Gulf Medical Projects Company PJSC and its subsidiary

Gulf Medical Projects Company PJSC and its subsidiary

Independent auditors report and consolidated financial statements For the year ended December 31, 2019

Guff Medical Projects Company PJSC and Its subsIdlety Consolidated financial statements

For the year ended December 31, 2019

Index Page

General information 1

Independent auditors report 2- 4

Consolidated statement of financial position 5

Consolidated statement of profit or loss 6

Consolidated statement of other comprehensive income 7

Consolidated statement of changes In equity 8

Consolidated statement of cash flows 9

Notes to the consolidated financial statements 10 - 36

Gulf Medical Projects Company PJSC and Its subsidiary United Arab Emirates

General information

Principal office address : M/s. Gulf Medical Projects Company PJSC 9th floor, Al Hind Tower, Al Qasba P.O. Box 5385 Sharjah, United Arab Emirates T: 06-5095555 F: 06-5095666 E:[email protected]

Website wimv.gmpc.ae

Board of Directors Sheikh Dr. Faisal Khalid Bin Khalid Al Ctasimi Chairman Mr. Salem Abdulla Salem Aihosani Vice Chairman Sheikh Majid bin Faisal bin Khaled Al Oassimi Managing Director Sheikh Mohammad Faisal Khalid Al Qassimi Member Mr. Abdulla Salem Abdulla Salem Al Hosani ' Member Mr. Mohammed Salem Abdulia Salem Al Hossani Member Sheikh Sultan Saeed Majid Al Oassimi Member Mr. Tarici Abdulhadi Mohammad Monslr Al Ajmi Member Dr. Khalifa Ahmed Mohammed Al Jaber Member

The Auditor

Crowe Mak P.O. Box 6954 Sharjah - United Arab Emirates

1

A Crowe Crowe Mak

1501 & 1502, Golden Tower. Buhairah Domicile P 0 Box 6959, Shadan. UBE Main 4971 6 544 9344 Fax +971 6 573 0791 admin.shlgerowese

Ref: SJ/2923/Feb 2020

Independent auditor's report

To, The Shareholders Gulf Medical Projects Company PJSC United Arab Emirates

Report on the audit of the consolidated financial statements

Opinion

We have audited the accompanying consolidated financial statements of Gulf Medical Projects Company PJSC ("the Company") and its subsidiary (the (Group), which comprise the consolidated statement of financial position as at December 31, 2019, and the consolidated statement of profit or loss and consolidated statement of other comprehensive income, consolidated statement of changes in equity, consolidated statement of cash flows for the year then ended, and notes to the consolidated financial statements, including a summary of significant accounting policies.

In our opinion, the accompanying consofidated financial statements present fairly, in all material respects, the consolidated financial position of the Group as at December 31, 2019, and its consolidated financial performance and its consolidated cash flows for the year then ended in accordance with International Financial Reporting Standards (IFRSs).

Basis for opinion

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

Other matter:

The consolidated financial statements of the Group for the year ended December 31, 2018 which are shown as comparatives, were audited by other auditors who expressed an unmodified opinion on those consolidated financial statements on February 20. 2019.

Information other than the consolidated financial statements and Auditors Report Theron

Management is responsible for the other information. Other information consists of the information included in the Group's Board of Directors Report of 2019, other than the consolidated financial statements and our auditors report thereon. We obtained the report of the Group's Board of Directors, prior to the date of our auditors report. Management is responsible for the other information.

Our opinion on the consolidated financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.

In connection with our audit of the consolidated financial statements, our responsibility is to read the other information identified above and, in doing so, consider whether the other information is materially inconsistent with the consolidated financial statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated. If. based on the work we have performed, we conclude that there is a material misstatement of this other information; we are required to report that fact. We have nothing to report in this regard.

2 Registered with the Depagment of Economic Development, Sharjah (#214937) as a Partnership Firm Sl as,za (riteMI le .:JLa e.eS LarLiJLO411,,ri etwall ,r.J

Crowe Crowe Mak

1501 & 1502. Golden Tower. Buhairah Comiche P 0 Box 6954. Sheilah. UM Main +971 6 544 4344 Fax +971 6 573 0741 adminshkgcrowe.ae

Responsibilities of management and those charged with governance for the consolidated financial statements

Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with International Financial Reporting Standards (IFRSs), and applicable provisions of UAE Federal Law No. 2 of 2015 and the Articles of Association of the Company and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the consolidated financial statements, management is responsible for assessing the Group's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Group or to cease operations, or has no realistic alternative but to do so.

Those charged with governance are responsible for overseeing the Group's financial reporting process.

Auditor's responsibilities for the audit of the consolidated financial statements

Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated financial statements.

As part of an audit in accordance with ISAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide an opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group's internal control.

Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

Conclude on the appropriateness of managements use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors report to the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors report. However, future events or conditions may cause the Group to cease to continue as a going concern.

Evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the Group audit. We remain solely responsible for our audit opinion.

3 Registered with the Department of Economic Development, Sharjah (#214937) as a Partnership Firm

Asas(TI ork, tl iLa 15 ataLa..L.D0 .1.t.4.1111 apla ,s.k1

A Crowe CTersve Mali

15013 1502 G Id Tawe , Buhaimh comiche Pa Box 6954. Sharjah, UAE Main +971 6 544 4344 Fax +971 6 573 0741 admin.shj@crowne

Auditor's responsibilities for the audit of the consolidated financial statements (continued)

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

Report on other legal and regulatory requirements

As required by the U.A.E. Federal Commercial Companies Law No. 2 of 2015, we further confirm that,

1 We have obtained all the information and explanations which we consider necessary for our audit.

2 The consolidated financial statements have been prepared and comply in all material respects with the applicable provisions of the U.A.E. Federal Commercial Companies Law No. 2 of 2015,

3 Proper books of accounts have been maintained by the Group.

4 The contents of the Directors report which relates to the consolidated financial statements are in agreement with the Group's books of account.

5 Investment in shares and stocks are included in Note 7 to the consolidated financial statements and include purchases and investments made by the Group during the year ended December 31, 2019.

6 Note 9 to the consolidated financial statements reflects the disclosures relating to material related party transactions and the terms under which they were conducted.

7 The Social Contributions made during the year disclosed in Note 23, and

8 Based on the information that has been made available to us nothing has come to our attention which causes us to believe that the Group has contravened, during the financial year ended, any of the applicable provisions of the U.A.E. Federal Commercial Companies Law No. 2 of 2015 or the Memorandum and Articles of Association of the Entity, which would materially affect its activities or its consolidated financial position as of December 31, 2019.

AtIk Munshi Senior Partner Regn. No, 483 Sharjah - United Arab Emirates February 20, 2020

4 Registered with the Department of Economic Development, Sharjah (4214937) as a Partnership Firm 4_51).45 (I 1 L'O"V 41 SL4 31.3 L.53 iALSJI r1.144L.43_0(14,44-1.115,-il L.44.1

These consolidated financial s merits were approved for Issue on behalf of the Board of Directors on February 20, 2020.

Sheikh Or. Faisal (Chairman)

Bin Khalid Al Oasimi Salem Abdulla Salem Alhosani (Vice Chairman)

5

Gulf Medical Projects Company PJSC and Its subsidiary Consolidated statement of financial position

As at December 31, 2019

2019 . 2018 Notes AED '000' AED '0017

Assets Non-current assets Property and equipment 4 764,152 769,282 Intangible assets 5 2,067 2,923 Investment properties 6 92,321 96,726 Investments at fair value through other comprehensive income (FVTOCI) 7 161,076 142,186 Total non current assets 1.019,616 1.011.117

Current assets Inventories 8 14,771 14,259 Due from an associate 9 3,676 5,389 Investments at fair value through profit or loss (FVTPL) 7 109 115 Accounts and other receivables 10 183,532 188.958 Cash and bank balances 11 166,901 247,951 Total current assets 368,989 456,672 Total assets 1,388,605 1467,789

Equity and Liabilities

Equity Share capital 12 698,916 698,916 Reserves 13 284,947 278,452 Cumulative change in fair value of investment measured at fair value through other comprehensive income (FVTOCI) (167,311) (185,887) Retained eamings 299,736 320,173 Equity attributable to equity holders of the parent company 1,116,288 1,131,654 Non-controlling interest 15 31,289 27,833 Total equity 1 147 77 1,159,487

Non-current liabilities Employees' end of service benefits 16 18,433 16,639 Bank loans 17 35,2S0 85,842 Total non-current liabilities 53,683 102,481

Current liabilities Accounts and other payables 18 136,753 152,621 Bank loans 17 50,592 53,200 Total current liabilities 187,345 205,821 Total liabilities 241,028 308,302 Total equity and liabilities 1,388,605 1,467,789 The accompanying notes constitute an integral part of these consolidated financial statements The report of the auditor is set out o gn • es 2 to 4.

Gulf Medical Projects Company PJSC and its subsidiary Consolidated statement of profit or loss


Note 2019

AED '000' 2018

AED '000'

Revenue 20 534,905 470,559 Cost of revenue 21 (398,640) (357,922) Gross profit 136,265 112,637

Fair value loss of investments at FVTFIL 7 (6) (14) Loss from an associate 9 (832) (227) Loss on changes In fair value of investment properties 6 (4,405) (7,137) Other income 22 $5,591 138,081 Administrative expenses 23 (106,412) (109,553) Finance cost (5,00$) (7,039) Profit for the year from continuing operations 75,196 126,748 Loss for the year from discontinued operations 25 (5,350) (7,091) Net Profit for the year 69,846 119,657

Attributable to: Equity holders of the parent company 64,950 113,246 Non-controlling interest 4,896 6,411

69,846 119,657

Earnings per share (AED per share) 24 0.09 0.16

The accompanying notes constitute an integral part of these consolidated financial statements

The report of the auditor is set out on pages 2 to 4.

6

Gulf Medical Projects Company PJSC and Its subsidiary Consolidated statement of other comprehensive income


2019 AED '000

2018 AED '000'

Net Profit for the year 69,846 119,657

Other comprehensive Income:

Items that will not be reclassified to the profit or loss:

Loss on sale of investment at FVTOCI (1,879) Change In fair value of investments at FVTOCI (1,424) (71,795)

Total other comprehensive loss (1,424) (73,674)

Total comprehensive Income for the year 68,422 45,983

Attributable to: Equity holders of the parent company 63,526 39,572 Non-controlling interest 4;896 6,411

68,422 45,983

Attributable to equity holders of the parent company arises from: Continuing operations 68,876 46.663 Discontinued operations (5,350) (7,091)

63,526 39.572

The accompanying notes constitute an Integral part of these consolidated financial statements


7

Gulf Medical Projects Company PJSC and its subsidiary Consolidated statement of changes in equity

For the year ended December 31,2019

Equity attributable to equity holders of the parent company

Share capital Reserves

Cumulative change in fair

value of Investment measured -

FVTOCI Retained earnings

Non- controlling

Total interest Total Equity

MD TOO AED '000' AED '000' AED 000 AED '000' AED 000 AED 000

Balance at January 01, 2018 698,916 268,875 (94,092) 420,797 1,294,496 33,357 1,327,853 Effect on adoption of IFRS 9 (32,522) (32,522) (11,935) (44,457) Adjusted balance as at January 01.2018 698,916 268,875 (94,092) 388,275 1,261,974 21.422 1,283,396 Net profit for the year ended December 31, 2018 113,246 113.246 6,411 119,657 Other comprehensive loss (71,795) (1,879) (73,674) (73,674) Total comprehensive income (71,795) 111,367 3%572 6,411 45$83 Cash dividends (69,892) (69,892) (6%892) Board of directors remuneration (100,000) (100,000) (100,000) Transfer to statutory reserve 11,325 (11,325) Transfer of revaluation surplus related to land and buildings (1,748) 1,748 Balance at December 31, 2018 698 916 278,452 (165,887) 320,173 1,131,654 27,833 1,159487

Balance at January 01,2019 698,916 278,452 (165,887) 320,173 1,131,654 27 833 1,159,487 Net profit for the year ended December 31, 2019 64,950 64,950 4,896 69,846 Other comprehensive loss (1,424) (1,424) (1,424) Total comprehensive income (1,424) 64,950 63.526 4,896 68,422 Transfer to statutory reserve 6,495 (6,495) Cash dividends (69,892) (69,892) (69.892) Board of directors remuneration (9,000) (9,000) (9,000) Net movements (1,440) (1,440) Balance at December 31, 2019 698,916 284,947 (167,311) 299,736 1116,288 31,289 1,147,577



8

Gulf Medical Projects Company PJSC and its subsidiary Consolidated statement of cash flows


2019 2018 AED '000' AED '000'

Cash flows from operating activities Profit for the year from continuing operations 75,196 126,748 Loss for the year from discontinued operations (5,350) (7,091) Net Profit for the year 69,846 119,657

Adjustments for: Depreciation on property and equipment 34,042 34,168 Amortization of intangible assets 398 499 Fair value loss of investments at FVTPL 14 Fair value loss from investment property 4,405 7,137 Finance cost 5,005 7,039 Loss from an associate 832 227 Employees end of service benefits 5,758 5,060 Interest income (4,046) (7,824) Provision for impairment of accounts receivable 28,859 31,541 Provision for slow-moving inventory items 59 585 Deferred income realized (29,500) Loss on disposal of intangible assets 458 Loss/(Gain) on sale of property and equipment 993 (8,213) Reversal of excess provisions (30,000) (7Q000)

Operating cash flows before changes in operating assets and liabilities 116,615 90,390 (Increase) (Decrease in inventories (571) 2,160 Decrease in due from an associate 881 499 (Increase) in accounts receivable and others (25,736) (54,998) Increase in accounts and other payables 14,791 10,295 Settlements of employees end of service benefits (3,964) (1,991) Finance costs paid (5,664) (7,125) Net cash from operating activities 96,352 39,230

Cash flow from investing activities Decrease in fixed deposits 42,524 275,794 Interest income received 6,349 10,697 Purchase of property and equipment (31,913) (66,299) Purchase of Investments at FVTOCI (20,314) Proceed from sale of investment at FVTOCI 1,116 Addition to intangible assets (7 ) Proceeds from sale of property and equipment 2,008 15,406 Net cash (used in)/ from Investing activities (1,346) 236,707

Cash flow from financing activities Repayment of bank loans (53,200) (53,200) Cash dividends paid (69,892) (69,892) Board of directors remuneration paid (9,000) (100,000) Net movement in non-controlling interest (1,440) Net cash (used) in financing activities (133,532) (223,092)

Net (decrease) / Increase in cash and cash equivalents (38,526) 52,845 Cash and cash equivalents, beginning of year 85,901 33,056

Cash and cash equivalents at end of year (Note 26) 47 375 85 901


The report of the auditor is set out on pages 2 to 4. 9

Gulf Medical Projects Company PJSC and Its subsidiary Notes to the consolidated financial statements


1 Legal status and business activities

1.1 Gulf Medical Projects Company PJSC (hereinafter referred to as the Parent Company') is a public joint stock company incorporated in Sharjah by an Arniri Decree No.48/79 issued by His Highness The Ruler of Sharjah on August 02, 1979.

1.2 The main activities of the company and its subsidiary (collectively referred to as "the Group") are general hospital, general clinic, import hospitals management, construction of medicine product factories, trading in medical equipment and Its instruments, medicine and medical tools,

1.3 The Group is domiciled In Sharjah and its registered address is P.O. Box: 5385. Sharjah, United Arab Emirates.

1.4 The management and control are vested with board of directors.

1.5 These consolidated financial statements incorporate the operating results of the license no. 14042, its branch license no. 126349 (refer note 25) and Its subsidiary license no. 571641 (refer note 3.3)

2 Application of new and revised international Financial Reporting Standards (IFRSs)

2.1 New and amended IFRS Standards that are effective for the current year

The following new and revised IFRSs have been applied in the current year in these consolidated financial statements. Their adoption had no significant impact on the amounts reported in these consolidated financial statements but may affect the accounting for future transactions or arrangements.

IFRS 16 "Leases" (effective from 1 January 2019)

IFRS 16 Leases, which was Issued in January 01, 2016 and became effective for annual periods beginning on or after January 01, 2019. has been adopted in these consolidated financial statements. Transition provisions of IFRS 9 allows the Group not to restate comparatives.

IFRS 16 replaces the existing guidance on leases, 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 in the Legal Form of a Lease'.

Impact of initial application of IFRS 16 Leases

IFRS 16 specifies how an IFRSs reporter will recognize, measure, present and disclose leases. The standard provides a single lessee accounting model, requiring lessees to recognize assets and liabilities for all leases unless the lease term is 12 months or less or the underlying asset has a low value. Lessors continue to classify leases as operating or finance, with IFRS 16's approach to lessor accounting substantially unchanged from its predecessor, IAS 17.

The Group adopted IFRS 16 on effective date (1 January 2019) using the modified retrospective approach. The Group elected to use the transition practical expedient allowing the standard to be applied to contracts entered into, or changed, on/or after 1 January 2019.

The Group also elected to use the recognition exemption for lease contract that have a lease term of 12 months or less and do not contain a purchase option 'short term lease' and lease contract for which the underlying assets is of low value 'Low-value assets'.

The Group presents right of use assets in 'other assets' and lease liabilities in 'other liabilities' in the consolidated statement of financial position.

Based on management assessment the adoption of IFRS 16 leases does not have material impact on these consolidated financial statements as a lessor or as lessee and hence, the Group did not make any adjustment in this regard. Accordingly, the comparative information presented for the year 2018 has not restated. Amendments to IFRS 9 "financial instruments"

Amendments to IFRS 9 allows more assets to be measured at amortized cost or depending on the business model, at fair value through other comprehensive income even in the case of negative compensation payment.

10

Gulf Medical Projects Company PJSC and its subsidiary Notes to the consolidated financial statements


2 Application of new and revised International Financial Reporting Standards (IFRSs) (continued)

2.1 New and amended IFRS Standards that are effective for the current year (continued)

Amendments to IAS 28 "Investment in Associates and Joint Venture"

Amendments to IAS 28 Investment in Associates and Joint Venture" relating to long-term interests in associates and joint venture. These amendments clarify that the entity applies IFRS 9 to long-term interests in associates and joint venture that form part of the net investment In the associate or joint venture but to which equity method is not applied.

Annual improvements to IFRS 2015 -2017 Cycle

The Annual Improvements include amendments to four Standards: IAS 23 Borrowing costs. IAS 12 Income taxes, IFRS 3 Business Combinations and IFRS 11 Joint Arrangements. The Group has adopted the amendments included in the Annual improvements to IFRS Standards 2015-2017 Cycle in the current year for IAS 23 Borrowing costs.

2.2 New and revised IFRS in issue but not yet effective

At the date of authorization of these consolidated financial statements, the Group has not applied the following new and revised IFRS Standards that have been issued but are not yet effective:

New and revised IFRSs Bffective for annual periods beninninn on

or after

Amendments to References to the Conceptual Framework in IFRS Standards - amendments to IFRS 2, IFRS 3, IFRS 6, IFRS 14. IAS 1, IAS 8, IAS 34, IAS 37,.IAS 38, IFRIC 12, IFRIC 19, IFRIC 20, IFRIC 22, and SIC-32 to update those pronouncements with regard to references to and quotes from the framework or to indicate where they refer to a different version of the Conceptual Framework.

Arnendment to IFRS 3 Business Combinations relating to definition of a business

Amendments to IAS 1 and IAS 8 relating to definition of material.

IFRS 17 insurance Contracts.

Amendments to IFRS 10 consolidated financial statements and IAS 28 investments in Associates and Joint Ventures (2011) relating to the treatment of the sale or contribution of assets between an investor, its associate or joint venture.

3 Significant accounting policies

3.1 Statement of compliance

January 1,2020

January 1,2020

January 1,2020

January 1,2021

Effective date deferred indefinitely. Adoption is

still permitted.

The consolidated financial statements have been prepared in accordance with international Financial Reporting Standards. These consolidated financial statements are presented in Arab Emirates Dirham (AED) which is the Group functional and presentation currency.

3.2 Basis of preparation

The consolidated financial statements have been prepared on the historical cost basis except for financial instruments that are measured at fair values, as explained in the accounting policies below.

Historical cost is generally based on the fair value of the consideration given in exchange for assets or goods or services.

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

The principal accounting policies applied in these consolidated financial statements are set out below.

11



3 Significant accounting policies (continued)

3.3 Basis of consolidation

The consolidated financial statements comprise the financial statements of the Parent Company and its subsidiary as at December 31, 2019. Control is achieved when the Parent entity is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee. Specifically, the Parent entity controls an investee If and only if it:

- has power over the investee

- Is exposed, or has rights, to variable returns from its involvement with the investee; and

has the ability to use its power to affect its returns

When the Group has less than a majority of the voting or similar rights of an investee, the Group considers all relevant facts and circumstances in assessing whether it has power over an investee, Including:

- The contractual arrangement with the other vote holders of the investee

- Rights arising from other contractual arrangements

The Group's voting rights and potential voting rights

The Group re-assesses whether or not it controls an investee if facts and circumstances Indicate that there are changes to one or more of the three elements of control. Consolidation of a subsidiary begins when the Group obtains control over the subsidiary and ceases when the Group loses control of the subsidiary. Assets, liabilities. income and expenses of a subsidiary acquired or disposed of during the year are Included in the statement of comprehensive income from the date the Group gains control until the date the Group ceases to control the subsidiary.

Profit or loss and each component of other comprehensive income (OCI) are attributed to the equity holders of the parent of the Group. When necessary, adjustments are made to the financial statements of subsidiary to bring their accounting policies into line with the Group's accounting policies. All intra-group assets and liabilities, equity, income, expenses and cash flows relating to transactions between members of the Group are eliminated in full on consolidation.

A change In the ownership interest of a subsidiary, without a loss of control, Is accounted for as an equity transaction. If the Group loses control over a subsidiary, it:

- Derecognizes the assets (including goodwill) and liabilities of the subsidiary

- Derecognizes the cumulative translation differences recorded in equity

- Recognizes the fair value of the consideration received

- Recognizes the fair value of any investment retained

- Recognizes any surplus or deficit in profit or loss

Reclassifies the parent's share of components previously recognized in OCI 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.

The details of the subsidiary are as follows % of ownership Principal Country of 2019 2018 actlytties Incorporation Company

AI Zahra (Pvt.) Hospital Dubai LLC 68.38% 68.38% General Hospital UAE

All significant intra-company transactions, balances, income and expenses are eliminated in full, on consolidation.

12




3.4 Current(Non current classification

The Group presents assets and liabilities In consolidated statement of financial position based on current/non-current classification. An asset is current when it is:

Expected to be realized or intended to sold or consumed in normal operating cycle or held primarily for the purpose of trading or expected to be reeked within twelve months after the reporting period, or cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period.

All other assets are classified as non-current.

A liability is current when it is expected to be settled in normal operating cycle or It is held primarily for the purpose of trading or it is due to be settled within twelve months after the reporting period, or there is no unconditional right to defer the settlement of the liability for at least twelve months after the reporting period.

The Group classifies all other liabilities as non-current.

3.5 Fair value measurement

Fair value Is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either

In the principal market for the asset or liability, or In the absence of a principal market, in the most advantageous market for the asset or liability.

The principal or the most advantageous market must be accessible to by the Group.

The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the asset or Ilabili ty, assuming that market participants act in their best economic interest.

A fair value measurement of a non-financial asset takes Into account a market participant's ability to generate economic benefits by using the asset in its highest and best use or by selling It to another market participant that would use the asset in its highest and best use.

All assets and liabilities for which fair value is measured or disclosed In the consolidated financial statements are categorized within the fair value hierarchy, described as follows, based on the lowest level Input that Is significant to the fair value measurement as a whole:

Level 1 Inputs are quoted price (unadjusted) In active market for Identical asset or liabilities that the Group can access at the measurement date;

Level 2 Inputs, other than quoted prices included within Level 1, that are observable for the asset or liability, either directly or Indirectly: and

Level 3 inputs are unobservable inputs for the asset or liability.

3.6 Foreign currency

The transactions in currencies other than the Group's functional currency are recognized at the rates of exchange prevailing at the dates of the transactions. At the end of each reporting period, monetary Items denominated In foreign currencies are retranslated at the rates prevailing at that date. Non-monetary Items carried at fair value that are denominated in foreign currencies are retranslated at the rates prevailing at the date when the fair value was determined. The non-monetary items that are measured in terms of historical cost in a foreign currency are not retranslated.

Exchange differences on monetary Items are recognized In profit or loss In the period In which they arise.

Changes in the fair value of monetary securities denominated in foreign currency classified as available for sale are analyzed between translation differences resulting from changes in the amortized cost of the security and other changes in the carrying amount of the security. Translation differences related to changes in amortized cost are recognized In profit or loss, and other changes in carrying amount are recogntzed in other comprehensive income.

13

Gull Medical Projects Company PJSC and its subsidiary Notes to the consolidated financial statements



3.6 Foreign currency (continued)

Translation differences on non-monetary financial assets and liabilities such as equities held at fair value through profit or loss are recognized in profit or loss as part of the fair value gain or loss. Translation differences on non-monetary financial assets, such as equities classified as other comprehensive income, are included in other comprehensive Income.

3.7 Property and equipment

Property and equipment Is stated at cost less accumulated depreciation and identified impairment loss, If any. The cost comprise of purchase price, together with any incidental expense of acquisition. Cost also includes transfers from equity of any gains or loss on qualifying cash flow hedges of foreign currency purchases of property and equipment.

Subsequent costs are included in the assets carrying amount or recognized 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. All other repairs and maintenance expenses are charged to the statement of profit or loss during the financial period In which they are Incurred.

Depreciation is spread over its useful lives so as to write off the cost of properly and equipment, using the straight-line method over its useful fives as follows:

Years Hospital buildings 10-40 Hospital furniture and equipment 1-10 Motor vehicles 3-5 Other furniture and equipment 1-5

When part of an item of property and equipment have different useful lives, they are accounted for as separate items (major components) of property and equipment.

The estimated useful fives, residual values and depreciation method are reviewed at the end of each reporting period, with the effect of any changes in estimate accounted for on a prospective basis.

The gain or loss arising on the disposal or retirement of an item of property and equipment Is determined as the difference between the sales proceeds and the carrying amount of the asset and is recognized in the statement of profit or loss.

Capital work In Progress

Properties in the course of construction for production, supply or administrative purposes are carried at cost. less any recognized impairment loss. Such properties are classified to the appropriate categories of property, plant and equipment when completed and ready for intended use. Depreciation of these assets, on the same basis as other property assets, commences when the assets are ready for their Intended use.

3.8 Investment properties at fair value

Investment property are properties held to earn rentals and/or for capital appreciation. Investment properties are measured initially at cost, including transaction costs. Subsequent to initial recognition, investment properties are measured at fair value. Gains and losses arising from changes In the fair value of investment properties are included in profit or loss In the period in which they arise.

Cost includes expenditure that is directly attributable to the acquisition of the investment property.

The Group determines at each reporting date whether there is any objective evidence that the investment properties are impaired. Whenever the carrying amount of an Investment property exceeds their recoverable amount, an impairment loss is recognized in the profit or loss. The recoverable amount is the higher of investment property's net selling price and the value in use. The net selling price is the amount obtainable from the sale of an Investment property in an arm's length open market transaction while value In use is the present value of estimated future cash flows expected to arise from the continuing use of this investment property and from its disposal at the end of its useful fife.

14




3.8 investment properties at fair value (continued)

An investment property is derecognized upon disposal or when the investment property is permanently withdrawn from use and no future economic benefits are expected from the disposal. My gain or loss arising on derecognition of the property (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in profit or loss in the period in which the property Is derecognized.

3.9 intangible assets

Intangible assets with finite useful lives that are acquired separately are canted at cost less accumulated amortization and accumulated impairment losses. Amortization is recognized on a straight4ine basis over their estimated useful lives. The estimated useful life and amortization method are reviewed at the end of each reporting period, with the effect of any changes in estimate being accounted for on a prospective basis. Intangible assets with indefinite useful lives that are acquired separately are canted at cost less accumulated impairment losses.

Software

Acquired computer software licenses are capitalized on the basis of the costs incurred to acquire and bring to use the specific software. These costs are amortized over their estimated useful lives of 8 years.

Directly attributable costs that are capitalized as part of the software product include the software development employee costs and an appropriate portion of relevant overheads.

Costs associated with maintaining computer software programs are recognized as an expense as incurred.

3.10 impairment of tangible and intangible assets

At the end of each reporting period, the Group reviews the carrying amounts of Its tangible and intangible assets to determine whether there is any Indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the Impairment loss (If any).

Where it is not possible to estimate the recoverable amount of an individual asset, the Group estimates the recoverable amount of the cash-generating unit to which the asset belongs. Where a reasonable and consistent basis of allocation can be identified, corporate assets are also allocated to individual cash-generating units, or otherwise they are allocated to the smallest group of cash-generating units for which a reasonable and consistent allocation basis can be identified.

Intangible assets with Indefinite useful lives and intangible assets not yet available for use are tested for Impairment at least annually, and whenever there is an indication that the asset may be impaired.

Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are 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 for which the estimates of future cash flows have not been adjusted.

If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than Its carrying amount, the carrying amount of the asset (or cash-generating unit) Is reduced to its recoverable amount. An Impairment loss is recognized immediately in the statement of profit or loss.

Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no Impairment loss been recognized for the asset (or cash-generating unit) in prior years. A reversal of an Impairment loss is recognized immediately in the statement of profit or loss.

15




3.11 Financial instruments

Financial assets and financial liabilities are recognized when the Group becomes a party to the contractual provisions of the instrument.

3.12 Financial assets

Classification

The Group classifies its financial assets in the following measurement categories:

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

those to be measured at amortized 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 Fosses will either be recorded in profit or loss or OCI. For investments in equity instruments that are not held for trading, this will depend on whether the Group has made an irrevocable election at the time of initial recognition to account for the equity investment at fair value through other comprehensive income (FVTOCI). For investments in these equity instruments. the Group does not subsequently reclassify between FVTOCI and FVTPL.

Measurement

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 (FVTPL), transaction costs that are directly attributable to the acquisition of the financial asset. Transaction costs of financial assets carried at FVTPL are expensed in profit or loss.

Financial assets comprise of cash and cash equivalents, receivables and other financial assets.

Cash and cash equivalents

Cash and cash equivalents comprise cash on hand and demand deposits and other short-term highly liquid investments that are readily convertible to a known amount of cash and are subject to an insignificant risk of changes in value.

Receivables

Receivable balances that are held to collect are subsequently measured at the lower of amortized cost or the present value of estimated future cash Rows. The present value of estimated future cash flows is determined through the use of value adjustments for uncollectable amounts. The Group assesses on a forward-looking basis the expected credit losses associated with its receivables and adjusts the value to the expected collectible amounts.

Receivables are written off when they are deemed uncollectible because of bankruptcy or other forms of receivership of the debtors. The assessment of expected credit losses on receivables takes into account credit-risk concentration, collective debt risk based on average historical losses, specific circumstances such as serious adverse economic conditions in a specific country or region and other forward-looking information.

Receivables that are held to collect and sell are subsequently measured at FVTOCI. The Group derecognizes receivables on entering into factoring transactions if the Group has transferred substantially all risks and rewards or if the Group does not retain control over those receivables.

Other financial assets

Other financial assets include both debt instrument and equity instruments. Debt instruments include those subsequently carried at amortized cost, those canied at FVTPL and those carried at FVTOCI.

16




3.12 Financial assets (continued)

Equity instruments

The Group subsequently measures all equity investments at fair value. Where the Group's management has elected to present fair value gains and losses on equity investments in OCI, there is no subsequent reclassification of fair value gains and losses to profit or loss following the derecognition of the investment. Dividends from such investments continue to be recognized in profit or loss as other income when the Group's right to receive payments is established.

Changes in the fair value of financial assets at FVTPL are recognized in other gains/(losses) in the statement of profit or loss as applicable. Impairment losses (and reversal of Impairment losses) on equity investments measured at FVOCI are not reported separately from other changes in fair value.

Financial assets at Fair value through Profit or Loss (FVTPL)

Financial assets are classified as financial assets at fair value through profit or loss (FVTPL) when they are held for trading, which means they have been acquired principally for the purpose of selling in the near future.

Initially the financial assets In these criteria are measured at fair value through profits or losses (FVTPL). Gains or fosses resultant from changes in the fair value arising on subsequent measurement are recognized in the consolidated statement of profit or loss.

The net gain or loss recognized in the consolidated statement of profit or loss incorporates any dividend or Interest earned on the financial asset.

Financial assets at fair value through other comprehensive income (FVTOCI)

The Group has classified all Its Investments in equity instruments that are not held for trading as financial assets at fair value through other comprehensive income, on initial application of IFRS.9.

Investment in equity instruments at FVTOCI initially measured at fair value plus transaction costs. Subsequently, they are measured at fair value with gains and losses arising from changes in fair value recognized in other comprehensive income and accumulated in the Cumulative change In fair value of investment measured - FVTOCI. The group determines an asset's fair value in accordance with group accounting policy on fair value.

Impairment of financial assets

The Group assesses on a forward looking basis the expected credit losses associated with Its debt Instruments carried at amortized cost and FVTOCI. The Impairment methodology applied depends on whether there has been a significant increase In credit risk.

For trade receivables and due from related parties, the Group applies the simplified approach permitted by IFRS 9, which requires expected lifetime losses to be recognized from Initial recognition of the receivables.

Derecocnition of financial assets

The Group derer-ognizes a financial asset only when the contractual rights to the cash flows from the asset expire; or it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another Group. If the Group neither transfers nor retains substantially all the risks and rewards of ownership and continues to control the transferred asset, the Group recognizes Its retained interest in the asset and an associated liability for the amounts, It may have to pay. If the Group retains substantially all the risks and rewards of ownership of a transferred financial asset, the Group continues to recognize the financial asset.

17



3 Significant accounting policies (continued) 3.13 Financial liabilities

Financial liabilities are classified according to the substance of the contractual arrangements entered into and the definitions of a financial liability. All financial liabilities are recognized initially at fair value and, in the case of loans, borrowings and payables, net of directly attributable transaction costs. The Group's financial liabilities include account and other payables and bank loan.

Account and other payables

Account payables are obligations to pay for goods or services that have been acquired In the ordinary course of business from suppliers. Account payables are classified as current liabilities if payment is due within one year or less (or in the normal operating cycle of the business if longer). If not, they are presented as non-current liabilities. Account and other payables are recognized initially at fair value and subsequently are measured at amortized cost using effective interest method. Loans and other borrowings

Loans and other borrowings are recorded at the proceeds received, net of direct issue costs. Finance charges are accounted on accrual basis and are added to the carrying value of the instruments to the extent that they are not settled in the period in which they arise.

Derecocinition of financial liabilities

The Group derecognizes financial liabilities when, and only when, the Group's obligations are discharged, cancelled or they expire. When an existing financial liability is replaced by another, from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as the derecognition of the original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognized in the consolidated statement of profit or loss.

3.14 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 recognized amounts and there is an intention to settle on a net basis or realm the asset and settle the liability simultaneously. 3.15 inventories

Inventories are stated at the lower of cost and net realizable value. Costs of inventories are determined on a first-in-first-out basis. Cost of Inventories comprises of costs of purchase, and where applicable cost of conversion and other costs that has been incurred in bringing the inventories to their present location and condition. Net realizable value represents the estimated selling price for inventories less all estimated costs of completion and costs necessary to make the sale. Provisions are made for slow moving and obsolete Inventories 3.16 Borrowing cost

Borrowing cost directly attributable to the acquisition, construction or production of qualifying assets, which are assets that necessarily take a substantial period of time to get ready for their intended use or sale, are added to the cost of those assets, until such time as the assets are substantially ready for their Intended use or sale.

Investment income earned on the temporary investment of specific borrowings pending their expenditure on qualifying assets is deducted from the borrowing costs eligible for capitalization.

All other borrowing costs are recognized In the consolidated statement of profit or loss in the period in which they are Incurred.

3.17 Government grants

Government grants at fair value are recognized when there is reasonable assurance that the Group will comply with the conditions associated with the grants and the grants will be received. Government grants whose primary condition is that the Group should purchase, construct or otherwise acquire noncurrent assets are recognized as deferred income in the consolidated statement of financial position and transferred to the consolidated statement of comprehensive income on a systematic and rational basis over the useful lives of the related assets.

18

Gulf Medical Projects Company RISC and its subsidiary Notes to the consolidated financial statements



3.18 Provisions

Provisions are recognized when the Group has a present obligation (legal or constructive) as a result of a past event, it is probable that the Group will be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation.

The amount recognized as a provision is the best estimate of the consideration required to settle the present obligation at the end of the reporting period, taking into account the risks and uncertainties surrounding the obligation. When a provision is measured using the cash flows estimated to settle the present obligation, its carrying amount is the present value of those cash flows.

When some or all of the economic benefits required to settle a provision are expected to be recovered from a third party, a receivable is recognized as an asset, if it is virtually certain that reimbursement will be received and the amount of the receivable can be measured reliably.

3.19 Employees' end of service benefits

Amounts required to cover end of service indemnity at the statement of financial position date are computed pursuant to the United Arab Emirates Federal Labor Law based on the employees' accumulated period of service and current basic remuneration at the end of reporting period.

Retirement pension and social benefit scheme for U.A.E citizens are made by the Group in accordance with the Federal law.

3.20 Revenue recognition

Revenue is measured at the fair value of the consideration received or receivable. Revenue is reduced for estimated customer retums and rebates.

Rendering of services

Health care service revenues primarily comprise fees charged for inpatient and outpatient medical services. Services include charges for accommodation, theatre, medical professional services, equipment, laboratory and pharmaceutical items used. Revenue is recorded and recognized during the period in which medical service is provided based on the amounts due from the patient and/or medical funding entities. Fees are calculated and billed based on various tariffs agreed with insurers.

Sale of 000ds

Revenue from sale of goods represent of total revenue from sale of drug and cosmetics provided to customers and is recognized when control and benefits are transferred.

Dividend and interest income

Dividend income from investments is recognized when the shareholder's right to receive payment has been established.

Interest income from a financial asset is recognized when it is probable that the economic benefits will flow to the Group and the amount of income can be measured reliably. Interest income is accrued on a time basis, by reference to the principal outstanding and at the effective interest rate applicable, which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to that assets net carrying amount on initial recognition.

Rental income

Rental income from investment properties is recognized on a straight-line basis over the term of the relevant lease contract.

19


For the year ended December 31. 2019


3.21 Segment Information

For management purposes, the Group is organized into two operating segments based on their products and services. These segments are independently managed by respective segment managers who are reporting to the Group's management. The Group regularly review the segment results in order to assess the segment performance.

3.22 Critical accounting judgements and key sources of estimation uncertainty

In the application of the Group's accounting policies, which are described in policy notes, the management are required to make judgements, estimates and assumptions about the carrying amounts of assets and liabilities 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.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.

The significant judgments and estimates made by management, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are described below.

Critical judgements in applying accounting policies

In the process of applying the Group's accounting policies, which are described above, and due to the nature of operations, management makes the following judgment that has the most significant effect on the amounts recognized in the consolidated financial statements.

Determining the timing of satisfaction of performance obligations - revenue recognition

In making their judgement, the Group considers the detailed criteria for the recognition of revenue set out in IFRS 15, and in particular, whether the Group has transferred control of the goods to the customer. The management is satisfied that control has been transferred and that recognition of revenue in the current year is appropriate, In conjunction with the recognition of an appropriate warranty provision as applicable.

Business model assessment - classification and measurement of consolidated financial statements

Classification and measurement of financial assets depends on the results of business model test The Group determines the business model at a level that reflects how groups of financial assets are managed together to achieve a particular business objective.

Classification of properties

Based on managements intention at the time of acquisition of a property. it was decided to classify the property either as held for sale or held for development or held for rental or capital appreciation. The management changes the classification when the intention changes.

Classification of Investments

Management decides upon acquisition of an Investment whether it should be classified as investment carried at fair value through profit or loss or Investments at fair value through other comprehensive Income (FVTOCI).

Classification of investments as fair value through income statement is based on how management monitors the performance of these investments. When they are not classified as held for trading but have readily available reliable fair values and the changes in fair values are reported as part of the consolidated statement of profit or loss in the management accounts, they are classified as fair value through consolidated statement of profit or loss.

20




3.22 Critical accounting judgements and key sources of estimation uncertainty (continued)

Key sources of estimation uncertainty

The key assumptions concerning the future, and other key sources of estimation uncertainty at the reporting date, that have a significant risk of causing a material adjustment to the canying amounts of assets and liabilities within the next financial year. are discussed below.

Allowance for doubtful debts

Allowances for doubtful debts are determined using a combination of factors to ensure that trade receivables are not overstated due to uncollectibility. The allowance for doubtful debts for all customers is based on a variety of factors, including the overall quality and ageing of receivables, continuing credit evaluation of the customers financial conditions and collateral requirements from customers in certain circumstances. In addition, specific allowances for individual accounts are recorded when the Group becomes aware of the customer's inability to meet its financial obligations.

Net realizable value of inventories

Inventories are stated at the lower of cost or net realizable value. Adjustments to reduce the cost of inventory to its realizable value, if required, are made for estimated obsolescence or impaired balances. Factors influencing these adjustments include changes in demand, product pricing, physical deterioration and quality Issues.

Impairment of equity investments

The Group treats investments as impaired when there has been a significant or prolonged decline In the fair value below its cost or where other objective evidence of impairment exists giving due consideration to other factors, including normal volatility in share prices for quoted equities and the future cash flows.

Useful lives of property and equipment

Property and equipment is depreciated over its estimated useful life, which Is based on expected usage of the asset and expected physical wear and tear which depends on operational factors. The management has not considered any residual value as It is deemed Immaterial.

Impairment of financial assets

The loss allowances for financial assets are based on assumptions about risk of default and expected loss rates. The Group uses judgement In making these assumptions and selecting the inputs to the Impairment calculation, based on the Group's past history, existing market conditions as well as forward looking estimates at the end of each reporting period. Details of the key assumptions and inputs used are disclosed In the relevant notes to the consolidated financial statements.

21



4 Properly and equipment

Cost

Land Hospital buildings

Hospital furniture and equipment

Motor vehicles

Other furniture and equipment

Capital work- In-progress Total

AED '000' MD '000' AED '000' AED '000' AED '000' AED '000 AED '000'

As at December 31,2017 326,537 556,731 116,352 5,251 15,940 2,340 1,023,161 Additions during the year 58,250 304 7436 291 18 66,299 Disposals during the year (7,000) (118) (339) (302) (7,759) Adjustments (122,769) (122,769) As at December 31, 2018 255,018 556,917 123,449 5,251 15,929 2,358 958,922 Additions during the year 1,001 12,562 91 234 18,025 31$13 Disposals during the year (2,604) (16,726) (1,556) (20,886) Mat December 31, 2019 255,018 555,314 119,285 5,342 14,607 20,383 969,949

Accumulated Depreciation As at December 31, 2017 69,116 72,334 2,811 11,777 15$038 Charge for the year 15,342 16,428 975 1423 34,168 Eliminated on disposal during the year (46) (241) (279) (566) As at December 31, 2018 114412 88,521 3,786 12,921 189,640 Charge for the year 15,360 16,677 886 1,119 34,042 Eliminated on disposal during the year (2,327) (14,139) (1,419) (11,885) As at December 31,2019 97,445 91,059 4,672 12,621 205 797

Carrying value as at December 31,2019 255,018 457,869 28,226 670 1,986 20,383 764,152

Canying value as at December 31.2018 255,018 472,505 34,928 1,465 3,008 2,358 769,282

Notes: i Land of AED. 255,018 thousands (2018:255.018 thousands) mentioned above includes AW. 250,481 thousands (2018: AS). 250,481 thousands) represent the fair value of a plot of land

measuring 350,000 square feet registered with the concerned department in the name of the subsidiary. This land is mortgaged with a local bank against credit facilities granted by the bank. During the previous year, the Group changed the title deed from non-tradable to tradable status with the Land Department in Dubai.

ii Capital work-in-progress of MD. 20,383 thousands (2018: AED. 2,358 thousands) mentioned above represent the total costs Incurred for the interior work of the hospital buildings.

22



5 Intangible assets

Cost:

Software Total AED 000 AED '000'

Balance as at December 31, 2017 3,714 3,714 Additions 7 7 Transfer to related party (3) (3) Balance as at December 31, 2018 3,718 3,718 Disposals during the year (701) (701) Balance as at December 31, 2019 3.017 3.017

Accumulated Amortization:

Balance as at December 31, 2017 296 296 Charge for the year 499 499 Balance as at December 31,2018 795 795 Charge for the year 398 398 Eliminated on disposal during the year (243) (243) Balance as at December 31, 2019 950 950

Net book Value:

Mat December 31, 2019 2,067 2,087 As at December 31,2018 2,923 2,923

6 Investment properties 2019 2018 AED '000' AED '000'

Fair value at beginning of the year 96,728 103,863 Decrease in fair value (4,405) (7,137) Fair Value at end of the year 92,321 96,726

Commercial Residential Land properties properties Total

AED '000' AED '000' AED AED '000'

Fair value at beginning of the year 71,971 14,062 10,693 96,726 Decrease in fair value (233) (3,231) (941) (4,405) Fair value at end of the year 71 738 10,831 9,752 92,321

The Group's land and real estate properties are stated at their revalued amounts, being the fair value at the date of revaluation. The fair value measurements of the Group's land and real estate properties as at 31 December 2019 and 31 December 2018 were performed by the independent valuers and Dubai Land Department.

The fair value of the land was determined based on the sales comparable valuation approach and valuation

provided by Dubai Land Department that reflects recent transaction prices for similar properties.

The fair value of the commercial and residential properties were determined based on the direct comparison approach and valuation provided by Dubai Land Department that reflects recent transaction prices for similar properties.

There has been no change to the valuation technique during the year.

23



7 Investments at fair value

2019 AED 10001

2018 AED '000'

Investments at fair value comprise of the following:

Investments at fair value through other comprehensive Income (FVTOCI)

Fair value at beginning of the year 142,186 216,976 Purchases during the year 20,314 Disposal during the year (2,995) Decrease in fair value (1,424) (71,795) Fair value at end of the year 161,076 142186

Investments at FVTOCI represent Investment In securities quoted in the local financial markets.

Investments at fair value through profit or loss (FVTPL)

2019 2018 AED '000' AED '000'

Fair value at beginning of the year 115 129 Decrease In fair value (6) (14) Fair Value at end of the year 109 115

Investments at FVTPL represent investment in securities quoted in a regional financial market.

8 Inventories

2019 2018 AED '000' AED '000'

Goods held for sale (drugs and cosmetics) 7,523 7,029 General stores and hospital supplies 7,842 8,587 Provision for slow-moving items (594) (1,357)

14,771 14,259

Movement in allowance for slow moving inventories as al reporting date is as follows: 2018

AED '000' 2019

AED '000'

Balance at the beginning of the year 1,357 1,122 Charge during the year 59 585 Write off during the year (BO (350) Reversal during the year (Note 22) (1n) Balance at the end of the year 594 1,357

9 Balances and transactions with related parties

In the normal course of business, the Group enters into various transactions with related parties. Related parties represent major shareholders, directors and key management personnel of the group, and entities controlled, jointly controlled or significantly influenced by such parties. The prices and terms of these transactions are agreed with the group's management

a) Due from an associate

2019 MD '000'

2018 AED '0001

Balance at the beginning of the year 5,389 6,112 Net funds received from an associate (M) (496) Loss for the year transferred (832) (227) Balance at end of the year 3,676 5,389

24



9 Balances and transactions with related parties (continued)

Due from an associate (continued)

The above balance represents the amount due from Gulf Medical Commercial Agencies (LLC) — Sharjah. As per the management contract the associate is managed and financed by the Group in return for the yearly profitff lass) generated by the associate has been included in the consolidated statement of profit or loss for the Group.

The following are the details of significant related parties transactions: For the year ended December 31,

2019 2018 AED '000' AED '000'

Sales 115 14 Purchases 255 Expenses 579 579 Transfer of intangible assets 3

The remuneration, salaries and other benefits of Board of Directors and other members of key management during the year were as follows:

Board of directors remuneration 9,000 100.000 Board of directors and committee expenses 238 190 Key management salaries and other related benefits 7,837 8,545

10 Accounts and other receivables 2019 2018

AED '000' AED '000'

Accounts receivable 244,622 263,731 Provision for impairment of accounts receivable (81,43$) (97,167)

163,187 166 564

Prepaid expenses and others (net of provision) Prepaid expenses 5,793 7,879 Notes receivable — post-dated cheques 5,331 5,406 Advance payment 2,582 702 Margin held with banks 1,932 2,134 Refundable deposits 1,201 1,257 Interest receivable 119 2,423 Staff receivables 110 197 Recoverable tax 2,654 2,047 Others 623 349

183,532 188,958

The above total include accounts and other receivables for the discontinued operations (Note 25).

Before accepting any new customer, the Group assesses the potential customers credit quality and credit limits for the customer.

A provision has been made for estimated impairment of accounts receivables bases on assumptions about risk default and expected credit loss.

The Group uses the judgment in making the estimates and assumptions for the calculation of impairment based on past history, existing market conditions, including expectation of future events.

25



10 Accounts and other receivables (continued) 31-Dec-19

Gross carrying Expected credit loss rate

0-80 days 91-120 days

AED '000' AED 000' 81351 16,596

10% 16%

121-180 days

AED '00(Y 19.207

19%

181-365 .AED TOO'

35.338 24%

Above 365 days

AED TOO' 91,730

64%

Total

AED '000' 244,622

33%

Loss allowance 8,317 2.573 3,660 8,519 58.366 81,435 31-Dec-18 0-90 days 91-120 days 121 -1 80 days 181-365 days Above 365 days Total

AED '000' AED '000' AED '000 AED '000' AED '00(Y AED '000' Grossuorying 46.638 19.264 27,420 56,288 114,121 263,731 Expected credit loss rate 9% 18% 23% 28% 59% 37% Loss allowance 4,195 3.530 6.228 15,607 67.607 97,167

The details of movement in the provision for impairment of accounts receivable during the year are as follows:

2019 AED '000'

2018 AED '000'

Balance at January 01, ' 97,167 36338 Effect on adoption of IFRS 9 44,457 Adjusted balance as at 1 January 97,167 83,795 Additions to provision 28,859 31,541 Written off (44,591) (18,169) Balance at December 31, 81,435 97,167

11 Cash and bank balances 2019 2018 AED '000' AED '000'

Cash in hand 275 292 Bank balances - Current and call deposit accounts 47,100 86609 Fixed deposits 119,526 162050

166,901 247,951

The above total include cash and bank balances for the discontinued operations (Note 25).

Fixed deposits of AED. 119,526 thousand (2018: AED. 162050 thousand) mentioned above include fixed deposits AED. 2,061 thousand (2018: AED. 2,050 thousand) held under lien by local banks against credit facilities granted to the Group.

12 Share capital 2019 2018 AED '000' AED '000'

Authorized share capital is 698,916,094 ordinary shares of AED 1 each fully paid 698,916 698,916

13 Reserves Statutory reserve

10% of the yearly profit shall be deducted and retained in statutory reserve account, the deduction will be stopped when the reserve reaches 50% of the Company's paid-up capital and if the statutory reserve decreases from that percentage again will be back to deduction.

Optional reserve

The optional reserve of AED 6,041 thousand mentioned below represents total amounts annually transferred at a rate of 10% of the profits generated in the previous years, in accordance with the Articles of Association of the Company at that time, the company has resolved to discontinue the annual transfer to this reserve in accordance with a decision from Ordinary General Assembly Meeting. During the year 2016 the Company amended its articles of association to comply with applicable provisions of UAE Federal Law No. 2 of 2015. As per the article 60 of the Articles of Association the optional reserve may be used for the benefits and interest of the Group based on Board of Director's resolution.

26



13 Reserves (continued)

The details of movements in the reserves during the year are as follows

Statutory reserve

Optional reserve

Revaluation MONO

Total

AED '000' AED '000' AED '000' AED '000' Balance at December 31, 2017 255,996 6,041 6,838 268,875 Additions for the year 11,325 - - 11,325 Related to sale of land - (1,748) (1,748) Balance at December 31. 2018 267.321 ff 041 5,090 278,452 Additions for the year 6,495 - 6,495 Balance at December 31,2019 273,816 6,041 5,090 284,947

14 Proposed Appropriation of Profits

The Shareholders in their Ordinary General Meeting held on March 14 2019 approved a cash dividend of AED 69,891,609 at AED 0.1 per share

In respect of the current year, the Board of Directors have proposed a cash dividend of AED 69,891,609 at AED 0.1 per share to be paid to shareholders in 2020.

It has been also proposed that the Board of Directors remuneration for the year to be AED ff 841,000 (previous year: AED 9,000,000).

The above mentioned proposed dividends and board of directors remuneration are subject to the approval of the shareholders at the Ordinary Annual General Meeting and have not been included in consolidated financial statements.

15 Non-controlling interest 2019 2018

AED '000' AED '000'

The details of movement in this item during the year are as follows :

Balance at January 01. 27,833 33,357 Effect on adoption of IFRS 9 . (11,935) Adjusted balance as at January 01, 27,833 21,422 Share of profit for the year 4,896 6,411 Net movements (1,440) . Balance at December 31, 31,289 27,833

Non-controlling interest mentioned above represents the share of non-controlling as at the consolidated statement of financial position date and are as follows:

2019 2018 ok

Share in Al Zahra (Pvt) Hospital Dubai (L.L.C) 31.62 31.62

16 Employees' end of service benefits 2019 2018

AED '000' AED '000' Balance at beginning of the year 16,639 13,570 Current service cost 5,768 5,060 Settlements (3,964) (1991), Balance at end of the year 18,433 16,639

27



17 Bank loans

2019 2018 AED '000' AED '000'

Non-current 35,250 85,842 Current 50,592 53,200

85,842 139,042

Bank loans of AED. 85,842 thousand (2018: AED. 139,042 thousand) represent the balances of three commodity murabaha facility granted by a local bank on Sharia compliant murabaha basis for settlement of an existing syndication arrangement granted by two local banks to fund expansion construction works and to fund working capital requirements of the Group. Bank loans are repayable in quarterly installments up to 2021.

Bank loans and other bank credit facilities granted to the Group are secured by : First degree registered mortgage over land and building of the hospital. Assignment of all risk insurance policies on the mortgaged property, Unconditional irrevocable assignment of all receivables from insurance companies and any other existing or future sources of income, Duly notarized hypothecation charge over medical equipment, Assignment of all insurance policies, Corporate guarantees, Assignment of all point of service proceeds of the Group, Assignment of all risk insurance policies on building/ plant and equipment, Cash margin, Right to set off between accounts.

18 Accounts and other payables

2019 AED '000'

2018 AED '000'

Accounts payable 51,855 46,746 Uncollected portion of repayments to shareholders 1,091 1,091 Shareholders' dividends payable 6,832 6,832 Notes payable - post-dated cheques 10,280 5,248 Accrued expenses 4,928 7,938 Provision for staff leave salaries and air passage 13,499 13,265 Provision for claims - 30,000 Accrued interest payable 928 1,587 Income received in advance 6,569 5,934 Staff payable 145 44 Others 40,626 33,936

136,753 152,621

The above total include accounts and other payables for the discontinued operations (Note 25).

During the year 2017, the Group sold its subsidiary (Al Zahra PVT Hospital Company Limited - Sharjah) and the related land and buildings to a third party NMC Healthcare LLC - Dubai, as per the terms of the Sales and Purchase Agreement (SPA), the buyer can claim for indemnity for a period of 24 months from the deal completion date and warranties until 31 March 2018, therefore the management has decided to keep a provision of AED. 100,000 thousand to cover any claims of indemnity/warranties from the buyer.

During the current year, an amount of AED. 30,000 thousand (2018:AED. 70,000 thousand) was transferred to other income (Note 22) as per management decision due to the expiry of the indemnity/warranty period.

28


For the year ended December 31.2019

19 Segment Information

The Board of Directors are chief operating decision makers. The management determines the operation segments based on segments identified for the purpose of allocation resources and assessing performance.

The Group's reportable segments are organized into two major segments as follows:

ij Health services and others Principally providing health, medical care and other related services. ii) Investments Principally concerned with Investment properties and investment in securities.

Performance of each segment is measured based on segment profit as management believes that profit is the most relevant factor in evaluating the results of segment.

The financial analysis according to the business segments are as follows:

Health Services & others Investments Total For the year ended For the year ended For the year ended

2019 AED '000'

2018 AED DOCe

2019 AED '000'

2018 AED '000'

2019 AED '000'

2018 AED '000'

Revenue: Total revenue excluding discontinued operations 534 905 470,559 8,405 17,719 543,310 488,278

Result:

Segment result 136,265 112637 (5,243) (7,378) 131,022 105,259 Unallocated administrative expenses (111,417) (116,592) Operating profit/ (loss) 19,605 (11,333) Other income 42,981 113,400 12,610 24,681 55,591 138,081

Profit from continuing operations 75,196 126,748 (Loss) from discontinued operations (Note 25) (5,350) (7,091) Non-controlling interest (4,846) (6,411)

Profrt for the period 64,950 113,246

Other Information: Segment assets 1,125,213 1 214 619 263,392 253,170 1,388,605 1,467,789 Segment liabilities 225,500 262942 15,528 45,360 241,028 308 302 Capital expenditure 31,913 66,306 - 31,913 66,306 Depreciation 8 amortization 34,440 34,667 34,440 34,667

29



20 Revenue For the year ended December 31,

2019 2018

AED '000' AED '000'

Revenue from contracts with customers 634,905 470,559

534,905 470,559

20.1 Disaggregated revenue information

Set out below is the disaggregation of the Group's revenue from contracts with customers.

Segments

Revenue from healthcare services 534,905 470559 Total revenue from contracts with customers 534,905 470559

Geographical markets

Revenue : within U.A.E. .534,905 470,559 Total revenue from contracts with customers 534,905 470,559

Timing of revenue recognition

Services and goods transferred at a point in time 534,905 470,559 Total revenue from contracts with customers 534,905 470,559

20.2 Performance obligations

Information about the Group's performance obligations are summarized below:

Renderino of services

Health care service revenues primarily comprise fees charged for inpatient and outpatient medical services. Services include charges for accommodation, theatre, medical professional services, equipment, laboratory and pharmaceutical items used and recorded at the time of billing.

Sere of croods

Revenue from sale of goods represent of total revenue from sale of drug and cosmetics provided to customers and is recognized when control and benefits are transferred and billed.

21 Cost of revenue For the year ended December 31,

2019 AED '000'

2018 AED '000'

Salaries and other related benefits 231,230 209,259 Supplies and services 133,394 115,148 Depreciation on property and equipment 33,670 33,168 Amortization of intangible assets 346 349

398640 357,922

30



22 Other income For the year ended December 31, 2019 2018

AED '000' AED '000' Realized portion of deferred income (Note 22(b)) - 29500 Reversal of provision for claims (Note 18) 30,000 70,000 Dividends 6,739 15,137 Incentive received 2,746 1658 Interest income 4,046 . 7,824 Reversal of excess provision for slow-moving Inventories (Note 8) 758 - Rental income (Note 22(a)) 1,826 1,720 (Loss)/galn on sale of property and equipment (17) 8,279 (Loss) on disposal of Intangible assets (19) - Trademark income (Note 22(c)) 4,005 952 Miscellaneous Income 5 508 3,011

55,591 138,081

Rental income For the year ended December 31, This item consists of the following: 2019 2018

AED '000' AED '000'

Rental Income 2,031 1,909 Rental costs (206) (1891

1,826 1,720 Realized portion of deferred Income

Realized portion of deferred income of AED. 29,500 thousand in year 2018 represents the amount realized as income from deferred income out of the surplus value of land from Government of Dubai. During the previous year, the Group released the restriction on trading in the land to a freehold land with tradable status and therefore the balance of deferred income was closed.

22 e) Trademark Income In accordance with the 'Trademark License Agreement with the sold subsidiary (Al Zahra PVT Hospital Company Limited - Sharjah) on 13 March 2017 and amendment on 4 June 2017 and agreed to grant the right to use the domain name and right to use trademark 'Al Zahra Hospitar against a fees of AED. 12,000 thousand for a period up to 12 March 2021. Trademark Income of AED. 4,005 thousand (2018: AED. 952 thousand) is recognized In consolidated income statement for the year.

23 Administrative expenses For the year ended December 31, 2019 2018

AED '000' AED '000'

Staff salaries and benefits 48,626 46,791 Electricity and water expenses 8,535 8,261 Advertising and publicity 3,253 3,761 Provision for impairment of accounts receivable 27,340 30,218 Government expenses 4,789 5,453 Telephone, fax and postage 1,081 1,038 Insurance 1,109 1,039 Social contributions 980 1,000 Legal and professional fees 3,430 3,599 Banks and credit card charges 1,515 1,416 Provision for slow-moving Items 59 555 Miscellaneous expenses 6 795 6 422

106 412 109,553

31



24 Basic earnings per share For the year ended December 31, 2019 2018

AED '000' AED '000' Profit for the year attributable to equity holders of the Parent Company (AED '000') 64,950 113,246

Weighted average number of shares (in '000') 698,916 698,916 Basic earnings per share (AED) 0.09 0.16

25 Discontinued operation

On May 14, 2019, Board of Directors approved closure of the Gulf Medical Enter. Co. (Dubai Br) - AJ Zahra Pvt Medical Centre, Dubai, United Arab Emirates with effect from June 30, 2019. The branch is reported as a discontinued operation in the current period, along with comparative figures.

Financial information relating to the discontinued operation is set out below

25.1 Financial Information and cash flow Information

For the year ends December 31, 2019

AED '000' 2018

AED '000'

Revenue 5,044 14,955 Cost of revenue (7,797) (19,346) Gross (loss) (2,753) (4,391) Other income (203) 91 Administrative expenses (2,394) (2,791) (Loss) for the period (5,3501 (7,091)

2019 AED '000'

Net cash (used in) / from operating activities (2,691) Net cash from investing activities 1,998 Net (decrease) In cash and cash equivalents (693)

25.2 Carrying amounts of assets and liabilities are as follows:

Dec 31, 2019 AED '000'

Accounts and other receivables 950 Cash and bank balances 300 Total assets 1,260 Accounts and other payables 1,090 Due to related patty 5,510 Total liabilities 6,600 Net assets (5,350)

26 Cash and cash equivalents

At December 31, 2019 and 2018 'cash 8 cash equNalents• included in the consolidated statement of cash flows comprise the following items:

For the year ended December 31, 2019 2018

AED '000' AED '000'

Cash in hand 275 292 Bank balances 47 100 85 609

47,375 85 901

32

Gulf Medical Projects Company PJSC and its subsidiary Notes to the consofidated financial statements

For the year ended December 311 2019

27 Financial instruments

Significant accounting policies

Details of the significant accounting policies and methods adopted, including the criteria for recognition, the basis of measurement and the basis on which income and expenses are recognized, in respect of each class of financial asset and financial liability are disclosed in Note 3 to the consolidated financial statements.

Fair value of financial assets and financial liabilities that are not measured at fair value on recurring basis

Financial assets

Accounts and other receivables Cash and bank balances Due from an associate

2019 AED '000'

2018 AED '000'

2019 AED '000'

2018 AED '000'

Carrying amount Fair value

175,157 166,901

3 676

180,377 247,951

5,389

175,157 166,901

3,676

180,377 247,951

5,389 345 734 433 717 345 734 433,717

Financial liabilities

Accounts and other payables 136,753 152,621 136,753 152,621 85 842 139,042 85,842 139,042 Bank loans

222,595 291,663 222,595 291,663

Financial instruments comprise of financial assets and financial liabilities.

The fair value of the financial assets and liabilities is included at the amount at which the instrument could be exchanged in a current transaction between knowledgeable and willing parties.

Financial assets consist of Investments at fair value through other comprehensive income (FVTOCI), Investments at fair value through profit or loss (FVTPL), cash and bank balances, accounts and other receivables and certain other assets. Financial liabilities consist of accounts and other payables, bank borrowings, accruals and certain other liabilities.

As at reporting date financial assets and financial liabilities are approximates of their carrying values.

Fair value of financial assets that are measured at fair value on recurring basis

The Entitys financial assets are measured at fair value at the end of each reporting date. Following are the information about how the fair values of these financial assets are determined and their valuation technique and inputs used.

Investments at fair value through other comprehensive income (FVTOCI) Investments at fair value through profit or loss (FVTPL)

Valuation technique

Fair Value hierarchy

Fair value as at December 31,

2019 2018

Quoted Price

Quoted Price

Level 1

Level 1

AED '000' AED '000'

161,076

109

142,186

115

Fair value of financial assets is derived from quoted market prices in active markets

33

Guff Medical Projects Company PJSC and its subsidiary Notes to the consolidated financial statements


28 Financial risk management objectives

The Group management set out the Group's overall business strategies and its risk management philosophy. The Group's overall financial risk management program seeks to minimize potential adverse effects on the financial performance of the Group. The Group policies include financial risk management policies covering specific areas, such as market risk (including foreign exchange risk, interest rate risk), liquidity risk and credit risk. Periodic reviews are undertaken to ensure that the Group's policy guidelines are complied with.

There has been no change to the Group's exposure to these financial risks or the manner in which it manages and measures the risk.

The Group manages its financial risk by closely monitoring and diversifying into investments into various markets and different sectors. Detailed internal guidelines exist for the investment processes. The Management monitors all investments closely on a regular basis and ensures that these guidelines are followed and objectives are met.

The Group minimizes its risk by diversifying its investments in different markets and sectors. The Group's exposure in investments is monitored by management information systems and the analysis by the in-house team regarding the risk and reward perspective on each investment.

Foreign currency risk management

There are no significant exchange rate risks, as substantially all financial assets and financial liabilities are denominated in Arab Emirates Dirham, other GCC currencies or US Dollar to which the Arab Emirates Dirham is fixed.

Interest rate risk management

The Group is exposed to interest rate risk resultant from its borrowings. The risk is managed by maintaining an appropriate mix between fixed and floating interest rates balance at the start of the financial year.

Details of interest bearing assets and liabilities as at the consolidated statement of financial position date are as follows:

Effective interest rate

2018 Term deposit 0.55% to 4.15% p.a

0.4% to 4.15% p.a

Three months EIBOR +

Three months EIBOR + Bank loans 1.9% p.a

1.9% p.a

Liquidity risk management

Ultimate responsibility for liquidity risk management rest with the management which has built 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 continuously monitoring forecast and actual cash flows and matching the maturity profiles of financial assets and liabilities.

2019

34



28 Financial risk management objectives (continued)

c) Liquidity tisk management (continued)

POulditY and interest risk tables'

The table below summarizes the maturity profile of the Group's financial assets and financial liabilities. The contractual maturities of the financial assets and financial ['abilities have been determined on the basis of the remaining period at the financial position date to the contractual maturity date. The maturity profile of the assets and liabilities at the statement of financial position date based on contractual repayment arrangements were as follows:

Interest bearing Non interest bearing

Total Particulars Within 1

year More than 1

year

On demand or Ins than 3

months Within 1 year More than 1

year As at December 31, 2019

AED '00(r Financial assets

Investments at fair value through other oamprehensIve income (FVTOCI) - 181.078 161.076 Accounts and other receivable 175.157 175.157 Cash and bank balances 119.526 47,375 166,901 Iiis,sitants at fair value through profit or loss (FV7PL) 109 109 Due from an associate 3,678 3,676

119,528 47,375 178,942 161.076 506,919 Financial liabilities

Amounts and other payables 136,753 136.753 Sank loans 50,592 35250 - - 85,842

50.592 35,250 - 138,753 222.595 As at December 31, 2018

AED '009 Financial assets

Investments en lair value through other comprehensive income (FVF061 ) - 142,186 142,186 Accounts and other montane 180,377 - 180,377 Cash and bank balances 182,050 85,901 - - 247,951 Investments at fair value through profit or loss (FVTPL) 115 115 Due from an associate 5,389 5,389

162,050 85,901 185,881 142.186 576,018 Financial liabilities

Accounts and other payables 152,621 152,621 Bank loans 53,200 85,842 139,042

53,200 85,842 152,621 291,663

35

31



28 Financial risk management objectives (continued)

d) Credit risk management

Credit risk is the risk of financial toss to the Group, if a customer or counterparty to a financial Instrument fails to meet its contractual obligations and arises principally from cash flows from financial Instruments recorded at amortized cost, fair value through comprehensive income and fair value through profit or loss.

The Group trade with recognized, creditworthy parties. The Group's policy that all customers are analyzed for creditworthiness on credit terms and are subject to monitor the receivable balances of customers on an ongoing basis, that receivable balances are the maximum exposure to credit risk relating accounts receivable.

The Group applies IFRS 9 simplified approach to measure expected credit loss (ECL) by grouped all financial assets based on shared credit risk characteristics and days past due.

The expected loss rates are based on the payment profiles of that business transaction and the corresponding historical credit loss experienced within this period.

The historical loss rates are adjusted to reflect current and future information on macro economic factors affecting the abilities of the customers to settle their receivable balances, with respect to credit risk arising from other financial assets such as cash and bank balances including deposits arising from default of counter party to limit that credit risk. The Group's cash is placed with banks of repute. Management is confident that it does not result in any credit risk to the Group as the banks are major banks operating in UAE.

29 Capital risk management

The Group manages its capital to ensure that It will be able to continue as a going concern while maximizing the return to the stakeholders through the optimization of the equity balance. The Group's overall strategy remains unchanged from prior year.

30

Except for the above and ongoing business obligations which are under normal course of business, there has been no other known contingent liability on Group's consolidated financial statements as of reporting date.

Commitments

2019 2018 AED '000' AED '000'

Capital purchases 14,437 16,347 Construction obligations 2,127

Except for the above and ongoing business obligations which are under normal course of business, there has been no other known commitment on Group's consolidated financial statements as of reporting date.

32 Reclassification

Certain amounts for the prior year were reclassified to conform to current year presentation, however such reclassification do not have any material impact on the results of the operations.

Contingent liabilities

2019 2018 AED '000' AED '000'

Letter of guarantee 2,393 2,844

36

Documents

Gulf Medical Projects Company PJSC and its subsidiary