Emaar Malls PJSC and its subsidiaries
UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
31MARCH 2017
EYErnst & Young
P.O. Box 9267
28th Floor, Al Saqr Business Tower
Tel: +9714 332 4000
Fax: +9714 332 4004
dubai@ae.ey.com
Building a better working worldSheikh Zayed Road
Dubai, United Arab Emirates
ey.com/mena
REPORT ON REVIEW OF INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS TO THE SHAREHOLDERS OF EMAAR MALLS PJSC AND ITS SUBSIDIARIES IntroductionWe have reviewed the accompanying interim condensed consolidated statement of financial position of Emaar Malls PJSC (the "Company") and its subsidiaries (the "Group") as of 31 March 2017 and the related interim condensed consolidated statements of income, other comprehensive income, cash flows and changes in equity for the three-month period then ended, and explanatory notes. Management is responsible for the preparation and presentation of these interim condensed consolidated financial statements in accordance with International Accounting Standard 34 Interim Financial Reporting ("!AS 34 "). Our responsibility is to express a conclusion on these interim condensed consolidated financial statements based on our review.
Scope of ReviewWe 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 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.
ConclusionBased on our review, nothing has come to our attention that causes us to believe that the accompanying interim condensed consolidated financial statements are not prepared, in all material respects, in accordance with IAS 34.
For Ernst & Young
Signed by:
Anthony O'Sullivan Partner
Registration Number 687
7 May 2017
Dubai, United Arab Emirates
A member firm of Ernst & Young Global LimitedEmaar Malls PJSC and its subsidiaries
INTERIM CONDENSED CONSOLIDATED INCOME STATEMENT
For the period ended 31 March 2017 (unaud ited)
(US $1.00 =AED 3.673)
1 January 2017 to | l January 2016 to | ||
31 March | 31 March | ||
Notes | 2017 AED'OOO | 2016 AED'OOO | |
REVENUE | |||
Rental income | 4 | 836,312 | 833, 192 |
Tota l reven ue | 836,312 | 833,192 | |
EXPENSES | |||
Operating expenses | 5 | (104,293) | (107,707) |
Sales and marketing expenses | (13,286) | (12,307) | |
Depreciation of property, plant and equipment | 10 | (9,414) | (11,500) |
Depreciation of investment properties | 11 | (83,260) | (78,039) |
General and administrative expenses | (41,126) | (43,436) | |
Write-off | 6 | (3,873) | |
Tota l expenses | (251,379) | (256,862) | |
OPERATING PROFIT FOR THE PERIOD | 584,933 | 576,330 | |
Finance income | 23,855 | 20,603 | |
Finance costs | 7 | (69,654) | (68,205) |
PROFIT FOR THE PERIOD | 8 | 539,134 | 528,728 |
ATTRIBUTA BLE TO: | |||
Equity holders of the Company | 539,134 | 528,728 | |
Earnings per share (AED) | |||
- basic and diluted | 9 | 0.04 | 0.04 |
Emaar Malls PJSC and its subsidiaries
INTERIM CONDENSED CONSOLIDATED STATEMENT OF OTHER COMPREHENSIVE INCOME
For the period ended 31 March 2017 (unaudited)
(US $1.00 =AED 3.673)
1 January
2017 to
31 March
2017
AED'OOO
1 January
2016 to
31 March
2016
AED'OOO
Profit for the period
Other comprehensive income to be
reclassified to the consolidated income statement in subsequent period:
539,134
528,728
Other comprehensive income: Net movement on cash flow hedges | 7,102 | (41,765) |
TOTAL COMPREHENSIVE INCOME | ||
FOR THE PERIOD | 546,236 | 486,963 |
ATTRIBUTABLE TO: Equ ity holders of the Company | 546,236 | 486,963 |
....
Emaar Malls PJSC and its subsidiaries
INTERIM CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION ·' ·
As at 31 March 2017 •I
(US $1.00 s AED 3.673)
31 March 2017 | 31 December 2016 | ||
(Unaudited) | (Audited) | ||
Notes | AED'OOO | AED'OOO | |
ASSETS | |||
Non-current assets Property, plant and equipment | 195,034 | 203,SSS | |
Investment properties | 21,321,616 | 21,218,905 | |
21,516,650 | 21,422,460 | ||
Current assets | |||
Inventories | 11,294 | 12,467 | |
Trade receivables | 12 | 198,166 | 187,172 |
Advances, prepayments and other receivables | 168,415 | 179,376 | |
Due from related parties | 13 | 62,974 | 55,828 |
Bank balances and cash | 14 | 4,048,317 | 3,550,594 |
4,489,166 | 3,985,437 | ||
TOTAL ASSETS | 26,005,816 | 25,407,897 | |
EQUITY AND LIABILITIES | |||
Equity | |||
Share capital | I S | 13,014,300 | 13,014,300 |
Reserves | 16 | 881,460 | 874,358 |
Retained earnings | 2,669,559 | 2,130,425 | |
TOTAL EQUITY | 16,565,319 | 16,019,083 | |
Non-current liabilities | |||
Employees' end of service benefits | 15,018 | 14,850 | |
Interest bearing loans and borrowings | 17 | 4,560,348 | 4,558,428 |
Sukuk | 18 | 2,738,211 | 2,737,734 |
Retentions payable after 12 months | 56,511 | 46,519 | |
7,370,089 | 7,357,531 | ||
Current liabilities | |||
Due to related parties | 13 | 115,299 | 86,883 |
Accounts payable and accruals | 19 | 649,439 | 654,883 |
Advances and security deposits | 975,204 | 911,593 | |
Retentions payable within 12 months | 10,148 | 9,515 | |
Deferred income | 320,218 | 368,349 | |
2,070,408 | 2,031,283 | ||
TOTAL LIABILITIES | 9,440,497 | 9,388,814 | |
TOTAL EQUITY AND LIABILITIES | 26,005,816 | 25,407,897 |
These interim condensed consolidated financial statements were authorised for issue on 7 May 2;0::..
Directors and signed on their behalf by:
..,_..ow.:::.
- Chairman
The attached notes I to 21 fonn oart of these interim condensed consolidated financial statements .
4
.......
Emaar Malls PJSC and its subsidiaries
INTERIM CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
For the period ended 31 March 2017 (unaudited)
(US $1.00 =AED 3.673)
1 January 2017 to 31 March 2017 | I January 2016 to 31 March 20 / 6 | ||
Notes | AED'OOO | AED'OOO | |
OPERATING ACTIVITIES | |||
Profit for the period | 539,134 | 528,728 | |
Adjustments for: | |||
Depreciation of property, plant and equipment | 10 | 9,414 | 11,500 |
Depreciation of investment properties | 11 | 83,260 | 78,039 |
Provision for doubtful debts | (3,678) | 1 18 | |
Provision for employees' end of service benefits | 839 | 440 | |
Finance costs | 69,654 | 68,205 | |
Loss on disposal of property, plant and equipment | (43) | 59 | |
Finance income | (23,855) | (20,603) | |
Write-off | 3,873 | ||
Working capital changes: | 674,725 | 670,359 | |
Inventories | 1,173 | 49 | |
Trade recei vables | (7,316) | 6,838 | |
Due from related parties | (7,146) | 34,992 | |
Advances, prepayments and other receivables | 21,229 | (1,099) | |
Due to related parties | 28,718 | (15,466) | |
Accounts payable and accruals | (29,106) | 16,593 | |
Advances and security deposits | 63,611 | (23,034) | |
Retentions payable | 10,666 | 4,496 | |
Deferred income | (48,131) | 10,523 | |
Net cash flows from operations | 708,423 | 704,251 | |
Employees' end of service benefits paid | (973) | (450) | |
Net cash flows from operating activities | 707,450 | 703,801 | |
INVESTING ACTIVITIES | |||
Purchases of property, plant and equ ipment | I O | (893) | (5,442) |
Amounts incurred on investment properties | I I | (185,971) | (122,338) |
I nterest received | 13,587 | 7,761 | |
Proceeds from disposal of property, plant and equipment | 43 | 36 | |
Deposits under lien or maturing after three months | (487,705) | (519,153) | |
Net cash flows used in investing activities | (660,939) | (639,136) | |
FINANCING ACTIVITY | |||
Fi nance cost paid | (36,493) | (34,560) | |
Net cash flows used in financing activities | (36,493) | (34,560) | |
INCREASE IN CASH AND CASH EQUIVA LENTS | 10,018 | 30,105 | |
Cash and cash equivalents at I January | 25,164 | 26,777 | |
CASH AND CASH EQUIVA LENTS AT 31 MARCH | 14 | 35,182 | 56,882 |
Emaar Malls PJSC and its subsidiaries
INTERIM CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the period ended 31 March 2017 (unaudited)
1 January 2017 to
31 March 2017
Share Retained
capital Reserves earnings Total
AED'OOO AED'OOO AED'OOO AED'OOO
As at 1 January 2017 13,014,300 874,358 2,130,425 16,019,083
Profit for the period 539, 134 539,134
Other comprehensive income for the period 7, 102 7,102 Total comprehensive
income for the period 7,102 539, 134 546,236
As at 31 Ma rch 2017 13,014,300 881,460 2,669,559 16,565,319
1 January 2016 to
31 March 2016
Share Retained
capital Reserves earnings Total
AED'OOO AED'OOO AED'OOO AED'OOO
As at 1 January 201 6 13,014,300 491,419 1,937,945 15,443,664
Profit for the period 528,728 528,728
Other comprehensive loss for the period (41,765) (41,765) Total comprehensive
Income I (loss) for the period (41,765) 528,728 486,963
As at 31 March 2016 13,014,300 449,654 2,466,673 15,930,627
The attached notes 1 to 21 form oart of these interim condensed consolidated financial statements.
Emaar Malls PJSC and its subsidiaries
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
As at 31 March 2017 (unaud ited)
CORPORATE INFORMATION
Emaar Malls Public Joint Stock Company (the "Company") and its subsidiaries (together the "Group") was established as a public joint stock company by Ministerial Decree number 922 of the year 2014 dated 30 September 2014.
The Company is a subsid iary of Emaar Properties PJSC (the "Parent Company"); a Company incorporated in the United Arab Emirates and listed on the Dubai Financial Market. During the year ended 31 December 2014, the Parent Company converted the legal status of the Company from that of a limited l iabi l ity company to public joint stock company and sold 15.37% of their shareholding in the Company through an Initial Public Offering ("!PO"). The Company is listed on the Dubai Financial Market and its shares were traded with effect from 2 October 2014.
The principal activities of the Group are retai 1 development and management of shopping malls.
The address of the registered office of the Group is P.O. Box 191741, Dubai, United Arab Emirates.
2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of prepa ration
The interim condensed consolidated financial statements of the Group for the period ended 31 March 2017 have been prepared in accordance with International Accounting Standard 34, Interim Financial Reporting and appl icable requirements of United Arab Emirates law.
The interim condensed consolidated financial statements do not contain all information and disclosures required for fu ll financial statements prepared in accordance with International Financial Reporting Standards and should be read with the Group's annual consolidated financial statements as at 31 December 2016.
Results for the three-months period ended 31 March 2017 are not necessarily indicative of the results that may be expected for the year ending 31 Decem ber 2017 .
The interi m condensed consol idated financial statements have been prepared in United Arab Emirates Dirhams (AED), wh ich is the Company's functional and presentation currency and all val ues are rounded to the nearest thousand except where otherwise ind icated.
Basis of consolidation
The consolidated financial statements comprise the financial statements of the Company and entities controlled by the Company (its subsidiaries) as at 31 March 2017. Control is achieved where all the following criteria are met:
the Company has power over an entity;
the Company has exposure, or rights, to variable returns from its involvement with the entity; and
the Company has the ability to use its power over the entity to affect the amount of the Company's returns.
When the Group has less than a majority of the voting or simi lar rights of an investee, the Group considers all relevant facts and circumstances in assessing whether it has power over an investee, including:
The contractual arrangement with the other vote holders of the investee Rights arising from other contractual arrangements
The Group's voting rights and potential voting rights
The Group re-assesses whether or not it controls an investee, if facts and circumstances indicate that there are changes to one or more of the three elements of control. Consolidation of a subsidiary begins when the Group obtains control over the subsidiary and ceases when the Group loses control of the subsidiary. Assets, l iabilities, income and expenses of a subsidiary acquired or d isposed of during the year are included i n the statement of comprehensi ve income from the date the Group gains control unti l the date the Group ceases to control the subsidiary.
-
Emaar Malls PJSC and its subsidiaries
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
As at 31 March 2017 (unaudited)
2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (contin ued) Basis of consolidation (continued)
Subsidiaries
Subsid iaries are fully consolidated from the date of acquisition or incorporation, being the date on which the Group obtains control, and continue to be consolidated until the date when such control ceases. The financial statements of the subsid iaries are prepared for the same reporting period as the Company, using consistent accounting policies. All intra-group balances, transactions, unrealised gains and losses resulting from intra-group transactions and dividends are eliminated in ful l.
Share of comprehensive income/ (loss) within a subsidiary is attributed to the non-controlling interest even if that results in a deficit balance.
A change in the ownershi p interest of a subsidiary, without a Joss of control, is accounted for as an equity transaction . If the Group loses control over a subsid iary, it:
Derecognises the assets (includ ing good wi ll) and liabil i ties of the subsidiary; Derecognises the carrying amount of any non-controlling interest; Derecognises the cumulative translation differences recorded in equity; Recognises the fair value of the consideration received;
Recognises the fair val ue of any investment retained; Recognises any surplus or deficit in profit and loss;
Reclassifies the parent's share of components previously recognised in other comprehensive income to profit and loss or retained earnings, as appropriate, as would be required if the Group had directly disposed of the related assets or l iabil ities.
The details of the Company's subsidiaries are as follows :
Name of the subsidiary
Country of incorporation
Principal activity Beneficial
Ownership 2017 2016
The Du bai Mall LLC UAE Self owned property leasing, buying and selling of real estate and management services
99% 99%
Emaar Dubai Malls LLC
UAE Self owned property leasing, buyi ng and selling of real estate and management services
99% 99%
Emaar International Mal ls LLC
UAE Self owned property leasing, buying and selling of real estate and management services
99% 99%
Special purpose entities
Special purpose entities are entities that are created to accomplish a narrow and well-defined objective. The financial information of special purpose entities is included in the Group's consolidated financial statements where the substance of the relationshi p is that the Group controls the special purpose entity and hence, they are accounted for as subsidiaries.
_ •"--
Emaar Malls PJSC and its subsidiaries
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
As at 31 March 2017 (unaud ited)
SUMMARY OF SIGNIFICANT ACCOU NTING POLICIES (contin ued) Basis of consolidation (continued)
Special purpose entities (continued)
The accounting pol icies adopted in the preparation of the interim condensed consolidated financial statements for the three-months period ended 3 I March 20 I 7 are consistent with those used in the preparation of the Group's annual financial statements for the year ended 31 December 2016, except for the adoption of new standards and interpretations issued by the International Accounting Standard Board ("IASB") and effective for annual periods beginn ing on or after I Jan uary 2017, which do not impact the interim condensed consolidated financial statements of the Grou p.
The Group has not early adopted any other standard, interpretation or amendment that has been issued but is not yet effective except for IFRS 15 "Revenue from Contacts with Customers" and IFRS 9 "Financial Instruments" as disclosed i n the annual consol i dated financial statements for the year ended 31 December 2016.
SEGMENT INFORMATION
Management monitors the operating results of its business segments separately for the purpose of making decisions about resource allocation and performance assessment. Segment performance is evaluated based on profit or loss and is measured consistently with the net profit or loss in the interim condensed consolidated financial statements.
Business segments
For management purposes, the Group is organised into five segments, namely:
Super Regional Malls:
Super regional malls include shopping centres which individually hold gross leasable area of more than 800 thousands sq. ft.
Regional Malls:
Regional malls include shopping centres ind ividually holds gross leasable area of more than 400 thousands sq. ft. but less than 800 thousands sq. ft.
Community Integrated Retail:
Community Retai l includes shopping centres or retail outlets individually hold gross leasable area of less than 400 thousands sq. ft.
Specialty Retail:
Specialty retail includes shopping centres mainly offering specialty stores for fine and casual d ining, commercial offices or retail outlets of man ufacturers.
Others:
Other segments incl ude businesses that individual ly do not meet the criteria for a reportable segment as per IFRS 8
Operating Segments and head office balances.
The following tables include reven ue, resu lts and other segment information from 1 January 2017 to 31 March 2017 and I Jan uary 2016 to 31 March 2016. Assets and l iabilities information regarding business segments are presented as at 31 March 2017 and 31 December 2016.
Emaar Malls PJSC and its subsidiaries
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
As at 31 March 201 7 (unaud ited)
3 SEGMENT INFORMATION (contin ued) Business segments (contin ued) Super | Community | ||||
Regional Malls | Regional Malls | Integrated Retail | Specialty Retail | Others | Total |
AED'OOO | AED'OOO | AED'OOO | AED'OOO | AED'OOO | AED'OOO |
1 January 2017 to 31 March 2017: | |||||
Reven ue |
Rental income 687,710 46,959 63,539 38,104 836,312
Resu lts
Profit for the period 519,522 29,336 41,198 27,149 (78,071) 539,134
Other segment information Capital expend iture
(Property, pl ant and equipment
and investment properties) 138,635 3,417 41,656 2,906 250 186,864
Depreciation
(Property, plant and equipment
and investment properties) 67,023 9,251 8,390 7,082 928 92,674
Finance costs 69,654 69,654
Assets and lia bilities as at 31 Ma rch 2017:
Segment assets | 18,864,059 | 1,265,656 | 983,235 | 1,319,043 | 3,573,823 | 26,005,816 |
Segment l iabi l ities | 1,466,538 | 107,643 | 193,784 | 85,949 | 7,586,583 | 9,440,497 |
Super | Community | |||||
Regional | Regional | integrated | Specialty | |||
Malls | Malls | Retail | Retail | Others | Total | |
AED'OOO | AED'OOO | AED'OOO | AED'OOO | AED'OOO | AED'OOO | |
1 January 2016 to | ||||||
31 March 2016: | ||||||
Reven ue | ||||||
Rental income | 681,778 | 47,539 | 66,989 | 36,886 | 833, 192 | |
Results | ||||||
Profit for the period | 513,287 | 29,003 | 43,095 | 23,475 | (80,132) | 528,728 |
Emaar Malls PJSC and its subsidiaries
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
As at 31 March 201 7 (unaud ited)
3 SEGMENT INFORMATION (contin ued)
Business segments (contin ued)
I January 2016 to 31 March 2016 :
Super Community
Regional Regional Integrated Specialty
Malls Malls Retail Retail Others Total
AED'OOO AED'OOO AED'OOO AED 'OOO AED 'OOO AED 'OOO
Other segment informa tion Capital expenditure
(Property, plant and equipment
(Property, plant and equipment and investment properties) | 65,529 | 9,323 | 8,613 | 5,455 | 619 | 89,539 |
Finance costs Assets and lia bilities | 68,205 | 68,205 |
and investment properties) 101,187 1,340 19,869 3,638 1,746 127,780 Depreciation
as at 31 Decem ber 2016:
Segment assets 18,829,367 1,261, 124 904,334 1,306,049 3,107,023 25,407,897
Segment l iabi l iti es 1,502,277 104,427 156,080 81,700 7,544,330 9,388,814
4 RENTAL INCOME | ]January | I January |
2017 to | 2016 to | |
31 March | 31 March | |
2017 | 2016 | |
AED'OOO | AED'OOO | |
Base rent | 556,320 | 532,640 |
Turnover rent | 35,858 | 76,564 |
Services charges | 89,100 | 88,493 |
Promotion and marketi ng contribution | 12,672 | 1 1,617 |
Specialty leasi ng | 57,217 | 59,835 |
Multimedia | 17,517 | 23,440 |
Others | 67,628 | 40,603 |
836,312 | 833, 192 |
Emaar Malls Group PJSC published this content on 14 May 2017 and is solely responsible for the information contained herein.
Distributed by Public, unedited and unaltered, on 06 June 2017 15:53:23 UTC.
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