Jebel Ali Free Zone Fze

JEBEL ALI FREE ZONE FZE
CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2012
Jebel Ali Free Zone FZE
Consolidated financial statements for the year ended 31 December 2012
Pages
Independent auditor’s report 1-2
Consolidated balance sheet 3
Consolidated statement of income 4
Consolidated statement of comprehensive income 5
Consolidated statement of changes in equity 6
Consolidated statement of cash flows 7
Notes to the consolidated financial statements 8 - 31

Independent auditor's report
To the shareholder of Jebel Ali Free
F Zone FZE
Report on the Financial Statements
We have audited the accompanying consolidated financial statements of Jebel Ali Free Zone FZE (the
“Establishment”) and its subsidiaries (together “the Group”), which comprise the consolidated balance sheet as
at 31 December 2012 and the consolidated statements
statement of income, comprehensive income, changes in equity and
cash flows for the year then ended, and a summary of significant accounting policies and other explanatory
notes.
Management’s Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of consolidated financial statements that
give a true and fair view in accordance with International Financial Reporting Standards (“IFRSs”), and for such
internal control as management
anagement determines is necessary to enable the preparation of consolidated financial
statements that are free from material misstatement, whether due to fraud or error.
Auditors’ Responsibility
Our responsibility is to express an opinion on these consolidated financial statements based on our audit. We
conducted our audit in accordance with International Standards on Auditing. Those standards require that we
comply with ethical requirements and plan and perform the audit to obtain reasonable assura
assurance about whether
the consolidated financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the
consolidated financial statements. The procedures selected
selected depend on the auditor’s judgment, including the
assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud
or error. In making those risk assessments, the auditor considers internal control relevant tto the entity’s
preparation and fair presentation of the consolidated financial statements in order to design audit procedures that
are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the
entity’s internal
nternal control. An audit also includes evaluating the appropriateness of accounting policies used and
the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation
of the consolidated financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit
opinion.
Opinion
In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the
financiall position of the Group as at 31 December 2012,, and its financial performance and cash flows for the
year then ended in accordance with International Financial Reporting Standards.
PricewaterhouseCoopers, Emaar Square, Building 4, Level 8, PO Box 11987, Dubai, United Arab Emirates
T: +971 (0)4 304 3100, F: +971 (0)4 330 4100, www.pwc.com/middle-east
W Hunt, AH Nasser, P Suddaby and JE Fakhoury are registered as practising auditors with the UAE Ministry of Economy (1)
Consolidated statement of income

Year ended 31 December
2012 2011
Note AED’000 AED’000
Revenue 18 1,429,874 1,338,582

Cost of sales 19 (689,561) (604,732)
Gross profit 740,313 733,850
Other operating income 20 49,417 42,867

General and administrative expenses 21 (174,152) (164,496)
Selling and marketing expenses 22 (38,757) (30,368)
Operating profit 576,821 581,853
Finance income 24 43,383 45,294

Finance costs 24 (491,585) (385,511)
Finance costs – net 24 (448,202) (340,217)
Profit for the year 128,619 241,636
The notes on pages 8 to 31 form an integral part of these consolidated financial statements. (4)
Consolidated statement of comprehensive income
Year ended 31 December

2012 2011
AED’000 AED’000
Other comprehensive income:

Cash flow hedges:
- Change in fair value 58,397 89,389
- Ineffective hedge reserve recycled to consolidated
statement of income 65,806 -
Other comprehensive income for the year 124,203 89,389
Total comprehensive income for the year 252,822 331,025
Consolidated statement of changes in equity

Share Retained Hedge
capital earnings reserve Total
AED’000 AED’000 AED’000 AED’000
Balance at 1 January 2011 4,268,000 1,285,488 (213,592) 5,339,896
Profit for the year - 241,636 - 241,636
Other comprehensive income - - 89,389 89,389

Balance at 31 December 2011 4,268,000 1,527,124 (124,203) 5,670,921
Profit for the year - 128,619 - 128,619
Other comprehensive income - - 124,203 124,203
Balance at 31 December 2012 4,268,000 1,655,743 - 5,923,743
Consolidated statement of cash flows

2012 2011
Notes AED’000 AED’000
Operating activities
Adjustments for:
Depreciation 5,6 97,531 102,203
Amortisation 7 90,729 90,476
Impairment of investment property 6 339,296 247,017
Loss / (gain) on disposal of investment property 20 5,645 (8)
Finance income 24 (43,383) (45,294)
Profit commission on Sukuk borrowing 316,516 380,094
Finance cost on syndicate loan facility 134,315 -
Other finance costs 24 40,754 5,417
Provision for employees’ end of service benefits and general
pension and social security 9,501 9,484
Provision for impairment of trade receivables 9 13,882 11,781
Payment of employees’ end of service benefits and general pension (7,535) (9,479)
Changes in working capital:
Trade and other receivables (8,796) 209,148
Trade and other payables 62,088 (22,755)
Due from related parties 1,122 15,810
Due to related parties 5,425 (5,414)
Deferred revenue (14,556) 18,039
Net cash generated from operating activities 1,171,153 1,248,155
Investing activities
Purchase of property and equipment (5,802) (2,267)
Purchase of investment property (77,848) (286,426)
Proceeds from sale of property and equipment - 8
Investment in fixed deposits 10 751,003 (751,003)
Finance income received 16,976 13,323
Net cash used in investing activities 684,329 (1,026,365)
Financing activities
Profit commission paid on Sukuk and bank borrowings (469,857) (381,695)
Repayment of Sukuk borrowing 13 (7,500,000) -
Proceeds from issuance of Sukuk borrowing 13 2,387,320 -
Proceeds from term debt 15 4,400,000 -
Repayment of bank borrowing (60,280) -
Restricted cash 10 (1,502) -
Other finance costs paid (187,180) (983)
Net cash used in financing activities (1,431,499) (382,678)
Net (decrease)/increase in cash and cash equivalents 423,983 (160,888)
Cash and cash equivalents at the beginning of the year 332,567 493,455
Cash and cash equivalents at the end of the year 10 756,550 332,567
Notes to the consolidated financial statements for the year ended 31 December 2012
1 LEGAL STATUS AND ACTIVITIES
Jebel Ali Free Zone FZE (“the Establishment”) was established as a Jebel Ali Free Zone Establishment under
registration number 1283 pursuant to Law No 9 of 1992 issued by the Ruler of Dubai and implementing regulations
issued by the Jebel Ali Free Zone Authority (“JAFZA”). The Establishment’s registered office is P.O. Box 16,888,
Jebel Ali, Dubai, United Arab Emirates.
The Establishment is a wholly owned subsidiary of Economic Zones World FZE (“the parent company”). The
ultimate parent company is Dubai World Corporation (“the ultimate parent”). The Establishment and its subsidiaries
(together, “the Group”) develop and manage free zones, develop, sell and lease warehouses, and provide facility
management.
Holding percentage
2012 2011
Name of entity Principal activity
United Arab Emirates

Consolidated Warehouse FZE** Leasing, operating and managing properties 100 100
JAFZ Sukuk (2019) Limited* Financing (Sukuk borrowing) 100 Not
applicable
Cayman Islands
JAFZ Sukuk Limited * Financing (Sukuk borrowing) 100 100
*The Group holds 100% beneficial interest in JAFZ Sukuk Limited and JAFZ Sukuk (2019) Limited, a special
purpose entities incorporated for the execution of AED 7.5 billion and AED 2.39 billion Islamic trust certificates
respectively. JAFZ Sukuk Limited is under liquidation as the underlying Sukuk were matured and repaid during the
year.
** On 20 May 2007, the power to govern the financial and operating policies, decision making and risks and
rewards associated with the ownership of Consolidated Warehouses FZE was transferred to the Establishment by the
parent company, which holds the legal ownership in Consolidated Warehouses FZE. The operations and financial
operations of Consolidated Warehouses FZE have been consolidated retrospectively and thereafter.
On 13 November 2007 and subsequently amended on 22 April 2012, the Establishment entered into two agreements
with JAFZA, one agreement to acquire land use right for a period of 99 years and another agreement for the
purchase of assets. The Establishment paid JAFZA AED 8.9 billion and AED 3 billion as consideration for the
acquisition of land use right and purchase of assets thereafter.
2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The principal accounting policies applied in the preparation of these consolidated financial statements are set out
below. These policies have been consistently applied to all the years presented unless otherwise stated.
2.1 BASIS OF PREPARATION
The consolidated financial statements of the Establishment have been prepared in accordance with International
Financial Reporting Standards (“IFRS”). These financial statements have been prepared under the historical cost
convention.
The preparation of the financial statements in conformity with IFRS requires the use of certain critical accounting
estimates. It also requires management to exercise its judgement in the process of applying the Group’s accounting
policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates
are significant to the financial statements are disclosed in Note 4.
(8)
(continued)
2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
2.2 BASIS OF CONSOLIDATION
(a) Subsidiaries
Subsidiaries are all entities (including special purpose entities) over which the Group has the power to govern the
financial and operating policies generally accompanying a shareholding of more than one half of the voting rights. The
existence and effect of potential voting rights that are currently exercisable or convertible are considered when
assessing whether the Group controls another entity.
Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are deconsolidated
from the date that control ceases.
The Group applies the acquisition method to account for business combinations. The consideration transferred for the
acquisition of a subsidiary is the fair values of the assets transferred, the liabilities incurred to the former owners of the
acquiree and the equity interests issued by the Group. The consideration transferred includes the fair value of any asset
or liability resulting from a contingent consideration arrangement. Identifiable assets acquired and liabilities and
contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition
date. The Group recognises any non-controlling interest in the acquiree on an acquisition-by-acquisition basis, either at
fair value or at the non-controlling interest’s proportionate share of the recognised amounts of acquiree’s identifiable
net assets. Acquisition-related costs are expensed as incurred.
If the business combination is achieved in stages, the acquisition date fair value of the acquirer’s previously held
equity interest in the acquiree is remeasured to fair value at the acquisition date through profit or loss.
Any contingent consideration to be transferred by the Group is recognised at fair value at the acquisition date.
Subsequent changes to the fair value of the contingent consideration that is deemed to be an asset or liability is
recognised in accordance with IAS 39 either in profit or loss or as a change to other comprehensive income.
Contingent consideration that is classified as equity is not remeasured, and its subsequent settlement is accounted for
within equity.
(b) Eliminations on consolidation
Inter-company transactions, balances, income and expenses on transactions between Group companies are
eliminated. Profits and losses resulting from inter-company transactions that are recognised in assets are also
eliminated. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the
policies adopted by the Group.
(9)
(continued)
2.3 CHANGES IN ACCOUNTING POLICY AND DISCLOSURES
(a) Amended or revised standard adopted by the Group
IFRS 7, Financial instruments: Disclosures (amendment) effective on or after 1 July 2011, the amendments
promote transparency in the reporting of transfer transactions and improve users’ understanding of the risk
exposures.
There are no other IFRSs or IFRIC interpretations that are effective for the first time for the financial year beginning
on or after 1 January 2012 that would be expected to have a material impact on the Group.
(b) New standards, amendments and interpretations issued but not effective for the financial years beginning on
or after 1 January 2012 and not early adopted
IAS 1 (amendment), ‘Financial statement presentation’, (effective for periods beginning on or after 1 July
2012);
IAS 12 (amendment), ‘ Income taxes’, effective on or after 1 January 2012,
IAS 19 (amendment), ‘Employee benefits’, (effective from 1 January 2013);
IAS 27 (amendment), ‘Separate financial statements’, (effective from 1 January 2013);
IAS 28 (amendment), ‘Associates and joint ventures’, (effective from 1 January 2013);
IAS 32 (amendment), ‘Financial instruments: Presentation’, (effective from 1 January 2014);
IFRS 1, ‘First time adoption’ (amendment), (effective from 1 January 2013);
IFRS 7, ‘Financial instruments: Disclosures’ (amendment), (effective from 1 January 2013);
IFRS 9, ‘Financial instruments’, (effective from 1 January 2015);
IFRS 10, ‘Consolidated Financial Statements’, (effective from 1 January 2013);
IFRS 11, ‘Joint Arrangements’, (effective from 1 January 2013);
IFRS 12, ‘Disclosure of Interests in Other Entities’, (effective from 1 January 2013);
IFRS 13, ‘Fair Value Measurement’, (effective from 1 January 2013); and
IFRIC 20, ‘Stripping costs in the production phase of a surface mine’, (effective from 1 January 2013);
There are no other IFRSs or IFRIC interpretations that are not yet effective that would be expected to have a material
impact on the Group.
(10)
(continued)
2.4 FOREIGN CURRENCY TRANSLATION
(a) Functional and presentation currency
Items included in the financial statements of each of the Group’s entities are measured using the currency of the
primary economic environment in which the entity operates (‘the functional currency’). The consolidated financial
statements are presented in United Arab Emirates Dirham (“AED”), which is the Group’s functional and
presentation currency.
(b) Transactions and balances
Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the
dates of the transactions or valuation where items are re-measured. Foreign exchange gains and losses resulting
from the settlement of such transactions and from the translation at year-end exchange rates of monetary assets and
liabilities denominated in foreign currencies are recognised in the consolidated statement of income, except when
deferred in other comprehensive income as qualifying cash flow hedges and qualifying net investment hedges.
Balances and transactions denominated in US dollars (“USD”) have been translated into the presentation currency
at a fixed rate as the exchange rate of AED to USD has been pegged since 1981.
2.5 PROPERTY AND EQUIPMENT
Property and equipment are stated at historical cost less accumulated depreciation. Historical cost includes
expenditures that are directly attributable to the acquisition of the asset.
Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only
when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the
item can be measured reliably. The carrying amount of the replaced part is derecognised. All other repairs and
maintenance are charged to the statement of income during the financial period in which they are incurred.
Depreciation is calculated using the straight-line method to allocate their cost to their residual values over their
estimated useful lives, as follows:
Years
Motor and utility vehicles 5-10
Furniture and fixtures 5-10
Equipment 3-5
The assets’ residual values, useful lives and methods of depreciation, are reviewed and adjusted if appropriate at
each financial year end.
An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is
greater than its estimated recoverable amount.
Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are
recognised within the statement of income.
Capital work-in-progress is stated at cost. When commissioned, capital work-in-progress is transferred to the
appropriate category of property and equipment and depreciated in accordance with the Group’s policy.
2.6 LAND USE RIGHT
The total cost of acquiring land use right is capitalised as a land use right asset and is carried at cost less
accumulated amortisation and impairment. Amortisation is calculated using the straight-line method to allocate the
cost over the term of rights of 99 years that is included under ‘cost of sales’ in the statement of income.
(11)
(continued)
2.7 INVESTMENT PROPERTY
Property that is held for long-term rental yields or for capital appreciation or both, and that is not occupied by the
companies in the consolidated Group, is classified as investment property. Investment property also includes
property that is being constructed or developed for future use as investment property.
Investment property is measured initially at its cost, including related transaction costs and where applicable
borrowing costs. After initial recognition, investment property is carried at cost less accumulated depreciation and
impairment, if any.
The fair value for disclosure purposes of the investment property is based on active market prices, adjusted, if
necessary, for any difference in the nature, location or condition of the specific asset. If this information is not
available, the Group uses alternative valuation methods, such as recent prices on less active markets or discounted
cash flow projections. Valuations are performed as of the financial position date by professional valuers who hold
recognised and relevant professional qualifications and have recent experience in the location and category of the
investment property being valued.
Subsequent expenditure is capitalised to the asset’s carrying amount only when it is probable that future economic
benefits associated with the expenditure will flow to the Group and the cost of the item can be measured reliably.
All other repairs and maintenance costs are expensed when incurred. When part of an investment property is
replaced, the carrying amount of the replaced part is derecognised.
When investment property is sold, gains and losses on disposal are determined by reference to its carrying amount
and are taken into account in determining operating profit.
Investment property under construction is not depreciated until such time as the relevant assets are completed and
commissioned.
Depreciation is calculated using the straight-line method to allocate their cost to their residual values over their
estimated useful lives, as follows:
Years
Building 20-35
Infrastructure 5-50
The useful lives and depreciation method are reviewed periodically to ensure that the method and period of
depreciation are consistent with the expected pattern of economic benefits from these assets.
2.8 IMPAIRMENT OF NON-FINANCIAL ASSETS
Assets that are subject to amortisation are reviewed for impairment whenever events or changes in circumstances
indicate that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by
which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an
asset’s fair value less costs to sell and value in use. For the purposes of assessing impairment, assets are grouped at
the lowest levels for which there are separately identifiable cash flows (cash-generating units). Non-financial assets
that suffered impairment are reviewed for possible reversal of the impairment at each reporting date.
(12)
(continued)
2.9 FINANCIAL ASSETS
2.9.1 CLASSIFICATION
The Group classifies its financial assets as loans and receivables or as derivatives. The classification depends on
the purpose for which the financial assets were acquired. Management determines the classification of its financial
assets at initial recognition.
Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted
in an active market. They are included in current assets, except for maturities greater than 12 months after the end
of the reporting period. These are classified as non-current assets. The Group’s loans and receivables comprise
‘due from related parties’, ‘trade and other receivables’ and ‘cash and cash equivalents’ in the balance sheet (Notes
8, 9 and 10).
2.9.2 RECOGNITION AND MEASUREMENT
Regular purchases and sales of financial assets are recognised on the “trade-date” – the date on which the Group
commits to purchase or sell the asset. Investments are initially recognised at fair value plus transaction costs for all
financial assets not carried at fair value through profit or loss. Financial assets are derecognised when the rights to
receive cash flows from the investments have expired or have been transferred and the Group has transferred
substantially all risks and rewards of ownership.
2.10 OFFSETTING FINANCIAL INSTRUMENTS
Financial assets and liabilities are offset and the net amount reported in the balance sheet when there is a legally
enforceable right to offset the recognised amounts and there is an intention to settle on a net basis or realise the
asset and settle the liability simultaneously.
2.11 IMPAIRMENT OF FINANCIAL ASSETS
Assets carried at amortised cost
The Group assesses at the end of each reporting period whether there is objective evidence that a financial asset or
Group of financial assets is impaired. A financial asset or a Group of financial assets is impaired and impairment
losses are incurred only if there is objective evidence of impairment as a result of one or more events that occurred
after the initial recognition of the asset (a ‘loss event’) and that loss event (or events) has an impact on the
estimated future cash flows of the financial asset or Group of financial assets that can be reliably estimated.
Evidence of impairment may include indications that the debtors or a Group of debtors is experiencing significant
financial difficulty, default or delinquency in interest or principal payments, the probability that they will enter
bankruptcy or other financial reorganisation, and where observable data indicate that there is a measurable decrease
in the estimated future cash flows, such as changes in arrears or economic conditions that correlate with defaults.
For loans and receivables category, the amount of the loss is measured as the difference between the asset’s
carrying amount and the present value of estimated future cash flows (excluding future credit losses that have not
been incurred) discounted at the financial asset’s original effective interest rate. The carrying amount of the asset is
reduced and the amount of the loss is recognised in the consolidated statement of income. If a loan has a variable
interest rate, the discount rate for measuring any impairment loss is the current effective interest rate determined
under the contract. As a practical expedient, the Group may measure impairment on the basis of an instrument’s
fair value using an observable market price.
If, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively
to an event occurring after the impairment was recognised (such as an improvement in the debtor’s credit rating),
the reversal of the previously recognised impairment loss is recognised in the consolidated statement of income.
(13)
(continued)
2.12 TRADE RECEIVABLES
Trade receivables are amounts due from customers for properties sold or services performed in the ordinary course of
business. If collection is expected in one year or less (or in the normal operating cycle of the business if longer), they
are classified as current assets. If not, they are presented as non-current assets.
Trade receivables are recognised initially at fair value and subsequently measured at amortised cost using the effective
interest method, less provision for impairment.
2.13 CASH AND CASH EQUIVALENTS
In the consolidated statement of cash flows, cash and cash equivalents includes cash in hand, deposits held at call
with banks, other short-term highly liquid investments with original maturities of three months or less.
2.14 SHARE CAPITAL
Ordinary shares are classified as equity when there is no obligation to transfer cash or other assets.
2.15 TRADE PAYABLES
Trade payables are obligations to pay for goods or services that have been acquired in the ordinary course of
business from suppliers. Accounts payable are classified as current liabilities if payment is due within one year or
less (or in the normal operating cycle of the business if longer). If not, they are presented as non-current liabilities.
Trade payables are recognised initially at fair value and subsequently measured at amortised cost using the
effective interest method.
2.16 ADVANCES FROM CUSTOMERS
Instalments received from buyers for sales of warehouse and/or service prior to meeting the revenue recognition
criteria, are recognised as advances from customers. These are considered a current liability as they are repayable
on demand on cancellation of the contracts, subject to certain penalties.
2.17 BORROWINGS
Borrowings are recognised initially at fair value, net of transaction costs incurred. Borrowings are subsequently
carried at amortised cost; any difference between the proceeds (net of transaction costs) and the redemption value is
recognised in the statement of income over the period of the borrowings using the effective interest method.
Fees paid on the establishment of loan facilities are recognised as transaction costs of the loan to the extent that it is
probable that some or all of the facility will be drawn down. In this case, the fee is deferred until the draw down
occurs. To the extent there is no evidence that it is probable that some or all of the facility will be drawn down, the
fee is capitalised as a pre-payment for liquidity services and amortised over the period of the facility to which it
relates.
2.18 BORROWING COST
General and specific borrowing costs directly attributable to the acquisition, construction or production of
qualifying assets, which are assets that necessarily take a substantial period of time to get ready for their intended
use or sale, are added to the cost of those assets, until such time as the assets are substantially ready for their
intended use or sale.
Investment income earned on the temporary investment of specific borrowings pending their expenditure on
qualifying assets is deducted from the borrowing costs eligible for capitalisation. All other borrowing costs are
recognised in profit or loss in the period in which they are incurred.
(14)
(continued)
2.19 DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES
Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are
subsequently re-measured at their fair value. The method of recognising the resulting gain or loss depends on
whether the derivative is designated as a hedging instrument, and if so, the nature of the item being hedged. The
Group designates its derivatives as hedges of a particular risk associated with a recognised asset or liability or a
highly probable forecast transaction (cash flow hedge).
The Group documents at the inception of the transaction the relationship between hedging instruments and hedged
items, as well as its risk management objectives and strategy for undertaking various hedging transactions. The
Group also documents its assessment, both at hedge inception and on an ongoing basis, of whether the derivatives
that are used in hedging transactions are highly effective in offsetting changes in fair values or cash flows of hedged
items. A hedge of the foreign currency risk of a firm commitment is accounted for as a cash flow hedge.
The fair values of various derivative instruments used for hedging purposes are disclosed in note 13. The full fair
value of a hedging derivative is classified as a non-current asset or liability when the remaining hedged item is more
than 12 months, and as a current asset or liability when the remaining maturity of the hedged item is less than 12
months. Trading derivatives are classified as a current asset or liability.
(a) Cash Flow Hedges
The effective portion of changes in the fair value of derivatives that are designated and qualify as cash flow hedges
is recognised in other comprehensive income. The gain or loss relating to the ineffective portion is recognised
immediately in the statement of income.
Amounts accumulated in equity are reclassified to profit or loss in the periods when the hedged item affects profit
or loss (for example, when the forecast sale that is hedged takes place). The gain or loss relating to the effective
portion of interest rate swaps hedging variable rate borrowings is recognised in the consolidated statement of
income within ‘Finance cost - net’. However, when the forecast transaction that is hedged, results in the recognition
of a non-financial asset (for example, inventory or fixed assets), the gains and losses previously deferred in equity
are transferred from equity and included in the initial measurement of the cost of the asset. The deferred amounts
are ultimately recognised in cost of goods sold in the case of inventory or in depreciation in the case of fixed assets.
When a hedging instrument expires or is sold, or when a hedge no longer meets the criteria for hedge accounting,
any cumulative gain or loss existing in equity at that time remains in equity and is recognised when the forecast
transaction is ultimately recognised in the statement of income. When a forecast transaction is no longer expected to
occur, the cumulative gain or loss that was reported in equity is immediately transferred to the statement of income
within ‘other gains/ (losses) – net’.
2.20 EMPLOYEE BENEFITS
(a) End of service benefits to non-UAE nationals – Defined benefit plan
An accrual is made for employees employed in the UAE for estimated liability for employees’ entitlement to
annual leave as a result of services rendered by the employees up to the balance sheet date. Provision is also made,
using actuarial techniques, for the full amount of end of service benefits due to the non-UAE Nationals in
accordance with the Group policy and UAE labour law, for their periods of service up to the balance sheet date.
The accrual relating to annual leave and leave passage is disclosed as a current liability, while the provision
relating to end of service benefits is disclosed as a non-current liability.
(b) General pension and social security – Defined contribution plan
Effective 1 January 2003, the Group joined the pension scheme operated by the Federal General Pension and
Social Security Authority. Accordingly contributions for eligible UAE National employees are made and charged
to the statement of comprehensive income, in accordance with the provisions of Federal Law No. 7 for 1999
relating to Pension and Social Security Law.
(15)
(continued)
2.21 PROVISIONS
Provisions are recognised when the Group has a present legal or constructive obligation as a result of past events,
where it is probable that an outflow of resources embodying economic benefits will be required to settle the
obligation, and a reliable estimate of the amount can be made. Provisions are not recognised for future operating
losses.
Provisions are measured at the present value of the expenditures expected to be required to settle the obligation
using a pre-tax rate that reflects current market assessments of the time value of money and risks specific to the
obligation. Increases in provisions due to the passage of time are recognised as interest expense.
Where there are a number of similar obligations, the likelihood that an outflow will be required in settlement is
determined by considering the class of obligations as a whole. A provision is recognised even if the likelihood of
an outflow with respect to any one item included in the same class of obligation may be small.
2.22 REVENUE RECOGNITION
Revenue is measured at the fair value of the consideration received or receivable. The Group recognises revenue
when the amount of revenue can be reliably measured; when it is probable that future economic benefits will flow
to the entity; and when specific criteria have been met for each of the Group’s activities, as described below.
(a) Lease rental
Lease rental is recognised on a straight line basis over the lease term. Where the consideration for the lease is
received for subsequent period, the attributable amount of revenue is deferred and recognised in the subsequent
period. Unrecognised revenue is classified as deferred revenue under liabilities in the balance sheet.
(b) Sale of property
Revenue from sale of property, normally warehouses, is recognised in the consolidated statement of income when
the risks and rewards of ownership are transferred to the buyer. The significant risks and rewards are deemed to be
transferred when the property is transferred to the buyer, which in the case of the buildings generally takes place
only upon completion of construction and physical handover of the property.
(c) Administrative services
Revenue from license, registration administration and consultancy service are recognised as the service is provided.
(d) Other operating income
Other operating income is recognised when the service is provided and right to receive payment is established.
2.23 INTEREST INCOME
Interest income is recognised using the effective interest method. When a loan and receivable is impaired, the
Group reduces the carrying amount to its recoverable amount, being the estimated future cash flow discounted at
the original effective interest rate of the instrument, and continues unwinding the discount as interest income.
Interest income on impaired loan and receivables is recognised using the original effective interest rate.
2.24 SEGMENT INFORMATION
The Group is managed as a single business unit and its assets are located in Jebel Ali Free Zone, Dubai, United
Arab Emirates. The Chief Executive Officer (“CEO”) is the Group’s chief operating decision-maker. Management
has determined the operating segments based on the information reviewed by the CEO for the purposes of
allocating resources and assessing performance. The CEO considers the business from a service perspective only as
the business is geographically carried out in United Arab Emirates. Apart from lease rental, all other activities such
as administrative services and license and registration do not meet the quantitative threshold required by IFRS 8.
Accordingly, management has determined that the business is one reportable segment based on the information
reviewed by the Chief Executive Officer for the purposes of allocating resources and assessing performance.
(16)
(continued)
3 FINANCIAL RISK MANAGEMENT

3.1 FINANCIAL RISK FACTORS
The Group’s activities expose it to a variety of financial risks: market risk, credit risk and liquidity risk. The
Group’s overall risk management programme focuses on the unpredictability of financial markets and seeks to
minimise potential adverse effects on the Group’s financial performance. The Group uses derivative financial
instruments to hedge certain risk exposures.
(a) Market risk
(i) Foreign exchange risk
The Group does not have any significant foreign currency exposure, as the majority of its transactions are
denominated in United Arab Emirates Dirham (“AED”).
(ii) Price risk
The Group is not exposed to equity securities or commodity price risk.
(iii) Cash flow and fair value interest rate risk
The Group’s interest rate risk arises from Sukuk - JAFZ Sukuk Limited borrowing and bank borrowings
denominated in the AED. Borrowings issued at variable rates expose the Group to cash flow interest rate risk which
is partially offset by cash held at variable rates. Borrowings issued at fixed rates expose the Group to fair value
interest rate risk. The Group management did not set ratio of variable rate borrowings to fixed rate borrowings.
The Group manages its cash flow interest rate risk by using floating-to-fixed interest rate swaps. Such interest rate
swaps have the economic effect of converting borrowings from floating rates to fixed rates. Generally, the Group
raises long-term borrowings at floating rates and swaps them into fixed rates that are lower than those available if
the Group borrowed at fixed rates directly. Under the interest rate swaps, the Group agrees with other parties to
exchange, at specified intervals (primarily semi-annually), the difference between fixed contract rates and floating-
rate interest amounts calculated by reference to the agreed notional amounts.
At 31 December 2012, if the interest rate on bank borrowing of AED 4.4 billion had been 1% higher/lower with all
other variables held constant, profit for the year would have been AED 23,737,690 (2011: Not applicable)
lower/higher, mainly as a result of higher/lower interest expense on floating rate borrowings.
At 31 December 2011, if the interest rate on the non-hedged portion of Sukuk borrowing of AED 3.5 billion had
been 1% higher/lower with all other variables held constant, profit for the year would have been AED 35,000,000
lower/higher, mainly as a result of higher/lower interest expense on floating rate borrowings.
(b) Credit risk

Credit risk is the risk that one party to a financial instrument will cause a financial loss for the other party by failing
to discharge an obligation. The Group has no significant concentrations of credit risk. Credit risk arises from cash
and cash equivalents held at banks, trade receivables, including rental receivables from lessees and derivatives.
Credit risk is managed on a Group basis. The Group has policies in place to ensure that rental contracts are entered
into only with lessees with an appropriate credit history. The Group’s maximum exposure to credit risk to customer
is in Note 9. The table below excludes cash in hand amounting to AED 305,000 (2011: AED 335,000) and presents
an analysis of short term bank deposits and cash and cash equivalents by rating agency designation at the end of
reporting period based on Moody's ratings or its equivalent for the main banking relationships:
Counterparties with external credit rating (Moody’s) 2012 2011
AED’000 AED’000
A1 146 338,195
A2 59,601 -
A3 - 263,080
Baa1 387,342 481,960
Baa2 250,845 -
* 59,813 -
757,747 1,083,235
* Balances of AED 59,813,000 (2011 AED Nil) are maintained with banks with no formal credit rating. However,
management views these banks to be high-credit-quality financial institutions and does not expect these financial
institutions to default.
(17)
(continued)
3 FINANCIAL RISK MANAGEMENT (continued)
3.1 FINANCIAL RISK FACTORS (continued)
(c) Liquidity risk
Prudent liquidity risk management implies maintaining sufficient cash and the availability of funding through an
adequate amount of credit facilities. Due to the dynamic nature of the underlying business, the Group maintains
flexibility in funding by keeping credit lines available.
The table below analyses the Group’s financial liabilities into relevant maturity based on the remaining period at the
balance sheet to the contractual maturity date. The amounts disclosed in the table are the contractual undiscounted
cash flows. Balances due within 12 months equal their carrying balances as the impact of discounting is not
significant.
Less than Between 1 Between 2

1 year and 2 years and 5 Over 5
Year years years years
AED’000 AED’000 AED’000 AED’000
At 31 December 2012
Borrowings 458,038 526,456 1,465,967 3,585,444
Sukuk borrowing 167,144 167,144 501,433 2,638,036
Trade and other payables excluding advances
from customers 810,787 - - -
Due to related parties 11,179 - - -
1,447,148 693,600 1,967,400 6,223,480
At 31 December 2011
Sukuk borrowing 7,862,844 - - -
Derivative financial instruments 124,203 - - -
Trade and other payables excluding advances
from customers 804,135 - - -
Due to related parties 5,754 - - -
8,796,936 - - -
3.2 CAPITAL MANAGEMENT
The Group’s objectives when managing capital are to safeguard the Group’s ability to continue as a going concern
in order to provide returns for partners and to maintain an optimal capital structure to reduce the cost of capital. In
order to maintain or adjust the capital structure, the Group may adjust the amount of profit distributed to partners or
manage its working capital requirements. Consistent with others in the industry, the Group monitors capital on the
basis of the gearing ratio. This ratio is calculated as net debt divided by total capital. Net debt is calculated as total
borrowings (including current and non-current borrowings as shown in the balance sheet) less cash and bank
balances (including short term deposits). Total capital is calculated as ‘Total equity’ as shown in the consolidated
balance sheet plus net debt.
(18)
(continued)
3 FINANCIAL RISK MANAGEMENT (continued)
3.2 CAPITAL MANAGEMENT (continued)
The gearing ratios at 31 December 2012 and 2011 were as follows:

2012 2011
AED’000 AED’000
Total borrowings (Note 13 and 15) 6,727,040 7,500,000

Less: Cash and cash equivalents (Note 10) (758,052) (1,083,570)
Net debt 5,968,988 6,416,430
Total equity 5,923,745 5,670,921
Total capital 11,892,733 12,087,351
Gearing ratio 50% 53%
3.3 FAIR VALUE ESTIMATION
The table below analyses financial instruments carried at fair value, by valuation method. The different levels have
been defined as follows:
Quoted prices (unadjusted) in active markets for identical assets or liabilities (level 1).
Inputs other than quoted prices included within level 1 that are observable for the asset or liability, either
directly (that is, as prices) or indirectly (that is, derived from prices) (level 2).
Inputs for the asset or liability that are not based on observable market data (that is, unobservable inputs)
(level 3).
The Group did not have any financial assets or liabilities as at 31 December 2012 or any other financial assets and
liabilities at 31 December 2011 that are measured at fair value.
Level 1 Level 2 Level 3 Total

AED’000 AED’000 AED’000 AED’000
31 December 2011
Liabilities
Derivative used for hedging - 124,203 - 124,203
The fair value of financial instruments that are not traded in an active market is based on valuation techniques (level
2). The fair value of the unlisted securities is based on net asset values provided by the fund managers. The fair
market value of these investments, as indicated by the fund managers are based on:
a) For listed investments, current bid prices in an active market;

b) For unlisted investments, valuations based on fundamentals and rationale of the portfolio performed by
independent valuers.
(19)
(continued)
4 CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS
Estimates and judgements are continually evaluated and are based on historical experience and other factors,
including expectations of future events that are believed to be reasonable under the circumstances.
4.1 CRITICAL ACCOUNTING ESTIMATES AND ASSUMPTIONS
The Group makes estimates and assumptions concerning the future. The resulting accounting estimates will, by
definition, seldom equal the related actual results. The estimates and assumptions that have a significant risk of
causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are
addressed below.
(a) Impairment of non-financial assets
Impairment of non-financial assets is a key area involving management judgement, requiring assessment as to
whether the carrying value of assets can be supported by the net present value of future cash flows derived from
such assets using cash flow projections which have been discounted at an appropriate rate.
In calculating the net present value of the future cash flows, certain assumptions are required to be made in respect
of the impairment reviews. The key assumptions on which management has based its cash flow projections when
determining the recoverable amount of the assets are as follows:
Management’s projections have been prepared on the basis of strategic plans, knowledge of the market, and
management’s views on achievable growth in market share over the long term period of five to fifteen years.
The discount rate of 11.8% based on the Group’s weighted average cost of capital with a risk premium
reflecting the relative risks in the markets in which the businesses operate.
Growth rate of 3% based on a conservative view of the long-term rate of growth.
At 31 December 2012, an impairment charge of AED 329,028,000 (2011: AED 247,017,000) has been recognised
against investment property under construction (Note 6).
If the estimated cost of capital used in determining the discount rate had been 1% higher/lower than management’s
estimates, net profit for the year would have been lower/higher by AED 62,925,000.
If the completion date was to be delayed by 1 year relative to management’s estimate - for example, due to delays in
the construction, an additional impairment charge of AED 70,739,000 would have been recognised due to delay in
generating rental income.
If the estimated growth rate used had been 1% higher/lower than management’s estimates, net profit for the year
would have been higher/lower by AED 15,135,000.
(20)
(continued)
5 PROPERTY AND EQUIPMENT
Motor and Capital

utility Furniture work-in-
vehicles and fixtures Equipment progress Total
AED’000 AED’000 AED’000 AED’000 AED’000
Cost
At 1 January 2011 90 46,602 24,610 3,110 74,412
Additions - 2,190 77 - 2,267
Transfer to investment property - - - (3,110) (3,110)
Disposals (106) - - (106)
At 31 December 2011 90 48,686 24,687 - 73,463
Additions - 5,727 75 - 5,802
Disposals - (85) - - (85)
At 31 December 2012 90 54,328 24,762 - 79,180
Depreciation
At 1 January 2011 90 21,851 20,728 - 42,669
Charge for the year - 8,693 2,419 - 11,112
Disposals - (106) - - (106)
At 31 December 2011 90 30,438 23,147 - 53,675
Charge for the year - 9,053 1,008 - 10,061
Disposals - (85) - - (85)
At 31 December 2012 90 39,406 24,155 - 63,651
Net book value

At 31 December 2012 - 14,922 607 - 15,529
At 31 December 2011 - 18,248 1,540 - 19,788
2012 2011
AED’000 AED’000
Depreciation included under:

Cost of sales (Note 19) 683 2,051
General and administrative expenses (Note 21) 9,378 9,061
10,061 11,112
(21)
(continued)
6 INVESTMENT PROPERTY
Investment
Buildings and properties under
infrastructure construction Total
AED’000 AED’000 AED’000
Cost
At 1 January 2011 3,188,979 1,360,803 4,549,782
Additions - 344,074 344,074
Transfer from a related party - 156,016 156,016
Transfer from property and equipment 3,110 - 3,110
Transfers 303,271 (303,271) -
At 31 December 2011 3,495,360 1,557,622 5,052,982
Additions - 42,261 42,261
Transfers 19,864 (19,864) -
Return of sale of a warehouse 17,055 - 17,055
Reversal of accrual (11,328) - (11,328)
Disposals (28,710) - (28,710)
At 31 December 2012 3,492,241 1,580,019 5,072,260
Depreciation and impairment

At 1 January 2011 683,890 226,749 910,639
Charge for the year (Note 19) 91,091 - 91,091
Impairment charge (Note 19) - 247,017 247,017
At 31 December 2011 774,981 473,766 1,248,747
Charge for the year (Note 19) 87,470 - 87,470
Return of sale of a warehouse 4,193 - 4,193
Impairment charge (Note 19) - 339,296 339,296
Disposal (23,065) - (23,065)
At 31 December 2012 843,579 813,062 1,656,641
Net book value

At 31 December 2012 2,648,662 766,957 3,415,619
At 31 December 2011 2,720,379 1,083,856 3,804,235
At 31 December 2012 and 31 December 2011, the Group’s investment property were fair valued on an open market
basis by independent professionally qualified valuers who have recent experience in the locations and categories of
the investment properties valued. Based on such valuation, the fair value of the investment property at 31 December
2012 is AED 6,397,683,000 (2011: AED 5,852,356,000) including investment property under construction of AED
766,957,000 (2011: AED 1,083,856,000). At 31 December 2012, an impairment charge of AED 339,296,000 (2011:
AED 247,017,000) has been recognised to the consolidated statement of income under ‘cost of sales’ (Note 19). The
following amounts have been recognised in the consolidated statement of income in respect of investment property:
2012 2011
AED’000 AED’000
Lease rental income (Note 18) 1,220,492 1,135,127
Direct operating expenses 147,780 158,642

Impairment of investment property (Note 19) 339,296 247,017
At 31 December 2012, the Group had unprovided contractual obligations for capital commitment of AED
332,204,000 (2011: AED 308,151,000).
(22)
(continued)
7 LAND USE RIGHT
2012 2011
AED’000 AED’000
Cost
At 1 January 8,981,284 8,923,000
Additions during the year 583 58,284
At 31 December 8,981,867 8,981,284
Amortisation
At 1 January 370,746 280,270
Charge for the year (Note 19) 90,729 90,476
At 31 December 461,475 370,746
Net book value at 31 December 8,520,392 8,610,538
The land use right of the Group is held under a long-term lease arrangement and amortised over the term of the lease of
99 years (Note 1). Amortisation of AED 90,729,000 (2011: AED 90,476,000) is included under ‘cost of sales’ in the
statement of income (Note 19).
8 RELATED PARTY TRANSACTIONS AND BALANCES
Related parties include the parent and the ultimate parent company, key management personnel and any businesses
which are controlled, directly or indirectly by the shareholders and directors or over which they exercise significant
management influence.
During the year the Group entered into the following significant transactions with related parties in the normal
course of business and at prices and terms agreed by the Group’s management.
2012 2011
AED’000 AED’000
Income:
Revenue generated from other related parties 33,777 27,655
Other operating income - other related parties - 6,783
Finance income - ultimate parent company 30,582 28,142
Expenses:
Cost recharged from the parent company 54,053 55,036
Repair and maintenance – other related parties 33,442 47,080
Security services – other related party 4,717 3,454
Key management remuneration:

- Salaries and other short term employee benefits 14,330 13,557
- Termination and post-employment benefits 1,210 1,158
15,540 14,715
(23)
(continued)
8 RELATED PARTY TRANSACTIONS AND BALANCES (continued)
2012 2011
AED’000 AED’000
Balance sheet items:

Transfer of investment property from the parent company (Note 6) - 156,016
Transfer of land use rights from the parent company (Note 7) - 58,284
Related party balances include the following:

Due from related parties comprises:
Current
Due from the parent company 261,787 255,203
Due from other related parties 69,082 77,369
330,869 332,572
Non-current
Loan to the ultimate parent 736,089 721,367
Less: Fair value loss (164,035) (179,895)
572,054 541,472
902,923 874,044
Due to related parties comprises:

Ultimate parent company 23 -
Other related parties 11,156 5,754
11,179 5,754
Amounts due from the parent company of AED 261,786,000 (2011: AED 255,203,000) represents surplus fund
receivable balance and does not bear any interest. This balance is payable on demand.
Loan receivable from the ultimate parent of AED 736,089,000 (2011: AED 721,367,000) is interest bearing at rate
of 2% and is payable by 2019, recognised initially at fair value. The fair value was based on cash flows discounted
at a rate of 5.6% per annum, which was reflective of the Establishment’s weighted average cost of capital at the
time of initial recognition. The undiscounted value and current carrying value of this balance at the balance sheet
date are as follows:
31 December 2012 31 December 2011

Undiscounted Carrying value Undiscounted Carrying value
AED’000 AED’000 AED’000 AED’000
Non-current due from the ultimate parent 736,089 572,054 721,367 541,472
(24)
(continued)
9 TRADE AND OTHER RECEIVABLES

2012 2011
AED’000 AED’000
Trade receivables 102,747 108,858

Less: provision for impairment of receivables (90,400) (76,518)
12,347 32,340
Other receivables and prepayments 49,377 51,508
As at 31 December 61,724 83,848
Analysed between:
Current assets 16,844 27,958
Non-current assets 44,880 55,890
61,724 83,848
At 31 December 2012 and 31 December 2011, the Group has a broad base of customers with no concentration of
credit risk within trade receivables. The carrying amounts of the Group trade and other receivables are denominated
entirely in AED.
As of 31 December 2012, trade receivables of AED 2,953,000 (2011: AED 1,312,000) were fully performing.
As of 31 December 2012, trade receivables of AED 9,395,000 (2011: AED 31,028,000) were past due but not
impaired. These relate to a number of independent customers for whom there is no recent history of default. The
ageing analysis of these trade receivables is as follows:
2012 2011
AED’000 AED’000
1 to 12 months 3,336 19,123

Over 12 months 6,059 11,905
As at 31 December 9,395 31,028
As of 31 December 2012, trade receivables of AED 90,400,000 (2011: AED 76,518,000) were impaired and provided
for. The ageing of these receivables is as follows:
2012 2011
AED’000 AED’000
1 to 12 months 27,621 22,666

Over 12 months 62,779 53,852
As at 31 December 90,400 76,518
Movements in the Group’s provision for impairment of trade receivables

are as follows:
At 1 January 76,518 64,737
Provision for impairment of trade receivables (Note 21) 13,882 11,781
As at 31 December 90,400 76,518
(25)
(continued)
9 TRADE AND OTHER RECEIVABLES (continued)
The provision for impairment of trade receivables balance of AED 90.4 million is a cumulative balance. The current
year provision charge amounted to AED 13.9 million (2011: AED 11.8 million). The creation and release of provision
for impairment of receivables have been included in “General and administrative expenses” (Note 21) in the statement
of income. Amounts charged to the allowance account are generally written off when there is no expectation of
recovering additional cash.
The other classes within trade and other receivables do not contain impaired assets. The maximum exposure to credit
risk at the reporting date is the fair value of each class of receivable mentioned above. The Group does not hold any
collateral as security.
10 CASH AND CASH EQUIVALENTS

2012 2011
AED’000 AED’000
Cash at banks and on hand 202,133 82,567

Fixed deposits 555,919 1,001,003
Cash and cash equivalent 758,052 1,083,570
Current accounts and fixed deposits are placed with domestically incorporated banks and local branches of
international banks. The fixed deposits earned interest at rates ranging from 0.3% to 4.0% per annum (2011: 0.7%
to 4.0%)
For purposes of the statement of cash flows, cash and cash equivalents comprise the following:
2012 2011
AED’000 AED’000
Cash and cash equivalents 758,052 1,083,570

Less: long term fixed deposits - (751,003)
Less: Restricted cash (1,502) -
756,550 332,567
11 SHARE CAPITAL
The total authorised, issued and fully paid share capital of the Establishment at 31 December 2011 and 31
December 2012 comprises 4,268 shares (2011: 4,268 shares) of AED 1,000,000 each.
12 PROVISION FOR EMPLOYEES’ END OF SERVICE BENEFITS

2012 2011
AED’000 AED’000
At 1 January 12,509 12,768

Charge for the year (Note 23) 2,494 2,313
Transfer out - (264)
Payments during the year (528) (2,308)
14,475 12,509
In accordance with the provisions of IAS 19, management has carried out an exercise to assess the present value of
its obligations at 31 December 2011, using the projected unit method, in respect of employees’ end of service
benefits payable under the UAE Labour Law. Under this method, an assessment has been made of an employee’s
expected service life with the branch and the expected basic salary at the date of leaving the service. Management
has assumed average increment/promotion cost of 5% (2011: 5%). The expected liability at the date of leaving the
service has been discounted to its net present value using a discount rate of 3% (2011: 4.25%).
(26)
(continued)
13 SUKUK BORROWING
The Group had issued through its subsidiary JAFZ Sukuk Limited trust certificates (“Sukuk”) for a nominal value
of AED 7,500,000,000 on 27 November 2007 listed on Nasdaq Dubai and the London Stock Exchange. Sukuk,
matures five years from the issue date and bears a profit commission at rate of six months EIBOR plus 1.30% per
annum to be paid semi-annually. The carrying amounts of Sukuk are denominated in AED.
The Group has settled Sukuk on 21 June 2012 and issued through its subsidiary JAFZ Sukuk (2019) Limited a new
Sukuk trust certificates for a nominal value of AED AED 2,387 million (AED 2,340 net of transaction costs of
AED 47 million) on 19 June 2012 listed on Nasdaq Dubai and the Irish Stock Exchange. Sukuk, matures seven
years from the issue date and bears a profit commission at average coupon rate of 7% per annum to be paid semi-
annually. The carrying amounts of Sukuk are denominated in United Stated Dollars (“USD”). Sukuk are secured in
parri passu with borrowings (Note 15).
The following fair values of Islamic Sukuk are based on quoted market rates:
Carrying amount Fair value

31 December 2012 31 December 2011 31 December 2012 31 December 2011
AED’000 AED’000 AED’000 AED’000
Sukuk borrowing 2,340,450 7,500,000 2,731,739 6,999,375
The table below presents an analysis of Islamic Sukuk at the end of reporting period:
2012 2011
AED’000 AED’000
Current
Sukuk - JAFZ Sukuk Limited (Note 1) - 7,500,000
Sukuk - JAFZ Sukuk (2019) Limited (Note 1) - -
- 7,500,000
Non-current
Sukuk - JAFZ Sukuk Limited (Note 1) - -
Sukuk - JAFZ Sukuk (2019) Limited (Note 1) 2,340,450 -
2,340,450 -
2,340,450 7,500,000
14 DEFERRED REVENUE
At 1 January 314,390 296,350

Additions during the year 1,205,938 1,153,167
Released during the year (1,220,492) (1,135,127)
At 31 December 299,836 314,390
Current portion 259,003 272,670

Non-current portion 40,833 41,720
299,836 314,390
(27)
(continued)
15 BORROWING
2012 2011
AED’000 AED’000
Non-current
Term loan 4,130,280 -
Deferred borrowing costs (73,420) -
4,056,860 -
Current
Term loan 209,440 -
Deferred borrowing costs (26,140) -
183,300 -
Total borrowings 4,240,160 -
During the year the Group has obtained a syndicated term loan facility from a consortium of banks and utilised it in
full to partially settle Sukuk borrowing (Note 13). The term loan bears an interest at rate of three months EIBOR
plus 4.25% per annum, paid on quarterly basis. At 31 December 2012, the loan repayment terms were as follows:
Principal repayment term

% AED’000
Less than 1 year 4.83 209,440
Between 1 year and 2 years 4.95 214,720
Between 2 years and 5 years 17.64 765,600
Over 5 years 72.58 3,149,960
Total 100.00 4,339,720
Borrowings are secured with the assignment of accounts receivable, pledge of shares of a fully owned subsidiary by
the parent company, mortgage over certain land use rights and a guarantee from the parent company for a certain
level of payment upon disposal of the pledged subsidiary.
16 DERIVATIVE FINANCIAL INSTRUMENTS
Up to 27 November 2012, the Group had various interest rate swap contracts for a notional principal amount of
AED 4,003,975,000 (31 December 2011: AED 4,003,975,000). Interest rate swaps relate to fixed interest rates that
vary from 4.5% to 5.97% in 2012, and the main floating rate is EIBOR. During the year, these interest rate swaps
matured and were settled (31 December 2011: AED 124,203,000 liability fair value).
As of 31 December 2012, these interest rate swap contracts were ineffective as the associated financial liability of
the Sukuk borrowing had been settled during the year. Accordingly, the hedge reserve of AED 65,806,000 has been
recycled to the consolidated statement of income.
Derivative financial instruments are analysed as follows:

2012 2011
AED’000 AED’000
Current liability - 124,203
(28)
(continued)
2012 2011
AED’000 AED’000
17 TRADE AND OTHER PAYABLES
Trade payable 67,823 66,119

Refundable deposits 492,326 433,252
Accrued expenses 207,764 261,281
Advances from customers 33,610 44,109
Retentions payable to contractors 30,854 35,623
Other Payables 12,019 7,862
844,396 848,246
18 REVENUE
Lease rental income:

- Plots 477,797 437,690
- Warehouses 274,119 251,787
- On site residences 228,670 222,885
- Offices 223,587 207,586
- Others 16,319 15,179
1,220,492 1,135,127
License and registration fees 111,984 103,793
Administration service revenue 97,398 99,662
1,429,874 1,338,582
19 COST OF SALES
Depreciation of property and equipment (Note 5) 683 2,051

Depreciation of investment property (Note 6) 87,470 91,091
Amortisation of land use right (Note 7) 90,729 90,476
Loss on impairment of investment property (Note 6) 339,296 247,017
Repairs and maintenance 60,310 67,551
Utilities 95,745 96,631
Others 15,328 9,915
689,561 604,732
20 OTHER OPERATING INCOME
Lease transfer, sub-lease income and lease commission 18,005 9,463

Public health services 10,747 10,382
Facility manager operating fee income 4,406 4,151
Courier service income 3,936 2,422
Security service allocation - 4,872
Rent on occupancy post termination 1,020 1,125
Fines and penalties income 932 1,203
Other income 16,016 9,249
Loss on disposal of investment property (5,645) -
49,417 42,867
(29)
(continued)
2012 2011
AED’000 AED’000
21 GENERAL AND ADMINISTRATIVE EXPENSES
Staff cost 87,974 76,051

Expenses recharged by related parties 54,356 55,712
Depreciation (Note 5) 9,378 9,061
Provision for impairment of trade receivables (Note 9) 13,882 11,781
Others 8,562 11,891
174,152 164,496
22 SELLING AND MARKETING EXPENSES
Staff cost 30,882 25,708

Others 7,875 4,660
38,757 30,368
23 STAFF COST
Salaries and other staff benefits 95,466 93,748

End of service benefits (Note 12) 2,494 2,313
Pension expenses 7,007 7,171
Bonus 13,889 24,861
Reversal of bonus - (26,334)
118,856 101,759
Included under:
General and administrative expenses 87,974 76,051
Selling and marketing expenses 30,882 25,708
118,856 101,759
24 FINANCE COST – NET
Finance income:
Interest income on bank deposits 13,972 15,982
Interest income on balance due from a related party 14,722 14,682
Unwinding of fair value loss of due from related party 15,860 13,459
Other finance (charges) / income (1,171) 1,171
43,383 45,294
Finance costs:
Profit commission on Sukuk borrowing (197,041) (264,548)
Fair value loss on interest rate swaps designated as cash flow hedges
transferred from equity (119,475) (115,546)
Interest on bank borrowing (134,315) -
Other finance charges (40,754) (5,417)
(491,585) (385,511)
(448,202) (340,217)
(30)
(continued)
25 FINANCIAL INSTRUMENT BY CATEGORY
2012 2011
AED’000 AED’000
Loans and receivable assets per balance sheet

Trade and other receivables excluding prepayments 15,498 35,789
Due from related parties 902,923 874,044
Cash and bank balances 758,052 1,083,570
1,676,473 1,993,403
Derivative liability Amortised cost

AED’000 AED’000
Financial liabilities per balance sheet
31 December 2012
Trade and other payables excluding refundable deposits and
customer advances - 318,460
Due to related parties - 11,179
Sukuk borrowing (gross of deferred borrowing costs) - 2,387,320
Borrowing (gross of deferred borrowing costs) - 4,240,160
- 6,957,119
31 December 2011
Derivative financial instruments 124,203 -
Trade and other payables excluding customer advances - 370,885
Due to related parties - 5,754
Sukuk borrowing - 7,500,000
124,203 7,876,639
26 FUTURE MINIMUM RENTAL PAYMENTS RECEIVABLE UNDER NON-CANCELLABLE

LEASES
The Group has non-cancellable leases having terms of between 1 and 15 years. All land leases agreements entered
after April 2009 contain rent review provisions whereby the Group will review the rent every 5 years, subject to
certain negotiated rent caps. Future minimum rentals receivable under non-cancellable operating leases as at 31
December are as follows:
2012 2011
AED’000 AED’000
Within one year 841,595 760,157

After one year but not more than five years 1,556,867 1,478,985
More than five years 1,502,143 1,474,133
3,900,605 3,713,275
(31)

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CONSOLIDATED FINANCIAL STATEMENTS

Consolidated financial statements for the year ended 31 December 2012

Independent auditor’s report 1-2

Consolidated balance sheet 3

Consolidated statement of income 4

Consolidated statement of comprehensive income 5

Consolidated statement of changes in equity 6

Consolidated statement of cash flows 7

Notes to the consolidated financial statements 8 - 31

Report on the Financial Statements

Management’s Responsibility for the Financial Statements

Consolidated statement of income

Revenue 18 1,429,874 1,338,582

Other operating income 20 49,417 42,867

Finance income 24 43,383 45,294

Profit for the year 128,619 241,636

Consolidated statement of comprehensive income

Year ended 31 December

Profit for the year 128,619 241,636

Other comprehensive income:

Total comprehensive income for the year 252,822 331,025

Consolidated statement of changes in equity

Balance at 1 January 2011 4,268,000 1,285,488 (213,592) 5,339,896

Profit for the year - 241,636 - 241,636

Other comprehensive income - - 89,389 89,389

Profit for the year - 128,619 - 128,619

Other comprehensive income - - 124,203 124,203

Balance at 31 December 2012 4,268,000 1,655,743 - 5,923,743

Consolidated statement of cash flows

1 LEGAL STATUS AND ACTIVITIES

United Arab Emirates

2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

2.1 BASIS OF PREPARATION

2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

2.2 BASIS OF CONSOLIDATION

(b) Eliminations on consolidation

2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

2.3 CHANGES IN ACCOUNTING POLICY AND DISCLOSURES

(a) Amended or revised standard adopted by the Group

2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

2.4 FOREIGN CURRENCY TRANSLATION

(a) Functional and presentation currency

(b) Transactions and balances

2.5 PROPERTY AND EQUIPMENT

2.6 LAND USE RIGHT

2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

2.7 INVESTMENT PROPERTY

2.8 IMPAIRMENT OF NON-FINANCIAL ASSETS

2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

2.9 FINANCIAL ASSETS

2.9.2 RECOGNITION AND MEASUREMENT

2.10 OFFSETTING FINANCIAL INSTRUMENTS

2.11 IMPAIRMENT OF FINANCIAL ASSETS

Assets carried at amortised cost

2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

2.12 TRADE RECEIVABLES

2.13 CASH AND CASH EQUIVALENTS

2.14 SHARE CAPITAL

2.15 TRADE PAYABLES

2.16 ADVANCES FROM CUSTOMERS

2.18 BORROWING COST

2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)