Deyaar Development : Financial statements for the year of 2021

Deyaar Development PJSC

Consolidated financial statements

For the year ended 31 December 2021

Deyaar Development PJSC

Consolidated financial statements for the year ended 31 December 2021

	Pages
Director's report	1
Independent auditor's report on consolidated financial statements	2 - 9
Consolidated statement of financial position	10
Consolidated statement of profit or loss	11
Consolidated statement of other comprehensive income	12
Consolidated statement of changes in equity	13
Consolidated statement of cash flows	14
Notes to the consolidated financial statements	15 - 63

Deloitte & Touche (M.E.)

Building 3, Level 6

Emaar Square

Downtown Dubai

P.O. Box 4254

Dubai

United Arab Emirates

Tel: [phone]

Fax:[phone]

www.deloitte.com

INDEPENDENT AUDITOR'S REPORT

The Shareholders

Deyaar Development PJSC

Report on the Audit of the Consolidated Financial Statements

Opinion

We have audited the consolidated financial statements of Deyaar Development PJSC ("the Company") and its subsidiaries ("the Group"), which comprise the consolidated statement of financial position as at 31 December 2021, and the consolidated statement of profit or loss, consolidated statement of other comprehensive income, consolidated statement of changes in equity and consolidated statement of cash flows for the year then ended, and notes to the consolidated financial statements, including a summary of significant accounting policies.

In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Group as at 31 December 2021, and its consolidated financial performance and its consolidated cash flows for the year then ended in accordance with International Financial Reporting Standards ('IFRSs').

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (ISAs). Our responsibilities under those standards are further described in the Auditors' Responsibilities for the Audit of the Consolidated Financial Statements section of our report. We are independent of the Group in accordance with International Ethics Standards Board for Accountants Code of Ethics for Professional Accountants (IESBA Code) together with the ethical requirements that are relevant to our audit of the consolidated financial statements in the United Arab Emirates, and we have fulfilled our other ethical responsibilities in accordance with these requirements and IESBA Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the consolidated financial statements of the current period. These matters were addressed in the context of our audit of the consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

Cont'd…

Akbar Ahmad (1141), Cynthia Corby (995), Georges Najem (809), Mohammad Jallad (1164), Mohammad Khamees Al Tah (717), Musa Ramahi (872), Mutasem M. Dajani (726), Obada Alkowatly (1056), Rama Padmanabha Acharya (701) and Samir Madbak (386) are registered practicing auditors with the UAE Ministry of Economy.

INDEPENDENT AUDITOR'S REPORT

To the Shareholders of Deyaar Development PJSC (continued)

Key Audit Matters (continued)

Key audit matter

How the matter was addressed in our audit

Valuation of properties held for development and sale

The Group holds properties for development and sale of AED 1,521 million, which comprise completed residential and commercial properties (AED 333 million), land held for mixed-use development and sale (AED 689 million) and properties under development (AED 499 million) (Note 8).

The Group determines whether its properties held for development and sale exhibit any indicators of impairment and if so, compares the recoverable amount of each property to its carrying amount.

The Group applies significant estimates in determining the recoverable amount of properties held for development and sale. Changes in these estimates could have a significant impact on the determination of the recoverable amount of these assets. Key inputs used by management in their valuation exercise include future projected cash flows and comparable property transactions, which are influenced by prevailing market conditions and the specific characteristics of each property in the portfolio.

In addition, when considered necessary, the Group also appoints professionally qualified external valuers to determine the recoverable amount of the Group's portfolio of properties held for development and sale.

The estimation of property cost and net realisable value is a key process as a change in the Group's forecast estimate of sales price and construction cost could have a material impact on the carrying value of the properties held for development and sale in the Group's consolidated financial statements.

In the event that the carrying amount of a property is higher than its recoverable amount, the Group will adjust the property to its recoverable amount and recognise an impairment loss.

We considered the properties held for development and sale as a key audit matter because of the quantitative materiality of the balance and the significant judgements applied and estimates made in determining the recoverable amount.

We assessed the design and implementation of controls in this area over the process involved in the determination of the valuation of properties held for development and sale.

We considered if there were any properties which had not been considered for an assessment of the recoverable amount by management.

We assessed the valuer's competence and capabilities and read their terms of engagement with the Group to determine that the scope of their work was sufficient.

We tested the data provided to the valuer by the Group, on a sample basis.

We involved our internal real estate valuation specialist to review selected properties and assessed whether the valuation of the properties was performed in accordance with the requirements contained within IFRSs relating to valuation and impairment.

We assessed and challenged the underlying key assumptions used in the recoverable amount assessment.

We performed sensitivity analyses on the significant assumptions to evaluate the extent of their impact on the determination of the recoverable amount.

We reperformed the arithmetical accuracy of the determination of recoverable amounts.

We assessed the disclosures made relating to this matter to determine if they were in accordance with the requirements of IFRSs.