dubai holding commercial operations...

DUBAI HOLDINGCOMMERCIAL OPERATIONS GROUP LLC

CONSOLIDATED FINANCIAL STATEMENTS31 DECEMBER 2014

Dubai Holding Commercial Operations Group LLC

CONSOLIDATED FINANCIAL STATEMENTSfor the year ended 31 December 2014

Pages

CEO’s message i – ii

Operational review iii – v

Independent auditor’s report 1

Consolidated balance sheet 2

Consolidated income statement 3

Consolidated statement of comprehensive income 4

Consolidated statement of changes in equity 5 – 6

Consolidated statement of cash flows 7

Notes to the consolidated financial statements 8 – 75

i

2014 Audited Financial Results

CEO’s Message

I am delighted to announce that 2014 has marked yet another solid year for Dubai Holding

Commercial Operations Group (“DHCOG”). DHCOG delivered its fifth consecutive year of

consistent, competitive and profitable growth with total revenue increasing by 13.6% to reach

AED 13.2 billion. Normalised EBITDA grew to AED 6.9 billion, a 25.5% increase over 2013;

while net profits increased by a remarkable 41.7% to reach AED 4.7 billion.

Once again our growth has been balanced and broad based with DHCOG continuing to

outperform our expectations and we have robust growth strategies to keep this momentum

going. Sustainable recurring revenues from our hospitality, leasing, facilities and property

management businesses registered a growth of 8.5% to reach AED 7.6 billion. Property sales,

driven by the handover cycle, and land sales, complemented by growing investor demand,

contributed a substantial AED 5.6 billion to total revenues.

In addition to our focus on innovation, we continue to drive the development of the Islamic

Economy, the growth of the SME sector and the long term success of the tourism industry.

Strong and effective corporate governance remains an important pillar of our strategy. Our

Boards of Directors continue to be active and diligent and we welcome their oversight that

allows us to make robust decisions to increase stakeholder value and provide stable, reliable

and growing returns.

TECOM Investments’ (“TECOM”) growth during 2014 was driven by consistently high

occupancy levels across its business and industrial parks, as well as commercial land sales led

by strong investor demand.

TECOM’s Dubai Design District (d3) which aims to create a sustainable, innovative and thriving

ecosystem for the region’s design industry is expected to be ready to welcome new business

partners very soon. d3 has already attracted 161 local and international design companies.

TECOM also launched Villa Lantana, a vibrant new villa community in the heart of new Dubai,

while its industrial park, Dubai Industrial City, announced the launch of the Halal Cluster.

TECOM continues to hold the mandate to drive Dubai’s efforts to become the global engine for

innovation, the global centre for the Islamic economy and to make Dubai the smartest city in the

world.

Jumeirah Group (“Jumeirah”) performed well during 2014 with stable occupancy levels in

Dubai and increased levels across the international portfolio, especially in Frankfurt and Spain.

ii

The construction of Madinat Jumeirah Phase IV is already on track for completion in 2016. This

will now be complemented by expansion of facilities at the flagship hotel, Burj Al Arab, as well

as the design finalisation of a new phase of the Jumeirah Beach Hotel.

As Jumeirah continues to expand its geographical footprint by signing new management

contracts for multiple hotels in China, India and Mauritius, as well as additional hotels in Dubai,

it also launched a new contemporary hotel brand, ‘Venu’.

During 2014 Dubai Properties Group (“DPG”), development arm, Dubai Properties (DP)

launched new residential and commercial projects across Dubai including the second phase of

Mudon Villas, and Manazel Al Khor and Dubai Wharf as part of its destination, Culture Village;

while it continued to hand over completed units in its projects, Remraam and Bay Square. DPG

also continued to increase sustainable revenues from its leasing, facilities and property

management businesses.

DPG is poised for future growth as it continues to leverage market demand, strengthen its

portfolio of residential units, and regional expansion of its facilities and property management

business.

Emirates International Telecommunications’ (“EIT”) portfolio companies demonstrated

stable overall results with ‘du’, Tunisie Telecom, GO and Forthnet showing strong growth in

their customer base and market shares.

OUTLOOK

2015 will see several high profile and important projects from Dubai Holding. Just a few of the

many include; the first phase of Mall of the World, a project that has captured the imagination of

people both here and abroad; the official openings of d3 as well as Jumeirah expansion projects,

and the execution of the recently announced ‘innovation strategy’, a major multi-year project

that will create a global innovation powerhouse and support the development of Dubai’s

economy for generations to come.

I would like to extend my sincere thanks to all our employees for their continued dedication and

tremendous support throughout the year. I would also like to extend a special thanks to our

partners and customers, who continue to give us their trust and confidence.

Together, we continue to be well positioned to move forward towards another milestone year,

and, of course, a range of fresh and new initiatives.

-----------------------------

Ahmad Bin Byat

Chief Executive Officer

Dubai Holding

iii

Operational Review

Key Highlights:

Total revenues increased by 13.6% to AED 13,233 million

Recurring revenues increased by 8.5% to AED 7,573 million

Net profit grew substantially by 41.7% to reach AED 4,679 million

Normalized EBITDA grew to AED 6,930 million

Total equity increased by 17.6% to AED 21,072 million thereby decreasing the debt equity

ratio to 0.52

AED million 2014 2013

Recurring revenues 7,573 6,981Property and land sales 5,660 4,664Total revenues 13,233 11,645

Gross profit 6,640 4,544% margin 50.2% 39.0%

Other operating income 643 510

EBITDA1 6,930 5,522

Impairment reversal – net (750) (372)

Net profit 4,679 3,302% margin 35.4% 28.4%

Selected balances sheet highlightsAED million 2014 2013

Total assets 87,411 85,490

Total equity 21,072 17,914

Cash and cash equivalents 4,907 3,459

Total financial debt 11,058 10,981

DHCOG continues to strengthen its balance sheet along with its liquidity and cash position. This

enabled DHCOG to repay its EUR 750 million (AED 3.7 billion) bond in January 2014 on maturity,

as well as to prepay an amortizing corporate bank facility in April 2014. DHCOG raised additional

financial debt at highly favourable terms at its business units’ level in order to maintain optimum

leverage. DHCOG’s next and only significant public debt maturity is a GBP500 million bond due in

February 2017. At the end of 2014, DHCOG’s debt-to-equity ratio stood at 0.52 (2013: 0.61).

The performance of each of DHCOG’s business unit is outlined below:

TECOM continued to see strong occupancy levels across its business parks with overall

commercial office occupancy rising to 89.1% and occupancy of Dubai Industrial City (“DI”)

rising to 88.6%. In Dubai Internet City, Dubai Knowledge Village and Dubai Media City,

occupancy levels continued their trend of 95%+, way ahead of the wider commercial

1Normalized EBITDA (excluding impairments and provisions for other liabilities and charges)

iv

market occupancy rates of around 76%1. Such occupancy levels along with gradual price

increases allowed office rental revenue to grow by 8%. DI also signed a significant number

of new land leases pushing land lease revenues to grow in excess of 30%.

TECOM continues to play an instrumental role in transforming Dubai’s economy. In 2014,

TECOM also took up the mandate to drive Dubai’s efforts to become a global engine for

innovation, media and content and to integrate the industries it operates in within the UAE

national innovation system. This will be achieved through pioneering projects including

business innovation incubators, financial funds and smart laboratories.

TECOM’s Dubai Design District “d3”, which aims to create a sustainable, innovative and

thriving ecosystem for the region’s design industry, continues to develop Phase 1 as

planned and is expected to be ready to welcome new business partners very soon.

TECOM’s DI announced the launch of its Halal Cluster, a dedicated platform for companies

and investors operating Halal businesses in the UAE, an initiative that is in line with

Dubai’s strategy to become the global centre for the Islamic Economy.

Global Village remains Dubai’s preferred family entertainment and cultural destination and

witnessed significant increase in the number of visitors for its 19th season, resulting in a

12.5% increase in revenues in 2014.

TECOM’s media, events and radio business, AMG, exceeded its goal of reaching 40,000,000

digital listening sessions in 2014 and hosted a number of mega concerts of internationally

acknowledged artists and reported consistent growth of 9.2% in 2014.

SmartCity, a developer of knowledge-based business townships, made significant progress

in 2014. SmartCity Malta occupancy levels stand over 72%, while SmartCity Kochi’s first

phase was substantially completed, with new agreements to develop additional 4 million

sq. ft. of space.

TECOM’s 11 industry-specific business parks employ over 74,000 individuals through

4,658 businesses based there. TECOM also offers 400 educational programmes.

Jumeirah performed well in 2014 and continued to expand market share in a challenging

international environment while at the same time remaining ahead of its competition,

which highlights the power of its brands and global appeal of its products and services.

Overall room revenues grew by 3.1% with occupancy levels of 76.5% and revenue per

available room (“RevPAR”) growing by 2.8%.

The construction of Madinat Jumeirah Phase IV, the 430 room resort development

opposite Burj Al Arab, is on track for completion in 2016. At the same time, designs for

expanding facilities of its flagship hotel, Burj Al Arab, as well as the new phase of the

Jumeirah Beach Hotel are also under finalisation.

1 Source: Jones Lang LaSalle Market Overview Q4 2014. Occupancy rate applies to single-owned buildings inDubai

v

Jumeirah continued to expand its geographical footprint during the year. Jumeirah signed

multiple new management contracts including: four in China - Guangzhou, Nanjing, Wuhan

and Haikou; one in both Goa in India and Mauritius, as well as additional hotels in Dubai.

Jumeirah also launched a new contemporary hotel brand, ‘Venu’ and completed the

refurbishments at its hotels, Emirates Towers and Mina A’Salam.

The Food and Beverage business continues to show stable growth with an overall increase

of 7.6% across Jumeirah’s hotels and restaurants.

Today, Jumeirah operates 22 hotels, resorts and residences in the Middle East, Europe and

Asia including 215 food and beverage outlets, employing over 14,000 staff.

During 2014, DPG established Dubai Properties (“DP”) to focus solely on delivering an

integrated, end-to-end project development solution for the Group. Since then, DP has

launched new residential and commercial projects across Dubai including the second

phase of Mudon Villas; and Manazel Al Khor and Dubai Wharf as part of its destination,

Culture Village.

During the year, DP launched 120 townhouses in Naseem and 284 villas in Rahat, both in

Mudon; 98 apartment units in Manazel Al Khor and 124 apartment units in Dubai Wharf.

DP handed over more than 1,600 completed units in Remraam and Bay Square, in the Burj

Khalifa district, and saw substantial increase in land sales due to increased investor

demand.

Masat, DPG’s portfolio management company that manages the residential, commercial

and retail leasing portfolios in DPG’s districts and destinations, has already established

itself as a strong player in the leasing business, with maximum occupancy rates of 99%

achieved across its residential leasing portfolio. Its retail portfolio situated in prime

locations such as ‘The Walk’ at Jumeirah Beach Residence, Bay Avenue and Bay Square,

witnessed the introduction of additional retail space into the market and occupancy levels

reaching 80%.

Ejadah, DPG’s facilities and property management business, demonstrated exceptional

growth of 11.4% in 2014, and DPG is confident that this business line will continue to

deliver momentous growth as it embarks on regional expansion.

EIT’s portfolio companies demonstrated stable overall results. ‘du’ has continued to show

strong growth in customers, revenue and profits while both Tunisie Telecom and Go

showed growth in mobile customer base and market share. Forthnet recorded positive

growth of its customer base specifically for its triple play offering. There were no

investment exits during the year, and the Group will continue to seek and assess viable

divestment opportunities.

***


The notes on pages 8 to 75 are an integral part of these consolidated financial statements. (3)

CONSOLIDATED INCOME STATEMENT

Year ended 31 DecemberNotes 2014 2013

AED’m AED’m

Revenue 34 13,233.1 11,645.2Direct costs (6,593.0) (7,101.3)Gross profit 6,640.1 4,543.9

Release of government grants 27 740.1 1,062.3Other operating income 35 643.0 510.0

8,023.2 6,116.2ExpensesGeneral and administrative 37 (1,991.8) (1,629.5)Marketing and selling 38 (450.2) (300.1)Other operating expenses 39 (917.9) (884.8)Operating profit 4,663.3 3,301.8

Finance costs 40 (643.1) (620.1)Finance income 40 68.2 32.7Finance costs – net (574.9) (587.4)

Share of profit of associates and joint ventures 8,9 612.8 517.2

Profit before income tax 4,701.2 3,231.6

Income tax (expense)/credit 41 (22.3) 70.6Profit for the year 4,678.9 3,302.2

Attributable to:Owners of the parent 4,680.4 3,299.0Non-controlling interests (1.5) 3.2Profit for the year 4,678.9 3,302.2



CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

Year ended 31 DecemberNotes 2014 2013

AED’m AED’m

Profit for the year 4,678.9 3,302.2

Other comprehensive income

Items that may be subsequently reclassified to profit or loss

Available-for-sale financial assets- Change in fair value for the year 12 (10.3) 34.0- Transfer to consolidated income statement on disposal - (21.3)

Share of other comprehensive (loss)/income of associates and jointventures 8,9 (10.1) 14.4

Cash flow hedges- Change in fair value for the year 2.1 3.9- Tax impact on cash flow hedges 41 (0.8) (1.3)

Currency translation differences- Arising during the year (490.7) (146.6)- Transfer to consolidated income statement on disposal (0.5) -

(510.3) (116.9)

Items that will not be reclassified to profit or lossActuarial losses on retirement benefit obligations 29 (2.8) (1.7)- Tax impact there-on 41 1.0 0.6

(1.8) (1.1)

Other comprehensive loss for the year, net of tax (512.1) (118.0)

Total comprehensive income for the year 4,166.8 3,184.2

Attributable toOwners of the parent 4,201.0 3,170.5Non-controlling interests (34.2) 13.7Total comprehensive income for the year 4,166.8 3,184.2



CONSOLIDATED STATEMENT OF CHANGES IN EQUITYfor the year ended 31 December 2014

Attributable to owners of the parent

NotesShare

capitalContributed

capitalOther

reserveStatutory

reserveTranslation

reserveFair value

reserveHedge

reserveRetainedearnings Total

Non-controlling

interestsTotal

equityAED’m AED’m AED’m AED’m AED’m AED’m AED’m AED’m AED’m AED’m AED’m

At 1 January 2014 2,000.0 887.1 3,513.3 1,243.8 (978.2) 27.5 (1.1) 10,915.0 17,607.4 306.6 17,914.0Comprehensive incomeProfit for the year - - - - - - - 4,680.4 4,680.4 (1.5) 4,678.9Other comprehensive incomeAvailable-for-sale financial assets 12 - - - - - (10.3) - - (10.3) - (10.3)Share of other comprehensive income of

associates and joint ventures 8,9 - - (9.8) - (9.0) 9.6 - - (9.2) (0.9) (10.1)Cash flow hedges - - - - - - 0.8 - 0.8 0.5 1.3Translation reserve - - - - (459.6) - - - (459.6) (31.6) (491.2)Retirement benefit obligations - - (1.1) - - - - - (1.1) (0.7) (1.8)Total other comprehensive income - - (10.9) - (468.6) (0.7) 0.8 - (479.4) (32.7) (512.1)Total comprehensive income - - (10.9) - (468.6) (0.7) 0.8 4,680.4 4,201.0 (34.2) 4,166.8Transactions with ownersTransfer to statutory reserve - - - 230.5 - - - (230.5) - - -Transfer to other reserve - - 0.4 - - - - (0.4) - - -Dividends 33 - - - - - - - (1,000.0) (1,000.0) (14.4) (1,014.4)Other movements - - - - - - - 5.4 5.4 - 5.4Total transactions with owners - - 0.4 230.5 - - - (1,225.5) (994.6) (14.4) (1,009.0)At 31 December 2014 2,000.0 887.1 3,502.8 1,474.3 (1,446.8) 26.8 (0.3) 14,369.9 20,813.8 258.0 21,071.8



CONSOLIDATED STATEMENT OF CHANGES IN EQUITYfor the year ended 31 December 2013

Attributable to owners of the parent

NoteShare

capitalContributed

capitalOther

reserveStatutory

reserveTranslation

reserveFair value

reserveHedge

reserveRetainedearnings Total

Non-controlling

interestTotal

equityAED’m AED’m AED’m AED’m AED’m AED’m AED’m AED’m AED’m AED’m AED’m

At 1 January 2013 2,000.0 887.1 3,517.2 880.1 (823.9) (5.8) 3.2 7,979.0 14,436.9 310.9 14,747.8Comprehensive incomeProfit for the year - - - - - - - 3,299.0 3,299.0 3.2 3,302.2Other comprehensive incomeAvailable-for-sale financial assets 12 - - - - - 12.7 - - 12.7 - 12.7Share of other comprehensive income of

associates and joint ventures 8,9 - - (2.5) - 0.9 20.6 (5.9) - 13.1 1.3 14.4Cash flow hedges - - - - - - 1.6 - 1.6 1.0 2.6Translation reserve - - - - (155.2) - - - (155.2) 8.6 (146.6)Retirement benefit obligations - - (0.7) - - - - - (0.7) (0.4) (1.1)Total other comprehensive income - - (3.2) - (154.3) 33.3 (4.3) - (128.5) 10.5 (118.0)Total comprehensive income - - (3.2) - (154.3) 33.3 (4.3) 3,299.0 3,170.5 13.7 3,184.2

Transactions with ownersTransfer to statutory reserve - - - 363.7 - - - (363.7) - - -Utilisation of other reserve - - (0.7) - - - - 0.7 - - -Contribution during the year - - - - - - - - - 1.3 1.3Dividends - - - - - - - - - (19.3) (19.3)Total transactions with owners - - (0.7) 363.7 - - - (363.0) - (18.0) (18.0)At 31 December 2013 2,000.0 887.1 3,513.3 1,243.8 (978.2) 27.5 (1.1) 10,915.0 17,607.4 306.6 17,914.0



CONSOLIDATED STATEMENT OF CASH FLOWSYear ended 31 December

2014 2013Notes AED’m AED’m

Cash flows from operating activitiesCash generated from operations 45 4,207.0 4,358.9

Payment of employees’ end of service benefits 29 (35.7) (32.3)Payment of provision for other liabilities and charges 31 (24.3) (1.5)Payment on disposal/settlement of derivative financial instruments (425.5) -Income tax (paid)/refunded (33.6) 46.8Net cash generated from operating activities 3,687.9 4,371.9

Cash flows from investing activitiesPurchase of property, plant and equipment 5 (673.7) (382.6)Proceeds from sale of property, plant and equipment 5 10.7 10.3Purchase of investment property, net of project accruals 6 (747.8) (1,345.3)Purchase of intangible assets 7 (43.5) (49.2)Purchase of available-for-sale financial assets 12 (23.5) (12.7)Proceeds from sale of available-for-sale financial assets 12 - 157.7Recovery of loans receivable 11.3 6.4Recovery of finance lease receivables, net 16 3.4 3.3Recovery of loans to related parties, net 7.6 -Interest received, net of accrual 71.5 36.0Investment in associates and joint ventures 8,9 (71.0) (7.3)Dividends received 8 398.6 489.5Net cash used in investing activities (1,056.4) (1,093.9)

Cash flows from financing activitiesRepayment of borrowings (5,995.9) (1,852.7)Proceeds from borrowings 6,344.3 912.3Interest paid, net of accruals (786.3) (556.1)Dividends paid to the parent company 33 (700.0) -Dividends paid to non-controlling interests (14.4) (19.3)Investments by non-controlling interests - 1.3Net cash used in financing activities (1,152.3) (1,514.5)

Increase in cash and cash equivalents 1,479.2 1,763.5Cash and cash equivalents, beginning of the year 3,440.5 1,675.6Exchange (loss)/gain on cash and cash equivalents (12.8) 1.4Cash and cash equivalents, end of the year 20 4,906.9 3,440.5


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSfor the year ended 31 December 2014

(8)

1. LEGAL STATUS AND ACTIVITIES

Dubai Holding Commercial Operations Group LLC (“the Company”/“DHCOG”) is a limited liability companyincorporated in the Emirate of Dubai, United Arab Emirates on 29 October 2006.

The Company’s registered address is PO Box 66000, Dubai, United Arab Emirates.

The Company is a wholly owned subsidiary of Dubai Holding LLC (“the parent company”). The principal activity ofthe Company is that of an intermediate holding company of the principal entities listed below and their subsidiaries,associates and joint ventures (referred together with the Company as “the Group”). The ultimate majority shareholderof the Group is His Highness Sheikh Mohammed Bin Rashid Al Maktoum (“the ultimate shareholder”).

Name of entity Principal activityHolding

percentage

2014 2013

United Arab Emirates

TECOM Investments LLC (“TECOM”) Real estate sales, leasing and services 100 100

Dubai Properties Group LLC (“DPG”) Real estate development and facilities management 100 100

Jumeirah Group LLC (“Jumeirah”) Hospitality and leisure 100 100

Emirates InternationalTelecommunications LLC (“EIT”)

International investments in the telecommunicationssector 100 100

Tatweer Dubai LLC (“Tatweer”) Real estate development/leisure and entertainment 100 100

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The principal accounting policies applied in the preparation of these consolidated financial statements are set outbelow. These policies have been consistently applied to all the years presented.

2.1 Basis of preparation

The consolidated financial statements of the Group have been prepared in accordance with International FinancialReporting Standards (“IFRS”) and International Financial Reporting Interpretations Committee’s (“IFRIC”)interpretations. The consolidated financial statements have been prepared under the historical cost convention, asmodified by the revaluation of available-for-sale financial assets and derivative financial instruments.

The preparation of financial statements in conformity with IFRS requires the use of certain critical accountingestimates. It also requires management to exercise its judgement in the process of applying the Group’s accountingpolicies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimatesare significant to the consolidated financial statements are disclosed in Note 4.

(a) New amendments and interpretations adopted by the Group during the current year

The following amendments and interpretations have been adopted by the Group for the first time for the financialyear beginning on or after 1 January 2014 and do not have a material impact on the Group:

Amendment to IAS 32, ‘Financial instruments: Presentation’ on offsetting financial assets and financialliabilities. This amendment clarifies that the right of set-off must not be contingent on a future event. It mustalso be legally enforceable for all counterparties in the normal course of business, as well as in the event ofdefault, insolvency or bankruptcy. The amendment also considers settlement mechanisms.

Amendments to IAS 36, ‘Impairment of assets’, on the recoverable amount disclosures for non-financialassets. This amendment removed certain disclosures of the recoverable amount of CGUs which had beenincluded in IAS 36 by the issue of IFRS 13.


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSfor the year ended 31 December 2014 (continued)

(9)

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

2.1 Basis of preparation (continued)

(a) New amendments and interpretations adopted by the Group during the current year (continued)

Amendment to IAS 39, ‘Financial instruments: Recognition and measurement’ on the novation of derivativesand the continuation of hedge accounting. This amendment considers legislative changes to ‘over-the-counter’ derivatives and the establishment of central counterparties. Under IAS 39 novation of derivatives tocentral counterparties would result in discontinuance of hedge accounting. The amendment provides relieffrom discontinuing hedge accounting when novation of a hedging instrument meets specified criteria.

IFRIC 21, ‘Levies’, sets out the accounting for an obligation to pay a levy if that liability is within the scopeof IAS 37 ‘Provisions’. The interpretation addresses what the obligating event is that gives rise to pay a levyand when a liability should be recognised.

(b) New standards, amendments and interpretations issued but not effective for the financial year beginning 1January 2014 and not early adopted by the Group

A number of new standards, amendments to standards and interpretations are effective for annual periods beginningafter 1 January 2014, and have not been early adopted in preparing these consolidated financial statements. None ofthese is expected to have a significant effect on the consolidated financial statements of the Group, except thefollowing set out below:

IFRS 9, ‘Financial instruments’, addresses the classification, measurement and recognition of financial assetsand financial liabilities. The complete version of IFRS 9 was issued in July 2014. It replaces the guidance inIAS 39 that relates to the classification and measurement of financial instruments. IFRS 9 retains butsimplifies the mixed measurement model and establishes three primary measurement categories for financialassets: amortised cost, fair value through other comprehensive income and fair value through profit or loss.The basis of classification depends on the entity’s business model and the contractual cash flowcharacteristics of the financial asset. Investments in equity instruments are required to be measured at fairvalue through profit or loss with the irrevocable option at inception to present changes in fair value in othercomprehensive income with no subsequent recycling. There is now a new expected credit losses model thatreplaces the incurred loss impairment model used in IAS 39. For financial liabilities there were no changes toclassification and measurement except for the recognition of changes in own credit risk in othercomprehensive income, for liabilities designated at fair value through profit or loss. IFRS 9 relaxes therequirements for hedge effectiveness by replacing the bright line hedge effectiveness tests. It requires aneconomic relationship between the hedged item and hedging instrument and for the ‘hedged ratio’ to be thesame as the one management actually use for risk management purposes. Contemporaneous documentation isstill required but is different to that currently prepared under IAS 39. The standard is effective for accountingperiods beginning on or after 1 January 2018 and earlier adoption is permitted. The Group is yet to assessIFRS 9’s full impact.

IFRS 15, ‘Revenue from contracts with customers’ deals with revenue recognition and establishes principlesfor reporting useful information to users of financial statements about the nature, amount, timing anduncertainty of revenue and cash flows arising from an entity’s contracts with customers. Revenue isrecognised when a customer obtains control of a good or service and thus has the ability to direct the use andobtain the benefits from the good or service. The standard will replace the existing IAS 18 ‘Revenue’ andIAS 11 ‘Construction contracts’ and related interpretations. The standard is effective for annual periodsbeginning on or after 1 January 2017 and earlier application is permitted. The Group is assessing the impactof IFRS 15.

There are no other IFRSs or IFRIC interpretations that are not yet effective that would be expected to have amaterial impact on the Group.



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2.2 Basis of consolidation

(a) Subsidiaries

Subsidiaries are all entities (including structured entities) over which the Group has control. The Group controls anentity when the Group is exposed to, or has rights to, variable returns from its involvement with the entity and hasthe ability to affect those returns through its power over the entity.

Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are de-consolidated from the date that control ceases.

The Group applies the acquisition method to account for business combinations. The consideration transferred forthe acquisition of a subsidiary is the fair values of the assets transferred, the liabilities incurred to the former ownersof the acquiree and the equity interests issued by the Group. The consideration transferred includes the fair value ofany asset or liability resulting from a contingent consideration arrangement. Identifiable assets acquired andliabilities and contingent liabilities assumed in a business combination are measured initially at their fair values atthe acquisition date. The Group recognises any non-controlling interest in the acquiree on an acquisition-by-acquisition basis, either at fair value or at the non-controlling interest’s proportionate share of the recognisedamounts of acquiree’s identifiable net assets.

Acquisition-related costs are expensed as incurred.

If the business combination is achieved in stages, the acquisition date fair value of the acquirer’s previously heldequity interest in the acquiree is remeasured to fair value at the acquisition date through profit or loss.

Any contingent consideration to be transferred by the Group is recognised at fair value at the acquisition date.Subsequent changes to the fair value of the contingent consideration that is deemed to be an asset or liability isrecognised in accordance with IAS 39 either in profit or loss or as a change to other comprehensive income.Contingent consideration that is classified as equity is not remeasured, and its subsequent settlement is accountedfor within equity.

The excess of the consideration transferred, the amount of any non-controlling interest in the acquiree and theacquisition-date fair value of any previous equity interest in the acquiree over the fair value of the identifiable netassets acquired is recorded as goodwill. If the total of consideration transferred, non-controlling interest recognisedand previously held interest measured is less than the fair value of the net assets of the subsidiary acquired in thecase of a bargain purchase, the difference is recognised directly in the consolidated income statement.

Business combinations involving entities under common control do not fall under the scope of IFRS 3 “BusinessCombinations”. Transfer of businesses under common control is accounted for under the uniting of interest method.Under the uniting of interest method there is no requirement to fair value the assets and liabilities of the transferredentities and hence no goodwill is created as the balances remain at book value. The results and cash flows of theentities/businesses under common control are consolidated/equity accounted prospectively from the date of transferwithout restatement of the consolidated income statement and the consolidated balance sheet comparatives.

(b) Eliminations on consolidation

Inter-company transactions, balances, income and expenses on transactions between Group companies areeliminated. Profits and losses resulting from inter-company transactions that are recognised in assets are alsoeliminated. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with thepolicies adopted by the Group.

(c) Changes in ownership interests in subsidiaries without change in control

Transactions with non-controlling interests that do not result in loss of control are accounted for as equitytransactions – that is, as transactions with the owners in their capacity as owners. The difference between fair valueof any consideration paid and the relevant share acquired of the carrying value of net assets of the subsidiary isrecorded in equity. Gains or losses on disposals to non-controlling interests are also recorded in equity.



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2.2 Basis of consolidation (continued)

(d) Disposal of subsidiaries

When the Group ceases to have control, any retained interest in the entity is re-measured to its fair value at the datewhen control is lost, with the change in carrying amount recognised in profit or loss. The fair value is the initialcarrying amount for the purposes of subsequently accounting for the retained interest as an associate, joint ventureor financial asset. In addition, any amounts previously recognised in other comprehensive income in respect of thatentity are accounted for as if the Group had directly disposed of the related assets or liabilities. This may mean thatamounts previously recognised in other comprehensive income are reclassified to profit or loss.

(e) Associates and Joint ventures

An associate is an entity over which the Group has significant influence but not control, generally accompanying ashareholding of between 20% - 50% of the voting rights.

A joint venture is a contractual arrangement between the Group and one or more other parties to undertakeeconomic activity that is subject to joint control.

Investments in associates and joint ventures are accounted for using the equity method of accounting. Under theequity method, the investment is initially recognised at cost, and the carrying amount is increased or decreased torecognise the investor’s share of the profit or loss of the investee after the date of acquisition. The Group’sinvestment in associates and joint ventures includes goodwill identified on acquisition.

If the ownership interest in an associate is reduced but significant influence is retained, only a proportionate share ofthe amounts previously recognised in other comprehensive income is reclassified to profit or loss whereappropriate.

The Group’s share of post-acquisition profit or loss is recognised in the consolidated income statement, and its share ofpost-acquisition movements in other comprehensive income is recognised in other comprehensive income with acorresponding adjustment to the carrying amount of the investment. When the Group’s share of losses in anassociate/joint venture equals or exceeds its interest in the associate/joint venture, including any other unsecuredreceivables, the Group does not recognise further losses, unless it has incurred legal or constructive obligations ormade payments on behalf of the associate/joint venture.

The Group determines at each reporting date whether there is any objective evidence that the investment in theassociate/joint venture is impaired. If this is the case, the Group calculates the amount of impairment as the differencebetween the recoverable amount of the associate/joint venture and its carrying value and recognises the amount in theconsolidated income statement.

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

Dilution gains and losses arising in investments in associates are recognised in the consolidated income statement.

2.3 Segment reporting

Operating segments are reported in a manner consistent with the internal reporting provided to the chief operatingdecision-maker. The chief operating decision-maker, who is responsible for allocating resources and assessingperformance of the operating segments, has been identified as the Executive Committee that makes strategicdecisions.



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2.4 Foreign currency translation

(a) Functional and presentation currency

Items included in the financial statements of each of the Group’s entities are measured using the currency of theprimary economic environment in which the entity operates (‘the functional currency’). The consolidated financialstatements are presented in United Arab Emirates Dirhams (“AED”), which is the Company’s functional and theGroup’s presentation currency.

(b) Transactions and balances

Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at thedates of the transactions or valuation where items are re-measured. Foreign exchange gains and losses resultingfrom the settlement of such transactions and from the translation at year-end exchange rates of monetary assets andliabilities denominated in foreign currencies are recognised in the consolidated income statement, except whendeferred in other comprehensive income as qualifying cash flow hedges and qualifying net investment hedges.

Balances and transactions denominated in US dollars (“USD”) have been translated into the presentation currencyat a fixed rate as the exchange rate of AED to USD has been pegged since 1981.

Foreign exchange gains and losses are presented in the consolidated income statement within ‘other operatingincome or expenses’.

Changes in the fair value of monetary securities denominated in foreign currency classified as available-for-sale areanalysed between translation differences resulting from changes in the amortised cost of the security and otherchanges in the carrying amount of the security. Translation differences related to changes in amortised cost arerecognised in profit or loss, and other changes in carrying amount are recognised in other comprehensive income.

Translation differences on non-monetary financial assets and liabilities such as equities held at fair value throughprofit or loss are recognised in profit or loss as part of the fair value gain or loss. Translation differences on non-monetary financial assets such as equities classified as available-for-sale are included in other comprehensiveincome.

(c) Group companies

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

(i) Assets and liabilities for each balance sheet presented are translated at the closing rate at the date of thebalance sheet;

(ii) Income and expenses for each income statement are translated at average exchange rates; and(iii) All resulting exchange differences are recognised in other comprehensive income.

Goodwill and fair value adjustments arising on the acquisition of a foreign entity are treated as assets and liabilitiesof the foreign entity and translated at the closing rate. Exchange differences arising are recognised in othercomprehensive income.

2.5 Property, plant and equipment

Property, plant and equipment are stated at historical cost less depreciation and accumulated impairment. The costof property and equipment is its purchase cost together with any incidental costs of acquisition. Subsequent costsare included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it isprobable that future economic benefits associated with the item will flow to the Group and the cost of the item canbe measured reliably. The carrying value of the replaced part is de-recognised. All other repairs and maintenancecosts are charged to the consolidated income statement during the financial period in which they are incurred.



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2.5 Property, plant and equipment (continued)

Land is not depreciated. Depreciation on other assets is calculated using the straight-line method to allocate theircost to their residual values over their estimated useful lives, as follows:

Type of assets Years

Buildings and infrastructure 20 - 35Leasehold improvements 2 - 4*Equipment and machinery 3 - 7Furniture, fixtures and office equipment 3 - 15Computer hardware 3 - 4Motor vehicles 3 - 4Other assets 3 - 20

*Leasehold improvements are depreciated over the lower of their expected useful lives or the lease term.

The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at the end of each reportingperiod. An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carryingamount is greater than its estimated recoverable amount (Note 2.12).

Gains and losses on disposals are determined by comparing proceeds with the carrying amount. These arerecognised within ‘other operating income or expenses’ in the consolidated income statement.

Capital work-in-progress is stated at cost and includes property that is being developed for future use. Whencommissioned, capital work-in-progress is transferred to the respective category, and depreciated in accordancewith the Group’s policy.

2.6 Investment property

Investment property comprises property held for capital appreciation, long term rental yields or both, and is carriedat cost less accumulated depreciation and impairment losses, if any. Investment property also includes property thatis being constructed or developed for future use as investment property. In addition, land held for undetermined useis classified as investment property and is not depreciated. The fair values for disclosure purposes of the investmentproperties are determined by external valuers every three years. Otherwise management updates the fair value of theinvestment property using recent market prices/transactions or alternatively, discounted cash flow projections.

When the development of investment property commences, it is classified under capital work-in-progress untildevelopment is complete, at which time it is transferred to the respective category, and depreciated on the straight-line method to allocate their cost to their residual values over their estimated useful lives, as follows:

Type of assets Years

Buildings and infrastructure 20 – 35Building interior improvements 3 – 15

Any expenditure that results in the maintenance of property to an acceptable standard or specification is treated asrepairs and maintenance and is expensed in the period in which it is incurred.

When investment property is sold, gains and losses on disposal are determined by reference to its carrying amountand are taken into account in determining operating profit.

2.7 Transfers

Transfers between property, plant and equipment, investment property and property held for development and saleare made when there is a change in use evidenced by commencement of owner-occupation or development with aview to sale, end of owner-occupation or commencement of an operating lease to another party, as applicable. Alltransfers are made at carrying value.



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2.8 Intangible assets

(a) Goodwill

Goodwill represents the excess of the cost of an acquisition over the fair value of the Group’s share of the netidentifiable assets of the acquired subsidiary, associate and joint venture as of the date of the acquisition. Goodwillon acquisitions of subsidiaries is included in ‘intangible assets’. Separately recognised goodwill is tested annuallyfor impairment and carried at cost less accumulated impairment losses. Impairment losses on goodwill are notreversed. Gains and losses on the disposal of an entity include the carrying amount of goodwill relating to the entitysold. Goodwill on acquisitions of associates and joint ventures is included in ‘Investment in associates/jointventures’ and is tested for impairment as part of the overall balance.

Goodwill is allocated to cash-generating units for the purpose of impairment testing. The allocation is made to thosecash-generating units or groups of cash-generating units that are expected to benefit from the business combinationin which the goodwill arose, identified according to operating segment.

Goodwill impairment reviews are undertaken annually or more frequently if events or changes in circumstancesindicate a potential impairment. The carrying value of goodwill is compared to the recoverable amount, which is thehigher of value in use and the fair value less costs of disposal. Any impairment is recognised immediately as anexpense and is not subsequently reversed.

(b) Customer base

The customer base arising on business combination comprises customer contracts and related customerrelationships. The customer base amount is arrived at by calculating the present value of the expected futureeconomic benefits to arise from those customer contracts and customer relationships after deducting a contributoryasset charge. Amortisation is calculated using the straight-line method to allocate the cost of the customer baseamount over their contractual period or estimated useful lives of 7 years.

(c) Long-term management contracts

Long-term management contracts comprise costs incurred in acquiring a hotel management contract and are carriedat cost less accumulated amortisation. Amortisation is calculated using the straight-line method to allocate the costof acquiring the contract over its estimated useful life of 15 years.

(d) Computer software

Acquired computer software licenses are capitalised on the basis of the costs incurred to bring to use the specificsoftware. These costs are amortised over their estimated useful lives of 3 years.

(e) Licenses and re-use rights

The total cost of acquiring the license and/or re-use right is capitalised as an intangible asset and is carried at costless accumulated amortisation. Amortisation is calculated using the straight-line method to allocate the cost over theterm of the licenses or rights. Theme park licenses, with a term commencing from the date of opening, are subject toamortisation only upon start-up of the park’s operations.

(f) Master plans

Master plans have finite useful lives and are carried at cost less accumulated amortisation. Amortisation is calculatedusing the straight-line method to allocate the cost of the master plans over their estimated useful lives of 3 years.

(g) Brands

The brands acquired by the Group are carried at cost and have been assessed to have an indefinite useful life.Recognised brand cost is tested annually for impairment and carried at initial recognised cost less accumulatedimpairment losses, if any.



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2.9 Financial assets

2.9.1 Classification

The Group classifies its financial assets in the following categories: at fair value through profit or loss, loans andreceivables, and available-for-sale. The classification depends on the purpose for which the financial assets wereacquired. Management determines the classification of its financial assets at initial recognition.

(a) Financial assets at fair value through profit or loss

Financial assets at fair value through profit or loss are financial assets held for trading. A financial asset is classifiedin this category if acquired principally for the purpose of selling in the short term. Derivatives are also categorisedas held for trading unless they are designated as hedges. Assets in this category are classified as current assets ifexpected to be settled within 12 months; otherwise, they are classified as non-current.

(b) Loans and receivables

Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted inan active market. They are included in current assets, except for maturities greater than 12 months after the end ofthe reporting period. These are classified as non-current assets. The Group’s loans and receivables comprise ‘tradeand other receivables’, ‘loans receivable’, ‘due from related parties’ and ‘cash and cash equivalents’ in theconsolidated balance sheet.

(c) Available-for-sale financial assets

Available-for-sale financial assets are non-derivatives that are either designated in this category or not classified inany of the other categories. They are included in non-current assets unless management intends to dispose of theinvestment within 12 months of the end of the balance sheet date.

2.9.2 Recognition and measurement

Regular purchases and sales of financial assets are recognised on the trade-date, the date on which the Groupcommits to purchase or sell the asset. Investments are initially recognised at fair value plus transaction costs for allfinancial assets not carried at fair value through profit or loss. Financial assets carried at fair value through profit orloss are initially recognised at fair value, and transaction costs are expensed in the consolidated income statement.Financial assets are derecognised when the rights to receive cash flows from the investments have expired or havebeen transferred and the Group has transferred substantially all risks and rewards of ownership. Available-for-salefinancial assets and financial assets at fair value through profit or loss are subsequently carried at fair value. Loansand receivables are subsequently carried at amortised cost using the effective interest method.

Gains or losses arising from changes in the fair value of the ‘financial assets at fair value through profit or loss’category are presented in the consolidated income statement within ‘other operating income/other operatingexpenses’ in the period in which they arise. Dividend income from financial assets at fair value through profit orloss is recognised in the consolidated income statement as part of ‘other operating income’ when the Group’s rightto receive payments is established.

Changes in the fair value of monetary and non-monetary securities classified as available-for-sale are recognised inconsolidated statement of comprehensive income.

When securities classified as available-for-sale are sold or impaired, the accumulated fair value adjustmentsrecognised in equity are included in the consolidated income statement as ‘other operating income’.

Interest on available-for-sale securities calculated using the effective interest method is recognised in theconsolidated income statement as part of ‘other operating income’. Dividends on available-for-sale equityinstruments are recognised in the consolidated income statement as part of ‘other operating income’ when theGroup’s right to receive payments is established.



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2.10 Impairment of financial assets

(a) Assets carried at amortised cost

The Group assesses at the end of each reporting period whether there is objective evidence that a financial asset orgroup of financial assets is impaired. A financial asset or a group of financial assets is impaired and impairmentlosses are incurred only if there is objective evidence of impairment as a result of one or more events that occurredafter the initial recognition of the asset (a ‘loss event’) and that loss event (or events) has an impact on the estimatedfuture cash flows of the financial asset or group of financial assets that can be reliably estimated.

The criteria that the Group uses to determine that there is objective evidence of an impairment loss include:

Significant financial difficulty of the issuer or obligor;

A breach of contract, such as a default or delinquency in interest or principal payments;

The Group, for economic or legal reasons relating to the borrower’s financial difficulty, granting to theborrower a concession that the lender would not otherwise consider;

It becomes probable that the borrower will enter bankruptcy or other financial reorganisation;

The disappearance of an active market for that financial asset because of financial difficulties; or

Observable data indicating that there is a measurable decrease in the estimated future cash flows from aportfolio of financial assets since the initial recognition of those assets, although the decrease cannot yet beidentified with the individual financial assets in the portfolio, including:

i) adverse changes in the payment status of borrowers in the portfolio; and

ii) national or local economic conditions that correlate with defaults on the assets in the portfolio.

The Group first assesses whether objective evidence of impairment exists.

The amount of the loss is measured as the difference between the asset’s carrying amount and the present value ofestimated future cash flows (excluding future credit losses that have not been incurred) discounted at the financialasset’s original effective interest rate. The asset’s carrying amount of the asset is reduced and the amount of the lossis recognised in the consolidated income statement. If a loan or held-to-maturity investment has a variable interestrate, the discount rate for measuring any impairment loss is the current effective interest rate determined under thecontract. As a practical expedient, the Group may measure impairment on the basis of an instrument’s fair valueusing an observable market price.

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

(b) Assets classified as available-for-sale

The Group assesses at the end of each reporting period whether there is objective evidence that a financial asset or agroup of financial assets is impaired. For debt securities, the Group uses the criteria referred to in (a) above. In thecase of equity investments classified as available-for-sale, a significant or prolonged decline in the fair value of thesecurity below its cost is also evidence that the assets are impaired. If any such evidence exists for available-for-salefinancial assets, the cumulative loss – measured as the difference between the acquisition cost and the current fairvalue, less any impairment loss on that financial asset previously recognised in profit or loss – is removed fromequity and recognised in the consolidated income statement.

Impairment losses recognised in the consolidated income statement on equity instruments are not reversed throughthe consolidated income statement. If, in a subsequent period, the fair value of a debt instrument classified asavailable-for-sale increases and the increase can be objectively related to an event occurring after the impairmentloss was recognised in profit or loss, the impairment loss is reversed through the consolidated income statement.



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2.11 Offsetting of financial instruments

Financial assets and liabilities are offset and the net amount reported in the balance sheet when there is a legallyenforceable right to offset the recognised amounts and there is an intention to settle on a net basis, or realise theasset and settle the liability simultaneously. The legally enforceable right must not be contingent on future eventsand must be enforceable in the normal course of business and in the event of default, insolvency or bankruptcy ofthe company or the counterparty.

2.12 Impairment of non-financial assets

Assets that have an indefinite useful life, for example goodwill, are not subject to amortisation and are testedannually for impairment. Assets that are subject to depreciation/amortisation are reviewed for impairment wheneverevents or changes in circumstances indicate that the carrying value may not be recoverable. An impairment loss isrecognised for the amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverableamount is the higher of the asset’s fair value less costs to sell and value in use. For the purposes of assessingimpairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows (“cashgenerating units”). Non-financial assets other than goodwill that suffered impairment are reviewed for possiblereversal of the impairment at each reporting date. A reversal of an impairment loss for an asset other than goodwillshall be recognised immediately in the consolidated income statement. After a reversal of an impairment loss isrecognised, the depreciation/amortisation charge of the asset shall be adjusted in future periods to allocate theasset’s revised carrying amount, less residual value over the remaining useful life.

2.13 Derivative financial instruments and hedging activities

Derivatives are initially recognised at fair value on the date a derivative contract is entered into and aresubsequently re-measured at their fair value. The method of recognising the resulting gain or loss depends onwhether the derivative is designated as a hedging instrument, and if so, the nature of the item being hedged. TheGroup designates certain derivatives as either hedges of the fair value of recognised assets or liabilities (fair valuehedge) or hedges of a particular risk associated with a recognised asset or liability or a highly probable forecasttransaction (cash flow hedge).

The Group documents, at the inception of the transaction, the relationship between hedging instruments and hedgeditems, as well as its risk management objectives and strategy for undertaking various hedge transactions. The Groupalso documents its assessment, both at hedge inception and on an ongoing basis, of whether the derivatives that areused in hedging transactions are highly effective in offsetting changes in fair values or cash flows of hedged items.

The fair values of various derivative instruments used for hedging are disclosed in Note 13. The full fair value of ahedging derivative is classified as a non-current asset or liability if the remaining maturity of the hedged item ismore than 12 months and as a current asset or liability if the remaining maturity of the hedged item is less than 12months. Trading derivatives are classified as a current asset or liability if expected to be settled within 12 months;otherwise, they are classified as non-current.

(a) Fair value hedges

Changes in the fair value of derivatives that are designated and qualify as fair value hedges are recorded in theincome statement, together with any changes in the fair value of the hedged asset or liability that are attributable tothe hedged risk. The Group only applies fair value hedge accounting for hedging fixed interest risk on borrowings.The gain or loss relating to the effective portion of interest rate swaps hedging fixed rate borrowings is recognisedin the income statement within ‘finance costs’. The gain or loss relating to the ineffective portion is recognised inthe consolidated income statement within ‘other operating income/expenses’. Changes in the fair value of thehedged fixed rate borrowings attributable to interest rate risk are recognised in the consolidated income statementwithin ‘finance costs’.

If the hedge no longer meets the criteria for hedge accounting, the adjustment to the carrying amount of a hedgeditem for which the effective interest method is used is amortised to profit or loss over the period to maturity.



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2.13 Derivative financial instruments and hedging activities (continued)

(b) Cash flow hedges

The effective portion of changes in the fair value of derivatives that are designated and qualify as cash flow hedgesare recognised in other comprehensive income. The gain or loss relating to the ineffective portion is recognisedimmediately in the consolidated income statement within ‘other operating income’ or ‘other operating expenses’.

Amounts accumulated in equity are recycled in the consolidated income statement in the periods when the hedgeditem affects profit or loss (for instance when the forecast sale that is hedged takes place). The gain or loss relating tothe effective portion of interest rate swaps hedging variable rate borrowings is recognised in the consolidatedincome statement within ‘finance costs – net’. However when the forecast transaction that is hedged results in therecognition of a non-financial asset (for example inventory or fixed assets), the gains and losses previously recordedin equity are transferred from equity and included in the initial measurement of the cost of the asset. The deferredamounts are ultimately recognised in direct costs.

When a hedging instrument expires or is sold, or when a hedge no longer meets the criteria for hedge accounting,any cumulative gain or loss existing in equity at that time remains in equity and is recognised when the forecasttransaction is ultimately recognised in the consolidated income statement. When a forecast transaction is no longerexpected to occur, the cumulative gain or loss that was reported in equity is immediately transferred to theconsolidated income statement within ‘other operating income’ or ‘other operating expenses’.

(c) Derivatives at fair value through profit or loss and accounted for at fair value through profit or loss

Certain derivative instruments do not qualify for hedge accounting. Changes in the fair value of any these derivativeinstruments are recognised immediately in the consolidated income statement.

Derivatives and hedges used by the Group are:

(i) Foreign currency options

Foreign currency options are contractual agreements under which the seller (writer) grants the purchaser (holder)the right, but not the obligation, either to buy (a call option) or sell (a put option) at or by a set date or during a setperiod, a specific amount of a foreign currency at a predetermined price. The seller receives a premium from thepurchaser in consideration for the assumption for foreign exchange risk.

(ii) Currency and interest rate swaps

Currency and interest rate swaps are commitments to exchange one set of cash flows for another. Swaps result in aneconomic exchange of currencies or interest rates (for example, fixed rate for floating rate) or a combination of allthese (i.e. cross-currency interest rate swaps). No exchange of principal takes place, except for certain currencyswaps. The Group’s credit risk represents the potential cost to replace the interest rate swap contracts ifcounterparties fail to perform their obligation. This risk is monitored on an ongoing basis with reference to thecurrent fair value, a proportion of the notional amount of the contracts and the liquidity of the market.

(iii) Structured equity instruments

These are over the counter arrangements and are included in the consolidated financial statements at fair value usingvaluation models.

Fair value models use observable market data and include assumptions on volatility and correlation. Changes inthese assumptions could affect the fair value of the structured equity-linked investments. The fair valuations areindependent from the respective investment bank trading desks.



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2.14 Trade receivables

Trade receivables are amounts due from customers for merchandise / properties sold or services performed in theordinary course of business. If collection is expected in one year or less, they are classified as current assets. If not,they are presented as non-current assets. Trade receivables are recognised initially at fair value and subsequentlymeasured at amortised cost using the effective interest method, less provision for impairment.

2.15 Inventories

Inventories are stated at the lower of cost and net realisable value. The cost of inventories is based on the weightedaverage method and includes expenditure incurred in acquiring the inventories and bringing them to their existinglocation and condition. Net realisable value is the estimated selling price in the ordinary course of business lessapplicable variable selling expenses.

2.16 Property held for development and sale

Land and buildings held for sale in the ordinary course of business, including buildings under construction, areclassified as such and are stated at the lower of cost and net realisable value. The cost of work-in-progresscomprises construction costs, infrastructure costs and other related direct costs including capitalised borrowingcosts. Net realisable value is the estimated selling price in the ordinary course of business, less cost of completionand selling expenses.

2.17 Cash and cash equivalents

In the consolidated statement of cash flows, cash and cash equivalents include cash in hand, balances in currentaccounts, call accounts, term deposits with original maturities of three months or less and bank overdrafts. In theconsolidated balance sheet, bank overdrafts are shown within borrowings in current liabilities.

2.18 Assets classified as held-for-sale

Assets are classified as assets held-for-sale when their carrying amount will be recovered principally through a saletransaction and a sale is considered highly probable. They are stated at the lower of carrying amount and fair valueless costs to sell.

2.19 Borrowings

Borrowings are recognised initially at fair value, net of transaction costs incurred. Borrowings are subsequentlystated at amortised cost; any difference between the proceeds (net of transaction costs) and the redemption value isrecognised in the consolidated income statement over the period of the borrowings using the effective interestmethod.

Fees paid on the establishment of loan facilities are recognised as transaction costs of the loan to the extent that it isprobable that some or all of the facility will be drawn down. In this case, the fee is deferred until the draw-downoccurs. To the extent there is no evidence that it is probable that some or all of the facility will be drawn down, thefee is capitalised as a pre-payment for liquidity services and amortised over the period of the facility to which itrelates.

Borrowing costs incurred for the construction of any qualifying asset are capitalised during the period of time that isrequired to complete and prepare the asset for its intended use. Other borrowing costs are expensed.

Borrowings are classified as current liabilities unless the Group has an unconditional right to defer settlement of theliability for at least 12 months after the balance sheet date.



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2.20 Trade payables

Trade payables are obligations to pay for goods or services that have been acquired in the ordinary course ofbusiness from suppliers. Accounts payable are classified as current liabilities if payment is due within one year orless (or in the normal operating cycle of the business if longer). If not, they are presented as non-current liabilities.

Trade payables are recognised initially at fair value and subsequently measured at amortised cost using the effectiveinterest method.

2.21 Provisions

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

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

Provisions are measured at the present value of the expenditures expected to be required to settle the obligationusing a pre-tax rate that reflects current market assessments of the time value of money and risks specific to theobligation. Increases in provisions due to the passage of time are recognised as interest expense.

Present obligations arising under onerous contracts are recognised and measured as provisions. An onerous contractis considered to exist where the Group has a contract under which the unavoidable costs of meeting the obligationsunder the contract exceed the economic benefits expected to be received under it.

2.22 Employee benefits

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

An accrual is made for employees in the UAE for estimated liability for their entitlement to annual leave and leavepassage as a result of services rendered up to the balance sheet date. Provision is also made, using actuarialtechniques, for the end of service benefits due to employees in accordance with the UAE Labour Law for theirperiods of service up to the balance sheet date.

The accruals relating to annual leave and leave passage is disclosed as a current liability, while that relating to endof service benefits is disclosed as a non-current liability.

(b) Pension and social security policy within the UAE

The Group is a member of the pension scheme operated by the Federal Pension General and Social SecurityAuthority. Contributions for eligible UAE National employees are made and charged to the consolidated incomestatement, in accordance with the provisions of Federal Law No. 7 of 1999 relating to Pension and Social SecurityLaw. The Group has no further payment obligations once the contributions have been paid.

(c) Defined contribution plan

A number of subsidiaries of the Group participate in a defined contribution plan sponsored by a fellow subsidiary.For the defined contribution plan, these subsidiaries pay contributions to a privately administered pension plan on avoluntary basis for certain eligible employees. The subsidiaries have no further payment obligations once thecontributions have been paid. The contributions are recognised as an employee benefit expense when they are due.Prepaid contributions are recognised as an asset to the extent that a cash refund or a reduction in the futurepayments is available.



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2.23 Current and deferred income tax

The tax expense for the period comprises current and deferred tax. Tax is recognised in the consolidated incomestatement, except to the extent that it relates to items recognised in other comprehensive income or directly inequity. In this case, the tax is also recognised in other comprehensive income or directly in equity, respectively.

The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at thebalance sheet date in the countries where the Group’s subsidiaries, associates and joint ventures operate andgenerate taxable income. Management periodically evaluates positions taken in tax returns with respect to situationsin which applicable tax regulation is subject to interpretation. It establishes provisions where appropriate on thebasis of amounts expected to be paid to the tax authorities.

Deferred income tax is recognised, using the liability method, on temporary differences arising between the taxbases of assets and liabilities and their carrying amounts in the consolidated financial statements. However, deferredtax liabilities are not recognised if they arise from the initial recognition of goodwill; deferred income tax is notaccounted for if it arises from initial recognition of an asset or liability in a transaction other than a businesscombination that at the time of the transaction affects neither accounting nor taxable profit or loss. Deferred incometax is determined using tax rates (and laws) that have been enacted or substantially enacted by the balance sheetdate and are expected to apply when the related deferred income tax asset is realised or the deferred income taxliability is settled.

Deferred income tax assets (including tax losses) are recognised to the extent that it is probable that future taxableprofit will be available against which the temporary differences can be utilised.

Deferred income tax is provided on temporary differences arising on investments in subsidiaries and associates,except for deferred income tax liability where the timing of the reversal of the temporary difference is controlled bythe Group and it is probable that the temporary difference will not reverse in the foreseeable future.

Deferred income tax assets and liabilities are offset when there is a legally enforceable right to offset current taxassets against current tax liabilities and when the deferred income taxes assets and liabilities relate to income taxeslevied by the same taxation authority on either the same taxable entity or different taxable entities where there is anintention to settle the balances on a net basis.

2.24 Government grants

(a) Land

Land granted to the Group by the Government of Dubai is initially recognised at fair value prevailing at the time ofthe grant, as determined by independent qualified appraisers, and recognised as an asset with a corresponding creditto deferred government grant classified as a non-current liability. This is subsequently released to the consolidatedincome statement as follows:

(i) Where land is held-for-sale without any further development, the grant is released when sale of the land isrecognised;

(ii) Where land is held-for-sale or lease after development, the grant is released when development on the land,in accordance with master plans approved by the Group, has commenced;

(iii) Where land is held for leasing, the grant is released on commencement of the lease.

Where plots of land are developed or sold in phases, the elements of grants released to the consolidated incomestatement are calculated with reference to the gross floor area on a pro-rata basis.

Returns of granted land, impairment losses or reversals of impairment on granted land that arise prior to theconditions attached for release of government grants are met, are adjusted directly against deferred governmentgrants in the consolidated balance sheet.

(b) Other grants

All other forms of government grants are accounted for under the income approach in accordance with IAS 20,‘Accounting for Government Grants and Disclosure of Government Assistance’.



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2.25 Revenue recognition

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

The Group recognises revenue when the amount of revenue can be reliably measured, it is probable that futureeconomic benefits will flow to the entity and when specific criteria have been met for each of the Group’s activitiesas described below. The Group bases its estimates on historical results, taking into consideration the type ofcustomer, the type of transaction and the specifics of each arrangement.

(a) Sale of land and buildings

Revenue from sale of land and buildings is recognised in the consolidated income statement when the risks andrewards of ownership are transferred to the buyer, which is deemed to take place when legal title passes to thebuyer. The significant risks and rewards are deemed to be transferred when the title deed is registered in the nameof the buyer, which in the case of the buildings generally takes place only upon completion of construction andphysical handover of the buildings. However, in certain circumstances, equitable interest in the land and buildingsmay vest in the buyer before the legal title passes and therefore the risks and rewards of ownership are transferred atthat stage. In such cases, provided that the Group has no further substantial acts to complete in connection with thesale of the land or buildings, revenue is recognised when equitable interest in the land or buildings passes to thebuyer.

(b) Deferred revenue

Where the consideration for the sale of land and/or buildings includes provision of subsequent infrastructurefacilities, the attributable amount of revenue for the provision of infrastructure facilities is deferred and recognisedonly upon substantial completion of such facilities. All infrastructure related costs incurred until completion, whichinclude the cost of infrastructure land, are included in work-in-progress within property held for development andsale and are recognised as cost of sales when the related revenue is recognised in the consolidated incomestatement. The amount of revenue deferred in relation to the provision of infrastructure facilities is determined byestimating the total cost to completion of those facilities, plus a margin that reflects current market rates for theconstruction of such facilities.

(c) Rental income

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

(d) Telecommunications, IT and related revenue

Revenue from telecommunications, IT and related services is recognised when the services are rendered. Revenuefrom maintenance contracts is recognised on a time apportionment basis. Revenue from equipment sales isrecognised when the risk and rewards of ownership are transferred to the buyer. Equipment lease revenues arerecognised on a straight-line basis over the life of the lease.

(e) Hotel revenue

Hotel revenue from rooms rental, food and beverage sales and other ancillary services is recognised when the roomsare rented, goods are sold and services are rendered, net of discounts and municipality fees where applicable.

(f) Commercial and sponsorship income

Commercial and sponsorship revenue (advertising) is recognised when the advertisement is published and relatedservices are rendered, by reference to the stage of completion of the services provided at the balance sheet date. Eventsrevenue is recognised when events are held.



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2.25 Revenue recognition (continued)

(g) Incorporation and government services

Incorporation and government services revenue is recognised when the services are rendered.

(h) Facilities and property management

Revenue from facilities and property management is recognised when the services are rendered.

(i) Barter transactions

Revenue relating to barter transactions is recorded at the fair value of goods and services received. When the fairvalue of the services received cannot be measured reliably, the revenue is measured at the fair value of the servicesprovided, adjusted by the amount of any cash and cash equivalents transferred.

2.26 Interest income

Interest income is recognised using the effective interest method. When a loan and receivable is impaired, theGroup reduces the carrying amount to its recoverable amount, being the estimated future cash flow discounted atthe original effective interest rate of the instrument, and continues unwinding the discount as interest income.Interest income on impaired loan and receivables are recognised using the original effective interest rate.

2.27 Dividend income

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

2.28 Leases

(a) Operating leases

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

(b) Finance leases

Finance leases, which transfer to the lessee substantially all the risks and benefits incidental to ownership of theleased asset, are shown as receivable at the inception of the lease at the lower of fair value of the leased asset andthe present value of the minimum lease payments. Lease payments are apportioned between the finance income andreduction of the lease receivable so as to achieve a constant periodic rate of interest on the remaining balance of thereceivable. Finance income is credited directly to income so as to produce a constant periodic rate of interest on theremaining balance of receivable for each period. The difference between the gross receivable and the present valueof the receivable is recognised as unearned finance income.

2.29 Dividend distribution

Dividend distribution to the Company’s shareholders is recognised as a liability in the Group’s consolidatedfinancial statements in the period in which the dividends are approved by the Company’s shareholders.

2.30 Advances from customers

Instalments received from buyers, for sales of land and/or buildings, prior to meeting the revenue recognitioncriteria, are recognised as advances from customers. These are subsequently released to the consolidated incomestatement once the revenue recognition criteria are met. Advances from customers may also be released to theconsolidated income statement in accordance with the procedures set out by the Dubai Real Estate RegulatoryAuthority (“RERA”), when a customer defaults on its contractual obligations.



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3. FINANCIAL RISK MANAGEMENT

3.1 Financial risk factors

The Group’s multinational operations and significant debt financing exposes it to a variety of financial risks: marketrisk (including currency risk, price risk and cash flow and fair value interest rate risk), credit risk and liquidity risk.The Group’s overall risk management programme focuses on the unpredictability of financial markets and seeks tominimise potential adverse effects on the Group’s financial performance. The Group uses financial instruments tohedge certain risk exposures.

Risk management is carried out by the individual entities within the Group, with oversight from the Company’sRisk Management Department, under policies approved by the Executive Committee. The Risk ManagementDepartment identifies, evaluates and hedges financial risks in close co-operation with the Group’s operating units.The Executive Committee provides written principles for overall risk management, as well as written policiescovering specific areas, such as foreign exchange risk, interest rate risk, credit risk, use of derivative and non-derivative financial instruments, and investment of excess liquidity.

(a) Market risk

(i) Foreign exchange risk

The Group operates internationally and is exposed to foreign exchange risk arising from currency exposures,primarily with respect to the British Pound (“GBP”) and the Euro (“EUR”). With the UAE dirham currently beingpegged to the US dollar, foreign exchange risk between these two currencies is limited. Foreign exchange riskarises from future commercial transactions, recognised assets and liabilities and net investments in foreignoperations. The Group uses foreign currency borrowings, forward foreign exchange contracts and cross currencyswaps to hedge its risks arising from significant exposure denominated in foreign currencies.

As per the Group’s policy, the Company’s Treasury Department (“Group Treasury”) is responsible for monitoringand managing all material foreign currency exposures relating to committed and uncommitted operating contractsthat generate foreign currency denominated cash flows at a future determinable date. Foreign currency dealings arecentralised with Group Treasury for all Group operations, and the results of hedging are pushed down to theentities. In order to hedge the foreign exchange exposure, Group Treasury firstly utilises natural hedges (forinstance, matching of foreign currency receivables against payables in the same currency elsewhere in the Group)and then enters into foreign exchange deals for the remaining Group exposure with external counterparties. TheGroup finances certain investments through the use of foreign currency borrowings to hedge the foreign currencyexposure arising from foreign investments. The Group uses currency swaps, forward exchange contracts, plainvanilla and other structured derivatives to hedge and manage foreign exchange risks.

GBP/AED exchange rate sensitivity analysis

At 31 December 2014, if the GBP had weakened/strengthened by 5% (2013: 5%) against the AED with all othervariables held constant, post-tax profit for the year would have been higher/lower by AED 143.6 million (2013:AED 152.4 million), mainly as a result of foreign exchange gains/losses on translation of GBP-denominatedborrowings and trade payables.

EUR/AED exchange rate sensitivity analysis

At 31 December 2014, if the EUR had weakened/strengthened by 5% (2013: 5%) against the AED with all othervariables held constant, post-tax profit for the year would have been AED 13.6 million higher/lower (2013: AED211.2 million) mainly as a result of foreign exchange gains/losses on translation of EUR-denominated borrowingsand trade payables.



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3. FINANCIAL RISK MANAGEMENT (continued)

3.1 Financial risk factors (continued)

(a) Market risk (continued)

(i) Foreign exchange risk (continued)

The table below shows the exposure to different currencies of the Group’s financial assets and liabilities:

AED USD GBP EUR Others Total

AED’m AED’m AED’m AED’m AED’m AED’m

At 31 December 2014

Financial assets

Available-for-sale financial assets 18.1 284.0 - - - 302.1

Derivative financial instruments - - - 10.6 - 10.6

Trade and other receivables 2,836.3 29.3 175.8 100.6 2.9 3,144.9Due from related parties 2,830.2 51.4 1.3 17.0 - 2,899.9

Cash and bank balances 6,050.3 118.0 10.8 199.7 23.7 6,402.511,734.9 482.7 187.9 327.9 26.6 12,760.0

Financial liabilities

Borrowings 4,426.3 3,461.5 2,854.7 311.1 4.2 11,057.8

Derivative financial instruments 77.0 557.2 - 9.5 - 643.7

Trade and other payables 6,101.0 26.9 205.8 279.9 20.1 6,633.7

Due to related parties 398.5 - 0.2 - - 398.711,002.8 4,045.6 3,060.7 600.5 24.3 18,733.9

At 31 December 2013Financial assetsAvailable-for-sale financial assets 1.5 287.4 - - - 288.9Derivative financial instruments - 275.4 - - - 275.4Trade and other receivables 1,531.1 53.1 191.3 283.3 5.2 2,064.0Due from related parties 3,339.9 22.5 - 38.3 63.4 3,464.1Cash and bank balances 3,279.3 262.2 10.1 318.5 55.1 3,925.2

8,151.8 900.6 201.4 640.1 123.7 10,017.6

Financial liabilitiesBorrowings 2,390.9 1,342.8 3,032.0 4,214.7 0.7 10,981.1Derivative financial instruments - 1,028.8 - 2.6 - 1,031.4Trade and other payables 6,300.4 49.0 216.4 645.8 35.3 7,246.9Due to related parties 417.9 - 1.9 - - 419.8

9,109.2 2,420.6 3,250.3 4,863.1 36.0 19,679.2



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(a) Market risk (continued)

(ii) Price risk

The Group does not have a significant exposure to equity securities price risk through investments held by theGroup and classified on the consolidated balance sheet as available-for-sale. The Group is not exposed tocommodity price risk.

(iii) Cash flow and fair value interest rate risk

The Group is exposed to interest rate risk on its interest bearing assets and liabilities (floating rate loan notes andborrowings). Borrowings at variable rates expose the Group to cash flow interest rate risk. Borrowings at fixed ratesexpose the Group to fair value interest rate risk. The ratio of variable rate borrowings to fixed rate borrowings is75:25 (2013: 37:63). The Group manages its interest rate risk by using derivative instruments such as interest rateswaps.

The Group analyses its interest rate exposure on a dynamic basis. Various scenarios are simulated taking intoconsideration refinancing, renewal of existing positions, alternative financing and hedging. Based on thesescenarios, the Group calculates the impact on profit and loss of a defined interest rate shift. For each simulation, thesame interest rate shift is used for all currencies. The scenarios are run for net exposures of the Group to interestbearing liabilities.

In addition, at 31 December 2014, if interest rates on variable rate borrowings had been 0.5% (2013: 0.5%)higher/lower with all other variables held constant, the impact on post-tax profit/(loss) would be a decrease/increaseof AED 42.2 million (2013: AED 21.1 million), as a result of higher/lower interest expense.



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(b) Credit risk

Credit risk is managed at the operating subsidiaries level. Credit risk arises from cash and cash equivalents,derivative financial instruments and deposits with banks and financial institutions, as well as credit exposures to realestate customers, including outstanding receivables and committed transactions.

Trade receivables are either made to customers with an appropriate credit history or secured by bank guarantees.Derivative assets and bank deposits are limited to high-credit-quality financial institutions. The Group has policiesthat limit the amount of credit exposure to any financial institution.

No credit limits were exceeded during the reporting period, and management does not expect any losses from non-performance by these counterparties.

The table below shows the balances with major banks (based on Moody’s rating) at the balance sheet date.

Counterparties with external credit rating 2014 2013

AED’m AED’m

Bank balances

Aa2 2.8 1.6

A1 157.9 42.2

A2 52.9 76.6

A3 185.6 569.1

Baa1 3,184.8 906.5

Baa2 1,845.4 842.3

Baa3 0.4 37.1

Ba2 0.7 -

Ba3 1.8 15.5

B1 1.3 0.6

B2 0.3 -

NA* 963.0 1,428.4

6,396.9 3,919.9

* Balances maintained with certain UAE banks with no formal credit rating. However, management views thesebanks to be high-credit-quality financial institutions.

** Cash in hand of AED 5.6 million (2013: AED 5.3 million) has been excluded from the above bank balances.



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(c) Liquidity risk

Prudent liquidity risk management implies maintaining sufficient cash and marketable securities, the availability offunding through an adequate amount of committed credit facilities and the ability to close out market positions. Dueto the dynamic nature of the underlying businesses, the Group aims to maintain flexibility in funding by keepingcommitted credit lines available.

The table below analyses the Group’s non-derivative financial liabilities and net-settled derivative financialliabilities into relevant maturity groupings based on the remaining period at the balance sheet to the contractualmaturity date. The amounts disclosed in the table are the contractual undiscounted cash flows, including interestwhere applicable.

Within 1 year 2 to 5 years More than 5 years

AED’m AED’m AED’m

At 31 December 2014

Borrowings 2,024.1 10,694.2 22.3

Trade and other payables 6,225.3 419.8 2.1

Net settled derivatives 37.3 11.3 37.9

Loans from related parties 259.4 - -

Due to related parties 140.1 - -

8,686.2 11,125.3 62.3

At 31 December 2013

Borrowings 5,527.3 6,356.7 117.4

Trade and other payables 6,731.4 522.9 -

Loans from related parties 258.2 - -

Due to related parties 162.3 - -

12,679.2 6,879.6 117.4

The Group has the following undrawn borrowing facilities:

2014 2013AED’m AED’m

Floating rate:- Expiring within one year 5,273.2 8,224.8

- Expiring beyond one year 308.7 236.3

Fixed rate:- Expiring within one year - 35.0

Note 26 analyses the Group’s borrowings into relevant maturity groupings based on the remaining period at thebalance sheet date to the contractual maturity date. Note 13 analyses the derivative financial instruments betweenassets and liabilities, including the contract amounts and fair values.



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(c) Liquidity risk (continued)

The table below analyses the Group’s derivative financial instruments which will be settled on a gross basis intorelevant maturity groupings based on the remaining period at the balance sheet to the contractual maturity date. Theamounts disclosed in the table are the contractual undiscounted cash flows.

Within1 year

2 to 5years

More than5 years


At 31 December 2014

Derivatives

Cross currency contracts and interest rate swaps

- Outflow (40.2) (3,829.4) -

- Inflow 33.3 3,415.1 -

(6.9) (414.3) -

At 31 December 2013

Derivatives

Cross currency contracts and interest rate swaps

- Outflow (9,579.6) (3,935.6) -

- Inflow 9,108.2 3,323.5 -

(471.4) (612.1) -

3.2 Capital risk management

The Group’s objectives when managing capital are to safeguard the Group’s ability to continue as a going concernin order to provide returns for shareholders and benefits for other stakeholders and to maintain an optimal capitalstructure to reduce the cost of capital. In order to maintain or adjust its capital structure, the Group may increase orreduce debt or adjust the amount of dividends paid to shareholders.

Consistent with others in the industry, the Group monitors capital on the basis of the gearing ratio. This ratio iscalculated as net debt divided by total capital. Net debt is calculated as total borrowings (including ‘current andnon-current borrowings’ as shown in the consolidated balance sheet and loans from related parties) less cash andcash equivalents. Total capital is calculated as ‘equity’ as shown in the consolidated balance sheet plus net debt.

The gearing ratios at 31 December 2014 and 2013 were as follows:

2014 2013

AED’m AED’m

Total borrowings (Notes 19, 26) 11,316.4 11,238.6

Less: cash and cash equivalents (Note 20) (4,907.1) (3,458.7)

Net debt 6,409.3 7,779.9

Total equity 21,071.8 17,914.0

Total capital 27,481.1 25,693.9

Gearing ratio 23% 30%

The decrease in the gearing ratio during 2014 resulted primarily due to cash generated from operations and from theincrease in total equity due to profit for the year.



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3.3 Fair value estimation

The table on the following page analyses financial instruments carried at fair value, by valuation method. Thedifferent levels have been defined as follows:

Quoted prices (unadjusted) in active markets for identical assets or liabilities (level 1). Inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly

(that is, as prices) or indirectly (that is, derived from prices) (level 2). Inputs for the asset or liability that are not based on observable market data (that is, unobservable inputs) (level

3).

The fair value of financial instruments traded in active markets is based on quoted market prices at the balance sheetdate. A market is regarded as active if quoted prices are readily and regularly available from an exchange, dealer,broker, industry group, pricing service, or regulatory agency, and those prices represent actual and regularlyoccurring market transactions on an arm’s length basis. The quoted market price used for financial assets held bythe Group is the current bid price. These instruments are included in level 1.

The fair value of financial instruments that are not traded in an active market is based on valuation techniques.These valuation techniques maximise the use of observable market data where it is available and rely as little aspossible on entity specific estimates. If all significant inputs required to fair value an instrument are observable,these instruments are included in level 2.

If one or more of the significant inputs is not based on observable market data, these instruments are included inlevel 3.

The Group uses a variety of methods and makes assumptions that are based on market conditions existing at eachbalance sheet date. Quoted market prices or dealer quotes for similar instruments are used for long-term debt. Thefair value of interest rate swaps is calculated as the present value of the estimated future cash flows. The fair valueof forward foreign exchange contracts is determined using quoted forward exchange rates at the balance sheet date.Other techniques, such as estimated discounted cash flows, are used to determine fair value for the remainingfinancial instruments.

The carrying value less impairment provision of trade receivables and payables are assumed to approximate theirfair values. The fair value of financial liabilities for disclosure purposes is estimated by discounting the futurecontractual cash flows at the current market interest rate that is available to the Group for similar financialinstruments. Other receivables and payables approximate their fair values.



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3.3 Fair value estimation (continued)

The following table presents the Group’s assets and liabilities that are measured at fair value at 31 December 2014.

Level 1 Level 2 Level 3 TotalAED’m AED’m AED’m AED’m

AssetsFinancial assets at fair value through profit or loss- Trading derivatives - - 10.6 10.6Available-for-sale financial assets- Equity Securities - - 16.6 16.6- Money market funds 196.3 87.7 1.5 285.5Total assets 196.3 87.7 28.7 312.7

LiabilitiesFinancial liabilities at fair value through profit or loss- Trading derivatives - 634.2 9.1 643.3- Derivatives used for hedging - 0.4 - 0.4Total liabilities - 634.6 9.1 643.7

The following table presents the Group’s assets and liabilities that are measured at fair value at 31 December 2013.

Level 1 Level 2 Level 3 TotalAED’m AED’m AED’m AED’m

AssetsFinancial assets at fair value through profit or loss- Trading derivatives - 275.4 - 275.4Available-for-sale financial assets- Money market funds - 80.6 208.3 288.9Total assets - 356.0 208.3 564.3

LiabilitiesFinancial liabilities at fair value through profit or loss- Trading derivatives - 1,028.8 - 1,028.8- Derivatives used for hedging - 2.6 - 2.6Total liabilities - 1,031.4 - 1,031.4

The following table presents the movement in level 3 financial instruments:


At 1 January 208.3 171.4Additions during the year 28.3 3.0Change in fair value for the year (10.5) 33.9Transfers out of level 3 (196.3) -Exchange differences (1.1) -At 31 December 28.7 208.3

During the year the Group’s investment in certain money market funds got publicly listed and were hencetransferred to level 1.



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4. CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS

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

The Group makes estimates and assumptions concerning the future. The resulting accounting estimates will, bydefinition, seldom equal the related actual results. The estimates and assumptions that have a significant risk ofcausing a material adjustment to the carrying amounts of assets and liabilities within the next financial year arediscussed below.

(a) Impairment of assets

Asset recoverability is an area involving management judgement, requiring assessment as to whether the carryingvalue of assets can be supported by the higher of, the net present value of future cash flows derived from suchassets using cash flow projections which have been discounted at an appropriate rate, and the assets’ fair value lesscosts to sell.

In calculating the present value of the future cash flows, certain assumptions are required to be made in respect ofthe impairment reviews. The key assumptions on which management has based its cash flow projections whendetermining the recoverable amount of the assets are as follows:

Management’s projections have been prepared on the basis of strategic plans, knowledge of the market,and management’s views on achievable growth in market share over the term period of three to five years.

Capitalisation rates of 8.5% - 9.75% applied to cash flows are based on the Group’s weighted averageyield based upon the timing of the cash flows, with a risk premium reflecting the relative risks in themarkets in which the businesses operate.

A net impairment reversal of AED 378.5 million has been recognised against property, plant and equipment (Note5), investment property (Note 6), investments in associates and joint ventures (Notes 8,9) and property held fordevelopment and sale (Note 18). This reversal has been recorded following management's impairment review ofthese balances due to the change in the estimates used to determine the assets’ recoverable amount arising from theoverall improvement in the competitive environment in which the Group operates. The impairment reversal/chargehas been determined as the difference between the carrying amount of the property, plant and equipment,investment property, and investments in associates and joint ventures (before impairment reversal/charge) and therespective recoverable amount. The recoverable amount has been determined on the basis of “value in use”. In thecase of property held for development and sale, the impairment reversal/charge has been determined as thedifference between the carrying amount and the “net realisable value”.

At 31 December 2014, if the capitalisation rates used were 0.5% higher, with all other variables held constant, thecarrying amount of these assets would have exceeded the recoverable amount by AED 314.9 million; if thecapitalisation rates used were 0.5% lower, with all other variables held constant, the recoverable amount of theseassets would have exceeded the carrying amount by AED 351.2 million.

At 31 December 2014, if the market comparable prices were 5% lower, with all other variables held constant, thecarrying amount of these assets would have exceeded the recoverable amount by AED 237.6 million; if the marketcomparable prices were 5% higher, with all other variables held constant, the recoverable amount of these assetswould have exceeded the carrying amount by AED 246.3 million.



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4. CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS (continued)

(b) Fair value of land and government grants

During 2014, the Group was granted land by the Government of Dubai. The fair value of this land was AED 322.8million (2013: AED 13.4 million), as valued by independent qualified appraisers. Significant judgement is requiredin determining the fair value of the land granted.

Such grants are released to the consolidated income statement in accordance with the accounting policy ongovernment grants as set out in Note 2.24. In applying this policy to plots of land that are developed or sold inphases, the elements of grants released to the consolidated income statement are calculated with reference to thegross floor area on a pro-rata basis.

(c) Infrastructure estimates and deferred revenue

As described in Note 2.25 (b), the Group defers a portion of revenue from sale of land and buildings if the Grouphas further substantial obligations to complete the infrastructure facilities in connection with the sale of such landand buildings. The amount of revenue deferred in relation to the provision of such infrastructure facilities isdetermined by estimating the total cost to completion of those facilities. This requires the use of significant estimatesand judgements to determine the quantum of infrastructure facilities required, the costs and time required tocomplete their construction, and the expected share of costs that may be recharged to the Group on account ofinfrastructure developed or under development by third parties or government authorities that are beyond theGroup’s control.

The amount of revenue deferred at 31 December 2014 is based on management’s best estimate at that date of thetotal costs to complete construction of the related infrastructure facilities, and the Group’s final cost of infrastructuremay ultimately be materially different.

(d) Contractors’ claims

Certain contractors have raised claims on the Group for termination or delay of contracts for construction andconsultancy, demobilisation of the contractor’s equipment, repatriation costs associated with the contractor’s staffand labour and other associated costs. Provisions in respect of contractors’ claims are subject to variousuncertainties and the outcome of individual matters is not predictable with assurance. Significant judgment isrequired in assessing probability and making estimates in respect of the provision, and the Group’s final liabilitymay ultimately be materially different. The Group’s total liability in respect of contractors’ claims is determined ona case-by-case basis and represents an estimate of probable losses after considering, among other factors, theprogress of discussion with the contractors, the Group’s experience and the experience of others in similar contractsand the opinions and views of legal counsel. Predicting the outcome of the Group’s terminated contracts isinherently difficult, particularly in cases in which claimants seek substantial or indeterminate damages. See Note 44“Contingencies” for information on the Group’s contingent liabilities with contractors. At 31 December 2014, thelikelihood of economic outflows resulting from these claims is assessed to be AED 283.2 million (2013: AED 384.7million) representing management’s best estimate of the liabilities that may be incurred in this regard. Themovement in the provision has been disclosed in Note 31 and the release/charge has been included within ‘otheroperating expenses’ (Note 39).

At 31 December 2014, if the proportion of the claim provided for was 5% higher/lower, with all other variables heldconstant, post-tax profit for the year would have been AED 12.3 million (2013: AED 13.8 million) lower/higher.

(e) Legal claims

The Group exercises judgement in measuring and recognising provisions and the exposures to contingent liabilitiesrelated to pending litigation or other outstanding claims subject to negotiated settlement, mediation or arbitration, aswell as other contingent liabilities. Judgement is necessary in assessing the likelihood that a pending claim willsucceed, or a liability will arise, and to quantify the possible range of the financial settlement. Because of theinherent uncertainty in this evaluation process, actual losses may be different from the originally estimatedprovision. See Note 44 “Contingencies” for information on the Group’s contingent liabilities for legal claims.



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5. PROPERTY, PLANT AND EQUIPMENT

Buildings Furniture,and Equipment fixtures Capital

infra- Leasehold and and office Computer Motor Other work-in-Note Land structure improvements machinery equipment hardware vehicles assets progress Total

AED’m AED’m AED’m AED’m AED’m AED’m AED’m AED’m AED’m AED’m

CostAt 1 January 2014 997.5 5,685.9 186.4 1,536.3 2,730.0 164.8 19.5 114.1 3,026.1 14,460.6Government grants received 27 145.0 - - - - - - - - 145.0Additions - 36.6 22.1 69.3 186.4 10.2 1.9 3.8 343.4 673.7Disposals - (3.8) (0.6) (1.4) (47.4) (11.0) (0.7) (3.3) - (68.2)Write-offs/retirements 39 - (5.5) - (68.0) (3.2) - - - (5.8) (82.5)Transfers to investment property 6 (5.6) (29.0) - - (0.9) - - - (519.3) (554.8)Transfers from investment property 6 12.5 - - - - - - - - 12.5Transfers to intangible assets 7 - - - - - (2.9) - - (10.1) (13.0)Transfers from property held for development and

sale 18 52.5 - - - - - - - 155.8 208.3Transfers from capital work-in-progress - 13.1 - 0.8 75.4 - - - (89.3) -Exchange differences (4.3) (31.1) (1.1) (165.3) (0.7) (4.6) (0.5) - (1.8) (209.4)At 31 December 2014 1,197.6 5,666.2 206.8 1,371.7 2,939.6 156.5 20.2 114.6 2,899.0 14,572.2

Depreciation and impairmentAt 1 January 2014 40.0 2,463.3 167.6 1,069.2 2,165.1 140.7 14.6 108.7 2,218.5 8,387.7Charge for the year - 196.6 19.9 92.0 202.0 12.7 1.5 3.7 - 528.4Disposals - (3.6) (0.6) (1.3) (38.0) (10.1) (0.7) (3.3) - (57.6)Write-offs/retirements 39 - (5.4) - (68.0) (2.5) - - - - (75.9)Impairment 39 - 1.2 - - 6.1 - - 0.5 99.9 107.7Transfers to investment property 6 - (15.6) - - - - - - (436.3) (451.9)Transfers to intangible assets 7 - - - - - (2.8) - - - (2.8)Transfers from property held for development and

sale 18 20.1 - - - - - - - 81.5 101.6Exchange differences - (9.7) (0.3) (118.0) (0.4) (3.1) (0.5) - - (132.0)At 31 December 2014 60.1 2,626.8 186.6 973.9 2,332.3 137.4 14.9 109.6 1,963.6 8,405.2

Net book amount at 31 December 2014 1,137.5 3,055.4 20.2 397.8 607.3 19.0 5.3 5.0 935.4 6,167.0



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5. PROPERTY, PLANT AND EQUIPMENT (continued)

Buildings Furniture,and Equipment fixtures Capital

infra- Leasehold and and office Computer Motor Other work-in-Note Land structure improvements machinery equipment hardware vehicles assets progress Total

AED’m AED’m AED’m AED’m AED’m AED’m AED’m AED’m AED’m AED’m

CostAt 1 January 2013 1,008.3 5,844.4 252.8 1,413.9 2,532.8 149.7 16.2 111.5 3,282.0 14,611.6Additions - - 9.6 81.4 141.2 12.5 3.7 2.3 131.9 382.6Disposals - (10.1) (13.2) (28.7) (27.7) (2.3) (0.5) (0.8) - (83.3)Write-offs/retirements 39 - (9.1) - - (8.8) (0.3) (0.1) (0.2) (0.2) (18.7)Transfers to investment property 6 (8.6) (149.7) (0.5) - (17.4) - - - (341.4) (517.6)Transfers from property held for development and

sale 18 2.4 - - - - - - - 11.5 13.9Transfers to/from capital work-in-progress (6.1) - 18.3 11.7 28.9 3.7 - 1.3 (57.8) -Other transfers and reclassifications - - (80.8) - 80.8 - - - - -Exchange differences 1.5 10.4 0.2 58.0 0.2 1.5 0.2 - 0.1 72.1At 31 December 2013 997.5 5,685.9 186.4 1,536.3 2,730.0 164.8 19.5 114.1 3,026.1 14,460.6

Depreciation and impairmentAt 1 January 2013 40.0 2,296.0 218.7 962.1 1,963.7 130.1 14.1 107.0 2,513.6 8,245.3Charge for the year - 198.6 14.7 95.0 199.5 12.3 0.9 2.1 - 523.1Disposals - (6.4) (13.1) (28.7) (24.4) (2.3) (0.5) (0.2) - (75.6)Write-offs/retirements 39 - (9.1) - - (8.7) (0.3) (0.1) (0.2) - (18.4)Impairment 39 - - - - - - - - 0.7 0.7Transfers to investment property 6 - (19.0) (0.5) - (17.3) - - - (295.8) (332.6)Other transfers and reclassifications - - (52.3) - 52.3 - - - - -Exchange differences - 3.2 0.1 40.8 - 0.9 0.2 - - 45.2At 31 December 2013 40.0 2,463.3 167.6 1,069.2 2,165.1 140.7 14.6 108.7 2,218.5 8,387.7

Net book amount at 31 December 2013 957.5 3,222.6 18.8 467.1 564.9 24.1 4.9 5.4 807.6 6,072.9



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5. PROPERTY, PLANT AND EQUIPMENT (continued)

The land on which a resort owned and operated by Jumeirah is constructed has not been recorded in the books ofthe Group. It is held in the name of the ultimate shareholder. No amount is payable by the Group for the use of suchland.

Capital work-in-progress comprises design and development costs of buildings and infrastructure. It also includesland of AED 74.8 million (2013: AED 94.9 million).

Depreciation charge is included under:Year ended

31 December2014

Year ended31 December

2013AED’m AED’m

Direct costs 453.1 458.5General and administrative expenses 74.4 64.1Marketing and selling 0.9 0.5

528.4 523.1



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6. INVESTMENT PROPERTY

Note Land Buildings Infrastructure

Buildinginterior

improvements

Capitalwork-in-progress Total


CostAt 1 January 2014 35,073.7 13,562.7 2,612.4 225.0 5,859.2 57,333.0Additions - - 10.1 9.4 498.5 518.0Write-offs/retirements 39 - (22.1) - (0.2) (38.0) (60.3)Government grants received 27 176.0 - - - - 176.0Government grants returned 27 (449.2) - - - - (449.2)Transfers to property, plant and equipment 5 (12.5) - - - - (12.5)Transfers from property, plant and equipment 5 5.6 548.3 - 0.9 - 554.8Transfers to property held for development and sale 18 (1,634.0) - (78.2) - (54.9) (1,767.1)Transfers from property held for development and sale 18 214.7 157.0 - - 69.6 441.3Transfers to/from capital work-in-progress (54.9) 331.1 245.7 (1.6) (520.3) -Exchange differences (1.4) (18.5) (15.8) - (26.7) (62.4)At 31 December 2014 33,318.0 14,558.5 2,774.2 233.5 5,787.4 56,671.6

Depreciation and impairmentAt 1 January 2014 12,357.0 4,339.6 590.1 207.3 2,626.9 20,120.9Charge for the year 0.6 387.7 97.9 15.5 - 501.7Write-offs/retirements 39 - (5.9) - (0.2) - (6.1)Government grants returned 27 (284.8) - - - - (284.8)Impairment charge/(reversal) 427.8 (720.8) - - 28.7 (264.3)Transfers from property, plant and equipment 5 - 451.9 - - - 451.9Transfers to property held for development and sale 18 (32.6) - (11.1) - - (43.7)Transfers from property held for development and sale 18 - 5.0 - - - 5.0Transfers from capital work-in-progress - 189.0 - - (189.0) -Exchange differences (0.1) (1.0) (0.3) - - (1.4)At 31 December 2014 12,467.9 4,645.5 676.6 222.6 2,466.6 20,479.2

Net book amountAt 31 December 2014 20,850.1 9,913.0 2,097.6 10.9 3,320.8 36,192.4



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6. INVESTMENT PROPERTY (continued)

Note Land Buildings Infrastructure

Buildinginterior

improvements

Capitalwork-in-progress Total


CostAt 1 January 2013 42,932.3 13,005.3 1,690.1 205.2 5,264.6 63,097.5Additions - 1.2 578.1 2.4 284.7 866.4Write-offs/retirements (415.7) (2.8) - - (0.4) (418.9)Government grants received 27 13.4 - - - - 13.4Government grants returned 27 (5,940.2) - - - - (5,940.2)Transfers from property, plant and equipment 5 8.6 195.8 - 17.4 295.8 517.6Transfers to property held for development and sale 18 (932.7) - (14.5) - (437.3) (1,384.5)Transfers from property held for development and sale 18 195.9 27.6 27.8 - 321.2 572.5Transfers to/from capital work-in-progress (780.3) 333.0 330.9 - 116.4 -Exchange differences (7.6) 2.6 - - 14.2 9.2At 31 December 2013 35,073.7 13,562.7 2,612.4 225.0 5,859.2 57,333.0

Depreciation and impairmentAt 1 January 2013 16,866.6 4,972.4 536.5 176.5 1,973.7 24,525.7Charge for the year 0.7 357.2 68.1 13.5 - 439.5Write-offs/retirements (273.4) (1.1) - - - (274.5)Government grants returned 27 (2,433.8) - - - - (2,433.8)Impairment (reversal)/charge (1,179.1) (1,008.6) - - 35.8 (2,151.9)Transfers from property, plant and equipment 5 - 19.5 - 17.3 295.8 332.6Transfers to property held for development and sale 18 (260.8) - (14.5) - (122.0) (397.3)Transfers from property held for development and sale 18 80.8 - - - - 80.8Transfers to capital work-in-progress (443.6) - - - 443.6 -Exchange differences (0.4) 0.2 - - - (0.2)At 31 December 2013 12,357.0 4,339.6 590.1 207.3 2,626.9 20,120.9

Net book amountAt 31 December 2013 22,716.7 9,223.1 2,022.3 17.7 3,232.3 37,212.1



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Fair value

As described in Note 2.6, the Group carries its investment property at cost less accumulated depreciation and impairmentlosses under the cost model in accordance with IAS 40, ‘Investment Property’. IAS 40 also requires separate disclosure ofthe fair values of investment property when the cost model is used. The fair values for disclosure purposes are determinedby professionally qualified external valuers once every three years and for all other years by the Group’s professionallyqualified internal valuation teams.

Valuation techniques underlying management’s estimation of fair value

‘Residual price method’ involves determination of the estimated selling price of a project development on the respectiveplots of land; reduced by the estimated construction and other costs to completion that would be incurred by a marketparticipant and an estimated profit margin that a market participant would require to hold and develop the plots tocompletion. The significant inputs into this valuation approach are the estimated selling prices, costs to complete anddevelopers’ margins. The valuation method adopted for these land plots is based on inputs that are not based on observablemarket data (that is, unobservable inputs - Level 3).

‘Capitalisation/discounted cash flow method’ involves determination of the value of the investment property by calculatingthe net present value of expected future earnings. The significant inputs into this valuation approach are the future rentalcash inflows, growth rates, discount rates and capitalisation rates. The valuation method adopted for these properties isbased on inputs that are not based on observable market data (that is, unobservable inputs - Level 3).

‘Sales comparison method’ involves determination of the value of the investment property with reference to comparablemarket transactions for properties in close proximity. These values are adjusted for differences in key attributes such assize, gross floor area and location. The most significant input into this valuation approach is price per square foot. Thevaluation method adopted for these properties is based on inputs that are indirectly derived from prices observable for theassets and then adjusted by inputs that are not based on observable market data (that is, unobservable inputs - Level 3).

The capitalisation/discounted cash flow method has been applied for the valuation of the Group’s residential, commercialand land lease portfolios including those under construction and the related infrastructure.

The residual price and sales comparison methods have been applied for the valuation of the Group’s land and relatedinfrastructure.

There were no changes to the valuation techniques during the year.

Accordingly, a formal external valuation of the Group’s investment property was performed at 31 December 2014. Basedon such valuation, the fair value of the investment property at 31 December 2014 was AED 75,902.3 million, which washigher than the net book amount of AED 36,192.4 million. In the prior year, the internal valuation of the Group’sinvestment property at 31 December 2013 was AED 58,971.7 million as against a net book amount of AED 37,212.1million.



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The net impairment reversal against investment property is analysed as follows:


(Charged)/reversed against deferred government grants (Note 27) (345.3) 1,172.8Reversed in the consolidated income statement (Note 39) 609.6 979.1

264.3 2,151.9

The land on which the retail area of a resort owned and operated by Jumeirah is constructed has not been recorded in thebooks of the Group. It is held in the name of the ultimate shareholder. No amount is payable by the Group for the use ofsuch land.

Certain investment property having a net book amount of AED 1,375.4 million (2013: AED 4,629.9 million) has beenpledged as security against loan facilities obtained by the Group (Note 26).

Certain investment property has been pledged as security against a loan facility obtained by the parent company. At 31December 2014, the parent company, in coordination with the lender, was in the process of substituting one of the pledgedproperties with another property of similar fair value. At 31 December 2014, the net book amount of investment propertypledged as security against this facility, excluding the property under substitution, was AED 2,737.4 million (2013: AED2,635.4 million).

The following amounts have been recognised in the consolidated income statement in respect of investment property:

Year ended 31 December2014 2013

AED’m AED’m

Rental income 2,486.7 2,126.3========= =========

Direct operating expenses arising from investment properties (includingdepreciation) 1,095.8 1,002.8

========= =========Impairment reversal on investment property (609.6) (979.1)

========= =========



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7. INTANGIBLE ASSETS

Note GoodwillCustomer

base

Long-termmanagement

contractsComputer

software

Licencesand trade

namesMaster

plans Brands Others* TotalAED’m AED’m AED’m AED’m AED’m AED’m AED’m AED’m AED’m

CostAt 1 January 2014 433.4 374.6 3.7 195.0 367.1 6.1 20.6 58.3 1,458.8Additions - - - 26.0 14.2 - - 3.3 43.5Write-offs 39 - - - (2.4) (9.4) (2.4) - (12.6) (26.8)Transfer from property, plant and equipment 5 - - - 13.0 - - - - 13.0Disposal of a subsidiary (1.8) (50.6) - (0.7) (12.0) - - (5.4) (70.5)Other transfers - - - 10.0 - - - (10.0) -Exchange differences (52.8) (39.7) - (8.6) (12.6) - (2.5) (0.7) (116.9)At 31 December 2014 378.8 284.3 3.7 232.3 347.3 3.7 18.1 32.9 1,301.1

Amortisation and impairmentAt 1 January 2014 - 235.0 1.0 145.1 154.8 6.1 17.0 44.3 603.3Charge for the year - 21.7 0.4 26.1 39.6 - 0.6 0.2 88.6Write-offs 39 - - - (2.3) (8.0) (2.4) - (9.1) (21.8)Impairment charge 39 - - - - 24.4 - - - 24.4Transfer from property, plant and equipment 5 - - - 2.8 - - - - 2.8Disposal of a subsidiary - (50.6) - (0.7) (8.7) - - (5.4) (65.4)Exchange differences - (24.6) - (7.5) (7.4) - (2.1) (0.5) (42.1)At 31 December 2014 - 181.5 1.4 163.5 194.7 3.7 15.5 29.5 589.8

Net book amount at 31 December 2014 378.8 102.8 2.3 68.8 152.6 - 2.6 3.4 711.3

*Other intangible assets mainly include software under implementation and indefeasible rights of use.



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7. INTANGIBLE ASSETS (continued)

Note GoodwillCustomer

base

Long-termmanagement

contractsComputer

software

Licencesand trade

namesMaster

plans Brands Others* TotalAED’m AED’m AED’m AED’m AED’m AED’m AED’m AED’m AED’m

CostAt 1 January 2013 414.9 360.6 3.7 170.5 383.0 6.1 19.7 65.9 1,424.4Additions - - - 13.0 33.4 - - 2.8 49.2Write-offs 39 - - - (0.9) (53.8) - - (1.2) (55.9)Other transfers - - - 9.5 - - - (9.5) -Exchange differences 18.5 14.0 - 2.9 4.5 - 0.9 0.3 41.1At 31 December 2013 433.4 374.6 3.7 195.0 367.1 6.1 20.6 58.3 1,458.8

Amortisation and impairmentAt 1 January 2013 - 192.5 0.6 121.1 171.8 6.1 15.7 44.3 552.1Charge for the year - 34.6 0.4 22.5 34.8 - 0.6 0.2 93.1Write-offs 39 - - - (0.9) (53.8) - - (0.4) (55.1)Exchange differences - 7.9 - 2.4 2.0 - 0.7 0.2 13.2At 31 December 2013 - 235.0 1.0 145.1 154.8 6.1 17.0 44.3 603.3

Net book amount at 31 December 2013 433.4 139.6 2.7 49.9 212.3 - 3.6 14.0 855.5

*Other intangible assets mainly include software under implementation and indefeasible rights of use.



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7. INTANGIBLE ASSETS (continued)

Goodwill is allocated to the Group’s cash generating units (“CGU”s) identified according to the business segments.A segment-level summary of the allocation of goodwill is presented below:

31 December 2014 31 December 2013Europe UAE Total Europe UAE TotalAED’m AED’m AED’m AED’m AED’m AED’m

Telecommunications 378.3 - 378.3 431.1 - 431.1Others - 0.5 0.5 - 2.3 2.3

378.3 0.5 378.8 431.1 2.3 433.4

The Group has tested recognised goodwill for impairment. As a result, no impairment loss was recognised in 2014and 2013.

The recoverable amount of a CGU is determined based on value-in-use calculations. These calculations use pre-taxcash flow projections covering a five-year period, based on financial budgets approved by management. Cash flowsbeyond the five-year period are extrapolated using the estimated growth rates stated below. The growth rate doesnot exceed the long-term average growth rate for the business in which the CGU operates.

The key assumptions used for value-in-use calculations for the significant CGUs are as follows:

Goodwill

Forecast cash flows based on past performance and expectations of market development Growth rate: 1.9% Discount factor: 9.9% Gross margin: 77.3% EBITDA margin: 33.8%

The weighted average growth rates used are consistent with the forecasts used in industry reports. The discountrates used are pre-tax and reflect specific risks relating to the relevant segments.



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8. INVESTMENTS IN ASSOCIATES


At 1 January 5,938.1 7,527.9Additions 69.8 -Share of profit 628.4 518.5Share of other comprehensive (loss)/income (5.7) 7.7Impairment reversal/(charge), net (Note 39) 76.3 (1,436.9)Dividends received (398.6) (489.5)Transfer to assets classified as held-for-sale (1,466.8) -Disposal of a subsidiary (0.6) -Other movements (30.1) 1.9Exchange differences (327.2) (191.5)At 31 December 4,483.6 5,938.1

Commitments and contingencies

Group’s share of associates’ contingencies 107.0 132.7

Group’s share of associates’ commitments 1,109.2 1,400.3

Where the Group’s share of losses exceeds its interest in the equity accounted associate, the carrying amount of theassociate is reduced to zero and the recognition of further losses is discontinued, except to the extent that the Grouphas an obligation to make payments on behalf of the associate. Accordingly, the Group has not recognised lossesamounting to AED 33.4 million (2013: AED 135.8 million) relating to an investment in an associate. As at 31December 2014, the Group’s share of accumulated losses that exceeded that associate’s carrying value amounted toAED 344.3 million (2013: AED 310.9 million).

An investment in an associate having a net book amount of AED 1,528.5 million (2013: AED 1,389.8 million) hasbeen pledged as security against a loan facility obtained by the Group (Note 26).

During the year an impairment reversal of AED 76.3 million (2013: AED 42.7 million) was recognised in respect ofan investment in an associate due to the overall improvement in the competitive environment in which the associateoperates. In 2013 an impairment charge of AED 1,479.6 million had also been recognised in respect of aninvestment in an associate due to the continued deterioration in the political and economic environment in which theassociate operates (Note 39).

The fair value at the year end of the Group’s investment in listed associates falls in level 1 of the fair valuehierarchy (i.e. quoted prices) and amounted to:


du 4,492.8 5,936.9Forthnet 181.8 311.9

4,674.6 6,248.8



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8. INVESTMENTS IN ASSOCIATES (continued)

Name Nature of businessHolding

percentage2014 2013

United Arab EmiratesAxiom Telecom LLC (“Axiom”) Mobile phone retail, wholesale and

services26 26

Emirates Integrated Telecommunications Company,PJSC (“du”) Telecommunications 19.5 19.5

Emirates Central cooling system corporation(“EMPOWER”) District cooling services 30 30

Dubai Festival City LLC Property development and leasing 30 30Jernain EMS LLC Energy management Solutions - 50

United KingdomInteroute Telecom Holding Limited (UK) Dark fibre and bandwidth services 30 30

TunisiaSociete Nationale De telecommunications (“Tunisie

Telecom”) Telecommunications 35 35

GreeceHellenic company for Telecommunications andTelematic Applications S.A (“Forthnet”) Telecommunications 41 41

Whilst the Group’s interest in du is 19.5%, the Group has representation on the Board of du and continues toexercise significant influence over its business. The investment therefore continues to be classified as an associate.



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8. INVESTMENTS IN ASSOCIATES (continued)

Summarised financial information relating to the Group’s associates based on their financial statements prepared under IFRS and aggregated by industry classification is as follows:

Industry classificationNon-current

assetsCurrent

assetsNon-current

liabilitiesCurrent

liabilities Revenues

Profit/(loss)from

continuingoperations

Othercomprehensive

loss

Totalcomprehensive

income/(loss)

Group’sshare of

net assets/(liabilities)

AED’m AED’m AED’m AED’m AED’m AED’m AED’m AED’m AED’m

2014Telecommunications 14,996.5 12,894.6 6,374.7 10,787.5 24,301.9 2,364.6 9.0 2,373.6 2,482.1Utilities and other services 4,871.5 1,141.1 2,134.4 1,396.7 1,488.3 813.8 - 813.8 744.5

Group’s share of net assets 3,226.6Goodwill and other adjustments 1,257.0Carrying amount 4,483.6

2013Telecommunications 17,789.9 13,391.7 6,931.2 12,352.9 25,434.0 2,242.8 (12.6) 2,230.2 2,904.5Real estate 9,723.0 1,775.0 11,304.0 600.0 1,545.0 (196.4) - (196.4) (121.8)Utilities and other services 4,337.4 749.6 1,371.3 1,946.8 840.7 239.8 - 239.8 530.9

Group’s share of net assets 3,313.6Goodwill and other adjustments 2,624.5Carrying amount 5,938.1

The dividends received during 2014 and 2013 were primarily from the Group’s associates operating in the telecommunications industry.



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9. INVESTMENTS IN JOINT VENTURES


At 1 January 503.9 361.7Additions 1.2 5.4Impairment reversal (Note 39) 164.7 131.1Share of loss (15.6) (1.3)Share of other comprehensive (loss)/income (4.4) 6.7Exchange differences (1.2) 0.3At 31 December 648.6 503.9

Commitments and contingencies

Group’s share of joint ventures’ commitments 133.6 284.8

During the year an impairment reversal of AED 164.7 million (2013: AED 131.1 million) was recognised in respectof an investment in a joint venture due to the overall improvement in the competitive environment in which the jointventure operates (Note 39).

Name Nature of businessHolding

percentage2014 2013

United Arab EmiratesEmaar Bawadi LLC Real estate development 50 50Arady Developments LLC Real estate development 50 50

MauritiusMadamobil Holdings Mauritius Limited (“Madamobil”) Telecommunications 44 44

CyprusGiradena Limited Telecommunications holding company 50 50



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9. INVESTMENTS IN JOINT VENTURES (continued)

Summarised financial information relating to the Group’s joint ventures based on their financial statements prepared under IFRS and aggregated by industry classification is as follows:

Industry classification

Non-current

assetsCurrent

assets

Cash andcash

equivalents

Non-current

liabilitiesCurrent

liabilities

Non-currentfinancial

liabilities*

Currentfinancial

liabilities*

Loss fromcontinuingoperations

Othercomprehensive

income

Totalcomprehensive

(loss)/income

Group’sshare of

net assetsAED’m AED’m AED’m AED’m AED’m AED’m AED’m AED’m AED’m AED’m AED’m

2014Real estate 1,221.5 1,933.0 190.1 150.7 907.7 150.7 372.6 (17.7) - (17.7) 1,048.0Telecommunications 17.3 - - - 0.1 - - (0.1) 8.8 8.7 8.6

Group’s share of net assets 1,056.6Impairment and other

adjustments (408.0)Carrying amount 648.6

2013Real estate 1,022.3 1,632.4 51.8 116.9 553.4 116.9 329.2 (2.8) - (2.8) 992.2Telecommunications 24.8 - - - - - - - 13.4 13.4 12.4

Group’s share of net assets 1,004.6Impairment and other

adjustments (500.7)Carrying amount 503.9

* excluding trade and other payables and provisions



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10. FINANCIAL INSTRUMENTS BY CATEGORY

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

Assets NoteLoans andreceivables

Assets at fairvalue throughprofit and loss

Available-for-sale Total

AED’m AED’m AED’m AED’m

At 31 December 2014Available-for-sale financial assets 12 - - 302.1 302.1Derivative financial instruments 13 - 10.6 - 10.6Trade and other receivables excluding advances

to suppliers and prepayments 3,093.9 - - 3,093.9Finance lease receivables 16 51.0 - - 51.0Due from related parties 19 2,899.9 - - 2,899.9Cash and bank balances 20 6,402.5 - - 6,402.5

12,447.3 10.6 302.1 12,760.0

At 31 December 2013Available-for-sale financial assets 12 - - 288.9 288.9Derivative financial instruments 13 - 275.4 - 275.4Trade and other receivables excluding advances

to suppliers and prepayments 1,998.3 - - 1,998.3Loans receivable 11.3 - - 11.3Finance lease receivables 16 54.4 - - 54.4Due from related parties 19 3,464.1 - - 3,464.1Cash and bank balances 20 3,925.2 - - 3,925.2

9,453.3 275.4 288.9 10,017.6

Liabilities Note

Liabilities atfair value

throughprofit and loss

Derivativesused forhedging

Otherfinancialliabilities Total


At 31 December 2014Borrowings 26 - - 11,057.8 11,057.8Trade and other payables excluding deferredrevenue and provisions - - 6,633.7 6,633.7

Derivative financial instruments 13 643.3 0.4 - 643.7Loans from related parties 19 - - 258.6 258.6Due to related parties 19 - - 140.1 140.1

643.3 0.4 18,090.2 18,733.9

At 31 December 2013Borrowings 26 - - 10,981.1 10,981.1Trade and other payables excluding deferredrevenue and provisions - - 7,246.9 7,246.9

Derivative financial instruments 13 1,028.8 2.6 - 1,031.4Loans from related parties 19 - - 257.5 257.5Due to related parties 19 - - 162.3 162.3

1,028.8 2.6 18,647.8 19,679.2



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11. FINANCIAL ASSETS INCLUDING DERIVATIVE FINANCIAL INSTRUMENTS


CurrentAvailable-for-sale financial assets (Note 12) 87.7 80.6Derivative financial instruments (Note 13) - 275.4

87.7 356.0

Non-currentAvailable-for-sale financial assets (Note 12) 214.4 208.3Derivative financial instruments (Note 13) 10.6 -

225.0 208.3

12. AVAILABLE-FOR-SALE FINANCIAL ASSETS

At 1 January 288.9 447.1Additions during the year 23.5 12.7Change in fair value for the year (10.3) 34.0Disposals during the year - (204.9)At 31 December 302.1 288.9Less: current (87.7) (80.6)Non-current 214.4 208.3

Available-for-sale financial assets include the following:2014 2013

AED’m AED’m

Listed funds 196.3 -Unlisted funds 89.2 288.9Unlisted equities 16.6 -

302.1 288.9

The currency-wise denomination of the Group’s available-for-sale financial assets is disclosed in Note 3.1(a)(i).

The fair values of listed funds are based on the bid-prices as of 31 December 2014. The fair values of the unlistedfunds are based on the latest valuations as of 31 December 2014 provided by the fund managers.



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13. DERIVATIVE FINANCIAL INSTRUMENTS

Contract amountmillions

2014 2013Assets Liabilities Assets Liabilities

2014 2013 AED’m AED’m AED’m AED’m

Derivatives

Cross currency swaps Pay CHF - 339EUR - 1,024

Receive USD - 1,575 - - - 721.5

Pay USD 982 1,957Receive EUR - 750

GBP 500 500 - 486.7 232.6 220.7

Interest rate swap contracts AED 5,920 -USD - 150GBP 250 250 - 147.5 0.1 86.6

Currency forwards EUR - 100 - - 42.7 -

Structured equity instruments 10.6 9.1 - -

Designated as cash flow hedges

Interest rate swap contracts EUR 24 24 - 0.4 - 2.6

Total 10.6 643.7 275.4 1,031.4Less: current - (37.3) (275.4) (721.5)Non-current 10.6 606.4 - 309.9

The Group uses cross currency and interest rate swaps to minimise the effect of currency and interest rate fluctuationson its foreign investments and borrowings.

The contracts entered into by the Group are principally denominated in GBP, USD and AED. The fair value of thesecontracts is recorded in the consolidated balance sheet and is determined by reference to valuations by external parties,who are reputable financial institutions.

The maximum exposure to credit risk at the reporting date is the fair value of the derivative assets in the consolidatedbalance sheet.

(a) Cross-currency swap contracts

Cross currency swaps are a commitment to exchange one set of cash flows for another where each leg of the swap isdenominated in a different currency. A cross currency swap therefore has two principal amounts, one for eachcurrency. The swaps will expire in February 2017. The fixed interest rate on the British Pound is 6% (2013: 6%) perannum. The floating rates are linked to LIBOR. Changes in the fair market value of the derivatives are recorded in theconsolidated income statement.



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13. DERIVATIVE FINANCIAL INSTRUMENTS (continued)

(b) Interest rate swap contracts

Interest rate swaps are commitments to exchange one set of cash flows for another. The swaps result in an economicexchange of interest rates, no exchange of principal takes place. These swap transactions entitle the Group to receive orpay amounts derived from interest rate differentials between an agreed fixed interest rate and the applicable floatingrate prevailing at the beginning of each interest period.

At 31 December 2014, the fixed interest rates vary from 1.86% to 3.59% per annum (2013: 3.19% to 3.37% perannum). The main floating rates are linked to LIBOR.

An interest rate swap contract which is designated as a hedging instrument and qualifies as cash flow hedge expires in2015. Changes in the fair market value that are considered effective are recognised in the hedging reserve in othercomprehensive income. There was no ineffectiveness to be recorded from the cash flow hedge.

Changes in the fair market values of other interest rate swaps which have not been designated and do not qualify ascash flow hedges are recorded in the consolidated income statement.

14. TRADE AND OTHER RECEIVABLES


CurrentTrade receivables, advances and prepayments (Note 15) 3,549.9 3,318.9Accrued income 11.7 20.8Loans receivable - 11.3Finance lease – net receivables (Note 16) 3.3 3.3Income tax 19.4 14.4

3,584.3 3,368.7

Non-currentTrade receivables, advances and prepayments (Note 15) 1,145.6 43.2Accrued income 435.9 441.5Finance lease – net receivables (Note 16) 47.7 51.1

1,629.2 535.8Less: provision for impairment of accrued income (158.1) (237.3)

1,471.1 298.5

Movement on the Group’s provision for impairment of accrued income is as follows:

At 1 January 237.3 307.3Provision for impairment – net (12.0) (13.4)Written-off (67.2) (56.6)At 31 December 158.1 237.3



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15. TRADE RECEIVABLES, ADVANCES AND PREPAYMENTS


CurrentTrade receivables 2,442.4 2,493.9Less: provision for impairment of trade receivables (997.5) (1,210.2)

1,444.9 1,283.7

Advances to suppliers 1,426.1 954.5Prepayments and deposits 153.9 385.7Other receivables 525.0 695.0

3,549.9 3,318.9

Non-currentTrade receivables 1,135.1 29.0Advances to suppliers - 8.3Prepayments and deposits 10.5 5.9

1,145.6 43.2

The Group has a broad base of customers with no concentration of credit risk within trade receivables at 31 December2014 and 2013.

As at 31 December 2014, trade receivables of AED 2,096.3 million (2013: AED 843.8 million) were fully performing.

As at 31 December 2014, trade receivables of AED 476.4 million (2013: AED 464.7 million) were past due but notimpaired. These related to a number of independent customers for whom there is no recent history of default. Theageing analysis of these trade receivables is as follows:


Up to 3 months 178.2 177.73 to 6 months 83.3 65.0Over 6 months 214.9 222.0

476.4 464.7

As at 31 December 2014, trade receivables of AED 1,004.8 million (2013: AED 1,214.4 million) were past due andpartially provided for. The amount of the provision as of 31 December 2014 was AED 997.5 million (2013: AED1,210.2 million). The ageing analysis of these trade receivables is as follows:


Up to 6 months 4.6 12.8Over 6 months 1,000.2 1,201.6

1,004.8 1,214.4

As at 31 December 2014, trade receivables included an amount of AED 972.9 million due from a related party onaccount of sale of land in the ordinary course of the Group’s business (Note 19(a)).



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15. TRADE RECEIVABLES, ADVANCES AND PREPAYMENTS (continued)

Movement on the Group’s provision for impairment of trade receivables is as follows:


At 1 January 1,210.2 1,402.9Provision for impairment of receivables 18.6 25.6Receivables written-off (106.7) (32.0)Unused amounts reversed (106.1) (188.9)Disposal of a subsidiary (11.3) -Exchange differences (7.2) 2.6At 31 December 997.5 1,210.2

The creation and release of the provision for impaired receivables have been included in the consolidated incomestatement. Amounts charged to the allowance account are generally written off, when there is no expectation ofrecovering additional cash.

The other classes within trade and other receivables do not contain impaired assets.

The currency-wise denomination of the Group’s trade and other receivables is disclosed in Note 3.1(a) (i).

The maximum exposure to credit risk at the reporting date is the carrying value of each class of receivable. The Groupdoes not hold any collateral as security.

The fair value of non-current trade and other receivables approximates their carrying amounts. The fair value is basedon contractual cash flows discounted at the current market rates and is within level 2 of the fair value hierarchy.



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16. FINANCE LEASE RECEIVABLES

Finance lease receivables relate to certain property leases with an option given to investors to buy the properties at theend of the lease period. The lease periods vary between 30 and 50 years. The leases carry interest linked to LIBOR.


At 1 January 54.4 57.7Recovery during the year (3.5) (3.4)Additions during the year 0.1 0.1At 31 December 51.0 54.4Less: current (3.3) (3.3)Non-current 47.7 51.1

A summary of the gross repayment schedule for the finance lease receivables is presented below:


Within one year 4.6 4.9After one year but not more than five years 37.5 39.5More than five years 13.7 16.5Gross investment in finance leases 55.8 60.9Unearned future finance income on finance leases (4.8) (6.5)Net investment in finance leases 51.0 54.4

The net investment in finance leases is analysed as follows:

Within one year 3.3 3.3After one year but not more than five years 34.1 34.9More than five years 13.6 16.2Net investment in finance leases 51.0 54.4

The fair value of finance lease receivables approximates its carrying value. The fair value is based on contractual cashflows discounted at the current market rates and is within level 2 of the fair value hierarchy. There has been no historyof default and there are no past due instalments. Management considers that no impairment provision is required forthese receivables.

17. INVENTORIES2014 2013

AED’m AED’m

Goods held for sale 8.8 10.1Operating supplies 19.5 22.1Food and beverage 23.7 25.6Stores and spares 24.6 26.7Engineering supplies and other consumables 7.0 4.9

83.6 89.4Less: provision for write-down of inventory (4.4) (5.1)

79.2 84.3

The cost of inventory recognised as an expense and included in ‘direct costs’ amounted to AED 339.5 million (2013:AED 328.6 million).



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18. PROPERTY HELD FOR DEVELOPMENT AND SALE

Note LandWork-in-progress Total


At 1 January 2013 15,574.8 8,699.0 24,273.8

Sales (1,312.6) (2,106.7) (3,419.3)Additions 8.3 580.4 588.7Transfers to property, plant and equipment 5 (2.4) (11.5) (13.9)Transfers from investment property 6 512.8 474.4 987.2Transfers to investment property 6 (115.1) (376.6) (491.7)Government grants returned 27 (75.9) - (75.9)Impairment reversal 1,061.9 256.7 1,318.6Exchange differences 0.6 2.4 3.0At 31 December 2013 15,652.4 7,518.1 23,170.5

Sales (984.3) (1,677.5) (2,661.8)Additions - 1,295.8 1,295.8Transfers to property, plant and equipment 5 (32.4) (74.3) (106.7)Transfers from investment property 6 1,601.4 122.0 1,723.4Transfers to investment property 6 (214.7) (221.6) (436.3)Government grants received 27 1.8 - 1.8Impairment reversal/(charge) 9.1 (28.2) (19.1)Exchange differences (1.9) (7.1) (9.0)At 31 December 2014 16,031.4 6,927.2 22,958.6

At 31 December 2014, management performed an assessment of the net realisable value of property held fordevelopment and sale. This assessment resulted in a net impairment charge against land and projects amounting to AED19.1 million (2013: reversal of AED 1,318.6 million) and is analysed as follows:


Reversed against deferred government grants (Note 27) 9.1 798.7(Charged)/reversed in the consolidated income statement (Note 39) (28.2) 519.9

(19.1) 1,318.6



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19. RELATED PARTY TRANSACTIONS AND BALANCES

Related parties include the shareholders, directors, key management personnel, associates, joint ventures; and businesses,which are controlled directly or indirectly, by the shareholders or directors.

The related party transactions and balances arise in the normal course of business primarily on sale and purchase ofgoods and services and loan and treasury arrangements.

(a) Related party transactions

During the year, the Group entered into the following significant transactions with related parties:


Parent companyInterest expense 2.9 5.1

========= =========Interest income 1.2 4.9

========= =========Sale of services 13.1 4.3

========= =========Fellow subsidiaries and other related partiesSale of land 972.9 -

========= =========Management fee income - 7.8

========= =========Sale of services 10.7 5.5

========= =========Joint ventures and associatesSale of services 33.8 46.0

========= =========

Purchase of services 149.0 144.8========= =========

Expenses incurred on behalf 5.1 10.5========= =========

Interest income 0.5 0.5========= =========

Dividends received (Note 8) 398.6 489.5========= =========

During the year the Group, in the ordinary course of its business, entered into a land sales transaction with a seven yeardeferred payment plan with a related party. The amount of revenue recognised during the year represents the fair valueof the transaction, estimated by discounting the future contractual cash flows.


(b) Compensation to key management personnel

Compensation to key management personnel comprises:- Salaries, allowances and other short term benefits 159.7 136.8- End of service and post-employment benefits 10.7 15.3

170.4 152.1



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19. RELATED PARTY TRANSACTIONS AND BALANCES (continued)


(c) Due from related parties comprises:

Due from the parent company 2,025.3 2,330.8Due from joint ventures 137.7 133.5Due from other related parties 10.8 233.4Due from associates 92.4 88.2

2,266.2 2,785.9Loans to the parent company 637.0 634.8Loan to an associate 16.3 25.3Loans to other related parties 899.1 899.1

3,818.6 4,345.1Less: provision for impairment of related party receivables (918.7) (881.0)

2,899.9 3,464.1

Analysed between:Current 2,262.9 2,806.9Non-current 637.0 657.2

2,899.9 3,464.1

Loans to an associate and other related parties are short-term loans which are due to be repaid within twelve months ofthe balance sheet date. The interest rate charged on loans to related parties during the year ranged from 0.33% to 1.60%(2013: 0.35% to 1.54%) per annum.


(d) Due to related parties comprises:

Due to the parent company 66.6 70.8Due to other related parties 47.9 66.7Due to associates 25.6 24.8

140.1 162.3Loans from related parties 258.6 257.5

398.7 419.8

The movement in loans from related parties is as follows:At 1 January 257.5 254.5Capitalisation of interest 1.1 3.0At 31 December 258.6 257.5

The effective interest charged on loans from related parties ranged from 0.82% to 4.50% per annum (2013: 1.16% to4.50%).



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20. CASH AND CASH EQUIVALENTS


Cash and bank balances including call deposits 3,920.9 2,625.1Short-term fixed deposits 2,481.6 1,300.1

6,402.5 3,925.2Less: cash held in escrow (1,495.4) (466.5)

4,907.1 3,458.7

Cash held in escrow represents cash received from customers that is held with banks authorised by the Real EstateRegularity Authority (“RERA”). Use of this cash is restricted to the specific development projects to which the cashreceipts relate.

Cash, cash equivalents and bank overdrafts include the following for the purposes of the consolidated statement of cashflows:


Cash and bank balances 4,907.1 3,458.7Cash and cash equivalents under assets held-for-sale (Note 21) - 3.2Bank overdrafts (Note 26) (0.2) (21.4)

4,906.9 3,440.5

Bank accounts are held with locally incorporated banks and branches of international banks. Short-term fixed and calldeposits bear interest ranging from 0.02% to 8.5% per annum (2013: 0.05% to 8.0% per annum).

21. ASSETS CLASSIFIED AS HELD-FOR-SALE

Two of the Group’s investments in associates, one each in the real estate and telecommunications sectors respectively,have been presented as held-for-sale. The Group is actively seeking buyers in the market and has firm plans to disposeof the associates within the next 12 months.


(a) Assets classified as held-for-sale

Property, plant and equipment - 20.0Trade and other receivables - 8.7Investment in associates 1,499.5 -Cash and cash equivalents - 3.2

1,499.5 31.9

(b) Liabilities associated with assets classified as held-for-sale

Trade and other payables 1.8 12.4Due to related parties - 4.3Provision for employees’ end of service benefits - 5.4

1.8 22.1

At 31 December 2014, one of the investments’ in associates that had been pledged as security against a loan facilityobtained by the parent company, was in the process of being substituted with another non-current asset.



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21. ASSETS CLASSIFIED AS HELD-FOR-SALE

The following amounts have been recognised in the consolidated income statement in respect of disposal of asubsidiary in the technology sector that had been previously classified as held-for-sale:

Year ended 31 December2014 2013

AED’m AED’m

Loss on disposal (Note 39) 0.7 -========= =========

22. SHARE CAPITAL

The total authorised, issued and fully paid up share capital of the Company comprises 2,000,000 shares (2013:2,000,000 shares) of AED 1,000 each.

23. RESERVES2014 2013

AED’m AED’m

Statutory reserve (Note 24) 1,474.3 1,243.8Translation reserve (Note 25) (1,446.8) (978.2)Fair value reserve 26.8 27.5Hedge reserve (0.3) (1.1)Other reserves 3,502.8 3,513.3

3,556.8 3,805.3

During 2006, the ultimate shareholder’s investment in subsidiaries of Jumeirah Group LLC, in the form of owner’saccounts was transferred to the Company. Other reserves include the balance amount of AED 3,488.5 million (2013:AED 3,488.5 million) arising from this transfer.

24. STATUTORY RESERVE

In accordance with the Articles of Association, 10% of the profit for the year in each UAE limited liability company istransferred to a statutory reserve, which is not distributable. Transfers to this reserve are required to be made until suchtime as it equals at least 50% of the paid up share capital of the respective companies.

25. TRANSLATION RESERVE

The translation reserve arises on re-translation of the assets and liabilities of foreign subsidiaries, associates and jointventures of the Group. Upon disposal of such subsidiaries, associates and joint ventures the reserve will be includedwithin the gain or loss on disposal in the consolidated income statement.



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26. BORROWINGS2014 2013

AED’m AED’m

Bank borrowings 8,202.9 4,129.5European medium term notes 2,854.7 6,830.2Bank overdrafts 0.2 21.4

11,057.8 10,981.1Less: current (1,436.0) (5,048.8)Non-current 9,621.8 5,932.3

The Group has not had any defaults of principal, interest or redemption amounts during the year on its borrowed funds.

The exposure of the Group’s borrowings to interest rate changes and the contractual re-pricing dates at the balance sheetdate is as follows:


Within 3 months 4,685.3 3,975.1After three months but not more than one year 3,510.6 40.4Borrowings at fixed rate 2,861.9 6,965.6

11,057.8 10,981.1

The maturity profile of the Group’s total borrowings is as follows:

Within 1 year 1,436.0 5,048.8After one year but not more than five years 9,621.8 5,814.9More than five years - 117.4

11,057.8 10,981.1

The fair value of current and short-term borrowings equals their carrying amount, as the impact of discounting is notsignificant. The fair values of the term notes are based on quoted market rates.

Carrying amount Fair value2014 2013 2014 2013


Bank borrowings 8,202.9 4,129.5 8,202.9 4,129.5European medium term notes 2,854.7 6,830.2 2,919.1 6,978.6Bank overdrafts 0.2 21.4 0.2 21.4

11,057.8 10,981.1 11,122.2 11,129.5

The currency-wise denomination of the Group’s borrowings is disclosed in Note 3.1(a) (i).

Interest rates on the Group’s borrowings ranged from 2.38% to 6.00% (2013: 1.41% to 6.00%) per annum.

The nature of securities provided by the Group in respect of its bank borrowings is as follows:

- Certain assets of subsidiaries pledged as security amounting to AED 2,903.9 million (2013: AED 6,019.7 million)(Notes 6,8).

- Guarantees issued by a subsidiary, Go plc, for a maximum amount of AED 431.2 million (2013: AED 491.4 million).- Guarantees issued by other subsidiaries for a maximum amount of AED 250 million (2013: AED 250 million).



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26. BORROWINGS (continued)

European medium term notes

Interest rate (%) 2014 2013AED’m AED’m

Euro 750 million fixed rate due in 2014 4.75% - 3,798.2Pounds Sterling 500 million fixed rate due in 2017 6% 2,854.7 3,032.0

2,854.7 6,830.2

All of the Group’s European medium term notes are unsecured and repayable only on maturity. The Euro 750 millionbonds were repaid in full on 30 January 2014.

Major bank borrowings

During 2013, a subsidiary of the Group obtained a ten-year AED term loan facility (the “existing facility”) amountingto AED 1,000.0 million for certain upcoming projects and general corporate purposes. At 31 December 2014, anaggregate amount of AED 700.0 million had been drawn down under the facility (2013: AED 300.0 million). During2014, the same subsidiary of the Group obtained an eight-year AED term loan facility amounting to AED 3,525.0million, partly to refinance the existing facility and partly, for upcoming projects and general corporate purposes. Theentire facility remained undrawn at 31 December 2014.

During 2013, a subsidiary of the Group obtained a five-year syndicated USD loan facility amounting to AED 5,142.2million for general corporate purposes. An amount of AED 3,673.0 million was drawn down in January 2014. Theundrawn amount under the facility as at 31 December 2014 amounts to AED 1,469.2 million.

During 2013, a subsidiary of the Group obtained a syndicated USD loan facility amounting to AED 2,570.0 million forrepayment of its intercompany loans. At 31 December 2014, the entire amount of AED 2,570.0 million had been drawndown under the facility (2013: AED 0.3 million).


27. GOVERNMENT GRANTS

Land

At 1 January 22,246.6 24,906.3Received during the year 322.8 13.4Returned during the year (164.4) (3,582.3)Released to income during the year (740.1) (1,062.3)Adjustment relating to impairment (336.2) 1,971.5At 31 December 21,328.7 22,246.6Less: current (2,388.4) (815.6)Non-current 18,940.3 21,431.0

28. RETENTIONS PAYABLE

Retentions payable (Note 30) 416.9 444.4Less: current (221.0) (332.8)Non-current 195.9 111.6

Non-current retentions are due to be paid to contractors within 2 to 5 years from the balance sheet date. The fair valueof retentions payable approximates their carrying amounts, as the impact of discounting is not significant.



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29. EMPLOYEES’ END OF SERVICE BENEFITS


Balance sheet obligations for:End of service benefits/pension benefits 344.6 312.7Less: current (Note 30) (12.6) (15.1)Non-current 332.0 297.6

The amounts recognised in the consolidated income statement are :Current service cost 72.4 73.7Effects of settlements - (0.3)

72.4 73.4

The amounts recognised in the consolidated balance sheet are determined as follows:

Present value of unfunded obligations 344.6 312.7

The movement in the defined benefit obligation over the year is as follows:

At 1 January 312.7 270.3Income statement charge 72.4 73.4Actuarial losses recognised in other comprehensive income 2.8 1.7Benefits paid (35.7) (32.3)Transfer to liabilities classified as held-for-sale - (0.9)Transfer to other liabilities - (0.8)Disposal of a subsidiary (3.7) -Exchange differences (3.9) 1.331 December 344.6 312.7

In accordance with the provisions of IAS 19, management has carried out an exercise to assess the present value of itsobligations as at 31 December 2014 and 2013, using the projected unit credit method, in respect of employees’ end ofservice benefits payable under the UAE labour law and the Pension Ordinance 1937 of Malta. Under this method anassessment has been made of the employee’s expected service life with the Group and the expected basic salary at thedate of leaving the service. Actuarial gains and losses arising from experience adjustments and changes in actuarialassumptions are charged or credited to equity in other comprehensive income in the period in which they arise.

Future salary increases have been estimated at 3% - 5% (2013: 4% - 5%) on a basis consistent with the naturalprogression of an employee’s salary in line with the Group’s salary scales, past experience and market conditions. Theexpected liability at the date of leaving the service has been discounted to its net present value using a discount rate of2.3% - 3.2% (2013: 3.8% - 4.5%).

Mortality assumptions, GO plc

Assumptions regarding future mortality experience are set based on published mortality tables in the UK and in Malta,which translate into an average life expectancy ranging between 80 and 95 years depending on the age and gender ofthe beneficiaries.



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30. TRADE AND OTHER PAYABLES


Trade payables 490.5 926.9Project related payables and accruals 3,397.7 3,627.4Retentions payable (Note 28) 416.9 444.4Refundable deposits 214.4 197.8Accrued expenses 1,040.1 1,152.5Others 1,129.2 919.0Deferred revenue (Note 4(c)) 16,579.2 15,781.4Employees’ end of service benefits (Note 29) 12.6 15.1

23,280.6 23,064.5Less: non-current (15,841.0) (15,489.9)Current 7,439.6 7,574.6

The fair value of non-current trade and other payables approximates its carrying amount, as the impact of discounting isnot significant. The fair value is based on contractual cash flows discounted at the current market rates and is withinlevel 2 of the fair value hierarchy.

31. PROVISION FOR OTHER LIABILITIES AND CHARGES

Terminatedcontracts

Delayclaims

Onerouslosses

Legalclaims Others Total


At 1 January 2013 1,137.7 229.1 868.4 905.4 1,214.7 4,355.3

Charged/(credited) to the consolidatedincome statement (Note 39):

- Additional provisions - - - 190.0 1,071.3 1,261.3- Unused amounts reversed (230.0) - - (12.7) - (242.7)- Release/utilisation - - - - (144.0) (144.0)Payments - - - (1.5) - (1.5)Transfer to other liabilities (627.8) (116.4) - (46.1) 341.3 (449.0)Reversed against capital work in progress - (7.9) - - - (7.9)At 31 December 2013 279.9 104.8 868.4 1,035.1 2,483.3 4,771.5

Charged/(credited) to the consolidatedincome statement (Note 39):

- Additional provisions - - - 464.1 824.1 1,288.2- Unused amounts reversed (3.5) - - - - (3.5)Payments (20.4) - - (3.9) - (24.3)Transfer to other liabilities (9.1) (69.1) - (90.8) (54.2) (223.2)Provided against capital work in progress - 0.6 - - - 0.6At 31 December 2014 246.9 36.3 868.4 1,404.5 3,253.2 5,809.3Less: non-current - - - - (552.2) (552.2)Current 246.9 36.3 868.4 1,404.5 2,701.0 5,257.1



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31. PROVISION FOR OTHER LIABILITIES AND CHARGES (continued)

Terminated contracts

The provision for terminated contracts is in respect of anticipated claims and demobilisation costs as a result of thetermination of contracts with builders and consultants. The provision has been determined on the basis of management’sbest estimate of the liability that the Group may incur upon termination of the existing contracts.

Delay claims

The provision relates to claims by certain contractors on the Group for delays that they believe have been caused by theGroup. The provision has been determined on the basis of management’s best estimate of the liability that the Groupmay incur on the claims.

Onerous losses

The provision for onerous losses represents the Group’s obligation under certain non-cancellable sales contracts lessrevenue expected to be earned on these contracts.

Legal claims

The provision relates to certain potential legal claims. In the management’s opinion, after taking appropriate legaladvice, the outcome of the legal claim will not give rise to any significant loss beyond the amount provided at 31December 2014.

Others

Other provisions include provision for infrastructure representing management’s best estimate of the expected share ofcosts that may be recharged to the Group on account of infrastructure developed or under development by third partiesor government authorities.

32. ADVANCES FROM CUSTOMERS

Advances from customers represent instalments received from customers towards the purchase of property held fordevelopment and sale.

33. DIVIDENDS

During the year the Company declared dividends amounting to AED 1,000.0 million (2013: Nil), out which AED 700.0million was paid in cash and AED 300 million was adjusted against balances due from the parent company.



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2014


2013AED’m AED’m

34. REVENUE

Property and land sales 5,659.7 4,663.8Room revenue 1,534.8 1,488.7Rental income 2,486.7 2,126.3Food and beverages 1,228.6 1,141.6Telecommunications, IT and related revenue 621.8 635.2Facilities and property management 421.1 375.1Commercials and sponsorships 244.9 224.2Incorporation, governmental and other services 413.1 386.6Others 622.4 603.7

13,233.1 11,645.2

35. OTHER OPERATING INCOME

Forfeiture income, late payment fees and cancellation charges 275.3 240.5Foreign exchange gain 199.0 41.0Write-back of liabilities/settlement discounts 142.5 106.9Gain on disposal/settlement of derivative financial instruments 10.8 -Gain on fair valuation of derivative financial instruments - 29.3Gain on disposal of property, plant and equipment 0.1 2.6Others 15.3 89.7

643.0 510.0

36. PAYROLL AND OTHER BENEFITS

Salaries and allowances 1,303.9 1,231.6End of service and other benefits 844.6 662.8

2,148.5 1,894.4

Included under:Direct costs 947.2 820.9General and administrative expenses (Note 37) 1,102.4 996.1Marketing and selling expenses (Note 38) 98.9 77.4

2,148.5 1,894.4



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2014


2013AED’m AED’m

37. GENERAL AND ADMINISTRATIVE EXPENSES

Payroll and related expenses (Note 36) 1,102.4 996.1Depreciation and amortisation 132.7 93.0Legal and professional 95.3 93.0Property operation and maintenance 114.5 92.8Bank charges 42.7 34.8Consultancy 64.1 53.4Office rent 30.5 27.6IT and communication 22.5 19.7Business travel 17.8 14.9Stationery, books and subscriptions 13.6 16.7Utilities 11.9 5.9Donations 208.7 6.7Others 135.1 174.9

1,991.8 1,629.5

38. MARKETING AND SELLING EXPENSES

Advertising 149.8 108.5Promotions 118.0 39.8Payroll and related expenses (Note 36) 98.9 77.4Sales commissions 38.0 21.8Sponsorships 25.7 12.1Depreciation and amortisation 0.9 0.6Others 18.9 39.9

450.2 300.1

39. OTHER OPERATING EXPENSES

Impairment charge on property, plant and equipment, net (Note 5) 107.7 0.7Impairment reversal on investment property, net (Note 6) (609.6) (979.1)Impairment charge on intangible assets, net (Note 7) 24.4 -Impairment (reversal)/charge on investment in associates, net (Note 8) (76.3) 1,436.9Impairment reversal on investment in joint ventures (Note 9) (164.7) (131.1)Impairment charge/(reversal) on property held for development andsale, net (Note 18) 28.2 (519.9)

Reversal of provision for impairment of trade and other receivables, net (59.5) (179.1)Reversal of provision for termination of contracts, net (Note 31) (3.5) (230.0)Provision for legal claims (Note 31) 464.1 177.3Provision for other liabilities and charges (Note 31) 824.1 1,071.3Foreign exchange loss - 231.6Loss on fair valuation of derivative financial instruments 315.1 -Loss on disposal of non-current assets held for sale (Note 21) 0.7 -Loss on sale of available-for-sale financial assets - 0.6Write-off of property, plant and equipment (Note 5) 6.6 0.3Write-off of investment property (Note 6) 54.2 0.4Write-off of intangible assets (Note 7) 5.0 0.8Others 1.4 4.1

917.9 884.8



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40. FINANCE COSTS – NETYear ended

31 December2014


2013AED’m AED’m

Interest expenseEuropean term notes (198.8) (355.2)Bank borrowings (433.1) (201.1)Loans from related parties (2.9) (5.1)Others (8.3) (58.7)Finance costs (643.1) (620.1)

Interest incomeDerivative financial instruments 29.9 -Term deposits 27.0 20.1Loans to related parties 1.7 5.4Others 9.6 7.2Finance income 68.2 32.7

Finance costs – net (574.9) (587.4)

41. TAXATION

(a) Deferred income tax assets and liabilities

The movement in deferred income tax assets and liabilities during the year is as follows:

At1 January

(Charge)/credit in

incomestatement

Recognisedin other

comprehensiveincome

Exchangedifferences

At31 December

AED’m AED’m AED’m AED’m AED’m2014Property, plant and equipment (24.3) 2.2 - 2.8 (19.3)Provisions 31.8 (1.0) 1.0 (3.9) 27.9Losses carried forward 3.4 - - (0.4) 3.0Capital allowances carried forward 15.7 (3.4) - (1.6) 10.7Investment tax credit 6.3 - - (0.8) 5.5Fair value adjustments arising from

acquisitions (50.8) 6.7 - 5.6 (38.5)Intangible assets (7.6) 2.8 - 0.7 (4.1)Cash flow hedges 0.9 (1.3) (0.8) 0.1 (1.1)Other short term timing differences 0.1 0.1 - - 0.2

(24.5) 6.1 0.2 2.5 (15.7)

2013Property, plant and equipment (29.3) 6.1 - (1.1) (24.3)Provisions 29.6 0.3 0.6 1.3 31.8Losses carried forward 4.2 (0.9) - 0.1 3.4Capital allowances carried forward 12.9 2.1 - 0.7 15.7Investment tax credit 6.0 - - 0.3 6.3Fair value adjustments arising from

acquisitions (56.6) 7.9 - (2.1) (50.8)Intangible assets (11.5) 4.3 - (0.4) (7.6)Cash flow hedges 2.2 - (1.3) 0.0 0.9Other short term timing differences (0.7) 0.8 - (0.0) 0.1

(43.2) 20.6 (0.7) (1.2) (24.5)



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41. TAXATION (continued)

(b) Income tax expense/(credit)


2014


2013AED’m AED’m

Current tax charge/(credit) 28.4 (50.0)Deferred tax credit (6.1) (20.6)

22.3 (70.6)

The tax on the Group’s profit before tax differs from the theoretical amount that would arise using the weightedaverage tax rate applicable to profits of the consolidated entities as follows:


2014


2013AED’m AED’m

Profit before tax 4,701.2 3,231.6

Of which profits relating to taxable jurisdictions are: 97.0 76.5

Tax calculated at domestic tax rates applicable to profits in respectivecountries: 35% (2013: 35%) 34.0 26.8

Release of deferred tax liability arising from acquisition (6.7) (7.7)Depreciation charges not deducted by way of capital allowances in

determining taxable income 2.6 0.9Chargeable to tax at different rates (0.4) (0.2)Expenses not deductible for tax purposes 0.2 3.9Prior period items (8.4) (85.3)Reversal of deferred tax asset on investment tax credits (4.0) (4.1)Further allowance on rental income (1.2) (1.2)Other permanent differences 6.2 (3.7)

22.3 (70.6)



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42. GUARANTEES

The Group has issued bank and other guarantees in the normal course of business as follows:


Against borrowings (Note 26) 681.2 741.4========= =========

Others 454.0 441.5========= =========

43. COMMITMENTS

(a) Capital commitments

The Group has capital commitments in respect of property, plant and equipment and investment property as follows:


Property, plant and equipment 947.6 219.2========= =========

Investment property 1,674.8 1,154.1========= =========

(b) Other commitments

The Group has commitments of AED 3,360.9 million (2013: AED 907.1 million) for projects in progress. Thesecommitments represent the value of contracts issued as at 31 December 2014 net of invoices received and accruals madeat that date.

(c) Operating lease rentals

As at 31 December, commitments under non-cancellable operating leases as lessee were:2014 2013

AED’m AED’m

Within 1 year 49.9 54.9After one year but not more than five years 173.3 197.7More than five years 492.4 607.4

715.6 860.0

As at 31 December, commitments under non-cancellable operating leases as lessor were:2014 2013

AED’m AED’m

Within 1 year 1,065.3 621.9After one year but not more than five years 1,610.7 968.4More than five years 11,074.9 7,328.8

13,750.9 8,919.1



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44. CONTINGENCIES

Legal claims

An operating subsidiary of the Group (the “subsidiary”) is party to certain litigation and arbitration proceedings.Collectively, the counterparties to those proceedings are seeking awards of damages against the subsidiary of AED10,900 million, being the losses allegedly arising from disputes relating to transfer of land and provision ofinfrastructure by the subsidiary and wrongful omission of works under certain construction contracts.

The Group believes that the amounts claimed against the subsidiary under certain of the litigation and arbitrationproceedings are in respect of the same heads of claim and therefore the potential financial impact on the Group issignificantly lower. In addition, the potential financial impact on the Group is further mitigated by the fact that thesubsidiary has a counterclaim for damages due to breach of contract by one of the counterparties and the Groupbelieves the quantum of this counterclaim exceeds the claim by that counterparty.

In relation to another counterparty, the Group believes that the claim does not belong in the courts and will, therefore,be dismissed due to a lack of jurisdiction.

Collectively, the Group is carrying liabilities of AED 182.3 million and has made provisions of AED 1,829.7 million,which are the maximum estimated cash outflows for these claims.

In the opinion of the Group’s internal legal counsel, direct liability does not extend out of the subsidiary to the Group withrespect to these litigation and arbitration proceedings.

Termination and Delay provisions

In the event of termination or delay of contracts for construction and consultancy, certain subsidiaries of the Group areliable to pay costs, which include demobilisation of the contractor’s equipment, repatriation costs associated with thecontractor’s staff and labour and other associated costs. At 31 December 2014, in addition to the provisions against certaintermination and delay claims under arbitration and litigation as disclosed above, the Group is carrying provisions of AED129.2 million representing management’s best estimate of the liabilities that may be incurred in this regard. The completeliability for the Group cannot be quantified and management is confident that there is a low possibility of cash outflows inexcess of the amount recorded in the consolidated financial statements.



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45. CASH GENERATED FROM OPERATIONS

Notes


2014


2013AED’m AED’m

Profit for the year before income tax 4,701.2 3,231.6

Adjustments for:Depreciation and amortisation 5,6,7 1,118.7 1,055.7Gain on sale of property, plant and equipment 35 (0.1) (2.6)Impairment and write-off of property, plant and equipment,investment property, intangible assets and property held fordevelopment and sale, net 5,6,7,18 (383.5) (1,496.8)

Impairment (reversal)/charge on associates and joint ventures 8,9 (241.0) 1,305.8Loss on disposal of available-for-sale financial assets - 0.6Gain on disposal/settlement of derivative financial instruments (10.8) -Loss/(gain) on fair valuation of derivative financial instruments 315.1 (29.3)Provision for other liabilities and charges, net 31 1,284.7 1,018.6Share of profit from associates and joint ventures 8,9 (612.8) (517.2)Government grants released to income 27 (740.1) (1,062.3)Reversal of impairment of receivables and accrued income (59.5) (179.1)Provision for employees’ end of service benefits 29 72.4 73.4Foreign exchange movements, net (245.4) 194.2Interest income 40 (68.2) (32.7)Interest expense 40 643.1 620.1

5,773.8 4,180.0Changes inNon-current trade and other receivables including accrued incomebefore movement in provisions (1,164.0) (0.2)

Net assets classified as held-for-sale 19.9 (3.2)Non-current deferred revenue 441.8 1,176.4Non-current retentions payable 84.3 (47.7)Non-current trade and other payables (291.0) (290.8)

Changes in working capitalTrade and other receivables before movement in provisions (120.7) (268.2)Inventories 5.0 (3.4)Property held for development and sale, net of government grants,transfers and impairments 1,366.6 2,822.7

Due from related parties, net of transfers 186.5 (826.6)Due to related parties, net of transfers (25.4) (279.8)Trade and other payables excluding project accruals 317.2 (174.6)Advances from customers (1,246.3) (1,224.6)Retentions payable (111.8) (234.6)Cash held in escrow (1,028.9) (466.5)Cash generated from operations 4,207.0 4,358.9

Significant non-cash transactions during the year include:

(i) Government grants of land amounting to AED 322.8 million (2013: AED 13.4 million) were received.(ii) Government grants of AED 740.1 million (2013: AED 1,062.3 million) were released to the consolidated

income statement.(iii) Impairment of AED 336.2 million (2013: AED 1,971.5 million) was adjusted against government grants.



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46. SEGMENT INFORMATION

Management has determined the operating segments based on the reports reviewed by the Executive Committee(“Committee”) that are used to make strategic decisions. The Committee considers the business from both a geographicand product perspective. Geographically, management considers the performance of UAE, Europe and others whichincludes operations in GCC and India.

The reportable operating segments derive their revenue primarily from the real estate sector in UAE and GCC, andhospitality, telecommunication and media sectors in UAE and Europe. The Committee assesses the performance of theoperating segments based on financial information which is in accordance with International Financial ReportingStandards.

The segment information provided to the Committee for the reportable segments is as follows:

Real estateHospitalityand leisure

Telecomm-unications Media Total

2014 AED’m AED’m AED’m AED’m AED’m

Total segment revenue 9,140.6 3,343.9 629.0 244.9 13,358.4Inter-segment revenue (124.6) (0.7) - - (125.3)Revenue 9,016.0 3,343.2 629.0 244.9 13,233.1Segment results 4,662.6 1,590.6 268.3 118.6 6,640.1Other income 1,383.1Unallocated operating expenses (3,359.9)Operating income 4,663.3Interest expense (643.1)Interest income 68.2Share of profit of associates and jointventures 149.3 - 463.5 - 612.8

Profit before income tax 4,701.2Income tax expense (22.3)Profit for the year 4,678.9

Depreciation and amortisation 577.8 396.5 139.2 5.2 1,118.7Impairment (reversal)/charge on non-financial assets, net (869.5) 32.2 147.0 - (690.3)

Non-cash expenses other than depreciationand amortisation 1,284.7 - - - 1,284.7

2013

Total segment revenue 7,734.9 3,182.2 644.5 224.2 11,785.8Inter-segment revenue (126.4) (11.3) (2.9) - (140.6)

Revenue 7,608.5 3,170.9 641.6 224.2 11,645.2

Segment results 2,681.3 1,496.3 260.1 106.2 4,543.9Other income 1,572.3Unallocated operating expenses (2,814.4)

Operating income 3,301.8Interest expense (620.1)Interest income 32.7Share of profit of associates and jointventures 11.8 - 505.4 - 517.2

Profit before income tax 3,231.6Income tax credit 70.6

Profit for the year 3,302.2

Depreciation and amortisation 465.1 429.5 156.2 4.9 1,055.7Impairment (reversal)/charge on non-financial assets, net (1,672.1) - 1,479.6 - (192.5)

Non-cash expenses other than depreciationand amortisation 1,018.6 - - - 1,018.6



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46. SEGMENT INFORMATION (continued)

The revenue from external parties reported to the Committee is measured in a manner consistent with that in theconsolidated income statement.

The amounts provided to the Committee with respect to total assets are measured in a manner consistent with that ofthe consolidated financial statements. These assets are allocated based on the operations of the segment and thephysical location of the asset.

The amounts provided to the Committee with respect to total liabilities are measured in a manner consistent with that ofthe consolidated financial statements. These liabilities are allocated based on the operations of the segment.

Segment assets consist primarily of property, plant and equipment, intangible assets, investment property, property heldfor development and sale and cash and cash equivalents.

Segment liabilities comprise operating liabilities, advances from customers, borrowings, and deferred governmentgrants.

Capital expenditure comprises additions to property, plant and equipment, intangibles, and additions resulting frominvestment properties.

The segment assets and liabilities at 31 December 2014 and capital expenditure for the year then ended are as follows:


Telecomm-unications Media Unallocated Total


Assets 70,313.9 6,579.8 2,007.8 195.7 3,181.3 82,278.5Associates and

joint ventures 1,378.3 - 3,753.9 - - 5,132.2Total assets 71,692.2 6,579.8 5,761.7 195.7 3,181.4 87,410.7

Liabilities 51,412.8 5,254.0 3,130.5 129.5 6,412.1 66,338.9

Capital expenditure 650.8 497.8 83.1 3.5 - 1,235.2

The segment assets and liabilities at 31 December 2013 and capital expenditure for the year then ended are as follows:


Telecomm-unications Media Unallocated Total


Assets 60,842.2 11,875.2 2,239.8 118.1 3,972.7 79,048.0Associates andjoint ventures 1,935.6 - 4,506.4 - - 6,442.0

Total assets 61,777.7 11,875.2 6,746.2 118.1 3,972.7 85,490.0

Liabilities 47,699.0 7,394.6 1,222.2 106.4 11,153.8 67,576.0

Capital expenditure 870.4 312.1 111.8 3.9 - 1,298.2



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46. SEGMENT INFORMATION (continued)

The Group’s business segments operate in three main geographical areas. The home country of the Group which is alsothe main region of operations is the UAE. The areas of operation in the UAE are principally property sale anddevelopment, rental, hospitality and media. Operations in Europe include telecommunications and hospitality.

The Group’s revenues are generated mainly in UAE and Europe.


RevenueUAE 12,467.8 10,905.4Europe 760.0 737.1Other 5.3 2.7

13,233.1 11,645.2

Revenue is allocated based on the country in which the investment is located.

Total assetsUAE 79,412.5 76,106.4Europe 2,645.9 2,665.6Other 220.1 276.0

82,278.5 79,048.0Associates and joint ventures 5,132.2 6,442.0

87,410.7 85,490.0

The assets are allocated based on where the assets are located.

Capital expenditureUAE 1,049.4 1,064.4Europe 145.9 230.6Other 39.9 3.2

1,235.2 1,298.2

Capital expenditure is allocated based on where the assets are located.

dubai holding commercial operations...

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