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JEBEL ALI FREE ZONE FZE

CONSOLIDATED FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2014

Jebel Ali Free Zone FZE

Consolidated financial statements for the year ended 31 December 2014

Pages

Independent auditor’s report 1

Consolidated balance sheet 2

Consolidated statement of comprehensive income 3

Consolidated statement of changes in equity 4

Consolidated statement of cash flows 5

Notes to the consolidated financial statements 6 - 29


The notes on pages 6 to 29 form an integral part of these consolidated financial statements. (3)

Consolidated statement of comprehensive income

Year ended 31 December

2014 2013

Note AED’000 AED’000

Revenue 18 1,688,442 1,530,868

Cost of sales 19 (353,559) (340,977)

Gross profit 1,334,883 1,189,891

Other operating income 20 82,452 83,296

General and administrative expenses 21 (179,291) (176,061)

Selling and marketing expenses 22 (55,116) (49,053)

Operating profit 1,182,928 1,048,073

Finance income 24 167,361 36,965

Finance costs 24 (286,036) (394,746)

Finance costs – net 24 (118,675) (357,781)

Profit and total comprehensive income for the year 1,064,253 690,292



Consolidated statement of changes in equity

Sharecapital

Retainedearnings Total

AED’000 AED’000 AED’000

Balance at 1 January 2013 4,268,000 1,655,743 5,923,743

Total comprehensive income for the year - 690,292 690,292

Balance at 31 December 2013 4,268,000 2,346,035 6,614,035

Total comprehensive income for the year - 1,064,253 1,064,253

Balance at 31 December 2014 4,268,000 3,410,288 7,678,288



Consolidated statement of cash flows2014 2013

Notes AED’000 AED’000

Operating activities

Profit for the year 1,064,253 690,292

Adjustments for:

Depreciation 5,6 88,160 95,103

Amortisation 7 90,726 90,727

Finance income 24 (167,361) (36,965)

Profit commission on Sukuk borrowing 24 167,144 167,144

Finance cost on bank borrowings 24 79,382 182,994

Other finance costs 24 39,510 44,608Provision for employees’ end of service benefits and general

pension and social security 23 11,205 11,818

Provision for impairment of trade receivables 10 2,614 3,076Payment of employees’ end of service benefits and general pension

and social security (8,708) (8,460)

Changes in working capital:

Trade and other receivables (34,203) (8,529)

Trade and other payables 18,639 59,862

Due from related parties 26,638 909,419

Due to related parties 11,702 25,315

Deferred revenue 18,013 698

Net cash generated from operating activities 1,407,714 2,227,102

Investing activities

Purchase of property and equipment (1,307) (745)

Purchase of investment property (50,282) (61,423)

Proceeds from sale of property and equipment - 59

Movement in fixed deposits (401,168) (481,892)

Finance income received 5,042 4,368

Net cash used in investing activities (447,715) (539,633)

Financing activities

Profit commission paid on Sukuk and bank borrowings (248,462) (354,877)

Repayment of bank borrowing (452,720) (1,751,440)

Restricted cash 11 6,000 (167,930)

Other finance costs paid (7,649) (23,584)

Net cash used in financing activities (702,831) (2,297,831)

Net increase / (decrease) in cash and cash equivalents 257,168 (610,362)

Cash and cash equivalents at the beginning of the year 146,188 756,550

Cash and cash equivalents at the end of the year 11 403,356 146,188


Notes to the consolidated financial statements for the year ended 31 December 2014

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1 LEGAL STATUS AND ACTIVITIES

Jebel Ali Free Zone FZE (“the Establishment”) was established as a Jebel Ali Free Zone Establishment underregistration number 1283 pursuant to Law No 9 of 1992 issued by the Ruler of Dubai and implementing regulationsissued by the Jebel Ali Free Zone Authority (“JAFZA”). The Establishment’s registered office is P.O. Box 16888,Jebel Ali, Dubai, United Arab Emirates.

The Establishment and its subsidiary (together, “the Group”) is a wholly owned subsidiary of Economic Zones WorldFZE (“the parent company”). The intermediate parent company is Port and Free Zone World FZE (“the intermediateparent”) and the ultimate parent company is Dubai World Corporation (“the ultimate parent”). The Establishmentdevelops and manages free zones, develops, sells and leases warehouses, and provides facility management.

Subsidiaries Principal activityHolding percentage2014 2013

United Arab EmiratesJAFZ Sukuk (2019) Limited* Financing (Sukuk borrowing) 100 100

*The Establishment holds 100% beneficial interest in JAFZ Sukuk (2019) Limited, a special purpose entityincorporated for the execution of AED 2.39 billion Islamic trust certificates (Note 14).

On 13 November 2007 and subsequently amended on 22 April 2012, the Establishment entered into two agreementswith JAFZA, one agreement to acquire a land use right for a period of 99 years and another agreement for thepurchase of assets. The Establishment paid JAFZA AED 8.9 billion and AED 3 billion as consideration for theacquisition of the land use right and purchase of assets respectively.

DP World Limited (DP World) and its wholly owned subsidiary, DP World FZE, announced on 13 November 2014that they have entered into an agreement in relation to the proposed acquisition of the parent company, its subsidiariesand subsidiary undertakings, including the Establishment from the intermediate parent company. The terms andconditions of the final agreement are currently under negotiation between the relevant parties and are expected to becompleted during March 2015.

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 unless otherwise stated.

2.1 BASIS OF PREPARATION

The consolidated financial statements of the Establishment have been prepared in accordance with InternationalFinancial Reporting Standards (“IFRS”) and IFRS interpretations committee (IFRS IC) applicable to companiesreporting under IFRS. These consolidated financial statements have been prepared under the historical cost conventionas modified by the revaluation of derivative financial instruments.

The preparation of the consolidated financial statements in conformity with IFRS requires the use of certain criticalaccounting estimates. It also requires management to exercise its judgement in the process of applying the Group’saccounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions andestimates are significant to the financial statements are disclosed in Note 4.


Notes to the consolidated financial statements for the year ended 31 December 2014(continued)

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2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

2.1 BASIS OF PREPARATION (continued)

(a) New and amended standards adopted by the Group

The following standards have been adopted by the Group for the first time for the financial year beginning on or after1 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. The amendmentdid not have a significant effect on the group financial statements.

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.

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 relief from discontinuing hedge accounting when novation of a hedging instrumentmeets 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. The Group is not currently subjected to significant levies as theimpact on the Group is not material.

(b) New standards and interpretations not yet adopted

A number of new standards and amendments to standards and interpretations are effective for annual periodsbeginning after 1 January 2014, and have not been applied in preparing these consolidated financial statements. Noneof these is expected to have a significant effect on the consolidated financial statements of the Group, except thefollowing set out below:

IFRS 9, ‘Financial instruments’, (effective from 1 January 2015);

IFRS 15, ‘Revenue from contracts with customers’ (effective for annual periods beginning on or after 1 January2017)

There are no other IFRSs or IFRS IC interpretations that are not yet effective that would be expected to have a materialimpact on the Group.

2.2 CONSOLIDATION

(a) Subsidiaries

Subsidiaries are all entities (including structured entities) over which the Group has control. The Group controls an entitywhen the Group is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability toaffect those returns through its power over the entity. Subsidiaries are fully consolidated from the date on which controlis transferred to the Group. They are deconsolidated from the date that control ceases.

The Group applies the acquisition method to account for business combinations. The consideration transferred for theacquisition of a subsidiary is the fair values of the assets transferred, the liabilities incurred to the former owners of theacquiree and the equity interests issued by the Group. The consideration transferred includes the fair value of any asset orliability resulting from a contingent consideration arrangement. Identifiable assets acquired and liabilities and contingentliabilities assumed in a business combination are measured initially at their fair values at the acquisition date. The Grouprecognises any non-controlling interest in the acquiree on an acquisition-by-acquisition basis, either at fair value or at thenon-controlling interest’s proportionate share of the recognised amounts of acquiree’s identifiable net assets.Acquisition-related costs are expensed as incurred.



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2.2 CONSOLIDATION (continued)

(a) Subsidiaries (continued)

If the business combination is achieved in stages, the acquisition date fair value of the acquirer’s previously held equityinterest 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. Contingentconsideration that is classified as equity is not remeasured, and its subsequent settlement is accounted for within equity.

(b) Eliminations on consolidation

Inter-company transactions, balances and unrealised gains or losses on transactions between Group companies areeliminated. When necessary amounts reported by subsidiaries have been adjusted to conform with the Group’saccounting policies.

2.3 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 Dirham (“AED”), which is the Group’s functional and presentationcurrency.

(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 resulting fromthe 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 statement of comprehensive income,except when deferred in other comprehensive income as qualifying cash flow hedges.

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

2.4 PROPERTY AND EQUIPMENT

Property and equipment are stated at historical cost less accumulated depreciation. Historical cost includesexpenditures that are directly attributable to the acquisition of the asset.

Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, onlywhen it is probable that future economic benefits associated with the item will flow to the Group and the cost of theitem can be measured reliably. The carrying amount of the replaced part is derecognised. All other repairs andmaintenance are charged to the statement of comprehensive income during the financial period in which they areincurred.

Depreciation is calculated using the straight-line method to allocate their cost to their residual values over theirestimated useful lives, as follows:

YearsMotor and utility vehicles 5-10Furniture and fixtures 5-10Equipment 3-5

The assets’ residual values, useful lives and methods of depreciation, are reviewed and adjusted if appropriate at eachfinancial year end.



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2.4 PROPERTY AND EQUIPMENT (continued)

An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount isgreater than its estimated recoverable amount.Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognisedwithin the statement of comprehensive income.

Capital work-in-progress is stated at cost. When commissioned, capital work-in-progress is transferred to theappropriate category of property and equipment and depreciated in accordance with the Group’s policy.

2.5 LAND USE RIGHT

The total cost of acquiring land use right is capitalised as a land use right asset and is carried at cost less accumulatedamortisation and impairment, if any. Amortisation is calculated using the straight-line method to allocate the cost overthe term of rights of 99 years that is included under ‘cost of sales’ in the statement of comprehensive income.

2.6 INVESTMENT PROPERTY

Property that is held for long-term rental yields or for capital appreciation or both, and that is not occupied by thecompanies in the consolidated Group, is classified as investment property. Investment property also includes propertythat is being constructed or developed for future use as investment property.

Investment property is measured initially at its cost, including related transaction costs and where applicableborrowing costs. After initial recognition, investment property is carried at cost less accumulated depreciation andimpairment, if any.

The fair value for disclosure purposes of the investment property is based on active market prices, adjusted, ifnecessary, for any difference in the nature, location or condition of the specific asset. If this information is notavailable, the Group uses alternative valuation methods, such as recent prices on less active markets or discountedcash flow projections. Valuations are performed as of the financial position date by professional valuers who holdrecognised and relevant professional qualifications and have recent experience in the location and category of theinvestment property being valued.

Subsequent expenditure is capitalised to the asset’s carrying amount only when it is probable that future economicbenefits associated with the expenditure will flow to the Group and the cost of the item can be measured reliably. Allother repairs and maintenance costs are expensed when incurred. When part of an investment property is replaced, thecarrying amount of the replaced part is derecognised.

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.

Investment property under construction is not depreciated until such time as the relevant assets are completed andcommissioned.

Depreciation is calculated using the straight-line method to allocate their cost to their residual values over theirestimated useful lives, as follows:

YearsBuildings 20-35Infrastructure 5-50

The useful lives and depreciation method are reviewed periodically to ensure that the method and period ofdepreciation are consistent with the expected pattern of economic benefits from these assets.



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2.7 IMPAIRMENT OF NON-FINANCIAL ASSETS

Assets that are subject to amortisation are reviewed for impairment whenever events or changes in circumstancesindicate that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by whichthe asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fairvalue less costs to sell and value in use. For the purposes of assessing impairment, assets are grouped at the lowestlevels for which there are separately identifiable cash flows (cash-generating units). Non-financial assets thatsuffered impairment are reviewed for possible reversal of the impairment at each reporting date.

2.8 FINANCIAL ASSETS

2.8.1 CLASSIFICATION

The Group classifies its financial assets as loans and receivables or as derivatives. The classification depends on thepurpose for which the financial assets were acquired. Management determines the classification of its financial assetsat initial recognition.

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 of thereporting period. These are classified as non-current assets. The Group’s loans and receivables comprise ‘due fromrelated parties’, ‘trade and other receivables’ and ‘cash and cash equivalents’ in the balance sheet (Notes 8, 10 and11).

Derivatives are categorised as held for trading unless they are designated as hedges. Assets in this category are classifiedas current assets if expected to be settled within 12 months, otherwise they are classified as non-current.

2.8.2 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 are derecognised when the rights toreceive cash flows from the investments have expired or have been transferred and the Group has transferredsubstantially all risks and rewards of ownership.

Loans and receivables are subsequently carried at amortised cost using the effective interest method.

2.9 OFFSETTING 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 the assetand settle the liability simultaneously.

2.10 IMPAIRMENT OF FINANCIAL ASSETS

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.

Evidence of impairment may include indications that the debtors or a Group of debtors is experiencing significantfinancial difficulty, default or delinquency in interest or principal payments, the probability that they will enterbankruptcy or other financial reorganisation, and where observable data indicate that there is a measurable decreasein the estimated future cash flows, such as changes in arrears or economic conditions that correlate with defaults.



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2.10 IMPAIRMENT OF FINANCIAL ASSETS (continued)

Assets carried at amortised cost (continued)

For loans and receivables category, the amount of the loss is measured as the difference between the asset’s carryingamount and the present value of estimated future cash flows (excluding future credit losses that have not beenincurred) discounted at the financial asset’s original effective interest rate. The carrying amount of the asset isreduced and the amount of the loss is recognised in the consolidated statement of comprehensive income. If a loanhas a variable interest rate, the discount rate for measuring any impairment loss is the current effective interest ratedetermined under the contract. As a practical expedient, the Group may measure impairment on the basis of aninstrument’s fair value using an observable market price.

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

2.11 DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES

Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequentlyre-measured at their fair value. The method of recognising the resulting gain or loss depends on whether thederivative is designated as a hedging instrument, and if so, the nature of the item being hedged. The Group designatesits derivatives as 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 hedging 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. Ahedge of the foreign currency risk of a firm commitment is accounted for as a cash flow hedge.

The full fair value of a hedging derivative is classified as a non-current asset or liability when the remaining hedgeditem is more than 12 months, and as a current asset or liability when the remaining maturity of the hedged item is lessthan 12 months. Trading derivatives are classified as a current asset or liability.

The effective portion of changes in the fair value of derivatives that are designated and qualify as cash flow hedges isrecognised in other comprehensive income. The gain or loss relating to the ineffective portion is recognisedimmediately in the statement of comprehensive income.

Amounts accumulated in equity are reclassified to profit or loss in the periods when the hedged item affects profit orloss (for example, when the forecast sale that is hedged takes place). The gain or loss relating to the effective portionof interest rate swaps hedging variable rate borrowings is recognised in the consolidated statement of comprehensiveincome within ‘Finance cost - net’. However, when the forecast transaction that is hedged, results in the recognitionof a non-financial asset (for example, inventory or fixed assets), the gains and losses previously deferred in equity aretransferred from equity and included in the initial measurement of the cost of the asset. The deferred amounts areultimately recognised in cost of goods sold in the case of inventory or in depreciation in the case of fixed assets.

When a hedging instrument expires or is sold, or when a hedge no longer meets the criteria for hedge accounting, anycumulative gain or loss existing in equity at that time remains in equity and is recognised when the forecasttransaction is ultimately recognised in the statement of comprehensive income. When a forecast transaction is nolonger expected to occur, the cumulative gain or loss that was reported in equity is immediately transferred to thestatement of comprehensive income within ‘other gains/ (losses) – net’.



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2.12 TRADE RECEIVABLES

Trade receivables are amounts due from customers for properties sold or services performed in the ordinary course ofbusiness. If collection is expected in one year or less (or in the normal operating cycle of the business if longer), they areclassified as current assets. If not, they are presented as non-current assets.

Trade receivables are recognised initially at fair value and subsequently measured at amortised cost using the effectiveinterest method, less provision for impairment.

2.13 CASH AND CASH EQUIVALENTS

Cash and cash equivalents includes cash in hand, deposits held at call with banks, other short-term highly liquidinvestments with original maturities of three months or less.

2.14 SHARE CAPITAL

Ordinary shares are classified as equity.

2.15 TRADE PAYABLES

Trade payables are obligations to pay for goods or services that have been acquired in the ordinary course of businessfrom suppliers. Trade payables are classified as current liabilities if payment is due within one year or less (or in thenormal 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.

2.16 ADVANCES FROM CUSTOMERS

Instalments received from buyers for sales of warehouse and/or service prior to meeting the revenue recognitioncriteria, are recognised as advances from customers. These are considered a current liability as they are repayable ondemand on cancellation of the contracts, subject to certain penalties.

2.17 BORROWINGS

Borrowings are recognised initially at fair value, net of transaction costs incurred. Borrowings are subsequently carriedat amortised cost; any difference between the proceeds (net of transaction costs) and the redemption value is recognisedin the statement of comprehensive income over the period of the borrowings using the effective interest method.

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.

2.18 EMPLOYEE BENEFITS

(a) End of service benefits to non-UAE nationals – Defined benefit plan

An accrual is made for employees employed in the UAE for estimated liability for employees’ entitlement to annualleave as a result of services rendered by the employees up to the balance sheet date. Provision is also made, usingactuarial techniques, for the full amount of end of service benefits due to the non-UAE Nationals in accordance withthe Group policy and UAE labour law, for their periods of service up to the balance sheet date. The accrual relatingto annual leave and leave passage is disclosed as a current liability, while the provision relating to end of servicebenefits is disclosed as a non-current liability.



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2.18 EMPLOYEE BENEFITS (continued)

(b) General pension and social security – Defined contribution plan

Effective 1 January 2003, the Group joined a pension scheme that is a defined contribution plan, operated by theFederal General Pension and Social Security Authority. Accordingly contributions for eligible UAE Nationalemployees are made and charged to the statement of comprehensive income, in accordance with the provisions ofFederal Law No. 7 for 1999 relating to Pension and Social Security Law.

2.19 PROVISIONS

Provisions are recognised when the Group has a present legal or constructive obligation as a result of past events,where it is probable that an outflow of resources embodying economic benefits will be required to settle theobligation, and a reliable estimate of the amount can be made. Provisions are not recognised for future operatinglosses.

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 obligation may be small.

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

2.20 REVENUE RECOGNITION

Revenue is measured at the fair value of the consideration received or receivable. The Group recognises revenuewhen the amount of revenue can be reliably measured; when it is probable that future economic benefits will flow tothe entity; and when specific criteria have been met for each of the Group’s activities, as described below.

(a) Lease rental

Lease rental is recognised on a straight line basis over the lease term. Where the consideration for the lease is receivedfor subsequent periods, the attributable amount of revenue is deferred and recognised in the subsequent period.Unrecognised revenue is classified as deferred revenue under liabilities in the balance sheet.

(b) Administrative services

Revenue from license, registration administration and consultancy service are recognised as the service is provided.

(c) Other operating income

Other operating income is recognised when the service is provided and right to receive payment is established.

(d) Sale of property

Revenue from sale of property, normally warehouses, is recognised in the consolidated statement of comprehensiveincome when the risks and rewards of ownership are transferred to the buyer. The significant risks and rewards aredeemed to be transferred when the property is transferred to the buyer, which in the case of the buildings generallytakes place only upon completion of construction and physical handover of the property.

2.21 INTEREST INCOME

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



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2.22 SEGMENT INFORMATION

The Group is managed as a single business unit and its assets are located in Jebel Ali Free Zone, Dubai, United ArabEmirates. The Chief Executive Officer (“CEO”) is the Group’s chief operating decision-maker. Management hasdetermined the operating segments based on the information reviewed by the CEO for the purposes of allocatingresources and assessing performance. The CEO considers the business from a service perspective only as thebusiness is geographically carried out in United Arab Emirates. Apart from lease rental, all other activities such asadministrative services and license and registration do not meet the quantitative threshold required by IFRS 8.Accordingly, management has determined that the business is one reportable segment based on the informationreviewed by the Chief Executive Officer for the purposes of allocating resources and assessing performance.

3 FINANCIAL RISK MANAGEMENT

3.1 FINANCIAL RISK FACTORS

The Group’s activities expose it to a variety of financial risks: market risk (including cash flow and fair value interestrate risk), credit risk and liquidity risk. The Group’s overall risk management programme focuses on theunpredictability of financial markets and seeks to minimise potential adverse effects on the Group’s financialperformance. The Group uses derivative financial instruments to hedge certain risk exposures.

(a) Market risk

(i) Foreign exchange risk

The Group does not have any significant foreign currency exposure, as the majority of its transactions aredenominated in United Arab Emirates Dirham (“AED”).

(ii) Price risk

The Group is not exposed to equity securities or commodity price risk.

(iii) Cash flow and fair value interest rate risk

The Group’s interest rate risk arises from Sukuk borrowing and bank borrowings denominated in the AED.Borrowings issued at variable rates expose the Group to cash flow interest rate risk which is partially offset by cashheld at variable rates. Borrowings issued at fixed rates expose the Group to fair value interest rate risk. The Groupmanagement did not set ratio of variable rate borrowings to fixed rate borrowings.

(iii) Cash flow and fair value interest rate risk (continued)

The Group manages its cash flow interest rate risk by using floating-to-fixed interest rate swaption agreements (Note9). Such interest rate swaptions have the economic effect of converting borrowings from floating rates to fixed rates.Under the loan agreement, the Group raised long-term borrowings at floating rates and should partially purchaseswaptions to fixed rates. Under these agreements, the Group has the right but not the obligation on other parties toexchange, at specified intervals (primarily quarterly), the difference between fixed contract amounts and floating-rateinterest amounts calculated in reference to the agreed notional amounts. Sukuk borrowings issued at fixed ratesexpose the Group to fair value interest rate risk.

If the interest rate on the non-hedged portion of bank borrowing of AED 1,085,560,000 (2013: AED 1,538,280,000)had been 1% higher/lower with all other variables held constant, profit for the year would have been AED10,856,000 (2013: AED 15,383,000) lower/higher, mainly as a result of higher/lower interest expense on floating rateborrowings.

If the interest rate on the hedged portion of bank borrowing of AED 1,050,000,000 had been 1% higher with all othervariables held constant, profit for the year would have been AED 10,500,000 (2013: AED 3,015,000) lower. If theinterest rate had been 1% lower with all other variables held constant, profit for the year would have been AED10,500,000 (2013: AED 10,500,000) higher. This is mainly as a result of exercise of the swaption agreements.



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3 FINANCIAL RISK MANAGEMENT (continued)

3.1 FINANCIAL RISK FACTORS (continued)

(b) Credit risk

Credit risk is the risk that one party to a financial instrument will cause a financial loss for the other party by failing todischarge an obligation. The Group has no significant concentrations of credit risk. Credit risk arises from cash andcash equivalents held at banks, trade receivables, including rental receivables from lessees, related party receivablesand derivative financial instruments (Note 8, 9, 10 and 11). Credit risk is managed on a Group basis. The Group haspolicies in place to ensure that rental contracts are entered into only with lessees with an appropriate credit history.The Group’s maximum exposure to credit risk to customer is in Note 10. Derivative assets and bank deposits arelimited to high-credit-quality financial institutions. The table below excludes cash in hand amounting to AED 215,000(2013: AED 160,000) and presents an analysis of short term bank deposits and cash and cash equivalents by ratingagency designation at the end of reporting period based on Moody's ratings or its equivalent for the main bankingrelationships:

Counterparties with external credit rating (Moody’s) 2014 2013

AED’000 AED’000

A1 618,674 100,297

A2 61,878 50,808

Baa1 423,759 169,103

Baa2 170,323 281,726

* 174,999 195,4171,449,633 797,351

* Balances of AED 174,999,000 (2013 AED 195,417,000) are maintained with banks with no formal credit rating.However, management views these banks to be high-credit-quality financial institutions and does not expect thesefinancial institutions to default.

(c) Liquidity risk

Prudent liquidity risk management implies maintaining sufficient cash and the availability of funding through anadequate amount of credit facilities. Due to the dynamic nature of the underlying business, the Group maintainsflexibility in funding by keeping credit lines available.

The table below analyses the Group’s financial liabilities into relevant maturity based on the remaining period at thebalance sheet to the contractual maturity date. The amounts disclosed in the table are the contractual undiscountedcash flows. Balances due within 12 months equal their carrying balances as the impact of discounting is notsignificant.

Less than1

year

Between 1year and 2

years

Between 2years and 5

yearsOver 5

years TotalAED’000 AED’000 AED’000 AED’000 AED’000

At 31 December 2014

Bank borrowings 287,551 302,329 1,131,260 674,033 2,395,173

Sukuk borrowing 167,144 167,144 2,805,181 - 3,139,469

Trade and other payablesexcluding advances fromcustomers (Note 17) 791,281 - - - 791,281

Due to related parties (Note 8) 48,196 - - - 48,196

1,294,172 469,473 3,936,441 674,033 6,374,119



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3 FINANCIAL RISK MANAGEMENT (continued)

3.1 FINANCIAL RISK FACTORS (continued)

Less than1

year

Between 1year and 2

years

Between 2years and 5

yearsOver 5

years TotalAED’000 AED’000 AED’000 AED’000 AED’000

At 31 December 2013

Bank borrowings 312,855 322,730 1,106,527 1,363,020 3,105,132

Sukuk borrowing 167,144 167,144 501,433 2,470,892 3,306,613

Trade and other payablesexcluding advances fromcustomers (Note 17) 736,427 - - - 736,427

Due to related parties (Note 8) 36,494 - - - 36,494

1,252,920 489,874 1,607,960 3,833,912 7,184,666

3.2 CAPITAL MANAGEMENT

The Group’s objectives when managing capital are to safeguard the Group’s ability to continue as a going concern inorder to provide returns to the shareholder and to maintain an optimal capital structure to reduce the cost of capital. Inorder to maintain or adjust the capital structure, the Group may adjust the amount of profit distributable to theshareholder or manage its working capital requirements. Consistent with others in the industry, the Group monitorscapital on the basis of the gearing ratio. This ratio is calculated as net debt divided by total capital. Net debt iscalculated as total borrowings (including current and non-current borrowings gross of transaction costs) less cash andbank balances (including short term deposits). Total capital is calculated as ‘Total equity’ as shown in theconsolidated balance sheet plus net debt.

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

2014 2013

AED’000 AED’000

Total Sukuk and bank borrowings (Note 14 and 16) 4,522,880 4,975,600

Less: Cash and bank balances (Note 11) (1,449,848) (797,512)

Net debt 3,073,032 4,178,088

Total equity 7,678,288 6,614,035

Total capital 10,751,320 10,792,123

Gearing ratio 29% 39%

3.3 FAIR VALUE ESTIMATION

The table below analyses financial instruments carried at fair value, by valuation method. The different levels havebeen 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 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’000 AED’000 AED’000 AED’000

Assets- Derivative financial instruments (Note 9). - 2,652 - 2,652



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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.

4.1 CRITICAL ACCOUNTING ESTIMATES AND ASSUMPTIONS

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 areaddressed below.

(a) Impairment of non-financial assets

Impairment of non-financial assets is a key area involving management judgement, requiring assessment as towhether the carrying value of assets can be supported by the net present value of future cash flows derived from suchassets using cash flow projections which have been discounted at an appropriate rate.

In calculating the net 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, andmanagement’s views on achievable growth in market share over the long term period of five to fifteen years.

The discount rate of 12% based on the Group’s weighted average cost of capital with a risk premium reflectingthe relative risks in the markets in which the businesses operate.

At 31 December 2014 and 2013 no impairment has been recognised against investment properties under construction(Note 6).



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5 PROPERTY AND EQUIPMENT

Motor andutility

vehiclesFurniture

and fixtures Equipment

Capitalwork-in-progress Total

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

Cost

At 1 January 2013 90 54,328 24,762 - 79,180

Additions - 484 27 234 745

Transfer - 218 16 (234) -

Disposals - (169) (5) - (174)

At 31 December 2013 90 54,861 24,800 - 79,751

Additions - - - 1,307 1,307

Transfer - 1,012 295 (1,307) -

Disposals (46) (31) (1) - (78)

At 31 December 2014 44 55,842 25,094 - 80,980

Depreciation

At 1 January 2013 90 39,406 24,155 - 63,651

Charge for the year - 9,360 253 - 9,613

Disposals - (110) (5) - (115)

At 31 December 2013 90 48,656 24,403 - 73,149

Charge for the year - 2,616 254 - 2,870

Transfer - (161) 161 - -

Disposals (46) (31) (1) - (78)

At 31 December 2014 44 51,080 24,817 - 75,941

Net book value

At 31 December 2014 - 4,762 277 - 5,039

At 31 December 2013 - 6,205 397 - 6,602

Depreciation of AED 2,870,000 (2013: AED 9,613,000) is included under General and administrative expenses (Note21).



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6 INVESTMENT PROPERTY

Buildings andInfrastructure

Investmentproperties under

construction TotalAED’000 AED’000 AED’000

Cost

At 1 January 2013 3,492,241 1,580,019 5,072,260

Additions 40 19,331 19,371

Transfers 2,775 (2,775) -

Transfer to the parent company (Note 8) - (1,436,470) (1,436,470)

Reversal of accrual - (24,373) (24,373)

At 31 December 2013 3,495,056 135,732 3,630,788

Additions - 72,094 72,094

Transfer 11,765 (11,765) -

Transfer from the parent company - 770,621 770,621

Disposal (15,375) - (15,375)

At 31 December 2014 3,491,446 966,682 4,458,128

Depreciation and impairment

At 1 January 2013 843,579 813,062 1,656,641

Charge for the year (Note 19) 85,490 - 85,490

Transfer to the parent company (Note 8) - (802,793) (802,793)

At 31 December 2013 929,069 10,269 939,338

Charge for the year (Note 19) 85,290 - 85,290

Disposal (15,375) - (15,375)

At 31 December 2014 998,984 10,269 1,009,253

Net book value

At 31 December 2014 2,492,462 956,413 3,448,875

At 31 December 2013 2,565,987 125,463 2,691,450

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

2014 2013

AED’000 AED’000

Lease rental income (Note 18) 1,427,485 1,305,923

Direct operating expenses 148,229 147,086

At 31 December 2014, the Group had unprovided contractual obligations for capital commitment of AED595,856,000 (2013: AED 88,707,000).

Management has provided, for each class of property, assumptions made in the determination of fair values and otherkey information on the properties. Management believes that this information is beneficial in evaluating the fairvalues of the investment property.

Level 1 Level 2 Level 3 TotalAED’000 AED’000 AED’000 AED’000

Buildings and infrastructure - - 5,754,150 5,754,150Investment properties under construction - - 956,413 956,413

Total - - 6,710,563 6,710,563



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6 INVESTMENT PROPERTY (continued)

On an annual basis, the Group engages external, independent and qualified valuers to determine the fair value of theGroup’s investment property.

The external valuations of the Level 3 investment properties have been performed using income capitalisation. Theexternal valuers, in discussion with the Group’s management, have determined these inputs based on the current leaserates, specific conditions and comparable rentals in the corresponding market.

The Group has all investment properties in Dubai, of which a significant portion has been leased out.

The significant unobservable inputs used in the fair value measurement categorised within Level 3 of the fair valuehierarchy of the entity's portfolios of investment property are:

Estimated rental value (per sqm per annum) Rent growth per annum. Historical and estimated long term occupancy rate Yields, discount rate and terminal growth rate

Significant increases/(decreases) in estimated rental value (per sqm per annum) and rent growth per annum inisolation would result in a significantly higher/(lower) fair value measurement. Significant increases/(decreases) inlong-term occupancy rate and discount rate in isolation would result in a significantly lower/(higher) fair valuemeasurement.

At 31 December 2014 and 31 December 2013, the Group’s investment property were fair valued on an open marketbasis by independent professionally qualified valuers who have recent experience in the locations and categories ofthe investment properties valued. Based on such valuation, the fair value of the investment property at 31 December2014 is AED 6,710,563,000 (2013: AED 6,137,681,000) including investment property under construction of AED956,413,000 (2013: AED 125,463,000).

For all investment property the current use of the properties is their highest and best use.

7 LAND USE RIGHT

2014 2013

AED’000 AED’000

Cost

At 1 January and 31 December 8,981,867 8,981,867

Amortisation

At 1 January 552,202 461,475

Charge for the year (Note 19) 90,726 90,727

At 31 December 642,928 552,202

Net book value at 31 December 8,338,939 8,429,665

The land use right of the Group is held under a long-term lease arrangement and amortised over the term of the lease of99 years.

8 RELATED PARTY TRANSACTIONS AND BALANCES

Related parties include the parent, the intermediate parent and the ultimate parent company, key managementpersonnel and any businesses (other related parties) which are controlled, directly or indirectly by the shareholdersand directors or over which they exercise significant management influence.



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8 RELATED PARTY TRANSACTIONS AND BALANCES (continued)

During the year the Group entered into the following significant transactions with related parties in the normal courseof business and at prices and terms agreed by the Group’s management.

2014 2013

AED’000 AED’000

Income:

Revenue generated from other related parties 35,776 31,912

Finance income earned from ultimate parent company 33,989 32,198

Expenses:

Cost recharged from the parent company 58,919 52,982

Repair and maintenance charged by other related parties 46,091 41,912

Security services charged by other related party 6,108 5,593

Key management remuneration:

- Salaries and other short term employee benefits 19,635 17,537

- Termination and post-employment benefits 1,866 1,645

21,501 19,182

Transfer of investment property from / (to) the parent company (Note 6) 770,621 (633,677)

Related party balances include the following:

Current

Due from other related parties 23,945 55,249

Non-current

Loan to the ultimate parent - 750,771

Less: Fair value loss - (146,520)

- 604,251

23,946 659,500

Due to related parties:Due to the parent company 34,533 21,930Other related parties 13,663 14,564

48,196 36,494

During 2013, the Group received AED 1,102,000,000 from the parent company upon disposal of shares of its pledgedsubsidiary against which the Group transferred Investment property under construction at fair market value, asdetermined by an independent valuer, of AED 904,600,000 to the parent company. The balance of AED 197,400,000was adjusted against amount due from the parent company. The fair market value comprised of the net book value ofinvestment property under construction of AED 633,677,000 and the contract value for the remaining works of AED270,923,000, out of which the Group had already made an advance payment of AED 227,500,000 during the period.

During the year, the loan receivable from the ultimate parent of AED 765,453,000 (2013: AED 750,771,000) wasassigned to the parent company, which was settled by the transfer of Investment property of AED 770,621,000 (Note6), the difference between the value of the financial asset and the non-financial liability was recognised as a balancedue to the parent company.



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9 DERIVATIVE FINANCIAL INSTRUMENTS

During the prior year, the Group entered into interest rate swap agreements (“swaptions”) for a notional amount ofAED 1,050,000,000. Under these swaptions, in consideration for a premium, the Group purchased the right but notthe obligation to receive an agreed upon capped 3 months EIBOR interest rate. The EIBOR cap rates that can beexercised during the corresponding reference periods as per the terms of the swaptions are as follows:

Reference periods EIBOR cap rateFrom 19 December 2013 to 18 December 2014 1.10%From 19 December 2014 to 18 December 2015 1.45%From 19 December 2015 to 18 December 2016 1.95%

The fair value of the Group’s derivative financial instruments, which represent swaptions that are not traded in anactive market, is determined by using valuation techniques which maximise the use of observable market data (Markto Market) where it is available and rely as little as possible on entity specific estimates. Since significant inputsrequired to fair value the swaptions are obtained through quotations from banks for new swaptions under similarterms, the instrument is included in Level 2. The fair value of swaptions can be analysed as follows:

2014 2013

AED’000 AED’000

Current assets 1,326 2,221

Non-current assets 1,326 4,442

2,652 6,663

10 TRADE AND OTHER RECEIVABLES

2014 2013

AED’000 AED’000

Trade receivables 94,187 104,363

Less: provision for impairment of receivables (83,434) (87,013)

10,753 17,350

Other receivables and prepayments 45,207 5,904

As at 31 December 55,960 23,254

At 31 December 2014 and 31 December 2013, the Group had a broad base of customers with no concentration of creditrisk within trade receivables. The carrying amounts of the Group trade and other receivables are denominated entirely inAED.

As of 31 December 2014, trade receivables of AED 1,115,000 (2013: AED 2,192,000) were fully performing.

As of 31 December 2014, trade receivables of AED 9,638,000 (2013: AED 15,158,000) were past due but not impaired.These relate to a number of independent customers for whom there is no recent history of default. The ageing analysis ofthese trade receivables is as follows:

2014 2013

AED’000 AED’000

1 to 12 months 2,209 5,953

Over 12 months 7,429 9,205

As at 31 December 9,638 15,158



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10 TRADE AND OTHER RECEIVABLES (continued)

As of 31 December 2014, trade receivables of AED 83,434,000 (2013: AED 87,013,000) were impaired and providedfor. The ageing of these receivables is as follows:

2014 2013

AED’000 AED’000

1 to 12 months 8,275 12,357

Over 12 months 75,159 74,656

As at 31 December 83,434 87,013

Movements in the Group’s provision for impairment of trade receivables are as follows:

At 1 January 87,013 90,400

Provision for impairment of trade receivables (Note 21) 2,614 3,076

Written off during the year (6,193) (6,463)

As at 31 December 83,434 87,013

The creation and release of provision for impairment of receivables have been included in “General and administrativeexpenses” (Note 21) in the statement of comprehensive income. Amounts charged to the allowance account are generallywritten off when there is no expectation of recovery.

The other classes within trade and other receivables do not contain impaired assets. The maximum exposure to creditrisk at the reporting date is the fair value of each class of receivable mentioned above. The Group does not hold anycollateral as security.

The carrying value less impairment provision of trade receivables is assumed to approximate their fair values due tothe short-term nature of trade receivables. Other receivables approximate their fair values. The fair values are withinLevel 3 of the fair value hierarchy.

11 CASH AND BANK BALANCES

2014 2013

AED’000 AED’000

Cash at banks and on hand 326,136 315,620

Fixed deposits 1,123,712 481,892

1,449,848 797,512

Current accounts and fixed deposits are placed with domestically incorporated banks and local branches ofinternational banks. The fixed deposits earned interest at rates ranging from 0.6% to 1.6% per annum (2013: 0.6% to1.8%)

For purposes of the statement of cash flows, cash and cash equivalents comprise the following:

2014 2013

AED’000 AED’000

Cash and bank balances 1,449,848 797,512

Less: Long term fixed deposits (883,060) (481,892)

Less: Restricted cash (163,432) (169,432)

Cash and cash equivalents 403,356 146,188



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12 SHARE CAPITAL

The total authorised, issued and fully paid share capital of the Establishment at 31 December 2014 and 31 December2013 comprises 4,268 shares of AED 1,000,000 each.

13 EMPLOYEES’ END OF SERVICE BENEFITS

2014 2013

AED’000 AED’000

At 1 January 17,955 14,475

Charge for the year (Note 23) 3,619 4,281

Transfer out 503 109

Payments during the year (1,122) (910)

20,955 17,955

In accordance with the provisions of IAS 19, management has carried out an exercise to assess the present value of itsobligations at 31 December 2014, using the projected unit method, in respect of employees’ end of service benefitspayable under the UAE Labour Law. Under this method, an assessment has been made of an employee’s expectedservice life with the Group and the expected basic salary at the date of leaving the service. Management has assumedaverage increment/promotion cost of 5% (2013: 5%). The expected liability at the date of leaving the service has beendiscounted to its net present value using a discount rate of 4.3 % (2013: 4.5%).

14 SUKUK BORROWING

On 19 June 2012, the Group issued through its subsidiary JAFZ Sukuk (2019) Limited, Sukuk trust certificates(“Sukuk”) for a nominal value of AED 2,387,000,000 (AED 2,340,000,000 net of transaction costs of AED47,000,000) which are listed on Nasdaq Dubai and the Irish Stock Exchange. The Sukuk matures seven years fromthe issue date and bears a profit commission at a coupon rate of 7% per annum to be paid semi-annually. The Sukukare denominated in United States Dollars (“USD”). Sukuk are secured in parri passu with bank borrowings (Note 16).

The following fair values of Islamic Sukuk are based on quoted market rates and are within Level 1 of the fair valuehierarchy:

Carrying amount Fair value31 December

201431 December

201331 December

201431 December

2013

AED’000 AED’000 AED’000 AED’000

Sukuk borrowing 2,387,320 2,387,320 2,735,725 2,727,513

Deferred borrowing costs (34,722) (41,016) - -

2,352,598 2,346,304 2,735,725 2,727,513



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2014 2013

AED’000 AED’000

15 DEFERRED REVENUE

At 1 January 300,534 299,836

Additions during the year 1,445,498 1,306,621

Released during the year (Note 18) (1,427,485) (1,305,923)

At 31 December 318,547 300,534

Current portion 279,490 260,590

Non-current portion 39,057 39,944

318,547 300,534

16 BANK BORROWINGS

Non-current

Term loan 1,904,120 2,373,560

Deferred borrowing costs (27,074) (47,990)

1,877,046 2,325,570

Current

Term loan 231,440 214,720

Deferred borrowing costs (23,053) (29,769)

208,387 184,951

Total bank borrowings 2,085,433 2,510,521

The Group obtained a syndicated loan facility from a consortium of banks which bore interest at a rate of threemonths EIBOR plus 2.75% per annum and paid on a quarterly basis. Effective 22 September 2014, the interest rate onterm loan has been revised to EIBOR plus 1.85% per annum. During the year, the Group made repayments towardsterm loan of AED 452,720,000 (2013: AED 1,751,440,000). At 31 December 2014, the loan repayment terms wereas follows:

Principal repayment term

% AED’000

Less than 1 year 10.84 231,440

Between 1 year and 2 years 11.62 248,160

Between 2 years and 5 years 46.61 995,280

Over 5 years 30.94 660,680

Total 100.00 2,135,560

Bank borrowings are secured with the assignment of accounts receivable and mortgage over certain land use rights.The carrying value of the borrowing approximates its fair values. The fair values are within Level 3 of the fair valuehierarchy.



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17 TRADE AND OTHER PAYABLES

2014 2013

AED’000 AED’000

Trade payable 42,645 58,809

Refundable deposits 611,779 542,728

Accrued expenses 109,591 105,067

Advances from customers 29,962 52,375

Retention and other Payables 27,265 29,824

821,242 788,803

The carrying value of trade and other payables is assumed to approximate their fair values due to the short-termnature of trade and other payables. The fair values are within Level 3 of the fair value hierarchy.

18 REVENUE

2014 2013

AED’000 AED’000

Lease rental income:

- Plots 622,231 540,137

- Warehouses 303,434 282,559

- On site residences 248,814 239,127

- Offices 236,707 227,626

- Others 16,299 16,474

1,427,485 1,305,923

License and registration fees 130,611 121,333

Administration service revenue 130,346 103,612

1,688,442 1,530,868

19 COST OF SALES

Utilities 102,885 90,457

Amortisation of land use right (Note 7) 90,726 90,727

Depreciation of investment property (Note 6) 85,290 85,490

Repairs and maintenance 62,939 61,596

Others 11,719 12,707

353,559 340,977

20 OTHER OPERATING INCOME

Lease transfer, sub-lease income and lease commission 22,343 14,828

Public health services 13,050 11,778

Courier service income 11,672 6,075Outdoor advertisement revenue 5,361 383Rent on occupancy post termination 5,030 4,296

Sale of property from repossessed facility 4,779 10,467

Facility manager operating fee income 4,382 4,403

Loss on disposal of investment property 478 -Recovery from contractors in lieu of revenue lost - 18,701

Others 15,357 12,365

82,452 83,296



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2014 2013

AED’000 AED’000

21 GENERAL AND ADMINISTRATIVE EXPENSES

Staff cost (Note 23) 87,078 91,441

Expenses recharged by related parties 70,883 63,351

Security charges 6,108 5,416

Depreciation (Note 5) 2,870 9,613

Provision for impairment of trade receivables (Note 10) 2,614 3,076

Others 9,738 3,164

179,291 176,061

22 SELLING AND MARKETING EXPENSES

Staff cost (Note 23) 43,856 38,332

Exhibitions 2,772 1,836

Advertisements 2,869 3,959

Events 1,423 817

Others 4,196 4,109

55,116 49,053

23 STAFF COST

Salaries and other staff benefits 108,348 102,565

End of service benefits (Note 13) 3,619 4,281

Pension expenses 7,586 7,537

Bonus 11,381 15,390

130,934 129,773

Included under:General and administrative expenses 87,078 91,441

Selling and marketing expenses 43,856 38,332

130,934 129,773



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24 FINANCE COSTS – NET

2014 2013

AED’000 AED’000

Finance income:

Interest income on bank deposits 6,159 4,768

Interest income on balance due from a related party 14,682 14,682

Unwinding of fair value loss of balance due from a related party 146,520 17,515

167,361 36,965

Finance costs:

Profit commission on Sukuk borrowing (167,144) (167,144)

Fair value loss on interest rate swaptions (4,012) (7,088)Interest on bank borrowing (79,382) (182,994)

Other finance charges (35,498) (37,520)

(286,036) (394,746)

(118,675) (357,781)

25 FINANCIAL INSTRUMENTS BY CATEGORY

Derivative used forhedging

Loans andreceivables

Assets per balance sheet

31 December 2014

Trade and other receivables excluding prepayments - 14,687

Due from related parties - 23,946

Cash and bank balances - 1,449,848

Derivative financial instruments 2,652 -2,652 1,488,481

31 December 2013

Trade and other receivables excluding prepayments - 20,154

Due from related parties - 659,500

Cash and bank balances - 797,512

Derivative financial instruments 6,663 -

6,663 1,477,166



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25 FINANCIAL INSTRUMENTS BY CATEGORY (continued)

Other financialliabilities at

amortised costAED’000

31 December 2014

Trade and other payables excluding refundable deposits and customer advances 179,501

Due to related parties 48,196

Sukuk borrowing 2,352,598

Bank borrowings 2,085,433

4,665,728

31 December 2013

Trade and other payables excluding refundable deposits and customer advances 193,700

Due to related parties 36,494

Sukuk borrowing 2,346,304

Bank borrowings 2,510,521

5,087,019

26 FUTURE MINIMUM RENTAL PAYMENTS RECEIVABLE UNDER NON-CANCELLABLELEASES

The Group has non-cancellable leases having terms of between 1 and 15 years. All land leases agreements enteredafter April 2010 contain rent review provisions whereby the Group will review the rent every 5 years, subject tocertain negotiated rent caps. Future minimum rentals receivable under non-cancellable operating leases as at 31December are as follows:

2014 2013

AED’000 AED’000

Within one year 990,923 882,542

After one year but not more than five years 1,925,506 1,717,916

More than five years 2,150,638 1,782,706

5,067,067 4,383,164

jebel ali free zone fze consolidated financial statements for the year ... - nasdaq...

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