Annual Report 2008-2009 - Emirates.com

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2. Summary of significant accounting policies (continued) Cash and cash equivalents Cash and cash equivalents comprise all cash and liquid funds with an original maturity of three months or less and bank overdrafts. Other bank deposits with maturity less than a year are classified as short term bank deposits. Bank overdrafts, if any, are shown within current liabilities in the consolidated balance sheet. 3. Critical accounting estimates and judgements In the preparation of the consolidated financial statements, a number of estimates and associated assumptions have been made relating to the application of accounting policies and reported amounts of assets and liabilities and income and expense. The estimates and associated assumptions are assessed on an ongoing basis and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. The following discussion addresses the accounting policies that require subjective and complex judgements, often as a result of the need to make estimates. Valuation of intangible assets on acquisition For each acquisition management assesses the fair value of intangible assets acquired. The instance where individual fair values of assets in a group are not reliably measurable, a single asset separate from goodwill is recognised. Where an active market does not exist for an intangible asset, fair values are established using valuation techniques e.g. discounting future cash flows from the asset. In the process, estimates are made of the future cash flows, the useful life and the discount rate based on management’s experience and expectation at the time of acquisition. Depreciation of property, plant and equipment Management assigns useful lives and residual values to property, plant and equipment based on the intended use of assets and the economic lives of those assets. Subsequent changes in circumstances such as technological advances or prospective utilisation of the assets concerned could result in the actual useful lives or residual values differing from initial estimates. Management has reviewed the residual value and useful lives of major items of property, plant and equipment and determined that no adjustment is necessary. Amortisation of intangible assets Management assigns useful lives and residual values to intangible assets based on the intended use of the assets, the underlying contractual or legal rights and the historical experience. Subsequent changes in circumstances such as technological advances, changes in the terms of the underlying contracts or prospective utilisation of the assets concerned could result in the useful lives or residual values differing from initial estimates. Management has reviewed the residual values and useful lives of major intangible assets and determined that no adjustment is necessary. Impairment of investment in associated companies and joint ventures (equity accounted investments) Management applies the guidance in IAS 39 to identify if potential impairment exists for its equity accounted investments. At each balance sheet date, an assessment is made whether there is any objective evidence of impairment. In such instances, the investment is subject to an impairment test by comparing the carrying amount to the recoverable amount of the asset. Considering the long term nature of these investments, the recoverable amount is determined based on value-in-use calculations. Calculating the value-in-use implies obtaining cash flow forecasts from the management of the equity accounted investments. Publicly listed companies often operate under restrictions due to the applicable listing regulations on disclosure of information to a selective group of shareholders. Thus, for such investments management develops its own estimated cash flows using publicly available data or the analyst forecasts, as appropriate. 121
4. Revenue Dnata 122 2009 2008 AED'000 AED'000 Services Airport operations 1,505,089 1,126,070 Information technology 568,013 483,557 Cargo 535,902 409,431 Agency commission 201,512 182,960 Reservations system 154,605 167,078 Other 76,420 65,264 Sale of goods 3,041,541 2,434,360 Inflight and institutional catering 117,307 119,342 3,158,848 2,553,702 5. Operating costs Employee (see below) 1,346,572 Airport operations and cargo - other direct costs 344,423 Information technology infrastructure costs 297,167 Depreciation and amortisation 249,470 Office accommodation 115,956 Cost of goods sold 40,134 Operating lease rentals 38,636 Corporate overheads 281,439 2,713,797 1,227,132 234,006 247,839 222,978 79,394 40,408 23,804 264,678 2,340,239 Employee costs include AED 35.3 million (2008: AED 73.9 million) in respect of post-employment benefits and AED Nil (2008: AED 131.8 million) in respect of an employee profit share scheme. 6. Finance income and costs Finance income: Interest income 44,651 2009 2008 AED'000 AED'000 70,148 Finance costs: Interest charges (19,638) (14,874) 7. Income tax expense The components of income tax expense are: Current tax 15,992 14,408 Deferred tax credit (Note 16) (6,526) (5,980) Income tax relates only to subsidiary companies which are subject to tax. Providing information on effective tax rates is therefore not meaningful. 9,466 8,428
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Annual Report 2008-2009 The Emirate
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The Emirates Group Emirates is the
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4 The Emirates Group Chairman and C
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6 The Emirates Group Chairman and C
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8 The Emirates Group Executive Vice
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First Class Suite 10 Emirates Presi
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12 Emirates The Airline Emirates A3
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14 Emirates The Airline 15 Emirates
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Other firsts included: The implemen
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A series of relief charter flights
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In West Asia, the total number of f
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Public, International, Industry and
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the aircraft had a direct impact on
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Creek extensions, and finally linki
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In Dubai, Dnata Travel Services ope
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coordination between them. This has
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Government Travel Services (GTS) ex
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XDAS also provided support for the
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EmQuest EmQuest is a travel distrib
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airport by serving 99,000 flights d
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Creation of the Customer Knowledge
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Tanzania; oversee Dnata Travel’s
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external agencies such as Dubai Imm
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- An enhanced version of flightcrew
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3 was heavily advertised, This incl
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was attended by officials of the Ba
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Contents Financial Report 2008-2009
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Consolidated financial statements T
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Profitability Group net profit for
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Value added Value added is a measur
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Fuel and oil 14,443 Employee (see (
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Capacity, traffic, load factor and
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At 31 Mach 2009: Fleet information
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Expenditure 067 2008-09 2007-08 AED
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Employee strength and productivity
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Page 78 and 79: 2. Summary of significant accountin
Page 84 and 85: 3. Critical accounting estimates an
Page 86 and 87: 4. Revenue (continued) Transport re
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Page 92 and 93: Movement of investments in associat
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Page 96 and 97: 18. Capital Capital represents the
Page 98 and 99: 22. Term loans Balance brought forw
Page 100 and 101: 24. Provisions (continued) (i) Fund
Page 102 and 103: 27. Trade and other payables Trade
Page 104 and 105: 32. Derivative financial instrument
Page 106 and 107: 34. Related party transactions The
Page 108 and 109: 35. Financial risk management Finan
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Page 112 and 113: 36. Capital risk management Emirate
Page 114 and 115: Consolidated income statement for t
Page 116 and 117: 1 April 2007 62,615 Currency transl
Page 118 and 119: 1. Establishment and operations Not
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Page 126 and 127: 10. Investments in subsidiaries, as
Page 128 and 129: 12. Trade and other receivables Tra
Page 130 and 131: 14. Employee end of service benefit
Page 132 and 133: 17. Trade and other payables Less t
Page 134 and 135: 23. Related party transactions The
Page 136 and 137: 24. Financial risk management Dnata
Page 138 and 139: 24. Financial risk management (cont
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