Emaar Sukuk Ltd XS0586840588 - London Stock Exchange

INDEPENDENT AUDITORS' REPORT TO THE SHAREHOLDERS OFEMAAR PROPERTIES PJSC AND ITS SUBSIDIARIESINDEPENDENT AUDITORS' REPORT TO THE SHAREHOLDERS OFEMAAR PROPERTIES PJSC AND ITS SUBSIDIARIES (continued)Report on the Financial StatementsWe have audited the accompanying consolidated financial statements of Emaar Properties PJSC and itssubsidiaries (the “Group”), which comprise the consolidated statement of financial position as at 31December 2009, the consolidated income statement, consolidated statement of comprehensive income,consolidated statement of cash flows and consolidated statement of changes in equity for the year thenended, and a summary of significant accounting policies and other explanatory notes.Management’s Responsibility for the Financial StatementsManagement is responsible for the preparation and fair presentation of these financial statements inaccordance with International Financial Reporting Standards and the applicable provisions of the articlesof association of Emaar Properties PJSC and the UAE Commercial Companies Law of 1984 (asamended). This responsibility includes: designing, implementing and maintaining internal control,relevant to the preparation and fair presentation of financial statements that are free from materialmisstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; andmaking accounting estimates that are reasonable in the circumstances.Auditors’ ResponsibilityOur responsibility is to express an opinion on these financial statements based on our audit. Weconducted our audit in accordance with International Standards on Auditing. Those standards require thatwe comply with ethical requirements and plan and perform the audit to obtain reasonable assurancewhether the financial statements are free from material misstatement.An audit involves performing procedures to obtain audit evidence about the amounts and disclosures inthe financial statements. The procedures selected depend on the auditors’ judgement, including theassessment of the risks of material misstatement of the financial statements, whether due to fraud orerror. In making those risk assessments, the auditor considers internal control relevant to the entity’spreparation and fair presentation of the financial statements in order to design audit procedures that areappropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness ofthe entity’s internal controls. An audit also includes evaluating the appropriateness of accounting policiesused and the reasonableness of accounting estimates made by management, as well as evaluating theoverall presentation of the financial statements.Emphasis of matter(i) Without qualifying our opinion we draw attention to note 29 to the financial statements. TheCompany is involved in arbitration proceedings with another party resulting from a claim made bythe other party in respect of a conditional joint venture agreement in the Kingdom of Saudi Arabia. Inthe opinion of the Company’s management and its legal advisors, the claim is without merit and theCompany has good arguments to refute substantially this claim. The outcome of the dispute ishowever uncertain and therefore it is not possible to determine the impact of this matter on thefinancial statements.(ii) Furthermore, without qualifying our opinion we draw attention to note 15 to the financial statements.As at 31 December 2009, the Group has an investment in Amlak Finance PJSC (“Amlak”) with acarrying amount of AED 944 million. The Federal Government of the UAE has announced that it isin discussions with the relevant authorities to potentially merge Amlak with other entities and inconjunction with the steering committee formed by the UAE Ministry of Finance and Industry isevaluating various options to secure sustainable funding for Amlak in order to enable it to meet itscommitments. The Group’s management is not in a position to assess its investment for anyimpairment pending the outcome of recommendations from the steering committee.Report on Other Legal and Regulatory RequirementsWe also confirm that, in our opinion, the consolidated financial statements include in all materialrespects, the applicable requirements of the UAE Commercial Companies Law of 1984 (as amended) andthe articles of association of Emaar Properties PJSC; proper books of account have been kept by EmaarProperties PJSC, an inventory was duly carried out and the contents of the report of the Board ofDirectors relating to these consolidated financial statements are consistent with the books of account. Wehave obtained all the information and explanations which we required for the purpose of our audit and, tothe best of our knowledge and belief, no violations of the UAE Commercial Companies Law of 1984 (asamended) or of the articles of association of Emaar Properties PJSC have occurred during the year whichwould have had a material effect on the business of Emaar Properties PJSC or on its financial position.We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis forour audit opinion.OpinionIn our opinion, the consolidated financial statements present fairly, in all material respects, the financialposition of the Group as of 31 December 2009, and its financial performance and its cash flows for theyear then ended in accordance with International Financial Reporting Standards.Signed byEdward B. Quinlan (Registration No. 93)PartnerFor Ernst & YoungDubai, United Arab Emirates23 March 2010Emaar Annual Report I 06 Emaar Annual Report I 07F-40