Emaar Sukuk Ltd XS0586840588 - London Stock Exchange

EMAAR Properties PJSC and SubsidiariesNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSAt 31 December 20081 DOMICILE AND ACTIVITIESEMAAR Properties Public Joint Stock Company (“the Company” or “the Parent”) was established as a public jointstock company by Ministerial Decree number 66 in the year 1997. The Company was established on 23 June 1997and commenced operations on 29 July 1997. The Company and its subsidiaries constitute the Group (‘the Group’).The Company’s registered office is at P.O. Box 9440, Dubai, United Arab Emirates. The shares of the Company aretraded on the Dubai Financial Market.The principal activities of the Group are property investment and development, property management services,education, healthcare, retail, hospitality and investment in providers of financial services.2.1 BASIS OF PREPARATIONThe consolidated financial statements of the Group have been prepared in accordance with International FinancialReporting Standards (IFRSs) and applicable requirements of United Arab Emirates laws.The consolidated financial statements have been prepared in United Arab Emirates Dirhams (AED), which is theCompany’s functional and presentation currency and all values are rounded to the nearest thousands except whereotherwise indicated. Each entity in the Group determines its own functional currency and items included in thefinancial statements of each entity are measured using that functional currency.The consolidated financial statements are prepared under the historical cost convention modified to include themeasurement at fair value of available-for-sale investments and derivatives.Basis of consolidationSubsidiary CompaniesThe consolidated financial statements comprise the financial statements of Emaar Properties PJSC and itssubsidiaries as at 31 December 2008. The financial statements of the subsidiaries are prepared for the samereporting year as the parent company, using consistent accounting policies. All intra-group balances, transactions,income and expenses and profits and losses resulting from intra-group transactions that are recognised in assets areeliminated in full. Subsidiaries are consolidated from the date on which control is transferred to the Group and ceaseto be consolidated from the date on which control is transferred out of the Group.Minority interests represent the portion of profit or loss and net assets not held by the Group and are presentedseparately in the income statement and within equity in the consolidated balance sheet, separately from parentshareholders' equity. Acquisitions of minority interests are accounted for using the parent entity extension method,whereby, the difference between the consideration and the book value of the share of the net assets acquired isrecognised in goodwill.Associated CompaniesAssociated companies are companies in which the Group has significant influence, but not control, over thefinancial and operating policies. In the consolidated financial statements, investments in associated companies areaccounted for using the equity method of accounting, from the date that significant influence commences until thedate that significant influence ceases. Investments in associated companies are carried in the balance sheet at cost,plus post acquisition changes in the Group’s share of net assets of the associate, less any impairment in value. Theincome statement reflects the Group’s share of the results of its associates.2.2 CHANGES IN ACCOUNTING POLICIES AND DISCLOSURESThe accounting policies adopted are consistent with those of the previous financial year. The Group has adopted thefollowing new and amended IFRS and IFRIC interpretations as of 1 January 2008:- IFRIC 11 IFRS 2 – Group and Treasury Shares Transactions- IFRIC 12 – Service Concession Agreements- IFRIC 14 IAS 19 – The Limit on a Defined Benefit Asset, Minimum Funding Requirements and theirinteraction- IFRIC 13 Customer Loyalty Programmes- IAS 23 Borrowing CostsEmaar Annual Report I 13EMAAR Properties PJSC and SubsidiariesCONSOLIDATED STATEMENT OF CHANGES IN EQUITYYear ended 31 December 2008 (US $1.00 = AED 3.673)Attributable to equity holders of the Parent_____________________________________________________________________Employees’performanceShare Treasury share Retained Minority Totalcapital shares program Reserves earnings Total interest equityAED’000 AED’000 AED’000 AED’000 AED’000 AED’000 AED’000 AED’000Emaar Annual Report I 12Balance at 1 January 2007 6,075,553 - (2,927) 14,669,084 9,237,022 29,978,732 565,928 30,544,660————— ————— ————— ————— ————— ————— ————— ——————Increase in unrealised gains/ (losses) reserve (note 24) - - - 642,544 - 642,544 - 642,544Increase in foreign currency translation reserve (note 24) - - - 462,875 - 462,875 27,308 490,183————— ————— ————— ————— ————— ————— ————— ——————Net income and expense recognised directly in equity - - - 1,105,419 - 1,105,419 27,308 1,132,727Profit for the year - - - - 6,575,314 6,575,314 (38,956) 6,536,358————— ————— ————— ————— ————— ————— ————— ——————Total income and expense for the year - - - 1,105,419 6,575,314 7,680,733 (11,648) 7,669,085————— ————— ————— ————— ————— ————— ————— ——————Transfer to reserves - - - 657,531 (657,531) - - -Directors’ fees - - - - (4,790) (4,790) - (4,790)Dividends – 2006 - - - - (1,215,111) (1,215,111) - (1,215,111)Issuance of shares under employees’ performance shareprogram (note 22) - - 1,481 - - 1,481 - 1,481Cost of share based payments (note 22) - - - - 16,565 16,565 - 16,565Rights issue 15,686 - - 62,744 - 78,430 - 78,430Additional capital contribution by minority shareholders - - - - - - 262,633 262,633Funds withdrawn by minority shareholders - - - - - - (164,687) (164,687)————— ————— ————— ————— ————— —————— ————— ——————Balance at 31 December 2007 6,091,239 - (1,446) 16,494,778 13,951,469 36,536,040 652,226 37,188,266 The attached notes 1 to 32 form part of these consolidated financial statements.F-71