DEPA PLC AND ITS SUBSIDIARIES
CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS AND REVIEW REPORT FOR SIX-MONTH PERIOD ENDED 30 JUNE 2024
DEPA PLC AND ITS SUBSIDIARIES
CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS AND REVIEW REPORT FOR THE SIX-MONTH PERIOD ENDED 30 JUNE 2024
CONTENTS
Page(s) | |
Condensed consolidated interim statement of profit or loss | 3 |
Condensed consolidated interim statement of comprehensive | 4 |
income | |
Condensed consolidated interim statement of financial position | 5 |
Condensed consolidated interim statement of changes in | 6 |
equity | |
Condensed consolidated interim statement of cash flows | 7 |
Notes to the condensed consolidated interim financial | 8 - 17 |
statements | |
Report on review of condensed consolidated interim financial | 18 |
statements |
DEPA PLC AND ITS SUBSIDIARIES
CONDENSED CONSOLIDATED INTERIM STATEMENT OF PROFIT OR LOSS
AED million | |||
30 June | 30 June | ||
2024 | 2023 | ||
Notes | (Unaudited) | (Unaudited) | |
Revenue | 623.0 | 464.2 | |
Expenses | 3 | (604.9) | (465.6) |
Net reversal of / (provision for) impairment on financial and | |||
contract assets | 5, 8 | 36.1 | (42.9) |
Share of (loss) / profit from associates | (0.5) | 0.9 | |
Finance income | 2.1 | 0.5 | |
Finance costs | (2.5) | (3.6) | |
Finance costs - net | (0.4) | (3.1) | |
Profit / (loss) before tax and zakat expense | 53.3 | (46.5) | |
Income tax and zakat expense | (7.0) | (3.2) | |
Profit / (loss) for the period | 46.3 | (49.7) | |
Attributable to: | |||
Owners of Depa PLC | 46.3 | (49.7) | |
Earnings per share | |||
Basic and diluted earnings per share (UAE fils) | 3 | (4) |
The notes on pages 8 to 17 are an integral part of these condensed consolidated interim financial statements 3
DEPA PLC AND ITS SUBSIDIARIES
CONDENSED CONSOLIDATED INTERIM STATEMENT OF COMPREHENSIVE INCOME
AED million | ||
30 June | 30 June | |
2024 | 2023 | |
(Unaudited) | (Unaudited) | |
Profit / (loss) for the period | 46.3 | (49.7) |
Other comprehensive income / (loss) | ||
Items that may be reclassified to profit or loss: | ||
Exchange differences on translation of foreign operations | (2.1) | (1.1) |
Total comprehensive income / (loss) for the period | 44.2 | (50.8) |
Attributable to: | ||
Owners of Depa PLC | 44.2 | (50.8) |
The notes on pages 8 to 17 are an integral part of these condensed consolidated interim financial statements 4
DEPA PLC AND ITS SUBSIDIARIES
CONDENSED CONSOLIDATED INTERIM STATEMENT OF FINANCIAL POSITION
AED million | |||
30 June 2024 | 31 December | ||
Note | (Unaudited) | 2023 (Audited) | |
ASSETS | |||
Cash and cash equivalents | 4 | 268.6 | 244.8 |
Restricted cash | 4 | 46.7 | 29.5 |
Fixed deposits | - | 0.7 | |
Trade and other receivables | 5 | 345.1 | 286.4 |
Due from construction contract customers | 8 | 136.5 | 150.7 |
Inventories | 41.2 | 37.1 | |
Total current assets | 838.1 | 749.2 | |
Contract retentions | 5 | 113.0 | 105.1 |
Property, plant and equipment | 81.9 | 84.1 | |
Right-of-use assets | 42.5 | 39.7 | |
Intangible assets | 7.3 | 7.7 | |
Investment properties | 9.9 | 12.7 | |
Investment in associates | 7 | 11.0 | 12.2 |
Goodwill | 6 | 32.3 | 32.3 |
Total non-current assets | 297.9 | 293.8 | |
Total assets | 1,136.0 | 1,043.0 | |
LIABILITIES | |||
Trade and other payables | 585.7 | 550.2 | |
Current tax liabilities | 5.7 | 2.0 | |
Borrowings | 9 | 0.5 | 2.2 |
Total current liabilities | 591.9 | 554.4 | |
Employees' end of service benefits | 52.0 | 50.3 | |
Retentions | 14.2 | 9.1 | |
Lease liabilities | 39.2 | 33.7 | |
Deferred tax liabilities | 1.0 | 1.8 | |
Borrowings | 9 | - | 0.2 |
Total non-current liabilities | 106.4 | 95.1 | |
Total liabilities | 698.3 | 649.5 | |
Net assets | 437.7 | 393.5 | |
EQUITY | |||
Share capital | 908.9 | 908.9 | |
Share premium | 322.1 | 322.1 | |
Treasury shares | (12.6) | (12.6) | |
Statutory reserve | 60.0 | 60.0 | |
Translation reserve | (22.9) | (20.8) | |
Other reserve | 0.2 | 0.2 | |
Accumulated losses | (814.3) | (860.6) | |
Equity attributable to equity holders of Depa PLC | 441.4 | 397.2 | |
Non-controlling interests | (3.7) | (3.7) | |
Total equity | 437.7 | 393.5 |
The condensed consolidated interim financial statements were approved for issue by the Board of Directors on 28 August 2024 and signed on its behalf by
Haitham Tuqan | Nader Mardini |
Group Chief Executive Officer | Group Chief Financial Officer |
The notes on pages 8 to 17 are an integral part of these condensed consolidated interim financial statements 5
DEPA PLC AND ITS SUBSIDIARIES
CONDENSED CONSOLIDATED INTERIM STATEMENT OF CHANGES IN EQUITY
AED million | ||||||||||
Attributable | Non- | |||||||||
Share | Share | Treasury | Statutory | Translation | Other Accumulated to owners of | controlling | ||||
capital | premium | shares | reserve | reserve | reserve | losses | Depa PLC | interests | Total | |
At 1 January 2023 | 908.9 | 322.1 | (12.6) | 60.0 | (29.3) | (1.0) | (773.4) | 474.7 | (52.0) | 422.7 |
Loss for the period | - | - | - | - | - | - | (49.7) | (49.7) | - | (49.7) |
Other comprehensive loss | - | - | - | - | (1.1) | - | - | (1.1) | - | (1.1) |
Total comprehensive loss | - | - | - | - | (1.1) | - | (49.7) | (50.8) | - | (50.8) |
At 30 June 2023 (Unaudited) | 908.9 | 322.1 | (12.6) | 60.0 | (30.4) | (1.0) | (823.1) | 423.9 | (52.0) | 371.9 |
At 31 December 2023 | 908.9 | 322.1 | (12.6) | 60.0 | (20.8) | 0.2 | (860.6) | 397.2 | (3.7) | 393.5 |
Profit for the period | - | - | - | - | - | - | 46.3 | 46.3 | - | 46.3 |
Other comprehensive loss | - | - | - | - | (2.1) | - | - | (2.1) | - | (2.1) |
Total comprehensive income | - | - | - | - | (2.1) | - | 46.3 | 44.2 | - | 44.2 |
At 30 June 2024 (Unaudited) | 908.9 | 322.1 | (12.6) | 60.0 | (22.9) | 0.2 | (814.3) | 441.4 | (3.7) | 437.7 |
The notes on pages 8 to 17 are an integral part of these condensed consolidated interim financial statements | 6 |
DEPA PLC AND ITS SUBSIDIARIES
CONDENSED CONSOLIDATED INTERIM STATEMENT OF CASH FLOWS
AED million | ||
30 June 2024 | 30 June 2023 | |
(Unaudited) | (Unaudited) | |
Operating activities | ||
Profit / (loss) before tax and zakat expense | 53.3 | (46.5) |
Adjustments for: | ||
Depreciation of property, plant and equipment | 8.2 | 8.4 |
Depreciation of right-of-use assets | 1.5 | 1.7 |
Amortisation of intangible assets | 0.4 | 0.4 |
Share of loss / (profit) from associates | 0.5 | (0.9) |
Net (reversal) / impairment of financial and contract assets | (36.1) | 42.9 |
Fair value loss on investment properties | 2.8 | - |
Finance income | (2.1) | (0.5) |
Finance cost | 2.5 | 3.6 |
Provision for employees' end of service benefits | 2.0 | 2.5 |
Operating cash flows before payment of employees end of | ||
service benefits, taxes and changes in working capital | 33.0 | 11.6 |
Employees' end of service benefits paid | (0.3) | (5.2) |
Income tax paid | (4.1) | (2.7) |
Working capital changes: | ||
Trade and other receivables | (18.7) | 35.6 |
Inventories | (4.1) | (4.4) |
Due from construction contract customers | 17.1 | 6.4 |
Contract retentions | (14.7) | (31.5) |
Retentions | 5.1 | (0.1) |
Trade and other payables | 41.7 | (40.1) |
Restricted cash | (17.2) | 28.4 |
Net cash generated from / (used in) operating activities | 37.8 | (2.0) |
Investing activities | ||
Purchase of property, plant and equipment | (6.7) | (10.5) |
Dividend received from associates | 0.7 | 0.6 |
Finance income received | 2.1 | 0.5 |
Net cash used in investing activities | (3.9) | (9.4) |
Financing activities | ||
Net movement in bank borrowings | (1.9) | (15.2) |
Principal element of lease payments | (2.5) | (3.3) |
Finance cost paid | (2.5) | (3.6) |
Net cash used in financing activities | (6.9) | (22.1) |
Net increase / (decrease) in cash and cash equivalents | 27.0 | (33.5) |
Exchange differences arising on translation of foreign | (3.2) | (3.6) |
operations | ||
Cash and cash equivalents at the beginning of the period | 244.8 | 238.3 |
Cash and cash equivalents at the end of the period | 268.6 | 201.2 |
The notes on pages 8 to 17 are an integral part of these condensed consolidated interim financial statements 7
DEPA PLC AND ITS SUBSIDIARIES
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS FOR THE SIX-MONTH PERIOD ENDED 30 JUNE 2024
1 Corporate information
Depa PLC (the "Company"), formerly Depa Limited, is a company limited by shares and registered in accordance with Companies Law - DIFC Law No. 5 of 2018 ("Companies Law"). The Company was incorporated in United Arab Emirates on 25 February 2008. Depa PLC is the management company of Depa United Group P.J.S.C.
The Company and its subsidiaries (together referred to as the "Group") specialises in the luxury fit-out sector, focusing primarily on hospitality, commercial and residential property developments, and also includes the airport, retail, yacht, theming and specialist fit-out sectors. Additionally, the Group is a provider of manufactured products and procurement services, with a primary focus on customised furniture, fixtures and equipment, much of which is produced in its in-house facilities. These financial statements are condensed consolidated interim financial statements for the Group consisting of the Company and its subsidiaries. The ultimate parent and controlling party of the Group is Public Investment Fund, Kingdom of Saudi Arabia.
On 9 December 2022 UAE Federal Decree Law No. 47 of 2022 was published setting in place a general corporate income tax for the first time which was substantially enacted on 16 January 2023. The profit threshold of AED 375,000 at which the 9% tax will apply was set in place by Cabinet Decision No. 116 of 2022 on profits generated by the Group for the year ending 31 December 2024. Therefore, the Group recorded a provision for income tax amounting to AED 3.2 million with respect to the UAE Corporate tax during the six-month period ended 30 June 2024.
Income tax expense is recognised during the six- month period ended 30 June 2024 on a best estimate of the weighted average annual income tax rate expected for the full financial year. Amounts accrued for income tax expense may have to be adjusted if the estimate of the annual income tax rate changes.
The Company's shares are listed on Nasdaq Dubai. The address of the Company's registered office is P.O. Box 56338, Dubai, United Arab Emirates.
2 Basis of preparation
The material accounting policies applied in the preparation of these condensed consolidated interim financial statements are consistent with those of the previous financial year. These policies have been consistently applied to all the periods presented, unless otherwise stated.
2.1. Statement of compliance and accounting convention
These condensed consolidated interim financial statements for the six-month period ended 30 June 2024 have been prepared in accordance with International Accounting Standard 'IAS 34 Interim Financial Reporting'.
The condensed consolidated interim financial statements have been prepared under the historical cost basis, except for investment properties which have been measured at fair value.
The condensed consolidated interim financial statements do not include all the information and disclosures required in the annual consolidated financial statements and should be read in conjunction with the Group's annual consolidated financial statements for the year ended 31 December 2023 and any public announcements made by the Group during the interim reporting period.
These condensed consolidated interim financial statements have been reviewed, not audited. The comparative information for the interim condensed consolidated statement of financial position is based on the audited financial statements as at 31 December 2023.
In addition, results for the period from 1 January 2024 to 30 June 2024 are not necessarily indicative of the results that may be expected for the financial year ending 31 December 2024.
2.2. Critical accounting estimates and judgements
The significant judgments made by the management in applying the Group's accounting policies and the key sources of estimation uncertainty were the same as those that were applied in preparation of the consolidated financial statements of the Group as at and for the year ended 31 December 2023.
As disclosed in note 6, management performed an in-house impairment assessment using the expected future cash flows based on an approved long-term strategic plan of the Group which takes into account macroeconomic factors.
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DEPA PLC AND ITS SUBSIDIARIES
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS FOR THE SIX-MONTH PERIOD ENDED 30 JUNE 2024 (CONTINUED)
The discount rate was also assessed based on the current market risks and key business unit's specific risks.
In addition, management has internally performed an assessment of the fair value of the investment properties and an impairment was recorded for the current reporting period.
2.3. Financial risk management
The condensed consolidated interim financial information does not include all financial risk management information and disclosures required in the annual consolidated financial statements; therefore, it should be read in conjunction with the Group's annual consolidated financial statements as at 31 December 2023. The Group's financial risk management objectives and policies are consistent with those disclosed in the annual consolidated financial statements at and for the year ended 31 December 2023.
There have been no significant changes in the risk management function or in any risk management policies since the year end.
2.4. Liquidity risk factors
Ultimate responsibility for liquidity risk management rests with the board of directors, which has an appropriate liquidity risk management framework for the management of the Group's short, medium, and long-term funding and liquidity management requirements. The Group manages liquidity risk by maintaining adequate reserves, banking facilities and reserve borrowing facilities, by monitoring forecast and actual cash flows and matching the maturity profiles of financial assets and financial liabilities.
2.5. Fair values of financial instruments
Financial instruments comprise financial assets and financial liabilities. Financial assets consist of cash and cash equivalents, trade receivable and other assets (excluding prepayments and advances to subcontractors and suppliers), amounts due from customers on construction contracts and due from related parties. Financial liabilities consist of bank borrowings, trade payables and accruals, (excluding advances received) subcontractors' retention, lease liabilities and due to related parties.
At the period end, the fair values of financial instruments are not materially different from their carrying values. The fair value of the financial assets and liabilities are considered at the amount at which the instrument could be
exchanged in a current transaction between willing parties, other than in a forced or liquidation sale. The following assumptions were used to estimate the fair values:
- Cash and cash equivalents, trade receivable and other assets (excluding prepayments and advances to subcontractors and suppliers), amount due from customers on construction contracts, due from related parties, bank borrowings, trade payables and accruals (excluding advances received) subcontractors' retention and due to related parties approximate their carrying amounts, largely due to the short-term maturities of these instruments.
- Long term receivables are evaluated by the Group based on parameters such as interest rates, specific country risk factors and individual credit worthiness of the customer and the risk characteristics of the financed project. Based on this evaluation, provisions are taken to account for the expected losses of these receivables. As at 30 June 2024, the carrying amounts of such receivables, net of provisions, are not materially different from their fair values.
2.6. Fair values estimation
The different levels have been defined as follows:
- Quoted prices (unadjusted) in active markets for identical assets or liabilities (Level 1).
- Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (that is, as prices) or indirectly (that is, derived from prices) (Level 2).
- Inputs for the asset or liability that are not based on observable market data (that is, unobservable inputs) (Level 3).
Investment properties valued at AED 9.9 million (31 December 2023: AED 12.7 million), are classified under Level 3.
Investment properties are valued based on the market value of the relevant region in which the property is located (a) annually by qualified independent property valuation firms or (b) at each reporting period based on latest information available. The most significant input into this valuation approach is price per square meter. The property valuation firms are specialized in valuing these types of investment properties.
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DEPA PLC AND ITS SUBSIDIARIES
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS FOR THE SIX-MONTH PERIOD ENDED 30 JUNE 2024 (CONTINUED)
Specific valuation techniques used to fair value the investment properties include Comparable method: market approach provides an indication of value by comparing the asset with identical or comparable assets for which price information is available. Factors such as location, accessibility, plot size and shape, view, land use and communities nearby are assessed.
2.7. Accounting policies Changes in accounting policies
The accounting policies applied are consistent with those of the previous financial year and corresponding interim reporting period.
- New and amended standards adopted by the Group
A number of amended standards became applicable for the current reporting period. The Group did not have to change its accounting policies or make retrospective adjustments as a result of adopting these amended standards.
- New standards and amendments not early adopted by the Group
The new standards and amendments that are issued, but not yet effective, up to the date of issuance of the Group's condensed consolidated interim financial statements are disclosed below.
Effective | |
date | |
Amendments to IAS 21 - | 1 January |
Lack of Exchangeability | 2025 |
Annual improvements to | 1 January |
IFRS Accounting | 2026 |
Standards | |
Amendment to IFRS 9 and | 1 January |
IFRS 7 - Classification and | 2026 |
Measurement of Financial | |
Instruments | |
IFRS 18 Presentation and | 1 January |
Disclosures in Financial | 2027 |
Statements | |
IFRS 19 Subsidiaries without | 1 January |
Public Accountability: | 2027 |
Disclosures | |
Sale or contribution of assets | Effective |
between an investor and its | date |
associate or joint venture - | deferred |
Amendments to IFRS 10 | indefinitely |
and IAS 28 |
Management is currently assessing the impact of aforementioned new accounting standards, amendments and interpretations.
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