FY 2024 Financial Statements

CONTENTS

1 Principal activities

2 Operational and financial review and results

1. Operational review

   The Group's performance in 2024 has achieved significant turnaround, reporting a stronger profit, after experiencing losses in 2023.

   Continued increased focus by the key business units in the Kingdom of Saudi Arabia has resulted in the Group securing a number of new wins in the Kingdom.

   1. Vedder

      Vedder, the Group's European key business unit, specialising in the superyacht, residence fit-out and private jet market, generated revenue of AED 394.5 million and profit of AED 20.5 million, a marginal decrease in revenue of AED 2.8 million or 0.7% on 2023 (AED 397.3 million) and an increase in profit of AED 2.1 million or 11% on 2023 (AED 18.4 million).

      Vedder ended the year with AED 260.0 million worth of new project wins. Vedder successfully completed and handed over a number of projects during the year, including both the interior and exterior package of a prominent new-build superyachts and a number of refit and smaller packages.

   2. Depa Interiors

      Depa Interiors is the Group's Middle Eastern business providing fit-out services to the hospitality, residential, commercial, and transport and civil infrastructure sectors. Depa Interiors generated revenue of AED 718.8 million (2023: AED 484.0 million) and a profit of AED 65.9 million (2023 a loss of AED 56.5 million).

      Depa Interiors' overall financial performance in 2024 has improved compared to 2023 due to increase in project level profitability and reversal of provision of impairment balances on settlement with customers.

      Depa Interiors was awarded contracts of AED 1,029.6 million during the year and with the Kingdom of Saudi Arabia is being regarded as a key market for Depa Interiors. Depa Interiors also continues to win UAE-based projects, securing a large fitout package in Dubai.

   3. Deco Group

      Middle East-based Deco Group comprises (i) Deco, which is focused on the high-end retail and commercial fitout sector, and (ii) Carrara, which supplies and installs premium marble, stone and granite.

      In 2024, Deco Group generated revenue of AED 268.3 million (2023: AED 230.3 million) and a profit of AED

      24.2 million (2023: AED 12.4 million). Deco saw a significant improvement in its backlog position in 2024.

      Deco continued its long-term relationships with several major luxury retailers, securing a number of projects during the year for international luxury retailers.

      Deco achieved strong project delivery during the year, successfully delivering projects for their repeat clients, while Carrara successfully handed over a number of hospitality packages in Dubai.

2. Backlog

   Depa's backlog stands at AED 2,051.5 million on 31 December 2024 (2023: AED 1,826.6 million) following a number of major contract awards during the year, including a significant number of project awards in the Kingdom of Saudi Arabia and the United Arab Emirates for both Depa Interiors and Deco Group.

3. Financial review

   1. Financial performance

      During the year ended 31 December 2024, Depa generated revenue of AED 1,336.2 million, a 22.2% increase of AED 242.6 million from 2023 (AED 1,093.6 million). Group's revenue growth during 2024 was supported by strong growth in all the business units of the Group.

      Expenses in 2024 increased by AED 110.4 million to AED 1,234.4 million (2023: AED 201.4 million to AED 1,124.0 million) in line with increase in revenue. Net reversal of provision for impairment of contract assets of AED 39.8 million (2023: Net provision for impairment of contract assets of AED 51.3 million) primarily relate to Depa Interiors and Deco Group for specific project related balances.

      During the year, associates generated a profit of AED 0.8 million (2023: AED 2.0 million) with net finance expense amounting to AED 1.3 million (2023: AED 4.1 million). The Group recognised an income tax expense of AED 13.5 million in 2024 (2023: AED 11.9 million).

      The Group generated net profit of AED 87.8 million (2023: net loss of AED 44.4 million).

   2. Cash flow

      Net cash inflows from operating activities amounted to AED 97.2 million (2023: AED 40.2 million) supported by better collections of receivables from customers and effective working capital management.

      Net cash outflows used in investing activities for 2024 amounted to AED 17.4 million (2023: AED 21.9 million).

      During 2024, the Group repaid borrowings amounting to AED 2.4 million excluding overdrafts (2023: AED 16.4 million) with net cash outflows used in financing activities for the year amounting to AED 14.5 million (2023: AED 27.3 million outflows).

      Foreign exchange differences resulted in a negative movement AED 4.5 million (2023: AED 15.5 million positive) mainly due to the fluctuation of the Euro in the reported cash and cash equivalents.

      As a result of the above, the Group ended 2024 with cash and cash equivalents as at 31 December 2024 standing at AED 305.6 million (2023: AED 244.8 million).

   3. Financial position

      The Group reported year-end cash and bank balances of AED 386.0 million (2023: AED 275.0 million) including fixed deposits and restricted cash. Year-end net cash stood at AED 264.2 million (2023: AED 201.9 million) net of bank borrowings and lease liabilities and excluding restricted cash and fixed deposits. Current ratio is reported at 1.44 (2023: 1.35) and debt-to-equity ratio at 1.70 (2023: 1.65).

      At year-end, equity attributable to owners of Depa PLC amounted to AED 467.1 million (2023: AED 397.2 million) and the Group's outstanding ordinary shares at end of 2024 were 1,364,145,794 (issued ordinary shares of 618,452,753 less 4,306,959 treasury shares and issued ordinary Class A shares of 750,000,000).

4. Outlook

   The Kingdom of Saudi Arabia remains a strong market for growth and an expansion target for the Group, with Depa Interiors and Deco spearheading this expansion.

   The Group's European business continues to benefit from its leading market position with promising opportunities for further diversification into the US premium residential fit-out market.

5. Risks and uncertainties

   The Group faces risks from a range of sources that could have a material impact on our financial commitments and future financial performance. The principal risks are determined considering our risk environment. The principal risks facing the Group include the following:

   • Operational risks: work delivery challenges may result in actual costs increasing above previous estimates; failure to continue to win and / or retain contracts on satisfactory terms and conditions; non delivery of projects to client required standards; ineffective management of contracts; serious injury or fatality being sustained by an employee and / or member of the public; and the retention of key management and personnel.

   • Financial and market risks: reduced access to financing facilities necessary to fund the business; inability to maintain a sustainable level of financial performance; interest rate and foreign currency risks; failure to collect major receivables from key clients; and liquidity risks.

   • Strategic risks: adverse changes in economic, regulatory and / or political conditions in the markets in which the Group operates; unforeseen external events and actions which may affect business development and / or project delivery; and material adverse brand and reputational damage.

   The Board recognises that certain risk factors that influence the principal risks are outside of the control of management. The Board is satisfied that these risks are being managed appropriately and consistently in view of the Group's target risk appetite. The set of principal risks should not be considered as an exhaustive list of all the risks the Group faces.

6. Dividend

3 Directors

1. Executive Committee

   Name Designation

   Muteb bin Mohammed AI Shathri Committee Chairman Sadhak Bindal Committee Member

   Marwan Shehadeh Committee Member

   Ahmed Ramdan Committee Member

   Fadi Adel AISaid_ Committee Member

2. Audit & Compliance Committee

   Name Designation

   Edward Quinlan Committee Chairman

   Ahmed Ramdan Committee Member

   Sadhak Bindal Committee Chairman

   Date of

   Appointment or Date of

   Reappointment Resignation

   23-Mar-2022

   28-Aug-2024

   23-Mar-2022

   23-Mar-2022

   02-Mar-2022

   Date of

   Appointment or Date of Reappointment Resignation

   01-Jun-2022 03-Jun-2024

   07-Feb-2021

   28-Aug-2024

   Fouad Alrashed Committee Member 28-Aug-2024

3. Nomination & Remuneration Committee

2024

2023

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

CONSOLIDATED STATEMENT OF CASH FLOWS

2024

2023

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024

1. Basis of preparation

   The consolidated financial statements have been prepared in accordance with and comply with IFRS Accounting Standards and interpretations issued by IFRS Interpretation Committee ("IFRS IC") applicable to companies reporting under IFRS Accounting Standards. The consolidated financial statements have been prepared under the historical cost convention, unless otherwise stated.

   The preparation of consolidated financial statements in conformity with IFRS Accounting Standards requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the Group's accounting policies. Areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the consolidated financial statements are disclosed in note 3.

   1. New amendments adopted by the Group

      1 Corporate information

1. • Classification of Liabilities as Current or Non-current - Amendments to IAS 1;

   • Supplier finance arrangements - Amendments to IAS 7 and IFRS 7; and

   • Lease Liability in a Sale and Leaseback -Amendments to IFRS 16.

     The Group did not have to change its material accounting policies or made retrospective adjustments as a result of adopting these amended standards.

2. New standards and amendments not early adopted by the Group

   The following new and amended standards which are effective 1 January 2025 and have not been early adopted by the Group. The Group is currently assessing the impact of these standards, and amendments on the future consolidated financial statements of the Group and intends to adopt these, if applicable, when they become effective

   • Amendments to IAS 21 -- Lack of Exchangeability;

     2 Material accounting policies

1. • Amendments to the Classification and Measurement of Financial Instruments -Amendments to IFRS 9 and IFRS 7;

   • IFRS 18 Presentation and Disclosure in Financial Statements; and

   • IFRS 19, 'Subsidiaries without public accountability: Disclosures'.

2. Basis of consolidation

   1. Subsidiaries

      Subsidiaries are all entities (including structured entities) over which the Group has control. The Group controls an entity when the Group 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. Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are deconsolidated from the date that control ceases.

      The Group applies the acquisition method of accounting to account for business combinations. The consideration transferred for the acquisition of a subsidiary is the fair values of the assets transferred, the liabilities incurred to the former owners of the acquiree and the equity interests issued by the Group. The consideration transferred includes the fair value of any asset or liability resulting from a contingent consideration arrangement.

      NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024 (CONTINUED)

1. Joint arrangements

   • derecognises the assets (including goodwill) and liabilities of the subsidiary;

   • derecognises the carrying amount of any non-controlling interests;

   • derecognises the cumulative translation differences recorded in equity;

   • recognises the fair value of the consideration received;

   • recognises the fair value of any investment retained;

   • recognises any surplus or deficit in profit or loss; and

   • reclassifies the parent's share of components previously recognised in other comprehensive income to profit or loss or retained earnings, as appropriate, as would be required if the Group had directly disposed of the related assets or liabilities.

     A listing of Group subsidiaries is set out in note 22.

     Under IFRS 11 Joint Arrangements, investments in joint arrangements are classified as either joint operations or joint ventures. The classification depends on the contractual rights and obligations of each investor, rather than the legal structure of the joint arrangement.

     The Group recognises its direct right to the assets, liabilities, revenues and expenses of joint operations and its share of any jointly held or incurred assets, liabilities, revenues and expenses. These have been incorporated in the consolidated financial statements under the appropriate headings. For details of the joint operations refer to note 26.

2. Changes in ownership interests

1. Associates

   Associates are all entities over which the Group has significant influence but not control or joint control. This is generally the case where the Group holds between 20% and 50% of the voting rights. Investments in associates are accounted for using the equity method of accounting, after initially being recognised at cost, and the carrying amount is increased or decreased to recognise the investor's share of the profit or loss of the investee after the date of acquisition. Dividends

   between the carrying amounts of the controlling and non-controlling interests to reflect their relative interests in the subsidiary. Any difference between the amount of the adjustment to non-controlling interests and any consideration paid or received is recognised in a separate reserve within equity attributable to owners of Depa PLC.

   Any contributions by the parent towards the accumulated deficit attributable to NCI is treated as transaction with non-controlling interests.

   NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024 (CONTINUED)

1. Segment reporting

   Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker. The chief operating decision maker of the Group is its Interim Group Chief Executive Officer. Refer to note 24.

2. Foreign currency translation

   1. Functional and presentation currency

      Items included in the financial statements of each of the Group's entities are measured using the currency of the primary economic environment in which the entity operates ("the functional currency"). The consolidated financial statements are presented in the United Arab Emirates Dirham ("AED") which is the Company's functional and the Group's presentation currency.

   2. Transactions and balances

      Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the consolidated statement of profit or loss.

   3. Group companies

      The results and financial positions of all the subsidiaries (none of which has the currency of a hyperinflationary economy) that have a functional currency different from the presentation currency are translated into the presentation currency as follows:

      1. assets and liabilities for each statement of financial position presented are translated at the closing rate at the date of the statement of financial position;

      2. income and expenses for each statement of comprehensive income are translated at average exchange rates during the financial year; and

      3. all resulting exchange differences are recognised as a separate component of equity called "translation reserve".

      On consolidation, exchange differences arising from the translation of the net investment in foreign operations are taken to equity. When a foreign operation is sold, exchange differences that were recorded in equity are recognised in the consolidated statement of profit or loss as part of the gain or loss on sale. Goodwill and fair value adjustments arising on the acquisition of a foreign entity are treated as assets

      and liabilities of the foreign entity and translated at the

      closing rate at the consolidated statement of financial position date. Exchange differences arising on translation of these items are recognised in consolidated statement of other comprehensive income.

3. Property, plant and equipment

   Property, plant and equipment are stated at historical cost less accumulated depreciation and accumulated impairment losses, if any.

   Subsequent costs are included in the asset's carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably.

   Land is not depreciated. Depreciation is calculated using the straight-line method to allocate the assets' cost to their residual values over their estimated useful lives. The principal annual rates used for this purpose are as follows:

   Buildings	6 - 15 years
   Machinery, plant and equipment	2 - 15 years
   Motor vehicles	4 - 5 years
   Furniture and office equipment	3 - 5 years

   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.

   Capital work-in-progress is stated at cost and includes equipment that is being developed for future use. When commissioned, capital work-in-progress is transferred to appropriate category of property, plant and equipment and depreciated in accordance with the Group's policies.

   At the end of each reporting period management assesses whether there is any indication of impairment of property, plant and equipment. If any such indication exists, management estimates the recoverable amount, which is determined as the higher of an asset's fair value less costs of disposal and its value in use. The carrying amount is reduced to the recoverable amount and the impairment loss is recognised in profit or loss for the year. An impairment loss recognised for an asset in prior years is reversed where appropriate if there has been a change in the estimates used to determine the asset's value in use or fair value less costs of disposal. Impairment of nonfinancial assets is disclosed in note 2.9.

   NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024 (CONTINUED)

1. Investment properties

   Investment properties are measured initially at cost, including transaction costs. The carrying amount includes the cost expenditure which are capitalised as and when activities that are necessary to get the investment properties ready for use for the purpose they are intended to. The carrying amount excludes the costs of day-to-day servicing of an investment property. Subsequent to initial recognition, investment properties are stated at fair value at each reporting period, which reflects market conditions at the reporting date. Gains or losses arising from changes in the fair values of investment properties are included in the consolidated statement of profit or loss in the year in which they arise.

   Investment properties are derecognised when either they have been disposed of or when the investment property is permanently withdrawn from use and no future economic benefit is expected from its disposal.

2. Goodwill

   Goodwill is tested for impairment annually or more frequently if events or changes in circumstances indicate a potential impairment and is carried at cost less accumulated impairment losses, if any. For the purpose of impairment testing, goodwill is allocated to cash generating units or groups of cash generating units that are expected to benefit from the business combination in which the goodwill arose. An impairment loss is recognised when the carrying value of the cash generating unit or group of cash generating units exceeds its recoverable amount. Impairment losses on goodwill are not reversed. Goodwill is measured by deducting the net assets of the acquiree from the aggregate of the consideration transferred for the acquiree, the amount of non-controlling interest in the acquiree and the fair value of an interest in the acquiree held immediately before the acquisition date. Any negative amount ("negative goodwill" or a "bargain purchase") is recognised in profit or loss, after management reassesses whether it identified all the assets acquired and all the liabilities and contingent liabilities assumed and reviews the appropriateness of their measurement.

   Gains and losses on disposal of an entity include the carrying amount of goodwill relating to the entity sold.

3. Intangible assets

   Intangible assets acquired separately are reported at cost less accumulated amortisation and accumulated impairment losses, if any. Amortisation is charged on a straight-line basis over their estimated useful lives. The estimated useful lives are reviewed at the end of each annual reporting period, with the effect of any changes in estimate being accounted for on a prospective basis. Intangible assets acquired in a business combination are identified and recognised separately from goodwill where they satisfy the definition of an intangible asset and their fair values can be measured reliably. The cost of such intangible assets is their fair value at the acquisition date.

   Subsequent to initial recognition, intangible assets acquired in a business combination are reported at cost less accumulated amortisation and accumulated impairment losses, on the same basis as intangible assets acquired separately.

   The intangible assets with following definite useful lives are amortised on straight-line basis:

   Brand name and rights Software

   15 years

   3 - 5 years

   Intangible assets residual values, useful lives and impairment indicators are reviewed at each financial year end and adjusted prospectively, if considered necessary. Intangible assets are written down to the recoverable amount if carrying value is higher that recoverable amount.

4. ‌Impairment of non-financial assets

   Goodwill is not subject to amortisation and is tested annually for impairment. Assets that are subject to depreciation/amortisation are reviewed for impairment whenever events or changes in circumstances indicate that the carrying value may not be recoverable. An impairment loss is recognised for the amount by which the asset's carrying amount exceeds its recoverable amount. The recoverable amount is the higher of the asset's fair value less costs to sell and value in use. For the purposes of assessing impairment, assets are grouped at the lowest level for which there is separately identifiable cash flows ("cash generating units").

   Non-financial assets other than goodwill that have suffered impairment are reviewed for possible reversal of the impairment at each reporting date.

5. Inventories

   Inventories are stated at the lower of cost and net realisable value. Cost is determined on a weighted average basis and includes expenditure incurred in acquiring the inventories and bringing them to their

   NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024 (CONTINUED)

1. Financial assets

   OCI, there is no subsequent reclassification of fair

   value gains and losses to profit or loss following the

   1. Classification

      The Group classifies its financial assets in the following categories:

      • those to be measured subsequently at fair value (either through OCI or through profit or loss), and

      • those to be measured at amortised cost.

        The classification depends on the Group's business model for managing the financial assets and the contractual terms of the cash flows.

        For assets measured at fair value, gains and losses will either be recorded in profit or loss or OCI. For investments in equity instruments that are not held for trading, the Group has made an irrevocable election at the time of initial recognition to account for equity investment at fair value through other comprehensive income (FVOCI).

        The Group reclassifies debt investments when and only when its business model for managing those assets changes.

   2. Recognition, derecognition and measurement

      Regular purchases and sales of financial assets are recognised on trade-date, the date on which the Group commits to purchase or sell the asset. Financial assets are derecognised when the rights to receive cash flows from the financial assets have expired or have been transferred and the Group has transferred substantially all the risks and rewards of ownership. At initial recognition, the Group measures a financial asset at its fair value plus, in the case of a financial asset not at fair value through profit or loss (FVPL), transaction costs that are directly attributable to the acquisition of the financial asset. Transaction costs of financial assets carried at FVPL are expensed in profit or loss.

      Subsequent measurement of financial asset depends on the group's business model for managing the asset and the cash flow characteristics of the asset.

      Financial assets that are held for collection of contractual cash flows, where those cash flows represent solely payments of principal and interest, are measured at amortised cost. Interest income from these financial assets is included in finance income using the effective interest rate method.

      derecognition of the investment. Dividends from such investments continue to be recognised in profit or loss when the Group's right to receive payments is established.

      The Group classifies debt instruments at amortised cost using effective interest rate method.

   3. Impairment

      The Group assesses on a forward-looking basis the expected credit losses associated with its financial assets. For trade receivables, amount due from construction contract customers and contract retentions, the Group applies the simplified approach permitted by IFRS 9 "Financial Instruments", which requires expected lifetime losses to be recognised from initial recognition of the receivables and contract assets (note 28).

2. Offsetting financial instruments

   Financial assets and liabilities are offset and the net amount reported in the consolidated statement of financial position when there is a legally enforceable right to offset the recognised amounts and there is an intention to settle on a net basis or realise the asset and settle the liability simultaneously. The legally enforceable right must not be contingent on future events and must be enforceable in the normal course of business and in the event of default, insolvency or bankruptcy of the Group or the counterparty.

3. Trade and other receivables

   Trade and other receivables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method, less provision for impairment.

4. Cash and cash equivalents

   In the consolidated statement of cash flows, cash and cash equivalents include cash in hand, deposits held at call with banks, other short-term highly liquid investments, which are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value, with original maturities of three months or less and bank overdrafts. In the consolidated statement of financial position, bank overdrafts are shown within bank borrowings. Term deposits are deposits that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.

   NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024 (CONTINUED)

1. Share capital

   Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new ordinary shares or options are shown in equity as a deduction, net of tax, from the proceeds.

2. Trade and other payables

   Trade payables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method. Trade and other payables are presented as current liabilities unless payment is not due within twelve months after the reporting period.

3. Provisions

   Provisions are recognised when the Group has a present legal or constructive obligation as a result of past events, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation, and a reliable estimate of the amount can be made. Provisions are not recognised for future operating losses. Provisions are measured at the present value of the expenditures expected to be required to settle the obligation using a pre-tax rate that reflects current market assessments of the time value of money and risks specific to the obligation. The increase in the provision due to the passage of time is recognised as interest expense. Where there are a number of similar obligations, the likelihood that an outflow will be required in settlement is determined by considering the class of obligations as a whole. A provision is recognised even if the likelihood of an outflow with respect to any one item included in the same class of obligations may be small.

   statement of profit or loss over the period of the

   borrowings using the effective interest method.

   Borrowings are removed from the balance sheet when the obligation specified in the contract is discharged, cancelled or expired. The difference between the carrying amount of a financial liability that has been extinguished or transferred to another party and the consideration paid, including any noncash assets transferred or liabilities assumed, is recognised in profit or loss as other income or finance costs.

   Borrowings are classified as current liabilities unless the group has an unconditional right to defer settlement of the liability for at least 12 months after the reporting period.

   1. Borrowing costs

      General and specific borrowing costs directly attributable to the acquisition, construction or production of qualifying assets are added to the cost of those assets, until such time as the assets are substantially ready for their intended use or sale. All other borrowing costs are recognised in consolidated statement of profit or loss in the period in which they are incurred.

   2. Current and deferred income tax

      The tax expense for the year comprises current and deferred tax. Tax is recognised in the consolidated statement of profit or loss, except to the extent that it relates to items recognised in comprehensive income or directly in equity. The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the consolidated statement of

      financial position date in the countries where the

4. Financial liabilities

   Financial liabilities are classified as financial liabilities at fair value through profit or loss or financial liabilities at amortised cost, as appropriate. The Group determines the classification of its financial liabilities at initial recognition.

   All financial liabilities are recognised initially at fair value and, in the case of loans and borrowings, net of directly attributable transaction costs. A financial liability is derecognised when the obligation under the liability is discharged or cancelled, or expires.

5. Borrowings

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024 (CONTINUED)

1. Share-based payments

   The Company had an equity settled share-based compensation plan in place, under which the entity receives services from employees as consideration for share awards. In accordance with IFRS 2, "Share-based payments", the cost of share-based payments awarded is charged to the consolidated statement of profit or loss over the performance and vesting periods of the instruments. The cost is based on the fair value of the awards made at the date of grant adjusted for the number of awards expected to vest. Where awards are settled by the new issue of shares, any proceeds received in respect of share options are credited to share capital and share premium. Share awards are granted by the Company to employees of its subsidiaries. As at 31 December 2024, the Group has share-based payment reserve of AED 2.6 million (2023: AED 2.6 million) included in other reserve in the consolidated statement of changes in equity.

   The interest cost component is expensed to the consolidated statement of profit or loss and is calculated by applying the discount rate to the balance of the defined benefit obligation. The defined benefit liability comprises the present value of the defined benefit obligations which is determined by discounting the estimated future cash outflows using interest rates of high-quality corporate bonds that are denominated in the currency in which the benefits will be paid, and that have terms approximating to the terms of the related obligation. In countries where there is no deep market in such bonds, the market rates on government bonds are used. The Group has not currently allocated any assets to such plans.

   Payments made to social security institutions in connection with government pension plans in various countries where the Group operates are dealt with as payments to defined contribution plans, where the

   Group's obligations under the plans are equivalent to

2. Employees' end of service benefits

   In accordance with labour laws prevailing in the countries in which the Company and its subsidiaries operate, the Group provides end of service benefits to its employees. The entitlement to these benefits is usually based upon the employees' salary and length of service, subject to the completion of a minimum

   those arising in a defined contribution retirement benefit plan. The Group pays contributions to the social security institutions on a mandatory basis. The Group has no further payment obligations once the contributions have been paid. The contributions are recognised as an employee benefit expense in the period to which the employees' service relates.

   NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024 (CONTINUED)

1. Rounding of amounts

   All amounts disclosed in the consolidated financial statements and notes have been rounded off to the nearest hundred thousand units unless otherwise stated.

2. Revenue recognition

   Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Group and the revenue can be reliably measured, regardless of when the payment is being made. Revenue is measured at the fair value of the consideration received or receivable, taking into account contractually defined terms of payment and excluding discounts, rebates, customer returns and other sales taxes or duty. The following specific recognition criteria must also be met before revenue is recognised:

   The Group recognises revenue from contracts with customers based on a five-step model as set out below:

   1. Identify the contract(s) with a customer: A contract is defined as an agreement between two or more parties that creates enforceable rights and obligations and sets out the criteria for every contract that must be met.

   2. Identify the performance obligations in the contract: A performance obligation is a promise in a contract with a customer to transfer a good or service to the customer.

   3. Determine the transaction price: The transaction price is the amount of consideration to which the Group expects to be entitled in exchange for transferring promised goods or services to a customer, excluding amounts collected on behalf of third parties.

   4. Allocate the transaction price to the performance obligations in the contract: For a contract that has more than one performance obligation, the Group will allocate the transaction price to each performance obligation in an amount that depicts the amount of consideration to which the Group expects to be entitled in exchange for satisfying each performance obligation.

   5. Recognise revenue when (or as) the entity satisfies a performance obligation at a point time or over time.

   The Group satisfies a performance obligation and recognises revenue over time, if one of the following criteria is met:

   1. The customer simultaneously receives and consumes the benefits provided by the Group's performance as the Group performs; or

   2. The Group's performance creates or enhances

      an asset that the customer controls as the asset is created or enhanced; or

   3. The Group's performance does not create an asset with an alternative use to the Group and the entity has an enforceable right to payment for performance completed to date.

   For performance obligations where any one of the above conditions are not met, revenue is recognised at the point in time at which the performance obligation is satisfied. The Group is required to assess each of its contracts with customers to determine whether performance obligations are satisfied over time or at a point in time in order to determine the appropriate method of recognising revenue.

   1. Contract revenue

      The Group provides interior fit out solutions to its customers operating in a wide variety of industries as noted in note 1. The Group has concluded that for its arrangements, it is either creating or enhancing an asset controlled by the customer or it is creating an asset with no alternative use and has an enforceable right to payment for work completed. Therefore, it meets the criteria to recognise revenue over time and measure progress of its projects through the cost to complete method (input method) as it best depicts the transfer of control of products and services under each performance obligation.

      When the Group satisfies a performance obligation by delivering the promised goods or services it creates a contract asset based on the amount of consideration earned by the performance. Where the amount of consideration received from a customer exceeds the amount of revenue recognised this gives rise to a contract liability.

      A receivable is recognised when the work performed is certified and as this is the point in time that the consideration is unconditional because only the passage of time is required before the payment is due. The payment terms for the customer are in accordance each contract with the customer.

      Revenue is measured at the fair value of the consideration received or receivable, taking into account contractually defined terms of payment and excluding taxes and duty. The Group assesses its revenue arrangements against specific criteria to determine if it is acting as principal or agent. The Group has concluded that it is acting as a principal in all of its revenue arrangements.

      Variations which are extension of existing scope of work are accounted for using cumulative catch-up adjustments to the cost to complete method of revenue recognition.

      NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024 (CONTINUED)

1. 1. 1. The two or more contracts entered into at or near the same time with the same customer are negotiated as a package, with a single commercial objective;

      2. The amount of consideration to be paid in one contract depends on the price or performance of the other contract; or

      3. The goods or services promised in the contracts (or some goods or services promised in each of the contracts) are a single performance obligation.

         If any of the above criteria is met, the arrangements are combined and accounted for as a single arrangement for revenue recognition.

         Pre-contract cost of obtaining a contract with a customer is recognised as an asset, which is amortised over the term of the contract, if those costs are expected to be recovered.

         The Group provides complete interior fit out solutions to its customers operating in a wide variety of industries as noted in note 1, therefore, the Group assess whether these arrangements can have single or multiple performance obligations under IFRS 15 "Revenue from contracts with customers" based on the nature of interior solutions being offered under that arrangement.

         Factors affecting the conclusion whether an arrangement has single or multiple performance obligations can include (among other factors)

   2. Sale of goods

      Revenue from sale of goods represents the sale of materials. Revenue from sale of goods is recognised at point in time when control of the goods are transferred to the customer at an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods. A receivable is recognised when the goods are delivered to the customer as this is the point in time that the consideration is unconditional because only the passage of time is required before the payment is due. The payment terms for the customer are in accordance with each contract with the customer. The Company is considered to be a principal in the arrangement.

2. Leases

   The Group leases various lands, buildings, offices, warehouses, equipment and cars.

   Rental contracts are typically made for fixed periods of

   2 to 15 years but may have extension options as described below. Lease terms are negotiated on an individual basis and contain a wide range of different terms and conditions. The lease agreements do not typically impose any covenants.

   Leases are recognised as a right-of-use asset and a corresponding liability at the date at which the leased asset is available for use by the Group. Each lease payment is allocated between the liability and finance cost. The finance cost is charged to statement of profit or loss over the lease period so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period. The right-of-use asset is depreciated over the shorter of the asset's useful life and the lease term on a straight-line basis.

   Assets and liabilities arising from a lease are initially measured on a present value basis. Lease liabilities include the net present value of the following lease payments:

   • fixed payments (including in-substance fixed payments), less any lease incentives receivable;

   • amounts expected to be payable by the lessee under residual value guarantees; and

     NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024 (CONTINUED)

1. Earnings per share

   The Group presents basic and diluted earnings per share ("EPS") for its ordinary shares. Basic EPS is calculated by dividing the profit or loss attributable to ordinary shareholders of the Company by the weighted average number of ordinary shares outstanding during the year, adjusted for bonus elements in ordinary shares issued during the year and excluding treasury shares.

   Diluted EPS is calculated by dividing the profit or loss attributable to ordinary shareholders of the Company (after adjusting for interest on the convertible bond and other consequential changes in income or expense that would result from the assumed conversion, if any) by the weighted average number of ordinary shares outstanding during the year including the weighted average number of ordinary shares that would be issued on conversion of all the dilutive potential ordinary shares into ordinary shares.

2. Finance cost and finance income

   1. Finance costs

      Finance costs comprise interest expense on borrowings, finance charges on leases based on the incremental borrowing rate in accordance with IFRS

      16 Leases that are recognised in consolidated statement of profit or loss and other comprehensive income.

      Borrowing costs that are not directly attributable to the acquisition, construction or production of a qualifying asset are recognised in consolidated statement of profit or loss and other comprehensive income using the effective interest method.

   2. Finance income

      Interest income on financial assets at amortised cost calculated using the effective interest method is recognised in consolidated statement of profit or loss and other comprehensive income as part of finance income.

3. Contract retentions

   Contract retentions represent amounts withheld by the

   customers in accordance with contract terms and

   1. Dividend

   Dividend distribution to the Company's shareholders is recognised as a liability in the Group's consolidated financial statements in the period in which the dividends are approved by the Company's shareholders.

   conditions. These amounts are to be repaid upon fulfilment of contractual obligations. The amounts are recognised initially at transaction price and subsequently measured at amortised cost, less provision for impairment, if any.

   NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024 (CONTINUED)

1. Foreign exchange translation reserve

   Exchange differences arising on translation of the foreign controlled entity are recognised in other comprehensive income and accumulated in a separate reserve within equity. The cumulative amount is reclassified to profit or loss when the net investment is disposed of.

   these estimates are reflected in the year in which the

   estimates are revised.

   1. Construction cost estimates

      The Group uses internal quantity surveyors together with project managers to estimate the costs to complete for construction contracts. Factors such as

      changes in material prices, labour costs, defects

2. Dividend income

1. Contract variations

   3 Critical accounting estimates and judgements

1. Recoverability of contract receivables, retentions and amounts due from contract customers

   Management has estimated the recoverability of contract receivables, retentions and amount due from customers and has considered the allowance required. Management has estimated the allowance for contract receivables, retentions and amount due from contract customers on the basis of prior experience, the current economic environment, the status of negotiations as well as forward-looking estimates at the end of each reporting period (refer note 28). Estimating the amount of the allowance requires significant judgement and the use of estimates related to the amount and timing of estimated losses based on historical loss experience, current disputes, consideration of current economic trends and conditions and contractor/employer-

   specific factors, all of which may be susceptible to

   3.1 Recognition of revenue from construction contracts

   The Group uses recognition of revenue and profit over time based on progress of its project through cost to complete method which requires the Group to estimate the progress of work performed as a proportion of contract costs incurred for work performed to date to the estimated total contract costs. Since contract costs can vary from initial estimates, the reliance on the total contract cost estimate represents an uncertainty inherent in the revenue recognition process. Individual contract budgets are reviewed regularly with project leaders to ensure that cost estimates are based upon up to date and as accurate information as possible, and take into account any relevant historic performance experience. Effects of any revision to

   significant change.

   To the extent actual outcomes differ from management estimates, additional allowance for doubtful debts or reversal of excess provisions could be made that could adversely or positively affect earnings or the financial position in future periods.

   The Group has overdue contract balances for completed projects for which the Group is currently in discussion with the customers for the settlement of the outstanding balances and believes no further provision is required. Refer to note 28.

   NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024 (CONTINUED)

1. Employees' end of service benefits

   The cost of the end of service benefits and the present value of the obligation are determined using actuarial valuations. An actuarial valuation involves making various assumptions that may differ from actual developments in the future. These include the determination of the discount rate and future salary increases. Due to the complexities involved in the valuation and its long term nature, a defined benefit obligation is highly sensitive to changes in these assumptions. All assumptions are reviewed at each reporting date. Further details about the assumptions used are set out in note 19.

   1. Critical judgements

      1. Joint operations

   The Group reports its interests in jointly controlled entities as joint operations when the Group has direct right to the assets, and obligations for the liabilities, relating to an arrangement. In this case it accounts for each of its assets, liabilities and transactions, including its share of those held or incurred jointly, in relation to the joint operation.

   Management has evaluated its interest in its joint arrangements and has concluded them to be joint

   operations.

2. Impairment of goodwill

   Determining whether goodwill is impaired requires an estimation of the recoverable amount which is higher of fair value less cost to sell or value-in-use of the cash-generating units to which goodwill has been allocated. The value-in-use calculation requires the Group to estimate the future cash flows expected to arise from the cash-generating unit and a suitable discount rate in order to calculate present value which necessarily involves making numerous estimates and assumptions regarding revenue growth, operating margins, tax rates, appropriate discount rates and working capital requirements. These estimates will likely differ from future actual results of operations and cash flows, and it is possible that these differences could be material. Refer to note 9 for further details.

3. Taxes

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024 (CONTINUED)

5 Income tax and zakat expense

1. Income tax and zakat recognised in the consolidated financial statements:

   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. 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 which was published on 16 January 2023 and at this point the tax law was considered enacted and substantively enacted for accounting purposes. As a result of the enactment / substantial enactment of Corporate tax, management performed assessment of deferred tax for subsidiaries in the UAE during 2023, with the help of an external consultant, for application of IAS 12 taking into consideration the cabinet decisions with respect to adjustments for temporary and permanent differences.

   AED million

   	2024	2023
   Current tax and zakat expense	13.5	11.9
   	13.5	11.9
   Effective tax rate from taxable operations:
   Profit before tax and zakat from operations which are taxable	131.8	26.9
   Loss before tax and zakat from operations which are taxable	(30.5)	(44.5)
   Loss from operations before tax and zakat which are not taxable	-	(14.9)
   Profit / (loss) before tax and zakat	101.3	(32.5)
   Total income tax and zakat expense during the year	(13.5)	(11.9)
   Effective tax rate on profit from operations which are taxable	10.2%	44.2%
   Income tax and zakat	(13.5)	(11.9)
   Tax and zakat on profit from operations which are taxable	(13.5)	(11.9)

   The relationship between tax expense and the accounting profit is as follows:

   AED million

   	2024	2023
   Profit / (loss) before tax and zakat	101.3	(32.5)
   Tax and zakat at the domestic rates applicable to profits in countries where the Group operates	(13.5) (11.9)

   NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024 (CONTINUED)

1. Tax and zakat balances

6 Basic and diluted earnings per share

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024 (CONTINUED)

‌7 Property, plant and equipment

‌8 Intangible assets

‌9 Goodwill

1. Annual test for impairment

   The Group carried out an impairment test for goodwill allocated to Vedder during the year. The recoverable amount of the cash generating unit has been estimated and is based on the higher of fair value less cost to sell or value in use calculated using cash flow projections approved by senior management covering a five-year period. The cashflow projections beyond the five-year period is extrapolated using the growth rate mentioned below. Management concluded that no impairment was required.

2. Key assumptions used

   The calculation of value in use is sensitive to the following assumptions:

   • Growth rate;

   • Discount rate; and

   • Earnings before interest and tax (EBIT) rate.

‌10 Investment in associates

‌11 Investment properties

‌12 Trade and other receivables

‌13 Due from construction contract customers