that is thecurrency in which the majority of the Group’s transactions are denominated.

These interim condensed consolidated financial statements have been prepared on the historical cost basis, exceptfor the measurement at fair value of financial instruments and investment properties.

The accounting policies used in the preparation of these interim condensed consolidated financial statements areconsistent with those applied to the audited annual consolidated financial statements for the year ended31 December 2015.

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3 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES continued

3.2 Basis of preparation continued

During the period, the Group has applied, for the first time, the following standards and amendments that requirerestatement of previous financial statements. However, except for the early adoption of IFRS 16, they do not impactthe interim condensed consolidated financial statements of the Group.

IFRS 14 Regulatory Deferral AccountsIFRS 11 Joint Arrangements: Accounting for Acquisitions of Interests (Amendment)IAS 16 and IAS 38: Clarification of Acceptable Methods of Depreciation and Amortisation (Amendment)IAS 16 and IAS 41: Property, plant and equipment and Agriculture-Bearer Plants (Amendment)IAS 27: Equity Method in Separate Financial Statements (Amendment)Annual Improvements 2012-2014 Cycle:o IFRS 5 Non-current Assets Held for Sale and Discontinued Operationso IFRS 7 Financial Instruments: Disclosureso IAS 19 Employee Benefitso IAS 34 Interim Financial ReportingAmendments to IAS 1 Disclosure InitiativeIFRS 10, IFRS 12 and IAS 28 Investment Entities: Applying the Consolidation Exception (Amendments).

LeasesAt inception of a contract, the Group assesses whether the contract is, or contains, a lease. A contract is, or contains,a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange forconsideration.

For a contract that is, or contains, a lease, the Group accounts for each lease component within the contract as a leaseseparately from non-lease components of the contract.

The Group determines the lease term as the non-cancellable period of a lease, together with both:

a) periods covered by an option to extend the lease if the lessee is reasonably certain to exercise that option;and

b) periods covered by an option to terminate the lease if the lessee is reasonably certain not to exercise thatoption.

In assessing whether a lessee is reasonably certain to exercise an option to extend a lease, or not to exercise an optionto terminate a lease, the Group considers all relevant facts and circumstances that create an economic incentive forthe lessee to exercise the option to extend the lease, or not to exercise the option to terminate the lease. The Grouprevises the lease term if there is a change in the non-cancellable period of a lease.

The Group as a lesseeFor a contract that contains a lease component and one or more additional lease or non-lease components, the Groupallocates the consideration in the contract to each lease component on the basis of the relative stand-alone price ofthe lease component and the aggregate stand-alone price of the non-lease components.

The relative stand-alone price of lease and non-lease components is determined on the basis of the price the lessor, ora similar supplier, would charge an entity for that component, or a similar component, separately. If an observablestand-alone price is not readily available, the Group estimates the stand-alone price, maximising the use ofobservable information.

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The Group as a lessee continuedThe non-lease components are accounted for in accordance with the Group’s policies.

For determination of the lease term, the Group reassesses whether it is reasonably certain to exercise an extensionoption, or not to exercise a termination option, upon the occurrence of either a significant event or a significantchange in circumstances that:

a) is within the control of the Group; andb) affects whether the Group is reasonably certain to exercise an option not previously included in its

determination of the lease term, or not to exercise an option previously included in its determination of thelease term.

At the commencement date, the Group recognises a right-of-use asset and a lease liability under the lease contract.

Lease liabilityLease liability is initially recognised at the present value of the lease payments that are not paid at thecommencement date. The lease payments are discounted using the interest rate implicit in the lease, if that rate canbe readily determined. If that rate cannot be readily determined, the Group uses its incremental borrowing rate.

After initial recognition, the lease liability is measured by (a) increasing the carrying amount to reflect interest on thelease liability; (b) reducing the carrying amount to reflect the lease payments made; and (c) remeasuring the carryingamount to reflect any reassessment or lease modifications or to reflect revised in-substance fixed lease payments.

Where, (a) there is a change in the lease term as a result of reassessment of certainty to exercise an exercise option,or not to exercise a termination option as discussed above; or (b) there is a change in the assessment of an option topurchase the underlying asset, assessed considering the events and circumstances in the context of a purchase option,the Group remeasures the lease liabilities to reflect changes to lease payments by discounting the revised leasepayments using a revised discount rate. The Group determines the revised discount rate as the interest rate implicit inthe lease for the remainder of the lease term, if that rate can be readily determined, or the its incremental borrowingrate at the date of reassessment, if the interest rate implicit in the lease cannot be readily determined.

Where, (a) there is a change in the amounts expected to be payable under a residual value guarantee; or (b) there is achange in future lease payments resulting from a change in an index or a rate used to determine those payments,including a change to reflect changes in market rental rates following a market rent review, the Group remeasuresthe lease liabilities by discounting the revised lease payments using an unchanged discount rate, unless the change inlease payments results from a change in floating interest rates. In such case, the Group use a revised discount ratethat reflects changes in the interest rate.

The Group recognises the amount of the remeasurement of lease liability as an adjustment to the right-of-use asset.Where the carrying amount of the right-of-use asset is reduced to zero and there is a further reduction in themeasurement of the lease liability, the Group recognises any remaining amount of the remeasurement in profit orloss.

The Group accounts for a lease modification as a separate lease if both:

a) the modification increases the scope of the lease by adding the right to use one or more underlying assets;and

b) the consideration for the lease increases by an amount commensurate with the stand-alone price for theincrease in scope and any appropriate adjustments to that stand-alone price to reflect the circumstances ofthe particular contract.

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Lease liability continuedLease modifications that are not accounted for as a separate, lease the Group, at the effective date of the leasemodification: (a) allocates the consideration in the modified contract; (b) determines the lease term of the modifiedlease; and (c) remeasures the lease liability by discounting the revised lease payments using a revised discount rate.

The revised discount rate is determined as the interest rate implicit in the lease for the remainder of the lease term, ifthat rate can be readily determined, or the lessee's incremental borrowing rate at the effective date of themodification, if the interest rate implicit in the lease cannot be readily determined.

Right-of-use assetsThe right-of-use asset is initially recognised at cost comprising of

a) amount of the initial measurement of the lease liability;b) any lease payments made at or before the commencement date, less any lease incentives received;c) any initial direct costs incurred by the Group; andd) an estimate of costs to be incurred by the Group in dismantling and removing the underlying asset, restoring

the site on which it is located or restoring the underlying asset to the condition required by the terms andconditions of the lease. These costs are recognised as part of the cost of right-of-use asset when the Groupincurs an obligation for these costs. The obligation for these costs are incurred either at the commencementdate or as a consequence of having used the underlying asset during a particular period.

After initial recognition, the Group applies fair value model to right-of-use assets that meet the definition ofinvestment property.

4 CRITICAL ACCOUNTING JUDGMENTS AND KEY SOURCES OF ESTIMATIONUNCERTAINTY

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

In preparing these interim condensed consolidated financial statements, the significant judgments made bymanagement in applying the Group’s accounting policies, and the key sources of estimates uncertainty were same asthose applied to the consolidated financial statements as at and for the year ended 31 December 2015 except forthose on account of early adoption of IFRS 16 as mentioned in note 2.1.

5 PROPERTY, PLANT AND EQUIPMENT

The movement in property, plant and equipment pertains to depreciation charge for the period of AED 104.3 millionand disposals at book value of AED 0.5 million. This is offset by transfers from investment properties and additionsduring the period of AED 36.9 million (Note 6) and AED 132.6 million respectively.

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6 INVESTMENT PROPERTIES

Investment properties comprise completed properties (buildings and retail centers) and properties underdevelopment. The movement during the period / year is as follows:

30 June 2016 31 December 2015 (Audited)Properties Properties

Completed under Completed underproperties development Total properties development TotalAED’000 AED’000 AED’000 AED’000 AED’000 AED’000

Balance at the beginning of the period / year 14,782,835 787,469 15,570,304 13,051,800 1,349,406 14,401,206Effect of change in accounting policy (note 2.1) (i) 331,434 - 331,434 - - -

15,114,269 787,469 15,901,738 13,051,800 1,349,406 14,401,206Development costs incurred during the period / year 278 26,921 27,199 1,295 42,376 43,671Finance cost capitalised - - - - 285 285Increase / (decrease) in fair value – net (69,525) - (69,525) 1,091,609 (604,598) 487,011Disposals (34,594) - (34,594) (32,832) - (32,832)Additions - - - 330,000 - 330,000

Transfers from / (to): Property, plant and equipment (Note 5) 1,967 (38,835) (36,868) 1,642 - 1,642 Inventories - - - 339,321 - 339,321

Balance at the end of the period / year 15,012,395 775,555 15,787,950 14,782,835 787,469 15,570,304

(i) These represent right-to-use assets amounting to AED 331.4 million recorded under the fair value model.All investment properties are located in the United Arab Emirates.

7 INVESTMENTS IN ASSOCIATES AND JOINT VENTURES

The movement in the investment in associates and joint ventures is as follows:

(Audited)30 June 31 December

2016 2015AED’000 AED’000

Balance at the beginning of the period / year 937,442 922,434Share in profit for the period / year 34,042 161,323Share in hedging reserve (3,521) 8,515Dividends received (42,037) (160,400)Transferred to joint venture current accounts 4,569 6,967Reversal of impairment - 8,603Disposals - (10,000)

Balance at the end of the period / year 930,495 937,442

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8 AVAILABLE-FOR-SALE FINANCIAL ASSETS


2016 2015AED’000 AED’000

Investment in UAE quoted securities 27,540 30,600Investment in UAE unquoted securities 35,201 35,201Investment in international unquoted securities 59,589 57,172

122,330 122,973

9 TRADE AND OTHER RECEIVABLES


2016 2015AED’000 AED’000

Non-current portionReceivable from project finance (Note 20) 155,422 157,382Receivable from the Government of Abu Dhabi (Note 20) 335,866 331,744Due from associates and joint ventures (Notes 20) 89,827 93,625Other 13,818 14,000

594,933 596,751

Current portionTrade receivables 1,424,865 2,000,782Less: provision for impairment and cancellations (310,059) (536,857)

1,114,806 1,463,925

Refundable costs (Note 20) 500,251 315,744Receivable from project finance (Note 20) 15,371 20,148Receivable from the Government of Abu Dhabi (Note 20) 794,448 790,223Due from associates and joint ventures (Note 20) 329,088 256,747Gross amount due from customers on contracts for sale of properties (Note 9.1) 114,822 111,408Gross amount due from customers on contracts to construct assets (Note 9.2) 198,167 188,642Advances and prepayments 1,351,250 1,335,661Accrued interest 38,245 25,679Others 383,615 430,140

4,840,063 4,938,317

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9 TRADE AND OTHER RECEIVABLES continued

9.1 Contracts with customers for sale of properties


2016 2015AED’000 AED’000

Amount due from customers included in trade and other receivables (Note 9) 114,822 111,408Amount due to customers included in trade and other payables (Note 15) (578,952) (653,562)

(464,130) (542,154)

Total contracts cost incurred plus recognised profits less recognised losses to date 997,638 588,375Less: total progress billings to date (1,461,768) (1,130,529)

(464,130) (542,154)

The above represents deferred revenue arising from sale of land and units. With respect to the above contracts,revenue aggregating to AED 3,304 million is expected to be recognised over the term of these contracts.

9.2 Contracts with customers to construct an asset


2016 2015AED’000 AED’000

Amount due from customers included in trade and other receivables (Note 9) 198,167 188,642Amount due to customers included in trade and other payables (Note 15) (61,617) (47,554)

136,550 141,088

Total contracts cost incurred plus recognised profits less recognised losses to date 6,762,963 6,677,435Less: total progress billings to date (6,626,413) (6,536,347)

136,550 141,088

The above represents unbilled revenue arising from construction contracts. With respect to the above contracts,revenue aggregating to AED 880.7 million is expected to be recognised over the period of these contracts.

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10 DEVELOPMENT WORK IN PROGRESS

Development work in progress represents development and construction costs incurred on properties beingdeveloped. Movement during the period/year is as follows:


2016 2015AED’000 AED’000

Balance at beginning of the period/year 2,744,976 2,870,995Development costs incurred during the period/year 233,994 311,021Recognised in costs of properties sold (220,185) (427,475)Impairments / write-offs of project costs - (9,565)

Balance at the end of the period/year 2,758,785 2,744,976

All development work in progress projects are located in the United Arab Emirates.

11 INVENTORIES


2016 2015AED’000 AED’000

Completed properties 180,416 276,532Other operating inventories 57,395 52,874

237,811 329,406

All completed properties are located in the United Arab Emirates.

12 CASH AND BANK BALANCES


2016 2015AED’000 AED’000

Cash and bank balances 1,226,743 1,427,268Short term deposits held with banks 4,343,774 4,832,486

5,570,517 6,259,754

Short term deposits with original maturities greater than three months (3,367,159) (3,654,944)Restricted bank balances (958,233) (1,000,643)

Cash and cash equivalents 1,245,125 1,604,167

The interest rate on term deposits ranges between 0.5% and 3% (2015: 0.025% and 2%) per annum.

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13 INTEREST-BEARING LOANS AND BORROWINGS

Non-convertiblesukuk Bank borrowings Total borrowings

------------------------------------------------------------- --------------------------------------------------------------- --------------------------------------------------------------30 June 31 December 30 June 31 December 30 June 31 December

2016 2015 2016 2015 2016 2015(audited) (audited) (audited)

AED ’000 AED ’000 AED ’000 AED ’000 AED ’000 AED ’000

CurrentWithin one year 9,983 9,983 478,929 401,344 488,912 411,327

Non-currentIn two to five years 2,747,400 2,745,405 2,716,818 2,790,080 5,464,218 5,535,485

2,757,383 2,755,388 3,195,747 3,191,424 5,953,130 5,946,812

Finance cost capitalised during the period / year 580 124 627 161 1,207 285

a) Loan securities are in the form of mortgage over plots of land, assignment of project receivables and lien onbank deposits.

b) Certain Group’s borrowings carry a net worth covenant.

14 ADVANCES FROM CUSTOMERS

Advances from customers represent mainly instalments collected from customers for the sale of the Group’sproperty developments. This also includes net advances received from the Government of Abu Dhabi (Note 20)amounting to AED 409 million (2015: AED 409 million).

15 TRADE AND OTHER PAYABLES


2016 2015AED’000 AED’000

Trade payables 358,012 367,809Accrual for contractors’ costs 1,572,371 1,674,009Accrual for infrastructure costs - 8,151Advances from the Government of Abu Dhabi (Note 20) 3,579,826 4,237,508Deferred income 310,848 304,952Dividends payable 108,565 106,042Provision for onerous contracts 80,230 102,918Gross amount due to customers on contracts for sale of properties (Note 9.1) 578,952 653,562Gross amount due to customers on contracts to construct an asset (Note 9.2) 61,617 47,554Due to the Government of Abu Dhabi (Note 20) 268,694 154,857Operating lease liability 485,928 -Other liabilities 640,212 634,513

8,045,255 8,291,875

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16 (PROVISIONS, IMPAIRMENTS AND WRITE DOWNS) / REVERSAL, NET


(unaudited) (unaudited) (unaudited) (unaudited)AED’000 AED’000 AED’000 AED’000

Provisions against trade and other receivables (6,040) (5,689) 41,819 (12,654)Other provisions (20,000) (14,000) (20,000) (14,000)(Write-downs) of development work in progress - (14,638) - (5,648)

(26,040) (34,327) 21,819 (32,302)

17 FINANCE COSTS



Gross finance costs 54,847 61,533 109,517 123,689Unwinding of finance cost on operating lease liability (Note 22.2) 4,804 - 9,608 -Less: Amounts included in the cost of qualifying assets (823) - (1,207) -

58,828 61,533 117,918 123,689

18 OTHER INCOME



Government grant income recorded upon handoverof infrastructure assets (Note 20.1 and 20.2) 107,271 32,946 326,424 165,668

Release of infrastructure accruals (i) - 254,958 - 254,958Write back on receivables 94,233 - 94,233 -Cancellation of land plots (49,807) - (49,807) -Others 20,796 42,446 54,755 57,325

172,493 330,350 425,605 477,951

(i) In 2015, the Group released infrastructure cost accruals in relation to finalisation of costs at a master plancommunity development.

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19 EARNINGS PER SHARE

Basic earnings per share amounts are calculated by dividing profit for the period attributable to owners of theCompany by the weighted average number of ordinary shares outstanding during the period. As there are no dilutiveinstruments outstanding, basic and diluted earnings per share are identical. The calculation of basic and dilutedearnings per share attributable to the owners of the Company is based on the following data:


(unaudited) (unaudited) (unaudited) (unaudited)

Earnings (AED ‘000)Earnings for the purpose of basic and diluted earnings

per share (profit for the period attributable toOwners of the Company) 657,380 599,171 1,306,640 1,167,895

Weighted average number of sharesWeighted average number of ordinary shares for the

purpose of basic and diluted earnings per share 7,862,629,603 7,862,629,603 7,862,629,603 7,862,629,603

Earnings per share (AED)Basic and diluted earnings per share attributable to owners of the Company 0.084 0.076 0.166 0.149

20 TRANSACTIONS AND BALANCES WITH RELATED PARTIES

Parties are considered to be related if one party has the ability to control the other party or exercise significantinfluence over the other party in making financial or operational decisions. Related parties comprise of majorshareholder, associated companies, directors, key management personnel of the Group and their related entities. Theterms of these transactions are approved by the Group's management and are made on terms agreed by the Board ofDirectors or management. Government of Abu Dhabi is an indirect major shareholder of the Company.

The Group maintains significant balances with these related parties, which are as follows:


2016 2015AED’000 AED’000

Due from / (to) Government: Refundable costs (Note 9) 500,251 315,744 Receivable in respect of assets sold (Note 9) 1,130,314 1,121,967 Other receivables 89,685 188,090 Other payables (Note 15) (268,694) (154,857)

1,451,556 1,470,944

Advances received (Note 14 and 15) 3,988,818 4,646,500

Due from associates and joint ventures (Note 9) 418,915 350,372

Due to joint ventures for project-related work: Contract payables 32,692 32,692 Retention payables - 815

32,692 33,507

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20 TRANSACTIONS AND BALANCES WITH RELATED PARTIES continued

Certain receivables from joint ventures carry interest of 9% and are repayable within 2 to 5 years from the end of thereporting period.


2016 2015AED’000 AED’000

Due (to) / from major shareholder owned by Government and / or its associated companies: Receivable from project finance (Note 9) 143,115 142,798 Due to a major shareholder – net (150,716) (150,716)

(7,601) (7,918)

Significant transactions with related parties during the period were as follows:

Six months ended 30 June2016 2015

AED’000 AED’000

Key management compensation:Salaries, bonuses and other benefits 7,224 6,401Post-employment benefits 319 257

7,543 6,658

Directors’ remuneration paid 23,000 25,000

Revenue from Government and major shareholder owned by Government:Project management income 63,701 43,516Rental income 134,065 106,514Government grant income 326,424 165,668

524,190 315,698

Revenue earned from joint ventures - 102

Finance income from project finance and joint ventures 9,165 11,867

21



20 TRANSACTIONS AND BALANCES WITH RELATED PARTIES continued

20.1 In January 2013, the Government of Abu Dhabi had agreed to reimburse up to AED 1.6 billion ofinfrastructure costs. This transaction has been accounted for as follows:

AED 1.3 billion of the amount received has been recorded as “advances from the Government of AbuDhabi” for refundable costs under trade and other payables. As of 30 June 2016, the balance in “Advancesfrom the Government of Abu Dhabi” is AED 433.6 million (Note 15). During the period, an amount ofAED 120.4 million was recognised as government grant income upon handover of infrastructure assets atShams (30 June 2015: Nil).

20.2 The amount and timing of the infrastructure cost reimbursement is subject to the completion of certainaudit and technical inspections and assessments to be performed by the relevant government authority.Once these activities are completed, there will be reasonable assurance that the grant will be received and atthat point it will be recognized as a deferred government grant. Once the conditions of the grant are met,i.e. infrastructure assets are handed over to the designated authorities, the deferred government grant willbe recognised in profit or loss. During the period, an amount of AED 206.0 million was recognised asgovernment grant income upon handover of infrastructure assets (30 June 2015: AED 165.7 million).

21 COMMITMENTS AND CONTINGENCIES

21.1 Capital commitments

Capital expenditure contracted for but not yet incurred is as follows:


2016 2015AED’000 AED’000

Projects under development 1,036,715 1,481,828Reimbursable project works in progress 5,315,686 4,364,283Investment in associates 30,342 30,342

6,382,743 5,876,453

The above commitments are spread over a period of one to five years.

21.2 Contingencies


2016 2015AED’000 AED’000

Letters of credit and bank guarantees: Issued by the Group 853,618 589,800

Group’s share in contingencies of joint ventures and associates 227,154 232,369

Included in the above are bank guarantees and letters of credit amount of AED 799.9 million (31 December 2015:AED 537.0 million) pertaining to a construction related subsidiary.

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22 LEASES

22.1 Lease commitment for the Group as a lessor


2016 2015AED’000 AED’000

Within one year 834,459 775,758 In the second to fifth year 2,070,720 2,061,257 After five years 554,163 533,431

3,459,342 3,370,446

22.2 Leases where the Group is a lessee

Six monthsended 30 June

2016AED’000

Unwinding of interest expense during the period on lease liabilities (note 17) 9,608

Expense relating to short-term leases 13,961

Total cash outflow in respect of leases 13,000

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24 APPROVAL OF CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The condensed consolidated financial statements were approved by the Board of Directors and authorised for issueon 1 August 2016.

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