ALAFCO AVIATION LEASE AND FINANCE COMPANY K.S.C.P. AND SUBSIDIARIES

INTERIM CONDENSED CONSOLIDATED FINANCIAL

INFORMATION (UNAUDITED)

30 JUNE 2023

Ernst & Young

Tel: +965 2295 5000

Al Aiban, Al Osaimi & Partners

Fax: +965 2245 6419

P.O. Box 74

kuwait@kw.ey.com

18-20th Floor, Baitak Tower

ey.com/mena

Ahmed Al Jaber Street

Safat Square 13001, Kuwait

REPORT ON REVIEW OF INTERIM CONDENSED CONSOLIDATED FINANCIAL INFORMATION TO THE BOARD OF DIRECTORS OF ALAFCO AVIATION LEASE AND FINANCE COMPANY K.S.C.P.

Introduction

We have reviewed the accompanying interim condensed consolidated statement of financial position of ALAFCO Aviation Lease and Finance Company K.S.C.P. (the "parent company") and its subsidiaries (collectively the "group") as at 30 June 2023, and the related interim condensed consolidated statements of income and comprehensive income for the three months and nine months periods then ended, and the related interim condensed consolidated statements of changes in equity and cash flows for the nine months period then ended. The management of the parent company is responsible for the preparation and presentation of this interim condensed consolidated financial information in accordance with International Accounting Standard 34: Interim Financial Reporting ("IAS 34"). Our responsibility is to express a conclusion on this interim condensed consolidated financial information based on our review.

Scope of Review

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

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the accompanying interim condensed consolidated financial information is not prepared, in all material respects, in accordance with International Accounting Standard 34.

Material Uncertainty Related to Going Concern

We draw attention to Note 2 and Note 6, to the interim condensed consolidated financial information which states that during the period, the Board of Directors considered and General Meeting of Shareholders convened on 27 December 2022 have approved the sale of a substantial portion of the group's portfolio of aircrafts and transfer of an order book with a manufacturer. Furthermore, the Board of Directors of the parent company acknowledges that there is material uncertainty associated with continuing use of the remaining fleet as market conditions in the future could provide better returns to shareholders through a sale opportunity. These conditions, along with other matters stated in Note 2, indicate the existence of a material uncertainty that may cast significant doubt about the group's ability to continue as a going concern. Our conclusion is not modified in respect of this matter.

REPORT ON REVIEW OF INTERIM CONDENSED CONSOLIDATED FINANCIAL INFORMATION TO THE BOARD OF DIRECTORS OF ALAFCO AVIATION LEASE AND FINANCE COMPANY K.S.C.P. (continued)

Report on Other Legal and Regulatory Requirements

Furthermore, based on our review, the interim condensed consolidated financial information is in agreement with the books of account of the parent company. We further report that, to the best of our knowledge and belief, we have not become aware of any violations of the Companies Law No. 1 of 2016, as amended, and its Executive Regulations, as amended, or of the parent company's Memorandum of Incorporation and Articles of Association during the nine months period ended 30 June 2023 that might have had a material effect on the business of the parent company or on its financial position.

We further report that, during the course of our review, we have not become aware of any material violations of the provisions of Law No. 7 of 2010 concerning the Capital Markets Authority and its related regulations during the nine months period ended 30 June 2023 that might have had a material effect on the business of the parent company or on its financial position.

ABDULKARIM ALSAMDAN

LICENCE NO. 208-A

EY

AL AIBAN, AL OSAIMI & PARTNERS

6 August 2023

Kuwait

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ALAFCO Aviation Lease and Finance Company K.S.C.P. and Subsidiaries

INTERIM CONDENSED CONSOLIDATED STATEMENT OF INCOME (UNAUDITED)

For the period ended 30 June 2023

Three months ended

Nine months ended

30 June

30 June

2023

2022

2023

2022

Notes

KD

KD

KD

KD

Operating lease income

8

9,175,439

20,151,196

26,149,761

71,113,635

Murabaha income

112,187

17,074

161,108

42,394

(Loss)/Gain on disposal of aircraft, engines and

(2,341,148)

-

(903,380)

equipment

5 & 6

2,409,682

Other income

9

6,694,224

1,560,682

22,482,449

3,583,115

Staff costs

(545,984)

(1,103,060)

(2,068,990)

(3,071,748)

Depreciation

5

(3,994,836)

(12,560,234)

(11,834,935)

(38,044,445)

Impairment loss on aircraft, engines and

-

-

equipment

(15,559,467)

(28,743,803)

Other operating expenses

(1,205,946)

(3,109,238)

(3,267,595)

(4,814,072)

Reversal of credit loss on receivables

768,494

1,135,842

1,384,854

976,797

Finance costs

(11,866,099)

(9,370,652)

(35,498,571)

(26,818,508)

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LOSS FOR THE PERIOD

(3,203,669)

(18,837,857)

(3,395,299)

(23,366,953)

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Basic and diluted loss per share

4

(3.36) fils

(19.79) fils

(3.57) fils

(24.54) fils

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The attached notes 1 to 15 form part of this interim condensed consolidated financial information.

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ALAFCO - Aviation Lease and Finance Company KSCC published this content on 07 August 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 07 August 2023 08:30:09 UTC.