Abu Dhabi Aviation

Consolidated financial statements

31 December 2018

Principal business address: P. O. Box 2723 Abu Dhabi United Arab Emirates

Abu Dhabi Aviation

Consolidated financial statements

Contents Page

Independent auditors’ report 1

Consolidated statement of financial position 8

Consolidated statement of profit or loss 10

Consolidated statement of profit or loss and other comprehensive income 11

Consolidated statement of changes in equity 12

Consolidated statement of cash flows 14

Notes to the consolidated financial statements 16

Abu Dhabi Aviation

Consolidated statement of financial position as at 31 December

2018 2017 Note AED’000 AED’000 Assets Non-current assets Property and equipment 6 2,585,458 2,637,323 Investment properties 7 410,363 355,614 Investments 8 88,115 54,740 Investment in joint ventures 9 53,645 46,889 ______Total non-current assets 3,137,581 3,094,566 ______

Current assets Inventories 469,949 442,235 Trade receivables 10 539,613 454,877 Prepayments and other current assets 12 178,998 195,198 Cash and deposits with banks 13 474,223 503,154 Assets held for sale 14 8,975 8,975 ______Total current assets 1,671,758 1,604,439 ______Total assets 4,809,339 4,699,005 ======Equity Share capital 15 444,787 444,787 Share premium 112,320 112,320 Reserves 16 1,873,533 1,762,407 Retained earnings 446,653 427,438 ______Equity attributable to owners of the Company 2,877,293 2,746,952 Non-controlling interests 18 321,578 268,522 ______Total equity 3,198,871 3,015,474 ======Liabilities Non-current liabilities Provision for employees’ end of service benefits 19 145,462 142,519 Non-current portion of term loans 20 489,225 806,040 Non-current portion of finance lease liabilities 21 113,881 115,121 Non-current portion of deferred income 22 213,505 267,186 ______Total non-current liabilities 962,073 1,330,866 ______

Continued…

Abu Dhabi Aviation

Consolidated statement of profit or loss for the year ended 31 December

2018 2017 Note AED’000 AED’000

Revenue from contracts with customers 24 1,806,762 1,606,575 Direct operating costs 25 (1,378,566) (1,223,827) ______

Gross profit 428,196 382,748

General and administrative expenses 26 (200,580) (190,021) Gain on change in fair value of investment properties 7 15,239 74 Income from investment properties 19,495 13,523 Property rental expense (3,175) (2,130) Gain / (loss) on disposal of property and equipment 6,786 (27,647) Impairment loss on property and equipment 6 (16,078) (59,493) Net (charge) / reversal of impairment loss on trade receivables 10 (12,765) 19,333 Amortisation of deferred income 22 55,223 161,097 Share of profit of joint ventures 6,756 5,081 Finance income 9,249 3,625 Finance costs (44,540) (38,474) Other income 20,660 15,827 Investments at FVTPL – net change in fair value 15 - ______

Profit for the year 284,481 283,543 ======Profit for the year attributable to: Owners of the Company 231,425 243,612 Non-controlling interests 18 53,056 39,931 ______284,481 283,543 ======

Basic and diluted earnings per share (AED) 27 0.52 0.55 ======

The notes set out on pages 16 to 66 form an integral part of these consolidated financial statements.

The independent auditors’ report is set out on pages 1 to 7.

Abu Dhabi Aviation

Consolidated statement of profit or loss and other comprehensive income for the year ended 31 December

2018 2017 Note AED’000 AED’000

Profit for the year 284,481 283,543

Other comprehensive income Items that are or may be reclassified subsequently to profit or loss Foreign currency translation differences 7 (7,742) 11,488 Debt investments at FVOCI – net change in fair value (4,385) - ______Other comprehensive (loss) / income for the year (12,127) 11,488 ______Total comprehensive income for the year 272,354 295,031 ======

Total comprehensive income attributable to:

Owners of the Company 219,298 255,100 Non-controlling interests 53,056 39,931 ______272,354 295,031 ======

The notes set out on pages 16 to 66 form an integral part of these consolidated financial statements.

The independent auditors’ report is set out on pages 1 to 7.

Abu Dhabi Aviation

Consolidated statement of changes in equity for the year ended 31 December 2018

Equity attributable Non- Share Share Retained to owners of controlling capital premium Reserves earnings the Company interests Total AED’000 AED’000 AED’000 AED’000 AED’000 AED’000 AED’000

Balance at 1 January 2018 444,787 112,320 1,762,407 427,438 2,746,952 268,522 3,015,474 ______Profit for the year - - - 231,425 231,425 53,056 284,481 Other comprehensive loss for the year - - (12,127) - (12,127) - (12,127) ______Total comprehensive income - - (12,127) 231,425 219,298 53,056 272,354

Dividends (Note 17) - - - (88,957) (88,957) - (88,957) Transfer to legal reserve (Note 16) - - 23,253 (23,253) - - - Transfer to maintenance and fleet replacement reserve - - 100,000 (100,000) - - - ______Balance at 31 December 2018 444,787 112,320 1,873,533 446,653 2,877,293 321,578 3,198,871 ======

Continued…

Abu Dhabi Aviation

Consolidated statement of changes in equity (continued) for the year ended 31 December 2017

Balance at 1 January 2017 444,787 112,320 1,593,381 416,978 2,567,466 228,591 2,796,057 ______Profit for the year - - - 243,612 243,612 39,931 283,543 Other comprehensive income for the year - - 11,488 - 11,488 - 11,488 ______Total comprehensive income - - 11,488 243,612 255,100 39,931 295,031

Dividends (Note 17) - - - (75,614) (75,614) - (75,614) Transfer to legal reserve (Note 16) - - 17,538 (17,538) - - - Transfer to maintenance and fleet replacement reserve - - 140,000 (140,000) - - - ______Balance at 31 December 2017 444,787 112,320 1,762,407 427,438 2,746,952 268,522 3,015,474 ======

The notes set out on pages 16 to 66 form an integral part of these consolidated financial statements.

Abu Dhabi Aviation

Consolidated statement of cash flows for the year ended 31 December

2018 2017 Note AED’000 AED’000

Cash flows from operating activities

Profit for the year 284,481 283,543

Adjustments for: - Depreciation 6 159,718 177,945 - Net charge / (reversal) of impairment losses on trade receivables 10 12,836 (5,303) - Reversal for obsolete and slow moving inventories (4,875) - - Recovery of impaired trade receivables 10 (71) (14,030) - Impairment loss on property and equipment 6 16,078 59,493 - Provision for employees’ end of service benefits 19 22,804 20,761 - Amortisation of deferred income 22 (55,223) (161,097) - Gain on change in fair value of investment properties 7 (15,239) (74) - Loss on disposal of property and equipment (6,786) 27,647 - Impairment of goodwill - 836 - Share of profit of joint ventures (6,756) (5,081) - Finance costs 44,540 38,474 - Finance income (9,249) (3,625) - Change in fair value of investments (15) - ______442,243 419,489 Changes in: - Inventories (22,839) (10,130) - Trade receivables 10 (92,901) 71,657 - Prepayments and other current assets 12 (24,246) 45,529 - Trade and other payables 23 8,223 6,401 - Accrued expenses and other current liabilities 15,829 (76,793) ______Cash generated from operating activities 326,309 456,153

Interest paid (44,540) (39,800) Employees’ end of service benefits paid 19 (19,861) (12,073) ______Net cash from operating activities 261,908 404,280 ______

continued…

Abu Dhabi Aviation

Consolidated statement of cash flows (continued) for the year ended 31 December

2018 2017 Note AED’000 AED’000

Cash flows from investing activities

Acquisition of property and equipment 6 (150,633) (107,775) Payments for investment property 7 (6,806) (182,800) Payments for investments 8 (37,745) (54,740) Proceeds from disposal of property and equipment 25,208 134,932 Proceeds from disposal of assets held for sale - 94,698 Finance income received 9,249 3,625 Deposits with maturities over three months 13 40,473 (90,183) ______Net cash used in investing activities (120,254) (202,243) ______Cash flows from financing activities

Proceeds from term loans 50,000 - Repayment of term loans (76,624) (82,846) Decrease in due to a related party - (5,429) Payments for finance lease liabilities (1,148) (1,063)* Dividends paid 17 (88,957) (75,614) ______Net cash used in financing activities (116,729) (164,952) ______

Net increase in cash and cash equivalents 24,925 37,085

Cash and cash equivalents at 1 January 158,713 121,628 ______

Cash and cash equivalents at 31 December 13 183,638 158,713 ======

* Other finance lease repayments are presented within related party cash flows above.

The Group entered into the following non-cash transaction which is not reflected in the consolidated statement of cash flows.

Capital work in progress transferred to a related party 6 4,600 - ======Write off of capital work in progress 6 3,680 - ======

The notes set out on pages 16 to 66 form an integral part of these consolidated financial statements.

The independent auditors’ report is set out on pages 1 to 7.

Abu Dhabi Aviation

Notes to the consolidated financial statements for the year ended 31 December

1 Legal status and principal activities

Abu Dhabi Aviation (the “Company”) is a national shareholding company incorporated in Abu Dhabi, United Arab Emirates by the Decrees and Laws No. 3, No. 10, No. 8, No. 9 and No. 11 of the years 1982, 1985, 1999, 2003 and 2004, respectively. The Company’s shares are listed on the Abu Dhabi Securities Exchange.

The Company and its subsidiaries (together referred to as the “Group”) have been established to own and operate helicopters and fixed wing aircraft both within and outside the United Arab Emirates and to undertake charter, commercial, air cargo and other related services. The Company has its registered office at P.O. Box 2723, Abu Dhabi, UAE. Information about Group’s consolidation structure is described in note 3(a).

2 Basis of preparation

(a) Statement of compliance

The consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (“IFRS”) and Interpretations issued by the IFRS Interpretations Committee of the IASB (IFRIC) and applicable requirements of the laws of the UAE.

(b) Basis of measurement

These consolidated financial statements have been prepared on the historical cost basis, except for investments and investment properties, which are carried at fair value.

These consolidated financial statements are presented in United Arab Emirates Dirhams (“AED”), which is the Company’s functional and presentational currency. All values are rounded to the nearest AED thousand, unless otherwise indicated.

(d) Use of estimates and judgements

The preparation of consolidated financial statements in conformity with IFRSs requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates.

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised and in any future periods affected.

Information about significant areas of estimation uncertainty and critical judgements in applying accounting policies that have the most significant effect on the amounts recognised in these consolidated financial statements are described in Note 5.

Abu Dhabi Aviation

Notes to the consolidated financial statements for the year ended 31 December

3 Significant accounting policies

The Group has consistently applied the following accounting policies to all periods presented in these consolidated financial statements except for the new standards and interpretations that became applicable and were adopted during the year (refer note 4).

New standards and interpretations adopted:

During the year new standards, amendments to standards and interpretations have become effective for the period and have been applied in preparing these consolidated financial statements. The amendment is listed below:

 IFRS 15 Revenue from Contracts with Customers  IFRS 9 Financial Instruments  Transfers of Investment Property (Amendments to IAS 40)  IFRIC 22 Foreign Currency Transactions and Advance Consideration

(a) Basis of consolidation

The Group accounts for business combinations using the acquisition method when control is transferred to the Group. The consolidated financial statements incorporate the financial statements of the Company and its subsidiaries.

Subsidiaries are entities controlled by the Group. The Group ‘controls’ an entity when it is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. The financial statements of subsidiaries are included in the consolidated financial statements from the date on which control commences until the date on which control ceases.

Non-controlling interests (NCI) are measured at their proportionate share of the acquiree’s identifiable net assets at the date of acquisition. Changes in the Group’s interest in a subsidiary that do not result in a loss of control are accounted for as equity transactions.

When the Group loses control over a subsidiary, it derecognises the assets and liabilities of the subsidiary, and any related NCI and other components of equity. Any resulting gain or loss is recognised in profit or loss. Any interest retained in the former subsidiary is measured at fair value when control is lost.

Intra-group balances and transactions, and any unrealised income and expenses arising from intra-group transactions, are eliminated. Unrealised gains arising from transactions with equity accounted investees are eliminated against the investment to the extent of the Group’s interest in the investee. Unrealised losses are eliminated in the same way as unrealised gains, but only to the extent that there is no evidence of impairment.

Abu Dhabi Aviation

Notes to the consolidated financial statements for the year ended 31 December

3 Significant accounting policies (continued)

(a) Basis of consolidation (continued)

The consolidated financial statements incorporate the financial position and performance of the Company and its subsidiaries as disclosed below:

Ownership interest 31 31 Name of subsidiary December December Country of 2018 2017 incorporation Principal activities ------Maximus Air – Sole 100% 100% UAE Air cargo Proprietorship L.L.C

Commercial air and Royal Jet L.L.C. 50% 50% UAE transportation services

Herbal Hill Gardens Investment property 100% 100% Gibraltar Limited ownership

ADA Real Estate Management and General 100% 100% UAE Real estate and facilities Maintenance L.L.C.

Maximus Airlines L.L.C. 100% 100% Ukraine Air cargo services

ADA International Real Estate Owned by Abu Dhabi Real estate lease and 100% 100% UAE Aviation – Sole management services Proprietorship Co. L.L.C.

Abu Dhabi Aviation Training Centre L.L.C. 100% 100% UAE Aviation training

Aviation training ADA Millennium Advisory and Consulting – Owned by Abu implementation Dhabi Aviation Sole 100% 100% UAE consultancy services to Proprietorship L.L.C. aviation, manufacturing, hospitality, oil and gas and private equity sectors

b) Investment in joint ventures

A joint venture is an arrangement in which the Group has joint control, whereby the Group has rights to the net assets of the arrangement, rather than rights to its assets and obligations for its liabilities.

Abu Dhabi Aviation

Notes to the consolidated financial statements for the year ended 31 December

3 Significant accounting policies (continued)

(b) Investment in joint ventures (continued)

Investment in joint ventures are accounted for using the equity method. They are initially recognised at cost, which includes transaction costs. Subsequent to initial recognition, the consolidated financial statements include the Group’s share of the profit or loss and other comprehensive income of equity-accounted investees, until the date on which significant influence or joint control ceases.

Losses of a joint venture in excess of the Group's interest in that joint venture (which includes any long term interests that, in substance, form part of the Group's net investment in joint venture) are recognised only to the extent that the Group has incurred legal or constructive obligations or made payments on behalf of a joint venture.

Where an entity in the Group transacts with a joint venture of the Group, profits and losses are eliminated to the extent of the Group's interest in the relevant joint venture.

The Group has initially applied IFRS 15 from 1 January 2018. Information about the Group’s accounting policies relating to contracts with customers is provided in Note 24. The effect of initially applying IFRS 15 is described in Note 4.

(d) Leases

i) Determining whether an arrangement contains a lease

At inception of an arrangement, the Group determines whether the arrangement is or contains a lease.

At inception or on reassessment of an arrangement that contains a lease, the Group separates payments and other consideration required by the arrangement into those for the lease and those for other elements on the basis of their relative fair values. If the Group concludes for a finance lease that it is impracticable to separate the payments reliably, then an asset and a liability are recognised at an amount equal to the fair value of the underlying asset; subsequently, the liability is reduced as payments are made and an imputed finance cost on the liability is recognised using the Group’s incremental borrowing rate.

ii) Leased assets

Leases of property and equipment that transfer to the Group substantially all of the risks and rewards of ownership are classified as finance leases. The leased assets are measured initially at an amount equal to the lower of their fair value and the present value of the minimum lease payments. Subsequent to initial recognition, the assets are accounted for in accordance with the accounting policy applicable to that asset.

Assets held under other leases are classified as operating leases and are not recognised in the Group’s consolidated statement of financial position.

Abu Dhabi Aviation

Notes to the consolidated financial statements for the year ended 31 December

3 Significant accounting policies (continued)

(d) Leases (continued)

iii) Lease payments

Payments made under operating leases are recognised in profit or loss on a straight-line basis over the term of the lease. Lease incentives received are recognised as an integral part of the total lease expense, over the term of the lease.

Minimum lease payments made under finance leases are apportioned between the finance expense and the reduction of the outstanding liability. The finance expense is allocated to each period during the lease term so as to produce a constant periodic rate of interest on the remaining balance of the liability.

iv) Sale and finance leaseback transaction

If the sale and leaseback transaction results in a finance lease, any excess of sales proceeds over the carrying amount is deferred and amortised over the lease term.

v) Sale and operating leaseback transactions

If the sale and leaseback transaction results in an operating lease, any profit or loss is recognised immediately in the profit or loss to the extent of fair value of the asset.

If the sale price is lower than the fair value, any profit or loss is recognised immediately except that if the loss is compensated for by future lease payments at below market price, it is deferred and amortised in proportion to the lease payments over the period for which the asset is expected to be used.

If the sale price is above fair value,the excess over the fair value is deferred and amortised over the period for which the asset is expected to be used.

(e) Interest / divdend income and interest expense

Interest income or expense is recognised using the effective interest method. Dividend income is recognised in profit or loss on the date on which the Group’s right to receive payment is established.

The ‘effective interest rate’ is the rate that exactly discounts estimated future cash payments or receipts through the expected life of the financial instrument to:

 the gross carrying amount of the financial asset; or  the amortised cost of the financial liability.

In calculating interest income and expense, the effective interest rate is applied to the gross carrying amount of the asset (when the asset is not credit-impaired) or to the amortised cost of the liability. However, for financial assets that have become credit-impaired subsequent to initial recognition, interest income is calculated by applying the effective interest rate to the amortised cost of the financial asset. If the asset is no longer credit-impaired, then the calculation of interest income reverts to the gross basis.

Abu Dhabi Aviation

Notes to the consolidated financial statements for the year ended 31 December

3 Significant accounting policies (continued)

(f) Foreign currency

i) Foreign currency transactions

Transactions in foreign currencies are translated into the respective functional currencies of Group companies at the exchange rates at the dates of the transactions.

Monetary assets and liabilities denominated in foreign currencies are translated into the functional currency at the exchange rate at the reporting date. Non-monetary assets and liabilities that are measured at fair value in a foreign currency are translated into the functional currency at the exchange rate when the fair value was determined. Non-monetary items that are measured based on historical cost in a foreign currency are translated at the exchange rate at the date of the transaction. Foreign currency differences are generally recognised in profit or loss

ii) Foreign operations

The assets and liabilities of foreign operations, including goodwill and fair value adjustments arising on acquisition, are translated into AED at the exchange rates at the reporting date. The income and expenses of foreign operations are translated into AED at the exchange rates at the dates of the transactions.

Foreign currency differences are recognised in other comprehensive income and accumulated in the translation reserve, except to the extent that the translation difference is allocated to non- controlling interests.

(g) Borrowing costs

Borrowing costs that are attributable to the acquisition or construction of qualifying assets are capitalised as part of the cost of such assets. A qualifying asset is one that necessarily takes a substantial period of time to get ready for its intended use or sale.

All other borrowing costs are recognised in profit or loss in the period in which they are incurred.

(h) Government grants

Non-monetary government grants are recognised at nominal value where there is reasonable assurance that the asset will be received and the Group will comply with any attached conditions, where applicable. Government grants whose primary condition is that the Group should purchase, construct or otherwise acquire non-current assets are recognised as deferred income in the consolidated statement of financial position and transferred to profit or loss on a systematic and rational basis over the useful lives of the related assets.

Other government grants are recognised as income over the periods necessary to match them with the costs for which they are intended to compensate, on a systematic basis. Government grants that are receivable as compensation for expenses or losses already incurred or for the purpose of giving immediate financial support to the Group with no future related costs are recognised in profit or loss in the period in which they become receivable.

Deferred income relating to Maximus Air – Sole Proprietorship L.L.C is recognised at the nominal value of shares that was granted to the Company. Deferred income is amortised on the basis of the agreed legal duration of the related investment of 25 years.

Deferred income relating to property and equipment granted by the Abu Dhabi Government to Royal Jet L.L.C. is recognised at the nominal value of the assets. Deferred income is amortised on the basis of the estimated useful life of the asset.

Abu Dhabi Aviation

Notes to the consolidated financial statements for the year ended 31 December

3 Significant accounting policies (continued)

(i) Property and equipment

i) Recognition and measurement

Items of property and equipment are measured at cost, which includes capitalized borrowing costs, less accumulated depreciation and any accumulated impairment losses.

If significant parts of an item of property and equipment have different useful lives, then they are accounted for as separate items (major components) of property and equipment.

Any gain or loss on disposal of an item of property and equipment is recognised in profit or loss.

ii) Subsequent expenditure

Subsequent expenditure is capitalised only if it is probable that the future economic benefits associated with the expenditure will flow to the Group. The cost of replacing part of an item of property and equipment including major inspections and overhauls is recognised in the carrying amount of the related asset if it is probable that future economic benefits embodied within the part will flow to the Group and its cost can be measured reliably. The remaining carrying amount of replaced parts is derecognised simultaneously. Major inspections and overhaul are capitalised as a separate component of property and equipment and are amortised over the period to the next major overhaul.

iii) Depreciation

Depreciation is calculated on a straight-line basis so as to write off the cost of assets over their estimated useful lives, after allowing for estimated residual value. The estimated useful lives of the Group's property and equipment are disclosed in Note 6.

Residual value is the net amount which the Group expects to obtain for an asset at the end of its useful life after deducting the expected costs of disposal. The estimated useful lives, residual values and depreciation method are reviewed at each year end, with the effect of any changes in estimate accounted for on a prospective basis.

Depreciation of operational property and equipment commences with the commercial use of the asset. Surpluses arising on revaluation are transferred to a revaluation reserve. This reserve is released to distributable reserves when assets are sold or disposed of.

(j) Assets held for sale

Non-current assets, or disposal groups comprising assets and liabilities, are classified as held for sale if it is highly probable that they will be recovered primarily through sale rather than through continuing use.

Such assets, or disposal groups, are generally measured at the lower of their carrying amount and fair value less costs to sell. Any impairment loss on a disposal group is allocated first to goodwill, and then to the remaining assets and liabilities on a pro rata basis, except that no loss is allocated to inventories, financial assets, employee benefit assets or investment property which continue to be measured in accordance with the Group’s other accounting policies. Impairment losses on initial classification as held-for-sale or held for distribution and subsequent gains and losses on remeasurement are recognised in profit or loss.

Once classified as held-for-sale, intangible assets and property and equipment are no longer amortised or depreciated, and any equity-accounted investee is no longer equity accounted.

Abu Dhabi Aviation

Notes to the consolidated financial statements for the year ended 31 December

3 Significant accounting policies (continued)

(k) Investment properties

Investment properties are initially measured at cost and subsequently at fair value with any change therein recognised in profit or loss.

Any gain or loss on disposal of investment properties (calculated as the difference between the net proceeds from disposal and the carrying amount of the item) is recognised in profit or loss. When investment properties that were previously classified as property and equipment are sold, any related amount included in the revaluation reserve is transferred to retained earnings.

(l) Inventories

Inventories are measured at the lower of cost and net realisable value. The cost of inventories is based on the first-in, first-out principle wherein the cost of inventories includes the invoiced cost, freight expenses, duties and other expenses incurred in bringing the inventories to their present condition and location. Allowance is made in the accounts for obsolete and slow-moving items based on management's judgement.

(m) Impairment

i) Non-derivative financial assets

Policy applicable from 1 January 2018

Financial instruments and contract assets

The Group recognises loss allowances for ECLs on:

 financial assets measured at amortised cost;  debt investments measured at FVOCI; and  contract assets.

The Group measures loss allowances at an amount equal to lifetime ECLs, except for the following, which are measured at 12-month ECLs:

 debt securities that are determined to have low credit risk at the reporting date; and  other debt securities and bank balances for which credit risk (i.e. the risk of default occurring over the expected life of the financial instrument) has not increased significantly since initial recognition.

Loss allowances for trade receivables and contract assets are always measured at an amount equal to lifetime ECLs.

When determining whether the credit risk of a financial asset has increased significantly since initial recognition and when estimating ECLs, the Group considers reasonable and supportable information that is relevant and available without undue cost or effort. This includes both quantitative and qualitative information and analysis, based on the Group’s historical experience and informed credit assessment and including forward-looking information.

The Group assumes that the credit risk on a financial asset has increased significantly based on significant judgement. Specific factors management considers include the age of balance, background of the customers, existence of disputes, recent historical payment patterns and any other available information concerning the creditworthiness of the counterparty.

Abu Dhabi Aviation

Notes to the consolidated financial statements for the year ended 31 December

3 Significant accounting policies (continued)

(m) Impairment (continued)

i) Non-derivative financial assets (continued)

Policy applicable from 1 January 2018 (continued)

Financial instruments and contract assets (continued)

The Group considers a financial asset to be in default when the borrower is unlikely to pay its credit obligations to the Group in full, without recourse by the Group to actions such as realising security (if any is held).

The Group considers a debt security to have low credit risk when its credit risk rating is equivalent to the globally understood definition of ‘investment grade’.

Lifetime ECLs are the ECLs that result from all possible default events over the expected life of a financial instrument.

12-month ECLs are the portion of ECLs that result from default events that are possible within the 12 months after the reporting date (or a shorter period if the expected life of the instrument is less than 12 months).

The maximum period considered when estimating ECLs is the maximum contractual period over which the Group is exposed to credit risk.

Measurement of ECLs

ECLs are a probability-weighted estimate of credit losses. Credit losses are measured as the present value of all cash shortfalls (i.e. the difference between the cash flows due to the entity in accordance with the contract and the cash flows that the Group expects to receive).

ECLs are discounted at the effective interest rate of the financial asset.

Credit-impaired financial assets

At each reporting date, the Group assesses whether financial assets carried at amortised cost and debt securities at FVOCI are credit-impaired. A financial asset is ‘credit-impaired’ when one or more events that have a detrimental impact on the estimated future cash flows of the financial asset have occurred.

Evidence that a financial asset is credit-impaired includes the following observable data:

 significant financial difficulty of the borrower or issuer;  a breach of contract such as a default;  the restructuring of a loan or advance by the Group on terms that the Group would not consider otherwise;  it is probable that the borrower will enter bankruptcy or other financial reorganisation; or  the disappearance of an active market for a security because of financial difficulties.

Abu Dhabi Aviation

Notes to the consolidated financial statements for the year ended 31 December

3 Significant accounting policies (continued)

(m) Impairment (continued)

i) Non-derivative financial assets (continued)

Presentation of allowance for ECL in the statement of financial position

Loss allowances for financial assets measured at amortised cost are deducted from the gross carrying amount of the assets.

For debt securities at FVOCI, the loss allowance is charged to profit or loss and is recognised in OCI.

Write-off

The gross carrying amount of a financial asset is written off when the Group has no reasonable expectations of recovering a financial asset in its entirety or a portion thereof. The Group individually makes an assessment with respect to the timing and amount of write-off based on whether there is a reasonable expectation of recovery. The Group expects no significant recovery from the amount written off. However, financial assets that are written off could still be subject to enforcement activities in order to comply with the Group’s procedures for recovery of amounts due.

Policy applicable before 1 January 2018

Financial assets not classified as at FVTPL were assessed at each reporting date to determine whether there was objective evidence of impairment.

Objective evidence that financial assets were impaired included:

 default or delinquency by a debtor;  restructuring of an amount due to the Group on terms that the Group would not consider otherwise;  indications that a debtor or issuer would enter bankruptcy;  adverse changes in the payment status of borrowers or issuers;  the disappearance of an active market for a security because of financial difficulties; or  observable data indicating that there was a measurable decrease in the expected cash flows from a group of financial assets.

Abu Dhabi Aviation

Notes to the consolidated financial statements for the year ended 31 December

3 Significant accounting policies (continued)

(m) Impairment (continued)

i) Non-derivative financial assets (continued)

Policy applicable before 1 January 2018 (continued)

Financial assets The Group considered evidence of impairment for these assets at both an at amortised individual asset and a collective level. All individually significant assets cost were individually assessed for impairment. Those found not to be impaired were then collectively assessed for any impairment that had been incurred but not yet individually identified. Assets that were not individually significant were collectively assessed for impairment. Collective assessment was carried out by grouping together assets with similar risk characteristics. In assessing collective impairment, the Group used historical information on the timing of recoveries and the amount of loss incurred, and made an adjustment if current economic and credit conditions were such that the actual losses were likely to be greater or lesser than suggested by historical trends. An impairment loss was calculated as the difference between an asset’s carrying amount and the present value of the estimated future cash flows discounted at the asset’s original effective interest rate. Losses were recognised in profit or loss and reflected in an allowance account. When the Group considered that there were no realistic prospects of recovery of the asset, the relevant amounts were written off. If the amount of impairment loss subsequently decreased and the decrease was related objectively to an event occurring after the impairment was recognised, then the previously recognised impairment loss was reversed through profit or loss. Investment in The objective evidence of impairment included a significant or prolonged equity decline in its fair value below its cost. The Group considers a decline of instrument 20% to be significant and a period of nine months to be prolonged.

ii) Non-financial assets

At each reporting date, the Group reviews the carrying amounts of its non-financial assets (other than investment properties) to determine whether there is any indication of impairment. If any such indication exists, then the asset’s recoverable amount is estimated. Goodwill is tested annually for impairment.

For impairment testing, assets are grouped together into the smallest group of assets that generates cash inflows from continuing use that are largely independent of the cash inflows of other assets or Cash Generating Units (CGUs). Goodwill arising from a business combination is allocated to CGUs or groups of CGUs that are expected to benefit from the synergies of the combination.

The recoverable amount of an asset or CGU is the greater of its value in use and its fair value less costs to sell. Value in use is based on the estimated future cash flows, discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset or CGU.

An impairment loss is recognised if the carrying amount of an asset or CGU exceeds its recoverable amount.

Abu Dhabi Aviation

Notes to the consolidated financial statements for the year ended 31 December

3 Significant accounting policies (continued)

(m) Impairment (continued)

ii) Non-financial assets (continued)

Impairment losses are recognised in profit or loss. They are allocated first to reduce the carrying amount of any goodwill allocated to the CGU, and then to reduce the carrying amounts of the other assets in the CGU on a pro rata basis.

An impairment loss in respect of goodwill is not reversed. For other assets, an impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised.

(n) Financial instruments

i) Recognition and initial measurement

Trade receivables and debt securities issued are initially recognised when they are originated. All other financial assets and financial liabilities are initially recognised when the Group becomes a party to the contractual provisions of the instrument.

A financial asset (unless it is a trade receivable without a significant financing component) or financial liability is initially measured at fair value plus, for an item not at FVTPL, transaction costs that are directly attributable to its acquisition or issue. A trade receivable without a significant financing component is initially measured at the transaction price.

ii) Classification and subsequent measurement

On initial recognition, a financial asset is classified as measured at: amortised cost; FVOCI – debt investment; FVOCI – equity investment; or FVTPL.

Financial assets are not reclassified subsequent to their initial recognition unless the Group changes its business model for managing financial assets, in which case all affected financial assets are reclassified on the first day of the first reporting period following the change in the business model.

A financial asset is measured at amortised cost if it meets both of the following conditions and is not designated as at FVTPL:

 it is held within a business model whose objective is to hold assets to collect contractual cash flows; and  its contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

A debt investment is measured at FVOCI if it meets both of the following conditions and is not designated as at FVTPL:

 it is held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets; and  its contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

Abu Dhabi Aviation

Notes to the consolidated financial statements for the year ended 31 December

3 Significant accounting policies (continued)

(n) Financial instruments (continued)

ii) Classification and subsequent measurement (continued)

On initial recognition of an equity investment that is not held for trading, the Group may irrevocably elect to present subsequent changes in the investment’s fair value in OCI. This election is made on an investment-by-investment basis.

All financial assets not classified as measured at amortised cost or FVOCI as described above are measured at FVTPL. On initial recognition, the Group may irrevocably designate a financial asset that otherwise meets the requirements to be measured at amortised cost or at FVOCI as at FVTPL if doing so eliminates or significantly reduces an accounting mismatch that would otherwise arise.

Financial assets – Business model assessment

The Group makes an assessment of the objective of the business model in which a financial asset is held at a portfolio level because this best reflects the way the business is managed and information is provided to management. The information considered includes:

 the stated policies and objectives for the portfolio and the operation of those policies in practice. These include whether management’s strategy focuses on earning contractual interest income, maintaining a particular interest rate profile, matching the duration of the financial assets to the duration of any related liabilities or expected cash outflows or realising cash flows through the sale of the assets;  how the performance of the portfolio is evaluated and reported to the Group’s management;  the risks that affect the performance of the business model (and the financial assets held within that business model) and how those risks are managed;  how managers of the business are compensated – e.g. whether compensation is based on the fair value of the assets managed or the contractual cash flows collected; and  the frequency, volume and timing of sales of financial assets in prior periods, the reasons for such sales and expectations about future sales activity.

Transfers of financial assets to third parties in transactions that do not qualify for derecognition are not considered sales for this purpose, consistent with the Group’s continuing recognition of the assets.

Financial assets that are held for trading or are managed and whose performance is evaluated on a fair value basis are measured at FVTPL.

Financial assets – Assessment whether contractual cash flows are solely payments of principal and interest

For the purposes of this assessment, ‘principal’ is defined as the fair value of the financial asset on initial recognition. ‘Interest’ is defined as consideration for the time value of money and for the credit risk associated with the principal amount outstanding during a particular period of time and for other basic lending risks and costs (e.g. liquidity risk and administrative costs), as well as a profit margin.

Abu Dhabi Aviation

Notes to the consolidated financial statements for the year ended 31 December

3 Significant accounting policies (continued)

(n) Financial instruments (continued)

ii) Classification and subsequent measurement (continued)

Financial assets – Assessment whether contractual cash flows are solely payments of principal and interest (continued)

In assessing whether the contractual cash flows are solely payments of principal and interest, the Group considers the contractual terms of the instrument. This includes assessing whether the financial asset contains a contractual term that could change the timing or amount of contractual cash flows such that it would not meet this condition. In making this assessment, the Group considers:

 contingent events that would change the amount or timing of cash flows;  terms that may adjust the contractual coupon rate, including variable-rate features;  prepayment and extension features; and  terms that limit the Group’s claim to cash flows from specified assets (e.g. non-recourse features).

A prepayment feature is consistent with the solely payments of principal and interest criterion if the prepayment amount substantially represents unpaid amounts of principal and interest on the principal amount outstanding, which may include reasonable additional compensation for early termination of the contract. Additionally, for a financial asset acquired at a discount or premium to its contractual par amount, a feature that permits or requires prepayment at an amount that substantially represents the contractual par amount plus accrued (but unpaid) contractual interest (which may also include reasonable additional compensation for early termination) is treated as consistent with this criterion if the fair value of the prepayment feature is insignificant at initial recognition.

Financial assets – Subsequent measurement and gains and losses

Financial assets at These assets are subsequently measured at fair value. Net gains and FVTPL losses, including any interest or dividend income, are recognised in profit or loss. Financial assets at These assets are subsequently measured at amortised cost using the amortised cost effective interest method. The amortised cost is reduced by impairment losses. Interest income, foreign exchange gains and losses and impairment are recognised in profit or loss. Any gain or loss on derecognition is recognised in profit or loss. Debt investments at These assets are subsequently measured at fair value. Interest income FVOCI calculated using the effective interest method, foreign exchange gains and losses and impairment are recognised in profit or loss. Other net gains and losses are recognised in OCI. On derecognition, gains and losses accumulated in OCI are reclassified to profit or loss. Equity investments These assets are subsequently measured at fair value. Dividends are at FVOCI recognised as income in profit or loss unless the dividend clearly represents a recovery of part of the cost of the investment. Other net gains and losses are recognised in OCI and are never reclassified to profit or loss.

Abu Dhabi Aviation

Notes to the consolidated financial statements for the year ended 31 December

3 Significant accounting policies (continued)

(n) Financial instruments (continued)

ii) Classification and subsequent measurement (continued)

Financial liabilities – Classification, subsequent measurement and gains and losses

Financial liabilities are classified as measured at amortised cost or FVTPL. A financial liability is classified as at FVTPL if it is classified as held-for-trading, it is a derivative or it is designated as such on initial recognition. Financial liabilities at FVTPL are measured at fair value and net gains and losses, including any interest expense, are recognised in profit or loss. Other financial liabilities are subsequently measured at amortised cost using the effective interest method. Interest expense and foreign exchange gains and losses are recognised in profit or loss. Any gain or loss on derecognition is also recognised in profit or loss.

The Group's financial liabilities comprise trade and other payables, accrued expenses and other current liabilities, due to a related party, term loans, finance lease liabilities and other non-current liability, which are initially measured at fair value, net of transaction costs, and are subsequently measured at amortised cost using the effective interest method, with interest expense recognised on an effective yield basis except, for short-term liabilities when the recognition of interest would be immaterial.

iii) Derecognition

Financial assets

The Group derecognises a financial asset when the contractual rights to the cash flows from the financial asset expire, or it transfers the rights to receive the contractual cash flows in a transaction in which substantially all of the risks and rewards of ownership of the financial asset are transferred or in which the Group neither transfers nor retains substantially all of the risks and rewards of ownership and it does not retain control of the financial asset.

The Group enters into transactions whereby it transfers assets recognised in its statement of financial position, but retains either all or substantially all of the risks and rewards of the transferred assets. In these cases, the transferred assets are not derecognised.

Financial liabilities

The Group derecognises a financial liability when its contractual obligations are discharged or cancelled, or expire. The Group also derecognises a financial liability when its terms are modified and the cash flows of the modified liability are substantially different, in which case a new financial liability based on the modified terms is recognised at fair value.

On derecognition of a financial liability, the difference between the carrying amount extinguished and the consideration paid (including any non-cash assets transferred or liabilities assumed) is recognised in profit or loss.

iv) Offsetting

Financial assets and financial liabilities are offset and the net amount presented in the statement of financial position when, and only when, the Group currently has a legally enforceable right to set off the amounts and it intends either to settle them on a net basis or to realise the asset and settle the liability simultaneously.

Abu Dhabi Aviation

Notes to the consolidated financial statements for the year ended 31 December

3 Significant accounting policies (continued)

(o) Provisions

Provisions are recognised when the Group has a legal or constructive obligation as a result of a past event, it is probable that an outflow of resources will be required to settle the obligation, and the amount can be reliably estimated.

Provisions are determined by discounting the expected future cash flows at a rate that reflects current market assessments of the time value of money and the risks specific to the liability. The unwinding of the discount is recognised as finance cost.

(p) Employee benefits

Short-term employee benefits Short-term employee benefit obligations are measured on an undiscounted basis and are expensed as the related service is provided. A liability is recognised for the amount expected to be paid under short-term cash bonus or profit-sharing plans if the Group has a present legal or constructive obligation to pay this amount as a result of past service provided by the employee, and the obligation can be estimated reliably.

Termination benefits for non UAE Nationals For Group entities domiciled in the UAE, provision for staff terminal benefits is made in accordance to the UAE Federal Labour Law and is determined as the liability that would arise if the employment of all staff were to be terminated at the reporting date.

Termination benefits for UAE Nationals With respect to its UAE national employees, the Company makes contributions to a pension fund established by the UAE General Pension and Social Security Authority calculated as a percentage of the employees’ salary. The Company’s obligations are limited to those contributions, which are expensed when due.

Pension contributions are made in respect of UAE national employees to Abu Dhabi Retirement Pensions and Benefits Fund in accordance with the UAE Federal Law No. (2) of 2000. Such contributions are charged to the profit or loss during the employees' period of service.

An actuarial valuation is not performed on staff terminal and other benefits as the net impact of the discount rate and future salary and benefits level on the present value of the benefits obligation are not expected by management to be significant.

(q) New standards and interpretations issued but not yet effective

A number of new standards are effective for annual periods beginning after 1 January 2018 and earlier application is permitted; however, the Group has not early applied the following new or amended standards in preparing these consolidated financial statements,

Management has performed its assessment on the following standards and concluded that these standards do not have material impact on the Group’s financial statements in the period of initial application.

Abu Dhabi Aviation

Notes to the consolidated financial statements for the year ended 31 December

3 Significant accounting policies (continued)

(q) New standards and interpretations issued but not yet effective

i) IFRS 16 Leases

IFRS 16 introduces a single, on-balance sheet lease accounting model for lessees. A lessee recognises a right-of-use asset representing its right to use the underlying asset and a lease liability representing its obligation to make lease payments. There are recognition exemptions for short-term leases and leases of low-value items. Lessor accounting remains similar to the current standard – i.e. lessors continue to classify leases as finance or operating leases.

IFRS 16 replaces existing leases guidance, including IAS 17 Leases, IFRIC 4 Determining whether an Arrangement contains a Lease, SIC-15 Operating Leases – incentives and SIC-27 Evaluating the Substance of Transactions Involving the Legal Form of a Lease.

The Group is required to adopt IFRS 16 Leases from 1 January 2019. The Group is in the process of evaluating the potential impact of IFRS 16 on the financial statements.

Transition

The Group plans to apply IFRS 16 initially on 1 January 2019, using the modified retrospective approach. Therefore, the cumulative effect of adopting IFRS 16 will be recognised as an adjustment to the opening balance of retained earnings at 1 January 2019, with no restatement of comparative information.

The Group plans to apply the practical expedient to grandfather the definition of a lease on transition. This means that it will apply IFRS 16 to all contracts entered into before 1 January 2019 and identified as leases in accordance with IAS 17 and IFRIC 4.

ii) Other standards

The following amended standards and interpretations are not expected to have a significant impact on the Group’s consolidated financial statements.

 IFRIC 23 Uncertainty over Tax Treatments.  Prepayment Features with Negative Compensation (Amendments to IFRS 9).  Long-term Interests in Associates and Joint Ventures (Amendments to IAS 28).  Plan Amendment, Curtailment or Settlement (Amendments to IAS 19).  Annual Improvements to IFRS Standards 2015–2017 Cycle – various standards.  Amendments to References to Conceptual Framework in IFRS Standards.  IFRS 17 Insurance Contracts.

4 Changes in significant accounting policies

The Group has initially applied IFRS 15 (see A) and IFRS 9 (see B) from 1 January 2018. A number of other new standards are also effective from 1 January 2018 but they do not have a material effect on the Group’s financial statements.

Due to the transition methods chosen by the Group in applying these standards, comparative information throughout these financial statements has not been restated to reflect the requirements of the new standards.

Abu Dhabi Aviation

Notes to the consolidated financial statements for the year ended 31 December

4 Changes in significant accounting policies (continued)

A) IFRS 15 Revenue from Contracts with Customers

IFRS 15 establishes a comprehensive framework for determining whether, how much and when revenue is recognised. It replaced IAS 18 Revenue, IAS 11 Construction Contracts and related interpretations. Under IFRS 15, revenue is recognised when a customer obtains control of the goods or services. Determining the timing of the transfer of control – at a point in time or over time – requires judgement.

The Group has adopted IFRS 15 using the cumulative effect method (without practical expedients), with the effect of initially applying this standard recognised at the date of initial application (i.e. 1 January 2018). Accordingly, the information presented for 2017 has not been restated – i.e. it is presented, as previously reported, under IAS 18, IAS 11 and related interpretations. Additionally, the disclosure requirements in IFRS 15 have not generally been applied to comparative information.

IFRS 15 did not have a significant impact on the Group’s accounting policies with respect to all revenue streams. Further information about the Group’s accounting policies relating to contracts with customers is provided in Note 24.

B) IFRS 9 Financial Instruments

IFRS 9 sets out requirements for recognising and measuring financial assets, financial liabilities and some contracts to buy or sell non-financial items. This standard replaces IAS 39 Financial Instruments: Recognition and Measurement.

As a result of the adoption of IFRS 9, the Group has adopted consequential amendments to IAS 1 Presentation of Financial Statements, which require impairment of financial assets to be presented in a separate line item in the statement of profit or loss and other comprehensive income. Previously, the Group’s approach was to include the impairment of trade receivables in general and administrative expenses. Consequently, the Group reclassified net impairment losses and recovery of impaired trade receivables amounting to AED 19.3 million, recognised under IAS 39, from ‘general and administrative expenses’ to ‘impairment loss on trade receivables’ and ‘recovery of impaired trade receivables’ respectively in the statement of profit or loss for the year ended 31 December 2017.

Additionally, the Group has adopted consequential amendments to IFRS 7 Financial Instruments: Disclosures that are applied to disclosures about 2018 but have not been generally applied to comparative information.

i) Classification and measurement of financial liabilities

IFRS 9 largely retains the existing requirements in IAS 39 for the classification and measurement of financial liabilities.

The adoption of IFRS 9 has not had a significant effect on the Group’s accounting policies related to financial liabilities.

For an explanation of how the Group classifies and measures financial instruments and accounts for related gains and losses under IFRS 9, see Note 3(n)(ii).

ii) Impairment of financial assets

IFRS 9 replaces the ‘incurred loss’ model in IAS 39 with an ‘expected credit loss’ (ECL) model. The new impairment model applies to financial assets measured at amortised cost, contract assets and debt investments at FVOCI, but not to investments in equity instruments. Under IFRS 9, credit losses are recognised earlier than under IAS 39 – see Note 3(m)(i).

Abu Dhabi Aviation

Notes to the consolidated financial statements for the year ended 31 December

4 Changes in significant accounting policies (continued)

B) IFRS 9 Financial Instruments (continued)

ii) Impairment of financial assets (continued)

For assets in the scope of the IFRS 9 impairment model, impairment losses are generally expected to increase and become more volatile. The Group has determined that the application of IFRS 9’s impairment requirements at 1 January 2018 does not result in any material additional allowance for impairment. Additional information about how the Group measures the allowance for impairment is described in Note 29(c)(ii).

iii) Transition

Changes in accounting policies resulting from the adoption of IFRS 9 have been applied retrospectively, except as described below.

If an investment in a debt security had low credit risk at the date of initial application of IFRS 9, then the Group has assumed that the credit risk on the asset had not increased significantly since its initial recognition.

5 Use of estimates and judgements

While applying the accounting policies as stated in Note 3, management of the Group has made certain judgements, estimates and assumptions that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

(a) Joint venture

As describe in Note 9, AgustaWestland Aviation Services L.L.C. (“AWAS”) is a joint venture of the Company and Agusta SpA. Although the Company owns a 70% ownership interest in AWAS, the Company does not have control or significant influence over AWAS as it is contractually agreed with Agusta SpA that the relevant activities of AWAS require unanimous consent of the parties sharing control. AWAS is a limited liability company whose legal form confers separation between the parties to the joint arrangement and the company itself. Furthermore, there are no contractual arrangements or any other facts and circumstances that indicate that the parties to the joint arrangement have rights to the assets and obligations for the liabilities of the joint arrangement. Accordingly, AWAS is classified as a joint venture of the Company.

(b) Subsidiary

The Company has a 50% ownership interest in Royal Jet LLC, with the other 50% owned by Presidential Flight Authority. Royal Jet LLC is accounted for as a subsidiary of the Group on the basis that the group is able to exert control over this entity as a result of majority Board representation and its reliance on the Company for technical support and operations.

In the process of classifying properties, management has made various judgements. Judgement is needed to determine whether a property qualifies as an investment property, property and equipment and/or asset held for sale. The Group develops criteria so that it can exercise that judgement consistently in accordance with the definitions of investment property, property and equipment and asset held for sale. In making its judgement, management considered the detailed criteria and related guidance for the classification of properties as set out in IAS 2, IAS 16, IAS 40 and IFRS 5, in particular, the intended usage of property as determined by management.

Abu Dhabi Aviation

Notes to the consolidated financial statements for the year ended 31 December

5 Use of estimates and judgements (continued)

(d) Allowance for impairment losses on trade receivables and contract assets

The Group recognises loss allowances for ECLs on trade receivables and contract assets. Loss allowances for trade receivables are always measured at an amount equal to lifetime ECLs. The Group measures loss allowances at an amount equal to lifetime ECLs.

When determining whether the credit risk of trade receivables and contract assets has increased significantly since initial recognition and when estimating ECLs, the Group considers reasonable and supportable information that is relevant and available without undue cost or effort. This includes both quantitative and qualitative information and analysis, based on the Group’s historical experience and informed credit assessment and including forward-looking information.

The Group assumes that the credit risk on trade receivables and contract assets has increased significantly based on significant judgement. Specific factors management considers include the age of balance, background of the customers, existence of disputes, recent historical payment patterns and any other available information concerning the creditworthiness of the counterparty. Management has estimated the recoverability of trade receivables balances and has considered the allowance required for impaired receivables. Allowance for impairment losses on trade receivables at 31 December 2018 is AED 52.4 million (2017: AED 45.5 million).

(e) Allowance for obsolete and slow moving inventories

Management has estimated the recoverability of inventory balances which relates to spare parts and rotables (finished goods) and has considered the allowance required for inventory obsolescence based on the current economic environment and past obsolescence history. Allowance for impairment of obsolete and slow-moving inventories as at 31 December 2018 is AED 29.3 million (2017: AED 34.1 million).

(f) Useful lives of property and equipment

The Group determines the estimated useful lives of its property and equipment for calculating depreciation. This estimate is determined after considering the expected usage of assets and physical wear and tear. Management reviews the residual value and useful lives annually and future depreciation charge is adjusted where management believes that the useful lives differ from the previous estimates.

(g) Impairment of property and equipment and capital work in progress

Properties classified under property and equipment and capital work in progress are assessed for impairment by comparing the carrying value to their estimated recoverable amount, being the higher of their estimated fair value less costs of disposal and value in use at individual CGU level. For the year ended 31 December 2018, Abu Dhabi Aviation has recorded an impairment loss on B412 EPI and fleet of B212 aircraft (separate CGUs) amounted to AED 16.1 million (2017: AED 59.4 million). Details of the impairment loss are set out in Note 6 to the consolidated financial statements.

(h) Fair value of investment properties

The fair value of investment properties is determined by independent real estate valuation experts using recognised valuation methods. Such estimations are based on certain assumptions, which are subject to uncertainty and might materially differ from the actual results.

Abu Dhabi Aviation

Notes to the consolidated financial statements for the year ended 31 December

5 Use of estimates and judgements (continued)

(i) Impairment of investment in joint venture

Management regularly reviews its investment in joint ventures for indicators of impairment. This determination of whether investment in joint ventures is impaired, entails management's evaluation of the investee's profitability, liquidity, solvency and ability to generate operating cash flows from the date of acquisition and into the foreseeable future. The difference between the estimated recoverable amount and the carrying value of investment is recognised as an expense in profit or loss. Management is satisfied that no impairment is required on its investment in joint ventures (Note 9).

(j) Measurement of fair values

A number of the Group’s accounting policies and disclosures require the measurement of fair values, for both financial and non-financial assets and liabilities. The Group has an established control framework with respect to the measurement of fair values. This includes a valuation team that has overall responsibility for overseeing all significant fair value measurements, including Level 3 fair values, and reports directly to the chief financial officer.

The valuation team regularly reviews significant unobservable inputs and valuation adjustments. If third party information, such as broker quotes or pricing services, is used to measure fair values, then the valuation team assesses the evidence obtained from the third parties to support the conclusion that such valuations meet the requirements of IFRS, including the level in the fair value hierarchy in which such valuations should be classified.

Significant valuation issues are reported to the Group’s Audit Committee. When measuring the fair value of an asset or a liability, the Group uses observable market data as far as possible. Fair values are categorised into different levels in a fair value hierarchy based on the inputs used in the valuation techniques as follows:  Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities.  Level 2: inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).  Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs).

If the inputs used to measure the fair value of an asset or a liability fall into different levels of the fair value hierarchy, then the fair value measurement is categorised in its entirety in the same level of the fair value hierarchy as the lowest level input that is significant to the entire measurement.

The Group recognises transfers between levels of the fair value hierarchy at the end of the reporting period during which the change has occurred.

Further information about the assumptions made in measuring fair values is included in the relevant notes.

(k) Determination of fair values for sale and leaseback transaction

In order to determine the fair values of sale and leaseback transactions, management invites bids from willing buyers in an open market or an independent valuation. The bids are evaluated considering quantitative and qualitative factors including price offered by the willing buyers.

Abu Dhabi Aviation

Notes to the consolidated financial statements for the year ended 31 December

6 Property and equipment

The Company has reassessed the useful life of buildings and the changes have been applied prospectively as from 1 January 2018.

The estimated useful life for property and equipment in the current year and comparative period is as follows:

Commercial aircraft, rotable parts and repairables 20 years Cargo aircraft and spare engines 25 years Fixed wing aircraft 15 years Helicopters and major rotables 10-15 years Fixed wing spares 15 years Motor vehicles 4 years Ground equipment 5 years Furniture and office equipment 4-5 years Housing complex 30 years Buildings 30 years (2017: 25 years) Commercial aircraft facility leasehold improvements 3 years Fixtures and fittings 10 years Main rotor yokes 5,000 - 10,000 hours Main rotor blades 4,000 hours

Abu Dhabi Aviation

Notes to the consolidated financial statements for the year ended 31 December

6 Property and equipment (continued)

Cost Balance at 1 Jan 2017 210,724 13,084 1,925,961 15,017 159,997 1,403,473 13,552 16,444 323,603 89,900 4,171,755 Additions 1,742 - 12,194 - 16,775 1,191 4,208 235 5,282 66,148 107,775 Disposals - - (47,650) - - (173,052) (700) - (12,030) - (233,432) Transfers 54,232 - 28,657 - - - - 1,792 - (84,681) ------Balance at 31 Dec 2017 266,698 13,084 1,919,162 15,017 176,772 1,231,612 17,060 18,471 316,855 71,367 4,046,098 ======

Balance at 1 Jan 2018 266,698 13,084 1,919,162 15,017 176,772 1,231,612 17,060 18,471 316,855 71,367 4,046,098 Additions 282 152 10,577 - 3,326 - 2,323 73 20,381 113,519 150,633 Disposals - - (66,387) - - - (1,206) - (101) - (67,694) Transfers 170 - 154,350 - - - - - 19,742 (182,542) (8,280)

------Balance at 31 Dec 2018 267,150 13,236 2,017,702 15,017 180,098 1,231,612 18,177 18,544 356,877 2,344 4,120,757 ======

Continued…

Abu Dhabi Aviation

Notes to the consolidated financial statements for the year ended 31 December

6 Property and equipment (continued)

Commercial Commercial aircraft Helicopters, aircraft facility aircraft and Cargo Cargo rotable Capital leasehold major aircraft aircraft and Commercial parts and Furniture work in Buildings improvements rotables building spares aircraft repairables and fittings Others progress Total AED’000 AED’000 AED’000 AED’000 AED’000 AED’000 AED’000 AED’000 AED’000 AED’000 AED’000 Accumulated depreciation and impairment Balance at 1 Jan 2017 78,543 11,392 683,583 4,806 73,841 167,732 724 16,303 226,037 - 1,262,961 Charge for the year 8,923 501 53,208 600 8,881 76,207 734 391 28,500 - 177,945 Eliminated on disposals - - (15,924) - - (65,265) - - (10,435) - (91,624) Impairment - - - - - 59,493 - - - - 59,493 ------Balance at 31 Dec 2017 87,466 11,893 720,867 5,406 82,722 238,167 1,458 16,694 244,102 - 1,408,775 ======

Balance at 1 Jan 2018 87,466 11,893 720,867 5,406 82,722 238,167 1,458 16,694 244,102 - 1,408,775 Charge for the year 8,127 534 55,455 600 10,406 56,377 907 712 26,600 - 159,718 Eliminated on disposals - - (49,172) - - - - - (100) - (49,272) Impairment - - 16,078 ------16,078

------Balance at 31 Dec 2018 95,593 12,427 743,228 6,006 93,128 294,544 2,365 17,406 270,602 - 1,535,299 ======

Carrying amount

At 31 Dec 2017 179,232 1,191 1,198,295 9,611 94,050 993,445 15,602 1,777 72,753 71,367 2,637,323 ------At 31 Dec 2018 171,557 809 1,274,474 9,011 86,970 937,068 15,812 1,138 86,275 2,344 2,585,458 ======

Abu Dhabi Aviation

Notes to the consolidated financial statements for the year ended 31 December

6 Property and equipment (continued)

 As at 31 December 1992, certain helicopters and major rotables were fully depreciated. Consequently, during 1993, management revalued helicopters and major rotables to market value on the basis of industry quotations. The helicopter revaluations were based on the "Official Helicopter Blue Book" and a valuation report prepared by Nash Helicopter Associates Limited. The major rotables revaluations were based on original cost and valuations performed by Canadian Gas Turbines. The carrying value and accumulated depreciation were adjusted to reflect this revaluation. As at 31 December 2018, the net carrying value of the revalued helicopters and major rotables are AED 20.5 million (2017: AED 20.5 million).

 In 2011, the Group entered into a finance lease arrangement which resulted in the recognition of a residential complex at the present value of the related minimum lease payments amounting to AED 127 million (Note 21).

 During 2018, the Group carried out a review of the recoverable amount of aircraft, being the higher of fair value less cost to sell and value in use. The review led to the recognition of an impairment loss of AED 16.1 million, which has been recognised in statement of profit or loss.

 The Group has classified certain commercial aircraft and related components to assets classified as held for sale with a net carrying amount of AED 8.9 million.

 Certain property and equipment with a carrying amount of AED 1,143 million (2017: AED 1,247 million) are mortgaged to the lending banks.

 Property and equipment is operated from the Group's base in the UAE.

Abu Dhabi Aviation

Notes to the consolidated financial statements for the year ended 31 December

7 Investment properties

Investment properties represent investment in a property located in Khalifa City, Abu Dhabi, a property of the Company located in London, United Kingdom and premises located in Al Rawdhat, Abu Dhabi. The property in London is registered in the name of Herbal Hill Gardens Limited, a company incorporated in Gibraltar for the purpose of owning the investment property and wholly owned by the Group.

2018 2017 AED’000 AED’000

Balance at 1 January 355,614 161,252 Increase in fair value – London property (note 7.1) 15,239 74 Investment properties – Al Rawdhat 303 182,800 Investment property under construction (note 7.2) 46,949 - Net foreign currency translation difference (7,742) 11,488 ______Balance at 31 December 410,363 355,614 ======

The fair value of the investment properties is arrived at on the basis of valuations carried out by independent valuers not connected with the Group. The valuers are members of a professional valuers' association, with appropriate qualifications and recent experience in the valuation of properties at the relevant locations.

The fair value was derived using the market comparable approach based on recent market prices without any significant adjustments being made to the market observable data.

7.1 The fair value of the investment property in London is based on the sale transaction of the said property entered into by the Company with third party in 2018. The sale transaction was completed in January 2019.

As at 31 December 2018, all of the Group's investment properties were grouped in Level 2 (31 December 2017: Level 2).

7.2 Investment property under construction represents two plots in Satwa Redevelopment Zone, Dubai. The purchase of these plots was completed in March 2018. Further payments for the construction of buildings are being capitalized as investment property under construction until the completion of construction of buildings over the plots.

8 Investments

The Group’s investments at the end of the reporting date are detailed below:

2018 2017 AED’000 AED’000

Equity securities – designated at FVTPL 18,416 - Corporate debt securities - at FVOCI 69,699 54,740 ______Balance at 31 December 88,115 54,740 ======

Abu Dhabi Aviation

Notes to the consolidated financial statements for the year ended 31 December

8 Investments (continued)

2018 2017 AED’000 AED’000

Balance at 1 January 54,740 - Purchase of investments (note 8.1) 37,745 54,740 Change in fair value (4,370) - ______Balance at 31 December 88,115 54,740 ======

The Group’s investments represent the investments in shares and bonds of the following:

2018 2017 AED’000 AED’000

Investment in Waha CEEMEA Fixed Income Fund SP 18,416 - ======Investment in Abu Dhabi Commercial Bank (ADCB) bonds 69,699 54,740 ======

8.1 The Group has invested AED 18.4 million for the purchase of 5,000 shares in Waha CEEMEA Fixed Income Fund SP which has been established as a segregated portfolio of Waha Investment Management Company SPC and is part of WAHA Investment PJSC which is listed.

Also, the Group has increased its investment in ADCB bonds by AED 19.3 million (2017: AED 54.7 million) during the year ended 31 December 2018.

9 Investment in joint venture

The Group has a 70% equity shareholding with equal voting power in AgustaWestland Aviation Services L.L.C. (AWAS), a joint venture established in the Emirate of Abu Dhabi, UAE as a limited liability company. AWAS is engaged to undertake repairs, overhaul, customisation, modification and upgrading of helicopters; and sale of helicopter spare parts and accessories.

The following table summarises the financial information of the joint venture and also reconciles the summarised financial information to the carrying amount of the Group’s interest in the joint ventures.

2018 2017 AED’000 AED’000

Total assets 143,649 141,747 Total liabilities (67,014) (74,764) ______Net assets 76,635 66,983 ======

Revenue 112,852 97,559 ======Profit for the year 9,652 7,259 ======

Abu Dhabi Aviation

Notes to the consolidated financial statements for the year ended 31 December

9 Investment in joint ventures (continued)

Reconciliation of the above summarised financial information to the carrying amount of the interest in the joint venture recognised in the consolidated financial statements:

2018 2017 AED’000 AED’000

Net assets 76,635 66,983 ______Carrying amount of interest in joint venture (70%) 53,645 46,889 ======

10 Trade receivables 2018 2017 AED’000 AED’000

Trade receivables 542,402 474,428 Due from related parties (Note 11) 49,563 25,926 ______591,965 500,354 Less: Allowance for impairment losses recognised (52,352) (45,477) ______539,613 454,877 ======

The movement in allowance for impairment losses recognised on trade receivables is as follows:

2018 2017 AED’000 AED’000

Balance at 1 January 45,477 101,203 Net charge / (reversal) for the year 12,836 (5,303) Write off (5,890) (36,393) Recovery (71) (14,030) ______Balance at 31 December 52,352 45,477 ======

Information about the Group’s exposure to credit and market risks, and impairment losses for trade and other receivables is included in Note 29(c).

Included in the Group's trade receivables and related party balances are past due debtors with a carrying amount after allowance for impairment losses of AED 172.3 million (2017: AED 182.8 million) mostly due from Government related entities.

Abu Dhabi Aviation

Notes to the consolidated financial statements for the year ended 31 December

10 Trade receivables (continued)

Ageing of trade receivables and due from related parties

2018 2017 AED’000 AED’000

Not past due 162,538 87,879 Due for 31 to 90 days 136,311 190,448 Due for 91 to 180 days 120,795 39,136 Due for more than 180 days 172,321 182,891 ______591,965 500,354 ======

11 Related parties

The Group, in the ordinary course of business, enters into transactions, at agreed terms and conditions, with "related parties" as defined in IAS 24 Related Party Disclosures. Related parties comprise of the Group's shareholders, directors, senior management and businesses controlled by them and their families or over which they exercise significant management influence as well as key management personnel.

The Group's significant related party services provided transactions and balances are as follows:

Transactions and balances with related parties through Royal Jet L.L.C.

2018 2017 AED’000 AED’000

Services provided 216,740 101,194 Amounts due from related parties 49,486 25,849 Amounts due to related parties - 5,548

Transactions and balances with related parties through the Company

2018 2017 AED’000 AED’000

Services provided 76,753 70,944 Amounts due from related parties 77 77 Amounts due to related parties 9,178 3,476

Total transactions and balances with related parties

2018 2017 AED’000 AED’000

Services provided 293,493 172,138 ======Amounts due from related parties (note 10) 49,563 25,926 ======Amounts due to related parties 9,178 9,024 ======

Abu Dhabi Aviation

Notes to the consolidated financial statements for the year ended 31 December

11 Related parties (continued)

(a) Finance lease liability

The finance lease between the Group and a related party was entered into for the purpose of financing 70% of the cost of a commercial aircraft for a period of 15 years from the date of delivery of the aircraft. 2018 2017 AED’000 AED’000 Due to a related party

Finance lease liability (note 21) Presidential Flight Authority – current portion - 5,429 ======

(b) Transactions with related parties

Transactions with related parties during the year were as follows:

2018 2017 AED’000 AED’000

Finance cost on finance lease of aircraft 63 174 ______

Key management compensation

Salaries and other short-term employee benefits 18,867 17,050 ______

Directors' fees (Note 26) 10,778 8,280 ______

Provision for employees’ end of service benefits 2,216 1,160 ______

12 Prepayments and other current assets

2018 2017 AED’000 AED’000

Prepayments 14,437 11,118 Deposits and advances 47,807 92,640 Other receivables and contract assets 116,754 91,440 ______178,998 195,198 ======

Abu Dhabi Aviation

Notes to the consolidated financial statements for the year ended 31 December

13 Cash and deposits with banks

Cash and cash equivalents included in the consolidated statement of cash flows comprise the following consolidated statement of financial position amounts:

2018 2017 AED’000 AED’000

Cash on hand 3,103 3,077 Bank current accounts 180,535 169,019 Deposits 290,585 331,058 ______Cash and deposits with banks in the consolidated statement of financial position 474,223 503,154 Less: bank overdrafts used for cash management purposes - (13,383) Less: deposits with maturities over three months (290,585) (331,058) ______Cash and cash equivalents in the consolidated statement of cash flows 183,638 158,713 ======

Bank balances and cash include an amount of AED 16.4 million (2017: AED 13.6 million) held in foreign banks abroad and the remaining balance is held within the UAE.

14 Assets held for sale

As at 31 December 2018, the Group has one aircraft classified as asset held for sale. Management is committed to sell this aircraft and expects to complete this transaction within the next twelve months.

15 Share capital

The share capital structure is as follows:

2018 2017 AED’000 AED’000

Issued and fully paid: 444,787,200 shares of AED 1 each (2017: 444,787,200 shares of AED 1 each) 444,787 444,787 ______

Abu Dhabi Aviation

Notes to the consolidated financial statements for the year ended 31 December

16 Reserves

Fleet Investment Revaluation Translation replacement Insurance revaluation General Other reserve reserve reserve reserve Legal reserve reserve reserve reserves Total AED’000 AED’000 AED’000 AED’000 AED’000 AED’000 AED’000 AED’000 AED’000

Balance at 1 Jan 2017 28,219 (33,776) 772,686 417,769 222,394 - 102,586 83,503 1,593,381 Foreign currency translation differences - 11,488 ------11,488 Transfer to legal reserve ------17,538 17,538 Transfer to maintenance and fleet replacement reserve - - 140,000 - - - - - 140,000 ------Balance at 31 Dec 2017 28,219 (22,288) 912,686 417,769 222,394 - 102,586 101,041 1,762,407 ======

Balance at 1 Jan 2018 28,219 (22,288) 912,686 417,769 222,394 - 102,586 101,041 1,762,407 Foreign currency translation differences - (7,742) ------(7,742) Loss arising on fair value of investments at FVTOCI - - - - - (4,385) - - (4,385) Transfer to legal reserve ------23,253 23,253 Transfer to maintenance and fleet replacement reserve - - 100,000 - - - - - 100,000 ------Balance at 31 Dec 2018 28,219 (30,030) 1,012,686 417,769 222,394 (4,385) 102,586 124,294 1,873,533 ======

Abu Dhabi Aviation

Notes to the consolidated financial statements for the year ended 31 December

16 Reserves (continued)

(a) Revaluation reserve

As at 1 January 1993, on the basis of industry quotations, the Group revalued part of its fleet of helicopters and major rotables (Note 6). A similar revaluation was performed on 1 January 1988. The revaluation reserve represents the surplus over net book value arising from the revaluations.

(b) Translation reserve

The translation reserve consists of exchange differences arising on the translation of non- monetary assets and liabilities denominated in foreign currencies.

The fleet replacement reserve consists of amounts appropriated from profits, which in the opinion of the Board of Directors are required to ensure that sufficient reserves exist to replace the existing fleet of helicopters when necessary.

(d) Insurance reserve

The insurance reserve consists of amounts appropriated from profits, which in the opinion of the Board of Directors are required to enable the Group to provide for a portion of the insurance cover in respect of its helicopter fleet and fixed wing aircraft.

(e) Legal reserve

The Articles of Association of the Company and its subsidiaries require 10% of the annual profit to be transferred to a legal reserve, until such reserve amounts to 50% of their paid up share capital, to comply with the UAE Federal Law No. (2) of 2015 concerning Commercial Companies. This reserve is not available for distribution. The Group's legal reserve represents the Company's legal reserve computed on the basis disclosed above in addition to the Group's share of legal reserve of subsidiaries. The Company has not made any transfers to the legal reserve since the reserve is now equal to 50% of the paid up capital of the Company.

The statutory reserves of the subsidiaries have been transferred to the restricted reserve as these amounts are not available for distribution.

(f) Investment revaluation reserve

Investment revaluation reserve represents gains and losses arising from changes in fair value of FVTOCI investments. This reserve is reclassified to retained earnings upon disposal of the investments.

(g) General reserve

Transfers to and from the general reserve are made in accordance with the decision of the Board of Directors and approved by the shareholders.

Abu Dhabi Aviation

Notes to the consolidated financial statements for the year ended 31 December

17 Dividend

The Board of Directors in its meeting held on 11 February 2019 proposed cash dividend of AED 0.20 per ordinary share (20% of par value) amounting to AED 88.9 million (2017: AED 0.17 per ordinary share, 17% of par value and amounting to AED 75.6 million - however, the shareholders approved cash dividend of AED 0.20 million per ordinary share (20% of par value) amounting to AED 88.9 million for the year 2017 at the general assembly meeting held in 2018). The Board of Directors will request approval of the shareholders for the cash dividends of the year 2018 at the annual general assembly meeting to be held in 2019.

18 Non-controlling interests 2018 2017 AED’000 AED’000

Balance at 1 January 268,522 228,591 Share of profit for the year (Note 18.1) 53,056 39,931 ______

Balance at 31 December 321,578 268,522 ======

18.1 The following table summarises the information relating to each of the Group’s subsidiaries that has material NCI, before any intra-group eliminations.

Royal Jet LLC 2018 2017 AED’000 AED’000 NCI percentage 50% 50% Non-current assets 1,063,779 1,103,760 Current assets 394,000 379,122 Non-current liabilities (628,377) (741,106) Current liabilities (186,246) (204,732) ______

Net assets 643,156 537,044 ======Net assets attributable to NCI 321,578 268,522 ======

Revenue 623,515 559,718

Profit 106,112 79,862 Other comprehensive income - - ______

Total comprehensive income 106,112 79,862 ______

Profit allocated to NCI 53,056 39,931 Other comprehensive income allocated to NCI - - ======Cash flows from operating activities 116,798 88,175 Cash flows (used in) / from investing activities (36,312) 175,150 Cash flows used in financing activities (98,170) (103,935) ______

Net (decrease) / increase in cash and cash equivalents (17,684) 159,390 ======

Abu Dhabi Aviation

Notes to the consolidated financial statements for the year ended 31 December

19 Provision for employees’ end of service benefits

The movement in provision for employees' end of service benefits is as follows:

2018 2017 AED’000 AED’000

Balance at 1 January 142,519 133,831 Charge for the year 22,804 20,761 Payments made during the year (19,861) (12,073) ______Balance at 31 December 145,462 142,519 ======

20 Term loans 2018 2017 AED’000 AED’000

Current portion of term loans 362,292 72,101 Non-current portion of term loans 489,225 806,040 ______Total term loans 851,517 878,141 ======The movement in term loans is as follows: 2018 2017 AED’000 AED’000

Balance at 1 January 878,141 960,987 Drawdown during the year 50,000 - Repayments during the year (76,624) (82,846) ______Balance at 31 December 851,517 878,141 ======

AED 1.3 billion term loan

In 2007, a loan facility was obtained by the Group from a local bank for AED 1.3 billion to finance the acquisition of new aircraft and related assets. There was no additional drawdown during 2018. The facility is secured by a negative pledge by the mortgage over the aircraft. In 2013, the Group agreed with the local bank on amendments of term of the loan agreement. Interest rate on the loan was amended to 3 months EIBOR plus 1.75% per annum and loan shall be repaid in 12 semi-annual installments (principal and interest) of AED 51.3 million effective 30 June 2013. The final repayment date shall be 31 December 2018. During 2014, the Group agreed with the local bank to further amend the interest rate on the loan to 3 months EIBOR plus 1.5%. Also, during 2014, the Group had deferred the second semi-annual installment payment amounting to AED 51.3 million.

During 2015, the Group agreed with the local bank on another amendment of the term loan agreement. Effective 29 January 2015, the term loan shall be repaid in 7 semi-annual installments (principal and interest) of AED 51.3 million starting on 31 December 2015. During 2017 the Group entered an addendum to pay the amount as a bullet payment on or before 30 June 2019 so the outstanding balance as at 31 December 2018 amounted to AED 281.9 million (2017: AED 281.9 million).

Abu Dhabi Aviation

Notes to the consolidated financial statements for the year ended 31 December

20 Term loans (continued)

AED 50 million term loan

During the year ended 31 December 2018, a term loan from a local bank amounting to AED 50 million was obtained to finance 50% of the purchase cost of two AW139 helicopters. The loan is repayable in twenty four equal quarterly installments. The first principal repayment has started from August 2018, six months from the date of loan drawdown. Residual balance of principal or interest, if any, is to be settled on the final maturity date. The interest is calculated by reference to three month EIBOR plus 1.40% per annum.

AED 297.7 million term loans of Royal Jet LLC

Two term loans from a local bank for AED 297.7 million were obtained to finance the acquisition of two commercial aircraft. The loans are repayable in 40 equal quarterly installments. The interest is calculated by reference to three month LIBOR plus 1.75% per annum. As at 31 December 2018, the outstanding balance of the term loan amounted to AED 174.8 million (2017: AED 204.6 million).

AED 429.2 million term loan of Royal Jet LLC

A term loan from a local bank for AED 429.2 million was obtained to finance the acquisition of commercial aircraft. The loan is repayable in 40 equal quarterly installments. The first principal repayment will start from 6 months from the date of delivery of aircraft(s) or 30 June 2017, whichever is earlier. The interest is calculated by reference to three month LIBOR plus 1.3% per annum.

As at 31 December 2018, the outstanding balance of the term loan amounted to AED 349.0 million (2017: AED 391.5 million).

21 Finance lease liabilities 2018 2017 AED’000 AED’000

Aircraft finance lease (Note 11) - 5,429 Residential complex finance lease 115,121 116,269 ______Total finance lease liabilities 115,121 121,698 Less: Non-current portion of finance lease liabilities (113,881) (115,121) ______Current portion of finance lease liabilities 1,240 6,577 ======

Included in the consolidated statement of financial position as:

Current portion of finance lease liabilities 1,240 1,148 Amounts due to related parties - 5,429 ______1,240 6,577 ======

Non-current portion of finance lease liabilities 113,881 115,121 ======

Abu Dhabi Aviation

Notes to the consolidated financial statements for the year ended 31 December

21 Finance lease liabilities (continued)

Interest rate on the aircraft finance lease is 6 months LIBOR plus 0.75%.

Amounts payable under finance leases:

Future Present value minimum lease of minimum payments Interest lease payments ______2018 2017 2018 2017 2018 2017 AED’000 AED’000 AED’000 AED’000 AED’000 AED’000

Less than one year 10,250 15,758 9,010 9,181 1,240 6,577 Between one and five years 55,250 43,000 34,689 35,322 20,561 7,678 More than five years 180,000 202,500 86,680 95,057 93,320 107,443 ------245,500 261,258 130,379 139,560 115,121 121,698 ======

22 Deferred income 2018 2017 AED’000 AED’000

Balance at 1 January 317,937 449,499 Deferred income from sale and lease back transaction - 29,535 Amortization of sale and lease back deferred income (15,048) (1,011) Release of deferred grant on assets sold during the year (4,421) (107,786) Amortisation of deferred income (35,754) (52,300) ______Balance at 31 December 262,714 317,937 ======Included in the consolidated statement of financial position as:

Current portion of deferred income 49,209 50,751 Non-current portion of deferred income 213,505 267,186 ______Total deferred income 262,714 317,937 ======

During 2014, the Presidential Flight Authority, a related party, transferred 5 commercial aircraft to the Group pursuant to a grant effective from 1 January 2014. The deferred income relating to the aircraft was recognised at AED 489.1 million. Previously, these commercial aircraft were under operating lease.

During 2017, deferred income amortized amounts to AED 52.3 million and is recognised to profit or loss to match the costs for which they are intended to compensate on a systematic basis.

During the 3rd Quarter of year 2017, the Group sold and leased back an aircraft, which resulted in the deferral of the proceeds in excess of fair value of the aircraft of AED 9.6 million.

Abu Dhabi Aviation

Notes to the consolidated financial statements for the year ended 31 December

22 Deferred income (continued)

An aircraft received from the Presidential Flight Authority in 2014 was sold and leased back in 2017 as part of the same transaction. The aircraft’s carrying value, and the associated deferred income, at the time of this transaction was AED 107 million. The sales proceeds were AED 87.8 million, which were considered to be in excess of the fair value of the aircraft by AED 67.4 million, which have been deferred.

At the date of sale and lease back transaction carrying value for aircraft was AED 108.7 million while fair value was AED 67.4 million resulting in a loss of AED 41.3 million. While government grant of AED 107 million related to the aircraft was released resulting in a net gain of AED 66.47 million on the transaction.

23 Trade and other payables 2018 2017 AED’000 AED’000

Trade payables 95,822 91,276 Amounts due to related parties (Note 11) 9,178 9,181 ______105,000 100,457 ======

The average credit period for purchases of goods and services is 30 days. The Group has risk management policies in place to ensure that all payables are paid within the credit period. Amounts due to related parties include AED Nil (2017: AED 5.4 million) pertaining to Royal Jet L.L.C.'s finance lease liabilities.

24 Revenue from contracts with customers

The effect of initially applying IFRS 15 on the Group’s revenue from contracts with customers is described in Note 4. Due to the transition method chosen in applying IFRS 15, comparative information has not been restated to reflect the new requirements.

a) Revenue streams

The Group has been established to own helicopter and fixed wing aircraft for use both within and outside the United Arab Emirates and undertake charter, commercial, air cargo and other related services.

The Group generates revenue primarily from the aviation services. Other sources of revenue include training of pilots, rental income from investment properties and other management consultancy services.

2018 2017 AED’000 AED’000

Revenue from contracts with customers 1,806,762 1,606,575 ======

Abu Dhabi Aviation

Notes to the consolidated financial statements for the year ended 31 December

24 Revenue from contracts with customers (continued)

b) Disaggregation of revenue from contracts with customers

In the following table, revenue from contracts with customers is disaggregated by primary service lines. The table also includes a reconciliation of the disaggregated revenue with the Group’s reportable segments as explained in note 33.

Helicopter & fixed Commercial wing aircraft Air Particulars operations operations cargo Investments Others Eliminations Total AED‘000 AED‘000 AED‘000 AED‘000 AED‘000 AED‘000 AED‘000

Fixed wing 18,749 587,744 216,492 - - - 822,985 Rotary wing 287,161 - - - - - 287,161 Sub-charter - 24,540 312,832 - - - 337,372 Others 310,723 11,231 20,363 - 42,964 (26,037) 359,244 ------Total 616,633 623,515 549,687 - 42,964 (26,037) 1,806,762 ======

c) Contract balances

The following table provides information about receivables, contract assets and contract liabilities from contracts with customers.

31 December 2018 1 January 2018 AED’000 AED’000

Receivables, which are included in ‘trade and other receivables’ 539,613 454,877 Contract assets 95,070 70,404 Contract liabilities 12,857 18,196 ______647,540 543,477 ======

The contract assets primarily relate to the Group’s rights to consideration for work completed but not billed at the reporting date. The amount of contract assets during the period ended 31 December 2018 was not impacted materially by an impairment charge. The contract assets are transferred to receivables when the rights become unconditional. This usually occurs when the Group issues an invoice to the customer.

The contract liabilities primarily relate to the advance consideration received from customers for contracts against which services will be rendered in future. This will be recognised as revenue when the services are rendered to customers.

Abu Dhabi Aviation

Notes to the consolidated financial statements for the year ended 31 December

24 Revenue from contracts with customers (continued)

d) Performance obligations and revenue recognition policies

Type of Nature and timing of Revenue recognition service satisfaction of performance obligations, including significant payment terms Helicopter Revenue represents amounts invoiced by the and fixed Group in respect of aviation services provided Invoices are issued on a wing during the year measured at the fair value of the monthly basis as and operations consideration received or receivable, net of when the services are Commercial discounts. rendered and the aircraft Revenue is recognized over time as the services customer obtains control operations are provided. as per the contract. If the services under a single arrangement are Invoices are usually rendered in different reporting periods, then the Air Cargo payable within 30 days. consideration is allocated based on the contracts signed with the customers. Rental Invoices are issued on a Revenue represents amounts invoiced by the income / monthly basis as per the Group in respect of rental / consultancy services Others rental / consultancy provided during the year measured at the fair contracts. value of the consideration received or receivable, Invoices are usually net of discounts. payable within 30 days. The Group recognises revenue when the amount of the revenue can be reliably measured and it is probable that future economic benefits will flow to the entity and when specific criteria have been met for Group’s activities.

IFRS 15 did not have a significant impact on the Group’s accounting policies for revenue recognition for all revenue streams.

Abu Dhabi Aviation

Notes to the consolidated financial statements for the year ended 31 December

25 Direct operating costs 2018 2017 AED’000 AED’000

Operating and maintenance costs 730,332 565,584 Staff costs 344,412 360,016 Depreciation 146,799 162,673 Other expenses 157,023 135,554 ______1,378,566 1,223,827 ======

26 General and administrative expenses 2018 2017 AED’000 AED’000

Staff costs 123,268 114,424 Depreciation 12,919 15,369 Licensing and professional fees 13,858 7,693 Directors’ fee (Note 11) 10,778 8,280 Others 39,757 43,419 Impairment of goodwill - 836 ______200,580 190,021 ======

27 Basic and diluted earnings per share

Earnings per share amounts are calculated by dividing the profit attributable to shareholders of the Company by the weighted average number of shares outstanding during the year. The following reflects the income and share data used in the earnings per share computations:

2018 2017 AED’000 AED’000

Profit attributable to owners of the Company 231,425 243,612 ______Weighted average number of shares in issue 444,787 444,787 ______Earnings per share (AED) 0.52 0.55 ======

The Group does not have potentially dilutive shares and accordingly, diluted earnings per share is equal to basic earnings per share.

28 Granted plots of land

Future economic benefits established

In prior years, the Government of Abu Dhabi had granted the Company two plots of land located in Khalifa City, Abu Dhabi.

The granted plots of land located in Khalifa City, Abu Dhabi had been identified and will be used for the purpose of construction of a training center and accordingly, has been recorded as property and equipment at nominal value at AED 1.

Abu Dhabi Aviation

Notes to the consolidated financial statements for the year ended 31 December

29 Financial instruments – Fair values and risk management

The effect of initially applying IFRS 9 on the Group’s financial instruments is described in Note 5.

a) Accounting classifications and fair values

The following table shows the carrying amounts and fair values of financial assets and financial liabilities, including their levels in the fair value hierarchy. It does not include fair value information for financial assets and financial liabilities not measured at fair value if the carrying amount is a reasonable approximation of fair value.

At 31 December 2018 Carrying amounts Fair values FVTPL - equity FVOCI - debt Measured at instruments instruments amortized cost Total Level 1 Level 2 Level 3 Total AED’000 AED’000 AED’000 AED’000 AED’000 AED’000 AED’000 AED’000 Financial assets measured

at fair value Investment in Waha CEEMEA Fixed Income Fund SP 18,416 - - 18,416 - 18,416 - 18,416 Investment in ADCB bonds - 69,699 - 69,699 69,699 - - 69,699

18,416 69,699 - 88,115 69,699 18,416 - 88,115

Financial assets not

measured at fair value Trade receivables - - 539,613 539,613 - - - - Other current assets - - 118,236 118,236 - - - - Cash and bank balances - - 474,223 474,223 - - - -

- - 1,132,072 1,132,072 - - - -

Financial liabilities not

measured at fair value Trade and other payables - - (105,000) (105,000) - - - - Term loans - - (851,517) (851,517) - - - - Finance lease liabilities - - (115,121) (115,121) - - - - Bank overdrafts ------Accrued expenses and other current liabilities - - (130,654) (130,654) - - - -

- - (1,202,292) (1,202,292) - - - -

Abu Dhabi Aviation

Notes to the consolidated financial statements for the year ended 31 December

29 Financial instruments – Fair values and risk management (continued)

a) Accounting classifications and fair values (continued)

At 31 December 2017 Carrying amounts Fair values FVTPL - equity FVOCI - debt Measured at instruments instruments amortized cost Total Level 1 Level 2 Level 3 Total AED’000 AED’000 AED’000 AED’000 AED’000 AED’000 AED’000 AED’000 Financial assets measured

at fair value Investment in ADCB bonds - 54,740 - 54,740 54,740 - - 54,740

- 54,740 - 54,740 54,740 - - 54,740

Financial assets not

measured at fair value Trade receivables - - 454,877 454,877 - - - - Other current assets - - 92,081 92,081 - - - - Cash and bank balances - - 503,154 503,154 - - - -

- - 1,050,112 1,050,112 - - - -

Financial liabilities not

measured at fair value Trade and other payables - - (100,457) (100,457) - - - - Term loans - - (878,141) (878,141) - - - - Finance lease liabilities - - (116,269) (116,269) - - - - Bank overdrafts - - (13,383) (13,383) - - - - Accrued expenses and other current liabilities - - (114,825) (114,825) - - - -

- - (1,223,075) (1,223,075) - - - -

There were no transfers between Level 1 and 2 during the year.

Abu Dhabi Aviation

Notes to the consolidated financial statements for the year ended 31 December

29 Financial instruments – Fair values and risk management (continued)

b) Capital risk management

The Group manages its capital to ensure that it will be able to continue as a going concern while maximising the return to shareholders through the optimisation of the debt and equity balances. The Group's overall strategy remains unchanged from 2013. The capital structure of the Group consists of debt, which includes the term loans, cash and bank balances and equity comprising share capital, reserves and retained earnings.

The gearing ratio, determined as net debt to equity, at the year-end was as follows:

2018 2017 AED’000 AED’000

Debt (i) 851,517 891,524 Cash and deposits with bank (Note 13) (474,223) (503,154) ______Net debt 377,294 388,370 ______

Equity (ii) 2,877,293 2,746,952 ______Net debt to equity ratio 13% 14% ======

(i) Debt is defined as long, short term loans and bank overdraft (Note 20). (ii) Equity includes all capital and reserves of the equity owners of the Company.

c) Financial risk management

The Group has exposure to the following risks arising from financial instruments:

 Credit risk  Liquidity risk  Market risk

(i) Risk management framework

The Company’s Board of Directors has overall responsibility for the establishment and oversight of the Group’s risk management framework. The Board of Directors has established the Audit Committee, which is responsible for developing and monitoring the Group’s risk management policies. The committee reports regularly to the Board of Directors on its activities.

The Group’s risk management policies are established to identify and analyse the risks faced by the Group, to set appropriate risk limits and controls, and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to reflect changes in market conditions and the Group’s activities. The Group, through its training and management standards and procedures, aims to maintain a disciplined and constructive control environment in which all employees understand their roles and obligations.

The Group Audit Committee oversees how management monitors compliance with the Group’s risk management policies and procedures, and reviews the adequacy of the risk management framework in relation to the risks faced by the Group. The Group Audit Committee is assisted in its oversight role by internal audit. Internal Audit undertakes both regular and ad hoc reviews of risk management controls and procedures, the results of which are reported to the Audit Committee.

Abu Dhabi Aviation

Notes to the consolidated financial statements for the year ended 31 December

29 Financial instruments – Fair values and risk management (continued)

c) Financial risk management (continued)

(ii) Credit risk

Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the Group’s receivables from customers, bank balances and corporate debt securities.

The Group has adopted a policy of only dealing with creditworthy counterparties, however significant revenue is generated by dealing with entities related to oil operating companies and government related entities in the UAE, for whom the credit risk is assessed to be low. The Group attempts to control credit risk by monitoring credit exposures, limiting transactions with specific non-related counterparties, and continually assessing the creditworthiness of such non-related counterparties. Balances with banks are assessed to have low credit risk of default since these banks are highly regulated by the Central Bank.

Concentration of credit risk arises when a number of counterparties are engaged in similar business activities, or activities in the same geographic region, or have similar economic features that would cause their ability to meet contractual obligations to be similarly affected by changes in economic, political or other conditions. Concentration of credit risk indicates the relative sensitivity of the Group's performance to developments affecting a particular industry or geographic location. Trade receivables from oil operating companies and government related entities in the UAE is AED 30.80 million (2017: AED 56.15 million) and AED 271.8 million (2017: AED 316.2 million) which represents 5.2% (2017: 7.9%) and 45.9% (2017: 44.5%) respectively, of the total trade receivables at the end of reporting period. Included in the trade receivables balance at the end of the year is an amount of AED 49.6 million (2017: AED 25.9 million) due from related parties.

Expected credit loss assessment for customers as at 1 January and 31 December 2018

The Group allocates each exposure to a credit risk grade based on data that is determined to be predictive of the risk of loss and applying experienced credit judgement. Credit risk grades are defined using qualitative and quantitative factors that are indicative of the risk of default.

Exposures within each credit risk grade are segmented by geographic region and industry classification and an ECL rate is calculated for each segment based on delinquency status and actual credit loss experience over the past five years. These rates are multiplied by scalar factors to reflect differences between economic conditions during the period over which the historical data has been collected, current conditions and the Group’s view of economic conditions over the expected lives of the receivables.

Scalar factors are based on GDP forecast and industry outlook.

As at 31 December 2018, maximum exposure to credit risk was as follows:

2018 2017 AED’000 AED’000

Trade receivables 539,613 454,877 Cash and deposits with bank 474,223 503,154 Investment in ADCB bonds 69,699 54,740 Investment in Waha CEEMEA Fixed Income Fund SP 18,416 - Other receivable balance 120,983 92,081 ______1,222,934 1,104,852 ======

Abu Dhabi Aviation

Notes to the consolidated financial statements for the year ended 31 December

29 Financial instruments – Fair values and risk management (continued)

c) Financial risk management (continued)

(iii) Liquidity risk

Liquidity risk is the risk that the Group will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Group’s approach to managing liquidity is to ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities when they are due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Group’s reputation. The Group limits its liquidity risk by ensuring adequate cash from operations and bank facilities are available.

The table below summarises the maturity profile of the Group's financial instruments. The contractual maturities of the financial instruments have been determined on the basis of the remaining period at the end of reporting period to the contractual maturity date. The maturity profile is monitored by management to ensure adequate liquidity is maintained. The maturity profile of the liabilities at the end of reporting period based on contractual repayment arrangements was as follows:

Effective interest Carrying Less than 3 months 1 year to More than rate value Total 3 months to 1 year 5 years 5 years AED’000 AED’000 AED’000 AED’000 AED’000 AED’000 2018 Non-interest bearing instruments 235,654 235,654 235,654 - - - Variable interest Note 20 rate instruments and 21 1,046,393 1,196,691 39,277 368,886 466,837 321,691 ------1,282,047 1,432,345 274,931 368,886 466,837 321,691 ======

2017 Non-interest bearing instruments 223,236 223,236 223,236 - - - Variable interest Note 20 rate instruments and 21 994,410 1,236,402 31,131 82,840 670,289 452,142 ------1,217,646 1,459,638 254,367 82,840 670,289 452,142 ======

(iv) Market risk

Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and equity prices, will affect the Group’s income or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimising the return.

Currency risk

The Group undertakes certain transactions denominated in foreign currencies. Hence, exposures to exchange rate fluctuations arise. The Group’s exposure to the currency risk is principally from the Group’s transactions in Pound sterling (“GBP”) as AED is currently pegged to USD at a fixed rate of exchange.

Abu Dhabi Aviation

Notes to the consolidated financial statements for the year ended 31 December

29 Financial instruments – Fair values and risk management (continued)

c) Financial risk management (continued)

(iv) Market risk (continued)

Currency risk (continued)

The carrying amounts of the Group’s foreign currency denominated monetary assets and monetary liabilities at the reporting date are as follows:

Assets Liabilities 2018 2017 2018 2017 AED’000 AED’000 AED’000 AED’000

Pound sterling 186,760 132,314 2,133 611 ======

Equity price risk

The Group is exposed to equity price risks arising from equity investments. The Group monitors the risk of change in equity prices by sensitivity analysis taking 15% change due to the volatile nature of the market in which the securities are listed.The sensitivity analyses below have been determined based on the exposure to equity price risks at the reporting date.

If equity prices had been 15% higher/lower, the Group's other comprehensive income would increase/decrease as follows:

2018 2017 AED’000 AED’000

FVOCI Investments 10,455 8,211 ======FVTPL Investments 2,762 - ======Interest rate risk

Interest rate risk primarily arises from the possibility that changes in interest rates will affect the net finance cost of the Group. The Group is exposed to fair value interest rate risk on bank borrowings at variable interest rates.

If interest rates had been 50 basis points higher/lower throughout the year and all other variables were held constant, the Group's net profit and equity for the year ended 31 December 2018 would decrease/increase by approximately AED 4.3 million (2017: AED 4.4 million).

The Group's sensitivity to interest rates has increased in line with the increase in interest bearing debt instruments.

30 Contingent liabilities

As at 31 December 2018, the Group had outstanding contingent liabilities in respect of letters of guarantee amounting to AED 87.6 million (2017: AED 55.1 million).

Abu Dhabi Aviation

Notes to the consolidated financial statements for the year ended 31 December

31 Commitments

Capital commitments

As at 31 December 2018, the Group had estimated commitments for the acquisition of property and equipment of AED 67.1 million (2017: AED 92.4 million).

Operating commitments

The Group is committed to pay annual maintenance fees of AED 750,000 over the lease term of the related residential complex which is included as part of due in less than one year.

2018 2017 Operating lease commitments AED’000 AED’000

Due in less than one year 16,362 16,457 Later than one year but not later than five years 10,051 16,164 Later than five years 12,750 13,500 ______39,163 46,121 ======

Abu Dhabi Aviation

Notes to the consolidated financial statements for the year ended 31 December

32 Reconciliation of movements of liabilities to cash flows arising from financing activities

Liabilities Equity Loans and borrowings Finance lease liabilitiy Due to related party Retained earnings Total AED’000 AED’000 AED’000 AED’000 AED’000

Balance at 1 January 2017 960,987 117,332 5,429 416,978 1,500,726 Changes from financing cash flows Proceeds from term loans - - - - - Repayment of term loans (82,846) - - - (82,846) Decrease in due to a related party - - (5,429) - (5,429) Payments for finance lease liabilities - (1,063) - - (1,063) Dividends paid - - - (75,614) (75,614)

Total changes from financing activities (82,846) (1,063) (5,429) (75,614) (164,952)

Other changes Total liability related changes - - - - -

Total equity related changes - - - 86,074 86,074

Balance at 31 December 2017 878,141 116,269 - 427,438 1,421,848

Balance at 1 January 2018 878,141 116,269 - 427,438 1,421,848 Changes from financing cash flows Proceeds from term loans 50,000 - - - 50,000 Repayment of term loans (76,624) - - - (76,624) Payments for finance lease liabilities - (1,148) - - (1,148) Dividends paid - - - (88,957) (88,957)

Total changes from financing activities (26,624) (1,148) - (88,957) (116,729)

Other changes Total liability related changes - - - - -

Total equity related changes - - - 30,258 30,258

Balance at 31 December 2018 851,517 115,121 - 368,739 1,335,377

Abu Dhabi Aviation

Notes to the consolidated financial statements for the year ended 31 December

33 Segment information

Information regarding the Group's operating segments is set out below in accordance with IFRS 8 Operating Segments. IFRS 8 requires operating segments to be identified on the basis of internal reports about components of the Group that are regularly reviewed by the chief operating decision maker in order to allocate resources to the segment and to assess its performance.

For operating purposes, the Group is organised into four major business segments:

(i) Helicopter and fixed wing operations, which provides charter flights and third party maintenance; (ii) Commercial aircraft operations, which provides commercial air transportation and aircraft management; (iii) Air cargo, which provides air cargo services to local and international customers using its fleet of aircraft and chartered aircraft; and (iv) Investments, which involves the management of the Group's investment portfolio.

These segments are the basis on which the Group reports its primary segment information. Transactions between segments are conducted at rates determined by management taking into consideration the cost of funds.

Information about reportable segments:

Helicopter & Commercial fixed wing aircraft Particulars operations operations Air cargo Investments Others Eliminations Total AED‘000 AED‘000 AED‘000 AED‘000 AED‘000 AED‘000 AED‘000

2018 Revenue 616,633 623,515 549,687 - 42,964 (26,037) 1,806,762 ------Profit for the year 119,873 106,112 102,826 15,779 9,884 (69,993) 284,481 ------2017 Revenue 652,176 559,718 389,272 - 19,730 (14,321) 1,606,575 ------Profit for the year 111,412 79,862 89,098 11,393 (2,598) (5,624) 283,543 ------

The segment assets and liabilities were as follows:

2018 Assets 3,027,368 1,416,664 640,633 498,478 250,730 (1,024,534) 4,809,339 ------Liabilities 828,140 815,454 54,990 - 13,377 (101,493) 1,610,468 ------2017 Assets 3,036,101 1,442,382 683,072 355,614 194,514 (1,012,678) 4,699,005 ------Liabilities 807,958 947,284 37,705 - 160,362 (269,778) 1,683,531 ------

The Group operates primarily from its base in the United Arab Emirates and accordingly no further geographical analysis of revenues, profit, fair value gains, assets and liabilities is given.

Abu Dhabi Aviation

Notes to the consolidated financial statements for the year ended 31 December

34 Comparative figures

Certain comparative amounts have been reclassified to conform to the current year’s presentation.

35 Subsequent event

Sale of investment property in London

The Group has entered into an agreement for the sale of investment property in London in November 2018 through Herbal Hill Gardens Limited (a company wholly owned by the Group). The sale transaction is completed by 11 January 2019 and the Group has received GBP 30 million against the sale amount on the same date.

36 Other disclosures

As at 31 December 2018, the Group has no exposure of investments in and relation with Abraaj Group and / or any of its projects or funds.

37 Approval of consolidated financial statements

The consolidated financial statements were approved by management and authorised for issue by the Board of Directors on 11 February 2019.