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Annual
Report
2013 was a year of continued growth for DSI with major milestones
achieved in the Middle East , North Africa, LEVANT , Europe and India.
The companys backlog is at an all time high of AED 12 billion
representing a 32 % year on year increase.
CONTENTS
Annual Report
Company Profile
Chairman Message ..............................................................................................................002

CEO Message ........................................................................................................................004
Board of Directors ................................................................................................................006
Facts and Figures ..................................................................................................................008
Risk Management and Corporate Governance .......................................................010
Corporate Social Responsibility .......................................................................................012
Our People ..............................................................................................................................014
Financial Review ...................................................................................................................016
Financials
Directors Report ...................................................................................................................020

Auditors Report ....................................................................................................................021
Financial Statements ...........................................................................................................030
Annual Report
001
01
CHAIRMANS
MESSAGE
Dear Valued Shareholders,
As I begin to gather my thoughts to address you once
again and review our progress and the state of our industry
worldwide, I realize that 2013 has been a remarkable
year with many rewarding moments, as well as some
challenges. DSI continues to admirably uphold its 130 year
legacy of excellence with a bold and visionary spirit. That
same sense of determination and entrepreneurship which
led two gentlemen with an unstoppable dream to create
Drake & Scull so many decades ago is still inherent in the
way we do business which has grown to new heights,
spanning the globe with over 25,000 employees in 12
countries and more than 700 quality projects delivered
around the world.
2013 showed an improvement in global economic
conditions as a result, short-term risks within the business
have significantly been reduced. Even though the worlds
economy continues to better itself, the pace is somewhat
slow. Dubais historic win of the EXPO 2020 is a validation of
the UAEs investment in critical infrastructure, with the Dubai
Tourism & Commercial Marketing estimating $8.8 Billion
expenditure on new developments required for Dubai to be
ready to host the Expo, at Destination Dubai 2020.
Construction projects worth $70 billion were completed
in the GCC in 2013 and according to a recent study
conducted by Ventures ME the market is expected to see
a growth of 17.4 percent in 2014, with new projects valued
at approximately $82.2 billion to be awarded in the GCC
alone. Saudi Arabia and the UAE remain firmly in the top
spots as the regions two biggest markets, dominating in
most sectors, while Qatar is leading the way in education
and healthcare projects. The transportation sector
experienced a surge in new project awards, particularly in
the Rail sector where major projects worth $250 Billion
002
have been earmarked for the next decade across the UAE,
Qatar, KSA, and Kuwait, according to a Terrapin study.
Overall sentiments across the region are more positive
and developments are once again moving forward. There
is indeed still a lot of speculation as to whether or not we
will witness yet another potential boom and bust; however
the greater overall outlook is that 2014 is expected to
bring in a significant increase in momentum with more
market activity. Financial strains and adjustments within
the European Community and in the United States have
slightly subsided, but they have not disappeared. While
current global financial conditions have begun to stabilise,
cash flow consistency and delayed payments continue to
be obstacles, although in this regard, the situation is better
than last year. Global liquidity has increased and there is
a larger appetite for risk among investors which has led to
asset prices moving upwards while capital flows have risen
in emerging economies.
In this highly competitive business, it is our innovation and
forward-thinking approach that enables us to successfully
adapt to the constantly changing global market. Through
its drive and dedication, DSI continues to meet client
demands and deliver excellence while remaining at the
forefront of the industry.
DSI has continued to excel as an industry leading,
integrated services provider offering our clients an
extensive range of superior end to end solutions. Our solid
performance is an indicator of our unwavering commitment
to excellence and innovation as we continue to build our
global presence and extend our reach. The levels of success
that we are able to achieve due to this approach is clearly
seen in the number of projects awarded in 2013 which
totaled AED 7.5 billion - up from AED 5.4 billion in 2012.
2013 saw DSI achieve its highest revenue and backlog
DSI has grown

to new heights
across the globe
with over 25000
employees in 12
countries and
more than 700
quality projects.
Annual Report
to date. Our earnings per share is up 74% and we are

definitely seeing more stability within the construction sector.
We have established and consolidated our positions in new
and emerging markets such as India, Algeria, Jordan and
Iraq which all show a great deal of potential and present
several new opportunities in the future. These markets
are a gateway to an increased and stronger backlog with
potential for realising higher margins although currently the
greater part of our backlog is generated in KSA. This is why
our presence in Saudi Arabia, is crucial to our continued
growth as the majority of our revenue is emerging from
this market. In addition to Saudi Arabia, our developments
in Abu Dhabi, Dubai and Qatar are steadily progressing
and are also a vital part of our future revenue stream. Our
strong presence in these three markets, and in most major
countries in the MENA, Asia and Europe has proven to
be highly beneficial for our continuous growth, while also
presenting us with new opportunities and further success
in each sector.
Our ability to deliver quality projects, in remote locations
at good margins is and will be our priority and positions us
as a preferred business partner and a leading contractor in
the region. We will continue to increase our portfolio, and
invest in cutting edge technology in order to expand our
global presence by venturing into new markets and creating
more opportunities for development across every segment
of our business.
We do not reach our goals and simply stop there! We
keep on aiming higher and moving forward. We will
continue to enhance the companys structure, expand
our offerings, win new business and seek out new markets
and opportunities for growth which increase profitability
and maximise shareholder value.
In closing, I would like to thank everyone at Drake & Scull
for their passion, dedication and drive. Every individual
in this company has something to contribute, and our
success is a direct result of everyones hard work. We thank
our shareholders for their unyielding support and of course
our highly esteemed clients. We look forward to continued
success and prosperity in the year ahead.
Majid Al Ghurair, Chairman

Drake & Scull International PJSC (DSI)
Annual Report
003
02
CHIEF EXECUTIVES
MESSAGE
Dear Valued Shareholders,
The end of 2013 brought back a great deal of renewed
faith and positivity into our industry. Business continues
to pick up momentum in key markets such as the UAE
and Qatar, which is greatly due to the outstanding Expo
2020 win in Dubai and the Qatar 2020 World Cup
steadily moving forward.
As the markets improve, we still anticipate seeing some
challenges in margins and profitability in the near term.
However the cash flow situation, which was uneasy in
2012, has significantly improved.
Sentiments are positive throughout the industry and
developers have started paying on time, which is also
an improvement. This clearly signifies the renewed
sense of eagerness and readiness among developers to
close outstanding debts and begin moving forward with
new and fresh ideas.
Although regional competition has become rather
fierce with the increased influx of European and Asian
companies into the GCC; we continue to expand
our footprint in newer strategic regions while also
consolidating our position as industry leaders in our
existing markets by offering a one stop shop package.
Our expertise in the region, ISO certification and
high tech engineering technology and modern BIM
design capabilities have given us an edge over
our competitors.
Our skilled and highly motivated people are a driving
force in the success of our organization and we all
remain focused on our shared vision for further
expansion and operational excellence. We are confident
that the achievements we have seen in 2013 will be
just as strong in the year ahead and DSI will continue
to play a pivotal and leading role within the industry.The
004
investments we made over the last two years are now

materializing to create a future of exceptional integrated
engineering services with tremendous opportunities for
DSI across all sectors in 2014.
At the end of 2013, we managed to sustain positive
momentum in our project wins as total project awards
reached AED 7.5 billion in MENA, South Asia and
Europe taking the backlog to a record high of AED 12
billion. Our performance demonstrated solid results
across all markets. Net profit for the fiscal year closed
at AED 182 million and revenues at AED 4.9 billion
representing a year on year increase of 58 % and
47 % respectively.
Operational excellence was the key highlight of the year
across all our business streams and markets resulting
in an increase of 58% in our operating profit compared
to 2012.
Our engineering and general contracting businesses
remain the key contributors to our revenue stream and
Rail and Oil & Gas will continue to consolidate their
presence in the GCC, North Africa and Levant.
Improved collections and advanced payments on major
projects boosted our net operating cash flow to AED
165 million. Our working capital was also significantly
improved as we aimed at reducing receivables days
and improving our cash conversion cycle to maintain
liquidity and to deliver on our growing backlog. We
continue to focus on cost reduction, return on capital
and liquidity to drive sustainable performance across all
our markets. We will also remain selective in the new
construction projects we undertake in order to minimize
risk and preserve capital.
Operational
excellence was
the key highlight
of the year across
all our business
streams and
markets resulting
in an increase
of 58% in our
operating profit
compared
to 2012.
Today, the collaborative capabilities of our Engineering

services (MEP and Water and Power), General
Annual Report
Bank, ITCC and KAPSARC and we are very optimistic

about our prospects in this promising new segment.
Our German Water and Waste Treatment subsidiary
Passavant Energy & Environment continues to improve
its market share in Eastern Europe and MENA markets.
The companys patented technologies will provide
potable water access to millions of people while also
helping to recycle industrial waste water back into
agriculture. Passavants pioneering work on the Saida
Waste to energy Plant (Lebanon) leads the introduction
of Waste to Energy to the region, by breaking down
over 300 tons of mechanical waste daily, into 5MW
of electricity and 43,000 tons of organic fertilisers,
and irrigation water which are fed back into Lebanons
energy grid and agriculture respectively.
Finally, with the right management in place and
enhanced operations, efficiency is at an all-time high.
Data is being collected and analyzed more thoroughly
and innovative strategies are in place to heighten
infrastructure development, human resources and our
geographical reach. Our prime objective is to not only
win business but to ensure that we plan, execute and
deliver quality projects. It is our People, Passion and
Innovation which enables us to achieve excellence. I
am more confident than ever that the accomplishments
we have seen in 2013 will be just as strong in the year
ahead and Drake & Scull International PJSC (DSI) will
continue to play a pivotal and leading role within the
industry and remain a formidable competitor in these
ever-evolving markets.
Contracting, Oil and Gas, Rail and Infrastructure

development continue to deliver strong performance
quality work on project sites. Armed with a multicultural
workforce, inherent financial strength and solid regional
experience, we remain positive about the outlook of our
region as we are capable to differentiate ourselves in
our markets and in turn reduce competition and realize
improved margins.
We have productively expanded our services portfolio
through investments in technology and personnel,
which we expect to be significantly fruitful in the near
future. Our rail business recently won their first project
and we are extremely confident that the rail business
will continue to excel and receive even more business
as this sector gains traction in the region. Our strategic
alliance with Huawei gives us a considerable advantage
in offering our services to the rapidly growing Data
Centers segment with ongoing projects for Al Rajhi
Annual Report
I would like to thank every member of our Drake &

Scull family for their endless support, hard work and
dedication. We have overcome several challenges and
successfully navigated our way through obstacles that
lay within our course. The outlook for 2014 is positive
and I am optimistic that DSI will continue to increase
shareholder value, generate more opportunities for
business growth and enjoy even further success ahead.
Khaldoun Tabari, Vice Chairman and CEO

005
03
BOARD OF
DIRECTORS
Majid Saif
Al Ghurair
KHALDOUN
TABARI
talal jassim
al bahar
Yusuf
al-nowais
Chairman
Vice Chairman and CEO
Board Member
Board Member
Mr. Majid Saif Al Ghurair is

the Chairman of Drake & Scull
International PJSC. Mr. Al Ghurair
holds the title of CEO of Al
Ghurair Private Company as well
as Managing Director of Gulf
Extrusions Co. and Arabian Can
Industry and is the President of
Burjuman Centre LLC and Reef
Mall. He was also a key member
in the formation of the Middle
East Council of Shopping Centres
and currently holds the position
of Chairman of the Council, as
well as of the Dubai Shopping
Malls Group.
Mr. Khaldoun Rashid Tabari is

the Vice Chairman and CEO of
Drake & Scull International (DSI)
PJSC. Mr. Tabari also serves as a
board member for DEPA, EMCOR
Facilities Services Group (ME),
Walltech; Cedar Mills, Jordan
Fleet Leasing Company; First
Qatar Real Estate and Energy
Central in Bahrain.
Mr. Talal Al-Bahar is an

independent board member and
a member of the Remunerations
Committee of DSI PJSC.
Mr. Al-Bahar has served in
various positions, starting off as
Chairman and Managing Director
of Kuwait Invest Holding Company,
Chairman of International Financial
Advisors, Vice Chairman and CEO
of IFA Hotels and Resorts, and
is affiliated with Raimon Land
PLC, United Investments Portugal
Commercial Real Estate Co., Kuwait
Invest Holding Company.
Mr. Yusuf Al Nowais is an

independent Board Member of
DSI PJSC, and the Chairman of the
Audit committee. He is currently
the Chairman and Managing
Director of Arab Development
as well as the Chairman, Vice
Chairman and Member of the
Board of several other government
and private institutions including
Abu Dhabi Holding, Al Rayan Real
Estate, Technical Metal Industries
(TMI), Al Maabar, Rotana Hotels &
Real Estate Investment Company.
He is also an Honourary Member
of the Al Ain Sports Club.
006
Annual Report
Tawfiq
Abu Soud
jamal saeed
saleh al-nuaimi
Saleh
Muradweij
Khalaf sultan
AL-DAHERI
Ivor Mark
goldsmith
Board Member
Board Member
Board Member
Board Member
Board Member
Mr. Tawfiq Abu Soud

is an Executive Board
Member of DSI PJSC with
over 25 years experience
in the oil, gas and MEP
contracting field. He was
previously responsible
of the MEP operations
with Jordan-based Manco
Contracting WLL and
is currently Managing
Director of Drake & Scull
Engineering (DSE).
Mr. Jamal Saeed

Saleh Al-Nuaimi is an
independent board
member and a member
of the Audit Committee
and the Chairman of the
Remuneration Committee
of DSI PJSC. Mr. Al-Nuaimi
also serves as a board
member for several other
companies including
the Abu Dhabi Tawteen
Council, Al Jazeera Capital
Sports Club and Siraj
Islamic Financing.
Mr. Saleh Muradweij is an

Executive Board Member
of DSI PJSC. With over
20 years of professional
experience throughout the
GCC and the Levant, Mr.
Muradweij has worked in
a number of managerial
positions in consulting,
project management,
operations and contracting
and is currently the
Managing Director of Drake
& Scull Construction (DSC).
Mr. Khalaf Sultan AlDaheri is an independent

board member and a
member of both the
Audit and Remuneration
Committees of DSI PJSC.
He is also Chairman of
a number of financial
institutions including Al
Wathba Company for
Central Services (AWCCS)
and Abu Dhabi National
Islamic Finance (ADNIF),
and the Board member
of Abu Dhabi Investment
company and Masraf Al
Rayan.
Mr. Ivor Mark Goldsmith

is an Independent Board
Member and a member
of the Audit Committee
of DSI PJSC. For over 40
years, he has been an
engineering construction
industry professional
inthe UK and overseas
including in consultancy
as prime contractor; in
major project design
and build; technology
solutions; and long-term
facilities management and
outsourcing.
Annual Report
007
04
FACTS AND
FIGURES
Increase in PROFIT
008
39% 32%
Increase in project AWARD
Revenue Comparision
In AED Billions as on 31st December 2013

5000
4000
Increase in BACKLOG
Profit Comparision
In AED Millions as on 31st December 2013
Backlog Comparision
In AED billions as on 31st december 2013
12
13
4867.8
182
3321.3
9.2
11
9
3000
115
2000
3
1000
2012
2013
2012
2012
2013
5.20%
2%
3.80%
7%
Backlog Comparision
by Business Stream
2013
as on 31st december 2013
2012
43.90%
2.4
0%
0%
4.40%
2012
42.30%
0%
4.5
10.50%
8.50%
5.50%
14.
30%
2013
5.80%
Qatar
Algeria
Iraq
Jordan
Others
6.90%
KSA
Dubai
Abu Dhabi
Kuwait
Egypt
8.70%
45.80%
0%
5.70%
6.60%
4.6
0%
7.8
as on 31st december 2013
42.20%
50.50%
5.80%
%
0.20
0%
6.9
Backlog Comparision
by Geography
2013
45.20%
2.8
DSE
CIVIL
OIL & Gas
RAIL
PR
NOTE: Please not that all facts and figures are in UAE AED
Annual Report
009
05
Risk Management
and Corporate
Governance
In order to effectively manage the risks present in the
contracting and construction industries, DSI develops and
implements a strategic series of robust and interlocking
management systems. These consist of a clear and
transparent system of corporate governance along with a
set of structures that measure and manage risk. The risks
that we face are very diverse in nature and must therefore
be carefully assessed from every angle in order to efficiently
calculate and predict outcomes. These may include project
risks through to area and regional risks which may manifest
themselves at the business stream and corporate levels.
Corporate Governance
Risk management is an essential practice in our business.
Having the right corporate governance enables DSI to align
its interests and procedures with the vision of its upper
management, practice accountability and monitor corporate
actions and progress. Primary risk management is overseen
by our board, which has independent directors and three
specialist committees: Executive, Remuneration and Audit.
010
The Executive Committee, chaired by the Chairman and

comprising of the CEO, Executive Directors and key officers,
develops strategies and policies for recommendation to
the board. The Remuneration Committee, comprised of
independent non-executive board members and, when
needed, the Head of HR, considers matters relating to
executive reward, including policy for executive directors
and senior managers remuneration and their annual
remuneration awards. The committee also approves
changes to incentive and benefits plans for senior managers
and reviews strategic HR issues including employee
retention, motivation and commitment, and succession
planning for senior managers.
The Audit Committee, comprised of independent nonexecutive board members, appoints external auditors and
oversees and monitors their work. It also assesses internal
audits and compliance, reviews financialstatements and
financial reporting systems and monitors compliance with
the Companys Code of Conduct.
Annual Report
Management Systems
Every project is devised with careful planning. An
essential part of any given strategy is to assess the
potential risks involved, and to determine if it is feasible
and beneficial to move forward once the risks are
examined and weighed. Within the management we
have the Risk Management Committee comprised of
the Chief Commercial Officer, Chief Financial Officer,
Corporate Finance Director and at least one Area General
Manager or Business Stream Director from each Business
Stream. This committee identifies exposures, manages a
Risk Control Programme and the Risk Financing Strategy.
It also oversees credit, market liquidity, operational,
legal and other risks, within a framework of prudent and
effective business controls and processes.The committee
recommends risk philosophy and tolerance for board
approval, defines the companys risk appetite and
reviews risk management processes. All business units
and projects must apply risk management techniques
and their compliance is monitored by the Risk
Management Committee. The metrics are based upon
a standard format which shows risk exposure before
application of control measures and the measurable
benefits of control and mitigation measures. The
measures are based upon a five by five matrix whereby
the vertical axis measures impact and severity of risk
graded and rated 1- 5. Also the horizontal axis measures
likelihood and probability also rated 1 5.
The resultant aggregate risk value results in a value which
is tracked and shown on a heat map as a green, yellow
or red rated risk. All risks are then reviewed again after
mitigation. The results are presented to our risk registrar and
tested against a specially designed traffic light system for a
go or no go decision on projects. Each project/market/client
gets evaluated prior to DSI committing to a project in order
to minimise risks and increase positive outcomes.
We saw our
recievable days
reduce from 175
days (at the end
of 2012) to 123
days at the end
of 2013, which
is a reduction of
nearly 30%.
Annual Report
Continuous Auditing
In 2011, DSI established its own Internal Audit Office
manned by a Director and supported by 4 staff members.
Its primary role is to continuously audit all internal
departments including their Quality Health Safety and
Environment performance. These risk policies and
standards are applied through a clearly documented
internal audit system that ensures that all departments and
project sites are closely monitored and their operations
conform to companypolicies and procedures, international
standards, local laws and regulations and contractual
agreements. Formal internal audits are conducted twice
a year. We also bring in external auditors for QHSE and
financial auditing to ensure compliance to international
standards and global best practices.
We invested considerable time and capital to execute
a sophisticated large scale Oracle J.D. Edwards ERP
implementation programme across all its businesses.
We also developed a robust, modern Data Centre which
connects all vital operations and business processes

centrally. This centralization has helped DSI achieve zero
downtime and high levels of data security, which has
helped considerably in reducing the companys overall
risk exposure. We are currently in the process of getting
our IT mechanisms certified to be compliant with ISO
27001 standards.
Continuously Assessing Risk and
Our Risk Appetite
Risk is inherent in all business. What determines if the risk is
worth it and how to successfully navigate these risks comes
from our ability to manage risk. This is, in many ways, a
key determinant of our profitability. There are various ways
to measure the risk appetite of a company. We use a
software application called Risk Explorer, which surveys
senior executive attitudes, consolidates the results and
provides us with a continuously updated snapshot of our
risk management capabilities. This informed measurement
of our capabilities allows management to quickly assess
capabilities and stress areas.
Prior to entering any market, acquiring new businesses or
undertaking any new ventures, rigorous due diligence is
undertaken. Risks are graded under a traffic light system
and compiled in a risk register, which allows the active
monitoring and management of all risks. Although we
cannot eliminate all risks associated with our work, we can
indeed effectively manage it and take the right measures to
reduce it thus creating more opportunities for growth and
successful ventures.
Managing Receivables Risk
Our operations are conducted using a monthly valuation
and billing cycle. All of our businesses are run on a
projectbased business model. Each project is governed
by the standard terms and conditions of the contract.
These terms highlight the payment procedure, always
based on a monthly valuation, certification and payment
cycle, subject to the normal payment days in the projects
country of location, and the specific requirements of the
project. These monthly certification and billing processes
are closely monitored by the Financial Controller, Finance
Manager or Chief Accountant of each business.They then
ensure that payments are made on time. Receivables
risk is managed in accordance with the Accounts
Receivable Policy and through direct relationships with the
consultants, the engineer or project manager working on
behalf of the client and the clients management team.
If necessary, non-payment issues may be referred to the
Board for further action. The stringent implementation
of this process has made a marked difference to our
revenue stream. In 2013, we saw our recievable days
reduce from 175 days (at the end of 2012) to 123 days
at the end of 2013, which is a reduction of nearly 30%,
which is a commendable achievement by our industry
standards. This has also brought down our risk exposure
and improved our cash flow.
011
06
Corporate
SOCIAL
RESPONSIBILITY
As a responsible, environmentally-friendly global citizen,
Drake & Scull remains actively involved in numerous CSR
activities. We aim to be a role model for our industry and
to be a positive influence in the communities where we
work. We maintain a consistent relationship with local
universities in order to recruit the right talent and provide
a host of exciting internship opportunities for students
in every sector. We work hard to keep green practices in
place both on and off site and keep energy consumption
to a minimum with our LEED projects. We have a stringent
and award-winning QHSE policy in place which we
execute without compromise to ensure the safety and
wellbeing of our employees.
In 2011, DSI established the Drake & Scull Foundation
which is responsible for the initiation, funding and
organisation of programmes dedicated to improving the
lives of under privileged sections of society. The Drake &
Scull Foundation is an imperative part of our commitment
to empowering people to achieve their dreams. The
foundation supports several causes from around the world
and offers both financial and moral assistance to various
charities and societies in the region.
012
Annual Report
The foundation develops public service campaigns that

reach out and help communities in need of healthcare,
education, housing and nutrition across the region. The
core focus of the foundation is to Give Back and make
a real difference in our communities by providing basic
needs like food, clothing, education and medical assistance
for disadvantaged people in the Middle East, Asia and
Africa. We established the foundation so that DSI may
effectively align our business operations with social values
that promote socially responsible business practices which
contribute to the enhancement of the overall welfare of the
surrounding communities where we operate. In addition,
the Drake & Scull Foundation partnered with the Welfare
Association to support the Mustqabali Foundation. The
Mustaqbali Foundation aims to empower the children of
war through education so that they have an opportunity to
live a positive and fulfilling life. This programme strives to
secure childrens futures by supporting their educational,
psychosocial, health and career development needs until
they reach adulthood.
To improve transparency, accountability and equity, we have

corporate governance policies and guidelines that define the
interrelationships between the management levels of the
company and authorities in compliance with the directions
and requirements of Emirates Securities & Commodities
Authority (ESCA), Dubai Financial Market (DFM) and
Commercial Companies Law Federal Law No (8).
Drake & Scull is the proud recipient of the highest ranking
corporate governance certificate from ESCA and was also
listed as one of the top 50 firms by Forbes Middle East. Our
Corporate Governance Framework covers shareholders,
the Board of Directors and Executive Management. The
Board of Directors is accountable to shareholders and seeks
to ensure that our business objectives are aligned with
shareholder expectations. The executive level implements
the corporate strategy and manages day-to-day affairs
according to the business plan approved by the Board.
Social divides are a growing challenge in the world we

live in and we hope that through the specialised efforts of
the foundation that DSI can ultimately set the course for
continuous and collaborative efforts by regional companies
to address these obstacles and do their part to help build
safe and healthy environments for future generations.
We aspire to be an international leader not only in our
field, but in our active efforts to encourage and foster real
change across the globe. Corporate Social Responsibility is a
fundamental part of DSIs culture and its core values.
DSI upholds its promise to be a sustainable, socially
responsible organisation through its operations each day.
The company remains committed to delivering the highest
levels of excellence to clients, shareholders, employees and
to society.
We conduct business with good governance and ethics, and
provide products and services that meet the ever evolving
expectations of our clients and business partners, we recruit
and retain quality employees, provide meaningful support in
our communities and do our best to improve the social and
environmental impacts of our business practices and those
of our suppliers and subcontractors.
In 2013, our commitment to maintaining the highest levels
of quality, health, safety, environment and welfare standards
enabled us to complete more than 213 million safe man
hours on our projects.
Annual Report
Sustainability
DSI is strongly committed to providing the best possible
solutions for our shareholders, stakeholders, society, and
the environment. Our sustainability philosophy is a logical
evolution of our lean quality initiatives, which are focused
on eliminating waste and redundancy. Our objective is to
regularly find ways in which we can improve our green
practices, such as:
Purchasing green products from our suppliers
Our commitment
to maintaining
the highest
levels of quality,
health, safety,
environment and
welfare standards
enabled us to
complete more
than 213 million
safe man hours
on our projects.
Reducing waste and recycle and reuse materials

whenever possible
Reducing our electrical energy consumption
Designing distribution routes to minimise total fuel
consumption
Encouraging carpooling and responsible business travel
Repairing rather than discard whenever it is possible
Capturing recycling data reports and cost savings
documentation
Targeting and enforcing zero paper document
management tools
013
07
OUR
PEOPLE
People
Our people are the main driving force behind our
business. We recognise the importance of investing in
our people, as it means to invest in the future success
of our company. We are committed to providing
a highly stimulating, safe and dynamic working
environment that encourages individual growth and
overall development. Our carefully devised succession
plan outlines corporate expectations and fosters
employee improvement and advancement across all
segments. The progression of our people is directly
aligned with the enhancement and expansion of our
company and is always a key area of focus.
to the employment of nationals. We strive to retain

employees from our host nations in order to ensure that
they play an integral role in our companys success.
We are dedicated to empowering our staff and creating

opportunities for them to heighten their skills and
knowledge. Our strategic HR policy is centered on
equality. We aim to recruit and employ more women
and to establish a truly unique and diverse workforce.
Our main objective is to increase productivity while
maintaining a healthy and engaging professional
atmosphere. We recognize the importance of nurturing
and honing local talent in our markets, and it is part of
our standard recruitment policy to maximize the hiring
of nationals in our offices and sites. We continue to
uphold our commitment to Saudization and Emiratization
initiatives as we have met all local regulations in regards
Passion
We have a real passion for what we do. We firmly believe
that true success is not attainable without the right heart
and dedication. We embrace and ignite passion in every
segment of our business. We remain passionate about
improving our standards, enhancing our skills, customer
satisfaction and every aspect of our management
process. We are a success because the people of Drake
& Scull are passionate about driving this organisation
forward and getting the job done right.
014
Innovation
Through our innovation, we continue to pursue original
ideas, new technologies, superior methods and a unique
approach to business. Our cutting-edge techniques
and sharp attention to detail enable us to work quickly,
efficiently and safely. We are always improving our
standards in order to ensure maximum benefits for our
stakeholders. It is our innovative and forward-thinking
tactics that keep us at the forefront of the industry.
We recognize the
importance
of investing in
our people, as
it means to invest
in the future
success of our
company.
DSI is an Equal Employment Opportunity employer and

does not discriminate towards any employer/employee
Annual Report
based on race, colour, religion, sex, nationality, age,

marital status, disability or any other basis.DSI has a
strong commitment to equal opportunity in the work
that exists with the company which is a competitive
advantage in the marketplace. DSI is committed to
treating all employees fairly, without regards to any
characteristics that have no bearing in job performance.
Succession Planning/Training
DSI implements a very thorough succession planning
policy in order to ensure that the appropriate measures
are taken to have a skilled, professional, highly-qualified
and capable team in place at every level. This policy
also encourages and supports individual employee
growth and development as well as positive overall
performance results. We want our staff to be driven and
have the tools they need to reach their full potential.
Our dedicated succession plan enables the right training
and ensures that employees receive the proper training
as they grow with the company. Employee morale and
motivation is a main priority for us and it is a key factor
in achieving success.
ESOP
To ensure that the interests of all individuals working
with Drake & Scull are aligned with those of shareholder
who have introduced an Employee Stock Option Plan
Annual Report
(ESOP). An ESOP is powerful retention, organisational

and motivational tool which allows us to ensure that
everyone involved from shareholders through project
managers, have the same aims and goals.
Learning and Development
Drake & Scull is continuously evolving. We stay ahead
by developing a truly innovative and technologically
advanced approach to our work. We firmly believe that
each new generation has something distinctive to offer.
The power of a fresh and youthful mind is limitless
and as part of our commitment to nurturing regional
talent, we offer several rewarding, and highly stimulating
internships where students can gain hands on experience
and receive insight from pioneering industry experts and
visionaries who are the best in their field.
015
08
FINANCIAL
REVIEW
With our heightened revenues and our backlog securely
at an all-time high, we continued to solidify our
presence in the region. DSI operations in the LEVANT
region progressed with strong growth from our general
contracting, engineering, oil & gas and rail divisions.
Our civil work has made substantial advancements
and is currently the largest contributor to our revenue
stream. Our solid and reliable track record for delivering
large scale, landmark projects will keep us firmly set as
an industry frontrunner. The successful completion and
handover of the AED 3 billion King Abdullah Petroleum
Studies and Research Center (KAPSARC) marks a major
milestone in our history.
Drake & Scull Rail managed to achieve tremendous
progress and was awarded their first contract in the
middle in 2013. We expect that the rail and oil & gas
business will grow even further in the years ahead while
significantly adding to the companys overall revenues.
Quarterly Breakdown
In the first quarter of 2013 DSI won the following
Engineering-MEP projects: The Musheireb Downtown
Doha Project Phase 1C Substructure & Superstructure
in Qatar valued at AED 304 million and in the same
016
sector, we also won the Asset Enhancement Scheme

Stage 1 Construction of Deep Trunk from MPS 14 to
MPS8 in Abu Dhabi worth AED 81.5 million.
Q1 also had many successes in the Civil Engineering
field with a major win in KSA with the KAUST Perimeter
Security System valued at AED 450 million. Additional
wins in KSA included the Al Rajhi Cash Center AED 22
million, the Al Rajhi Operations Center AED 167 million
and the Al Rajhi Data Center worth AED 98 million.
In the second and strongest quarter, noteworthy
accomplishments were plentiful. In the Engineering-MEP
sector there was a vast variety of project wins which
included a Private Residential project in Qatar worth AED
180 million, the Maliha Hospital for GHQ UAE Armed
Forces in Sharjah worth AED 138.5 million, the Mecca
Government Complex in KSA at AED 265 million, the
Abu Dhabi Airport South Airfield Development worth AED
91.2 million, the Monnet CHS Cross Country Conveying
System in India worth AED 205 million, the prominent
St. Regis Hotel in Jordan for AED 158 million and King
Fahad Medical City in KSA worth AED 261 million.
Our performance
in fiscal 2013
demonstrated
solid results. Net
profit for the fiscal
year closed at AED
182 million and
revenues at AED 4.9
billion an increase
of 58 % and 47 %
respectively over
fiscal 2012. Earnings
per Share (EPS)
Stood at AED 0.073
in comparison to
AED 0.042 recorded
in 2012.
The growth continued in Q2 with Civil Engineering.

These project wins included Maliha Hospital for GHQ.
Annual Report
UAE Armed Forces in Sharjah worth AED 137 million, the

ITCC Auxiliary Works in KSA at AED 180 million, Jeddah
Lamar Towers AED 170 million in KSA and in Jordan,
Saraya Aqaba at AED 766 million.
In the third quarter, our success continued with the
Engineering-MEP win of the internationally acclaimed
Louvre Museum in Abu Dhabi worth AED 211 million.
Other extremely noteworthy Engineering MEP wins
included the Fairmont Hotel in Abu Dhabi AED 233
million, the Presidential Palace in Abu Dhabi AED 251
million and in Dubai, Habtoor City AED 200 million.
In addition, during this quarter we were given the Civil
Engineering project of Emiral Phases 2 and 3 in Algeria
worth AED 640 million.
Developments continued to move ahead well into
the fourth quarter. By Q4, even more contracts were
underway and we saw more expansion as far as
project locations in Q4 as well. Our wins for PassavantRoediger spanned the globe with a CL 2 Extension and
Modernization of Waste Water Treatment Plant City
Campina and Plopeni in Romania valued at AED 72.9
million, another CL 2 Extension and Modernization of
Waste Water Treatment Plant City Campina and Plopeni
in Turkey worth AED 79.6 million, Stage 2 Jabal Al Asfar
WWTP in Egypt for AED 179 million and in Q4 the
Engineering-MEP contracts were the Mall of Qatar AED
355 million and the New Cuffe Parade Mumbai in India
with a total value of AED 59 million.
Continued Growth in Order Book
The total value of new projects acquired during 2013
amounted to AED 7.5 billion, compared to AED 5.4
billion for the same timeframe in 2012. Our Total Net
Profit presently stands at AED182 million which is a
58% increase on year on year growth.
The companys backlog is at an all time high of AED 12
billion representing a 32 % year on year increase.
Annual Report
017
09
FINANCIALS
018
Annual Report
DIRECTORS REPORT and consolidated financial

statements for the year ended 31 December 2013
Directors report......................................................................................................................020
Independent auditors report............................................................................................021
Consolidated balance sheet..............................................................................................022
Consolidated income statement.....................................................................................024
Consolidated statement of comprehensive income...............................................025
Consolidated statement of changes in equity...........................................................026
Consolidated statement of cash flows..........................................................................028
Notes to the consolidated financial statements........................................................030
Annual Report
019
Directors
report
Dear Shareholders,
The Board of Directors of Drake & Scull International PJSC (DSI) or
(the Company) and its Subsidiaries (the Group) have the pleasure
in presenting their consolidated financial statements for the year
ended 31 December 2013.
Principal activities
During the year ended 31 December 2013 DSI was preliminary
engaged in engineering, integrated design and construction disciplines
of Mechanical, Electrical and Plumbing (MEP), Civil Contracting, Water
and Power Infrastructure and Oil and Gas Infrastructure.
Financial results
For the year ended 31 December 2013, DSI earned revenues
amounting to AED 4,879 million and the profit for the year amounted
to AED 182 million. The Earnings per share was AED 0.073 for
the year.
We continue to deliver good financial results and a healthy statement
of financial position. We are satisfied with our strong earnings
performance for the full year across our operating segments and look
forward to continued improvements in our key markets in 2014. Our
commitment to growth and returns continues to improve value for
our shareholders.
DSI has been consistently achieving positive results and we have

continued this trend in 2013. DSI has a strong project portfolio and
managed to achieve a substantial increase in its Order backlog across
the region. DSI has announced total project awards of AED 7.5 billion
in 2013 in comparison to AED 5.4 billion awarded in 2012. The total
Order Backlog reached a record high of AED 12 billion representing
a year on year increase of 32%, giving us substantial leverage to
support the Companys development and expansion plan for 2014.
DSI has successfully met number of targets and objectives that were
set at the beginning of the financial year mainly through expanding
the business streamlines and services and increasing the companys
geographical reach. With a successful year behind us, DSI has positive
outlook for 2014 as well.
Auditors
PricewaterhouseCoopers were appointed as external auditors
of the Group for the year ended 31 December 2013.
PricewaterhouseCoopers are eligible for reappointment as auditors for
2014 and have expressed their willingness to continue in office.
Majid Al Ghurair, Chairman

On behalf of board of directors

31 March 2014
P O Box 65794
Dubai, United Arab Emirates
020
Annual Report
Independent auditors report

to the shareholders of Drake and Scull International PJSC
Report on the consolidated financial statements

We have audited the accompanying consolidated financial statements
of Drake and Scull International PJSC (the Company) and its
subsidiaries (together, the Group), which comprise the consolidated
balance sheet as at 31 December 2013 and the consolidated
statements of income, comprehensive income, changes in equity
and cash flows for the year then ended, and a summary of significant
accounting policies and other explanatory notes.
Managements responsibility for the consolidated
financial statements
Management is responsible for the preparation and fair presentation
of these consolidated financial statements in accordance with
International Financial Reporting Standards, 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.
Auditors responsibility
Our responsibility is to express an opinion on these consolidated
financial statements based on our audit. We conducted our audit
in accordance with International Standards on Auditing. Those
standards require that we comply with ethical requirements and
plan and perform the audit to obtain reasonable assurance about
whether the consolidated financial statements are free from material
misstatement.
An audit involves performing procedures to obtain audit evidence
about the amounts and disclosures in the consolidated financial
statements. The procedures selected depend on the auditors
judgement, including the assessment of the risks of material
misstatement of the consolidated financial statements, whether
due to fraud or error. In making those risk assessments, the auditor
considers internal control relevant to the entitys preparation and
fair presentation of the consolidated financial statements 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 entitys internal control. An audit also includes evaluating the
appropriateness of accounting policies used and the reasonableness
of accounting estimates made by management, as well as evaluating
the overall presentation of the consolidated financial statements.
We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our audit opinion.
Opinion
In our opinion, the accompanying consolidated financial statements
present fairly, in all material respects, the financial position of the
Group as at 31 December 2013, and its financial performance and its
cash flows for the year then ended in accordance with International
Financial Reporting Standards.
Annual Report
Emphasis of Matter
We draw attention to Note 8 to these consolidated financial
statements, which describes the uncertainty related to the outcome of
the arbitrations with certain customers. Our opinion is not qualified in
respect of this matter.
Report on other legal and regulatory requirements
Further, as required by the UAE Federal Law No. (8) of 1984, as
amended, in respect of the Company, we report that:
i. we have obtained all the information we considered necessary for
the purposes of our audit;
ii. the financial statements comply, in all material respects, with the
applicable provisions of the UAE Federal Law No. (8) of 1984, as
amended, and the Articles of Association of the Company;
iii. the Company has maintained proper books of account and has
carried out physical verification of inventories in accordance with
properly established procedures;
iv. the financial information included in the Directors report is
consistent with the books of account of the Company; and
v. nothing has come to our attention which causes us to believe that
the Company has breached any of the applicable provisions of the
UAE Federal Law No. (8) of 1984, as amended, or of its Articles
of Association which would materially affect its activities or its
financial position as at 31 December 2013.
PricewaterhouseCoopers
31 March, 2014
Amin H Nasser
Registered Auditor Number 307
Dubai, United Arab Emirates
PricewaterhouseCoopers
Emaar Square, Building 4, Level 8
PO Box 11987, Dubai, United Arab Emirates
T: +971 (0)4 304 3100
F: +971 (0)4 330 4100
www.pwc.com/middle-east
W Hunt, AH Nasser, P Suddaby and JE Fakhoury are registered
as practising auditors with the UAE Ministry of Economy
021
Consolidated balance sheet

AS At 31 December
Note
2013
AED000
2012
AED000
ASSETS
Non-current assets
Property and equipment
510,680
504,200
Intangible assets
1,098,469
1,136,219
Investment property
10
29,376
Investment accounted for using the equity method
32
93,249
5,646
17,630
11
75,159
2,384
Deferred income tax assets

Available-for-sale financial assets
Trade and other receivables
212,503
174,415
2,025,082
1,834,848
Current assets
Inventories
15
30,259
26,510
Development properties
14
19,111
64,830
4,256,323
3,741,861
Due from related parties
23
268,628
25,990
Financial assets at fair value through profit or loss
12
4,678
4,821
Cash and bank balances
16
558,217
730,700
5,137,216
4,594,712
7,162,298
6,429,560
17
2,285,047
2,285,047
Total assets
EQUITY AND LIABILITIES

Equity attributable to owners
of the Parent
Share capital
Share premium
17
3,026
Treasury shares
17
(28,622)
Statutory reserve
18
93,722
79,219
Other reserve
19
24,543
24,543
Retained earnings
515,801
363,835
Foreign currency translation reserve
(15,685)
(8,346)
2,906,454
2,715,676
68,372
53,106
2,974,826
2,768,782
Non-controlling interests
Total equity
The notes on pages 30 to 62 are an integral part of these consolidated financial statements.
022
Annual Report
Consolidated balance sheet

AS At 31 December
Note
2013
AED000
2012
AED000
LIABILITIES
Non-current liabilities
Bank borrowings
20
Derivative financial instruments

Deferred income tax liabilities
Employees end of service benefits
48,878
119,384
13
21,659
2,414
8,835
22
110,234
84,669
161,526
234,547
Current liabilities
Trade and other payables
21
2,938,909
2,205,158
Bank borrowings
20
1,067,592
1,209,374
Due to related parties
23
19,445
11,699
4,025,946
3,426,231
Total liabilities
4,187,472
3,660,778
Total equity and liabilities
7,162,298
6,429,560
The consolidated financial statements were

approved for issue by the Board of Directors on
31 March 2014 and signed on its behalf by:
Chairman
Chief Executive Officer
Annual Report
023
Consolidated income statement

Year ended 31 december
Note
Contract revenue
Contract costs
2013
AED000
2012
AED000
4,879,189
3,321,268
26
(4,382,296)
(2,938,354)
496,893
382,914
Gross profit
Other income
25
20,658
12,123
General and administrative expenses
28
(328,581)
(265,293)
Other losses - net
29
(3,070)
(11,977)
185,900
117,767
23,147
33,687
Operating profit
Finance income
24
Finance costs
24
(36,032)
(17,078)
Finance (costs)/income net
24
(12,885)
16,609
Share of profit from investment accounted for using the equity method
32
64,043
237,058
134,376
(55,323)
(19,333)
181,735
115,043
166,469
94,293
15,266
20,750
181,735
115,043
0.073
0.042
Profit for the year before tax

Income tax expense
30
Profit for the year

Profit attributable to:
- Owners of the Parent
- Non-controlling interests
Earnings per share

- Basic and diluted (AED)
33
024
Annual Report
Consolidated statement of comprehensive income

2013
AED000
Profit for the year
2012
AED000
181,735
115,043
Foreign currency translation
(7,339)
432
Other comprehensive (loss)/ income for the year
(7,339)
432
174,396
115,475
159,130
94,725
15,266
20,750
174,396
115,475
Other comprehensive income

Items that will not be reclassified to profit or loss
Items that may be subsequently reclassified to profit or loss
Total comprehensive income for the year
Attributable to:
- Owners of the Parent
- Non-controlling interests
Annual Report
025
Consolidated statement
of changes in equity
Share
capital
AED000
Balance at 1 January 2013
Treasury
shares
AED000
Share
premium
AED000
Statutory
reserve
AED000
2,285,047
(28,622)
79,219
Profit for the year
Other comprehensive income for the year
28,622
3,026
Total transaction with owners
28,622
3,026
Transfer from retained earnings to statutory reserve
14,503
2,285,047
3,026
93,722
Transaction with owners

Re-issue of treasury shares (Note 17)
Balance at 31 December 2013
Share
capital
AED000
Balance at 1 January 2012
Treasury
shares
AED000
2,177,778
Share
premium
AED000
(28,622)
Statutory
reserve
AED000
-
73,753
Profit for the year
Other comprehensive income for the year
107,269
Transaction with owners

Dividends (Note 34)
Bonus shares issued to shareholders (Note 34)
Non-controlling interests contribution to subsidiarys capital
Total transaction with owners

Transfer from retained earnings to statutory reserve
Balance at 31 December 2012
107,269
5,466
2,285,047
(28,622)
79,219
026
Annual Report
Consolidated statement
of changes in equity
Other
reserve
AED000
Foreign currency
translation
reserve
AED000
Retained
earnings
AED000
Non-controlling
interests
AED000
Total
AED000
Total
AED000
24,543
363,835
(8,346)
2,715,676
53,106
2,768,782
166,469
166,469
15,266
181,735
(7,339)
(7,339)
(7,339)
166,469
(7,339)
159,130
15,266
174,396
31,648
31,648
31,648
31,648
(14,503)
24,543
515,801
(15,685)
2,906,454
68,372
2,974,826
Other
reserve
AED000
Foreign currency
translation
reserve
AED000
Retained
earnings
AED000
24,543
446,639
Non-controlling
interests
AED000
Total
AED000
Total
AED000
(8,778)
2,685,313
32,244
2,717,557
94,293
94,293
20,750
115,043
432
432
432
94,293
432
94,725
20,750
115,475
(171,631)
(171,631)
(171,631)
107,269
107,269
112
112
(171,631)
(64,362)
112
(64,250)
-5,466
24,543
363,835
(8,346)
2,715,676
53,106
2,768,782
Annual Report
027
Consolidated statement of cash flows

Note
2013
AED000
2012
AED000
Operating activities
Profit for the year before tax
237,058
134,376
32
(64,043)
Depreciation
47,388
42,567
Amortisation of intangible assets
37,750
37,750
Provision for employees end of service benefits
22
41,665
29,537
Management fee expense
28
14,800
Gain on sale of available-for-sale financial assets
11
(8,815)
(4,450)
Adjustments for:
Share of profits of investment accounted for using the equity method
Gain on sale of held-to-maturity investments

Loss on sale of development properties
29
5,160
Impairment (reversal)/loss on available-for-sale financial assets
11
(727)
3,583
Fair value loss on financial assets at fair value through profit or loss
29
143
Fair value gain on settlement of share swaps
29
(5,583)
Fair value loss on interest rate swaps
29
4,050
21,174
Loss on settlement of equity warrants
29
27
485
Finance income
24
(23,147)
(33,687)
Finance costs
24
36,032
17,078
Gain on disposal of property and equipment
25
(982)
(1,218)
Provision for impairment on trade receivables and retentions - net
28
22,509
12,081
337,300
265,261
Operating cash flows before payment of employees end of service

benefits, income tax and changes in working capital
Employees end of service benefits paid
Income tax paid
22
(16,100)
(14,171)
(49,760)
(19,596)
Changes in working capital

Inventories
(3,749)
(347)
(1,306)
(13,898)
Trade and other receivables before provisions and excluding interest

receivable and loans and advances
(578,182)
(741,122)
(242,638)
(524)
Trade and other payables excluding income tax, interest and group
management fee payable
732,064
107,741
(20,153)
7,746
(31,395)
165,222
(448,051)
165,222
(448,051)

Net cash generated from/(used in) operating activities
Balance carried forward
028
Annual Report
Consolidated statement of cash flows

Note
Balance brought forward
2013
AED000
2012
AED000
165,222
(448,051)
(86,733)
(124,683)
32,229
2,938
32
(29,206)
(Purchase of)/proceeds from sale of available-for-sale investments
11
(72,048)
271,572
9,683
51,346
15,083
33,045
(130,992)
234,218
Investing activities
Purchase of property and equipment
Proceeds from disposal of property and equipment
Loans and advances

Interest received
Net cash (used in)/

generated from investing activities
Financing activities
Term deposits under lien
16
Dividends paid
Proceeds from re-issue of treasury shares
17
Net proceeds from trust receipts and other borrowings
(68,608)
219,745
(64,361)
31,648
277,477
336,279
Proceeds from term loans
20
24,350
604,817
Payment of term loans
20
(577,659)
(462,633)
Non-controlling interests contribution to subsidiarys capital
112
(21,856)
(16,674)
(334,648)
617,285
(300,418)
403,452
(4,217)
79
Movement in restricted cash
444,867
(444,867)
Cash and cash equivalents, at the beginning of the year
182,034
223,370
322,266
182,034
Interest paid
Net cash (used in)/

generated from financing activities
Net (decrease)/increase in cash and cash equivalents
Net foreign currency translation difference
Cash and cash equivalents,

at the end of the year
16
Annual Report
029
Notes to the consolidated financial statements

for the year ended 31 December 2013
General information
Drake and Scull International PJSC (the Company or the Parent Company) was incorporated on 16 November 2008 and was registered on 21
January 2009 as a Public Joint Stock Company in accordance with the UAE Federal Law No. 8 of 1984, (as amended). The Company is listed on
Dubai Financial Market.
The Companys registered office is PO Box 65794, Dubai, United Arab Emirates.
The principal activities of the Company and its subsidiaries (together, the Group) are carrying out contracting work relating to the construction
industry, such as electrical, plumbing, air conditioning and sanitation work in the Middle East, Europe, Asia and North Africa region.
The Company has either directly or indirectly the following major subsidiaries:
Shareholding %
Country of
incorporation
Major Subsidiaries
Principal activities
2013
2012
Drake & Scull International LLC (Abu Dhabi)
Contracting work relating to the construction industry
100
100
UAE
Gulf Technical Construction Company LLC
Mechanical, electrical and civil construction work
100
80
UAE
Drake & Scull Water and Power LLC
Developing waste water, water and sludge treatment

plants
100
100
UAE
Drake & Scull International for Electrical Contracting

WLL
Electrical contracting and repairing work relating to the

construction industry
75
75
Kuwait
Drake & Scull International (Qatar) WLL
100
100
Qatar
Passavant Engineering Limited
Holding company
100
100
British Virgin Island
Passavant Roediger GmbH and its subsidiaries (a

subsidiary of Passavant Engineering Limited)

plants
100
100
Germany
Drake & Scull International WLL
65
65
Saudi Arabia
International Center for Contracting Co. Ltd
100
100
Saudi Arabia
Drake & Scull Construction Company LLC
94
94
Saudi Arabia
Drake & Scull International for Contracting SAE
100
100
Egypt
Drake & Scull Water & Energy India Private Limited

plants
100
100
India
Drake & Scull International LLC (Oman)
51
51
Oman
The Group, through Gulf Technical Construction Company LLC, also has a 50% interest in Ranya Test Joint Venture, a joint arrangement with Ranya
General Contracting Company LLC under a joint arrangement agreement dated 12 August 2005. This is classified as joint operation in these
consolidated financial statements.
The Group, through Drake & Scull International for Contracting SAE, also has a 50% interest in a joint venture with Hassan Allam Sons (Misr Sons
Development S.A.E) under a joint arrangement agreement dated 21 July 2011. This is classified as joint operation in these consolidated financial
statements.
The Group, through Drake & Scull Water & Power LLC, also has a 50% interest in a joint venture with Afghan Electrical Power Corporation under a joint
arrangement agreement dated 27 September 2011. This is classified as joint operation in these consolidated financial statements.
030
Annual Report

2
The Group, through Drake & Scull Construction Company LLC, also
has a 50% interest in a joint venture with Consolidated Contractors
Group S.A.L (Offshore) (CCC) under a joint arrangement agreement
dated 27 September 2011. This is classified as joint operation in these
The Group, through Drake & Scull Construction Company LLC
Saudi Arabia, also has a 50% interest in a joint venture with Saudi
Arabia Construction Co (SACC DSC JV) under a joint arrangement
agreement dated 15 October 2012. This is classified as joint operation
in these consolidated financial statements.
The Group, through Drake & Scull Construction LLC, also has a 90%
interest in a joint venture with John Sisk and Sons Construction LLC,
(SISK-DSC-SMH-Joint Venture) under a joint arrangement agreement
dated 25 November 2012. This is classified as joint operation in these
Drake and Scull International PJSC, has a 50% interest in a joint venture
with SICIM S.p.A under joint arrangement agreement dated 11 January
2013. This is classified as joint operation in these consolidated financial
statements.
Drake and Scull International PJSC, also has a 51% interest in a joint
venture with Al Habtoor Specon LLC (DSI-HLS Joint Venture) under a
joint arrangement agreement dated 17 April 2013. This is classified as
joint operation in these consolidated financial statements.
Drake & Scull Engineering LLC, also has a 49% interest in a joint
venture with Al Habtoor Specon LLC (HLS-DSE Joint Venture) under a
joint arrangement agreement dated 1 May 2013. This is classified as
joint operation in these consolidated financial statements.
The Group, through Drake & Scull (Cayman Islands) No. 3 Limited, also
has a 50% interest in a joint venture with Omniyat Properties Twenty
Seven Limited (DSO Development Limited) under a joint arrangement
agreement dated 6 November 2012. This is classified as joint venture
in these consolidated financial statements.
Annual Report
Summary of significant
accounting policies
The principal accounting policies applied in the preparation
of these consolidated financial statements are set out
below. These policies have been consistently applied to
all the years presented, unless otherwise stated.
2.1.1
Basis of preparation
The consolidated financial statements of the Group have been
prepared in accordance with International Financial Reporting
Standards (IFRS) and IFRS Interpretations Committee (IFRS IC)
applicable to companies reporting under IFRS. The consolidated
financial statements have been prepared under the historical cost
convention, except as disclosed in the accounting policies below.
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 Groups 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 in Note 4.
2.1.2
Changes in accounting policy and disclosures
(a) New and amended standards adopted by the Group
The following standards have been adopted by the Group
for the financial year beginning on 1 January 2013:
Amendment to IAS 1, Financial statement presentation, regarding
other comprehensive income (effective from 1 July 2012);
Amendment to IAS 19, Employee benefits regarding
elimination of the corridor approach and calculating
finance costs on a net funding basis (effective from
1 January 2013). The impact of amendment is not
material to these consolidated financial statements;
IAS 27 (revised 2011), Separate financial
statements (effective from 1 January 2013);
IAS 28 (revised 2011), Associates and joint
ventures (effective from 1 January 2013);
Amendment to IFRS 7, Financial instruments: Disclosures, on
asset and liability offsetting (effective from 1 January 2013);
IFRS 10, Consolidated financial statements
(effective from 1 January 2013);
IFRS 11, Joint arrangements (effective from 1 January 2013);
IFRS 12, Disclosures of interests in other entities
(effective from 1 January 2013); and
IFRS 13, Fair value measurement (effective from 1 January 2013).
031

(b) New standards and interpretation not yet adopted

A number of new standards and amendments to standards
and interpretations are effective for annual periods beginning
after 1 January 2013, and have not been applied in preparing
these consolidated financial statements. None of these is
expected to have a significant effect on the consolidated financial
statements of the Group, except the following set out below:
IAS 32 (amendment), Financial instruments:
Presentation, (effective from 1 January 2014);
Amendments to IFRS 10, 12 and IAS 27 on consolidation
for investment entities (effective from 1 January 2014);
Amendment to IAS 36, Impairment of assets on recoverable
amount disclosures (effective from 1 January 2014);
Financial Instruments: Recognition and Measurement
Amendment to IAS 39 Novation of derivatives
(effective from 1 January 2014); and
IFRS 9, Financial instruments, As part of the Limited Amendments
to IFRS 9 project, the International Accounting Standards Board
(IASB) tentatively decided at the July 2013 board meeting to defer
the mandatory effective date of IFRS 9. The IASB agreed that the
mandatory effective date should no longer be annual periods
beginning on or after 1 January 2015 but rather be left open
pending the finalisation of the impairment and classification and
measurement requirements. The Group is yet to assess IFRS 9s
full impact.
There are no other IFRSs or IFRIC interpretations that are not
yet effective that would be expected to have a material impact
on the Group.
2.2
Consolidation
(a) Subsidiaries
Subsidiaries are all entities (including structured entities) over
which the Group has control. The Group controls an entity when
the Group is exposed to, or has rights to, variable returns from
its involvement with the entity and has the ability to affect those
returns through its power over the entity. Subsidiaries are fully
consolidated from the date on which control is transferred to the
Group. They are deconsolidated from the date that control ceases.
The Group applies the acquisition method of accounting to account
for business combinations. The consideration transferred for the
acquisition of a subsidiary is the fair value of the assets transferred,
the liabilities incurred to the former owners of the acquiree and
the equity interests issued by the Group. The consideration
transferred includes the fair value of any asset or liability resulting
from a contingent consideration arrangement. Identifiable assets
acquired and liabilities and contingent liabilities assumed in a
business combination are measured initially at their fair values at
the acquisition date. The Group recognises any non-controlling
interest in the acquiree on an acquisition-by-acquisition basis,
either at fair value or at the non-controlling interests proportionate
share of the recognised amounts of acquirees identifiable net
assets. Acquisition-related costs are expensed as incurred.
032
The excess of the consideration transferred, the amount of any

non-controlling interest in the acquiree and the acquisition-date
fair value of any previous equity interest in the acquiree over the
fair value of the identifiable net assets acquired is recorded as
goodwill. If the total of consideration transferred, non-controlling
interest recognised and previously held interest measured is less
than the fair value of the net assets of the subsidiary acquired
in the case of a bargain purchase, the difference is recognised
directly in the consolidated income statement (Note 2.6).
If the business combination is achieved in stages, the
acquisition date carrying value of the acquirers previously
held equity interest in the acquiree is re-measured to fair
value at the acquisition date; any gains or losses arising from
such re-measurement are recognised in profit or loss.
Any contingent consideration to be transferred by the group is
recognised at fair value at the acquisition date. Subsequent changes to
the fair value of the contingent consideration that is deemed to be an
asset or liability is recognised in accordance with IAS 39 either in profit
or loss or as a change to other comprehensive income. Contingent
consideration that is classified as equity is not re-measured, and
its subsequent settlement is accounted for within equity.
Inter-company transactions, balances and unrealised gains on
transactions between Group companies are eliminated. Unrealised losses
are also eliminated. When necessary amounts reported by subsidiaries
have been adjusted to conform with the Groups accounting policies.
Transactions with non-controlling interests that do not result in
loss of control are accounted for as equity transactions that
is, as transactions with the owners in their capacity as owners.
The difference between fair value of any consideration paid and
the relevant share acquired of the carrying value of net assets of
the subsidiary is recorded in equity. Gains or losses on disposals
to non-controlling interests are also recorded in equity.
(b) Joint ventures
The Group has applied IFRS 11 to all joint arrangements as of 1
January 2013. Under IFRS 11 investments in joint arrangements
are classified as either joint operations or joint ventures depending
on the contractual rights and obligations of each investor. The
Group has assessed the nature of its joint arrangements and
determined them to be both joint ventures and joint operations. Joint
ventures are accounted for using the equity method whereas joint
operations are consolidated on a proportional line by line basis.
Under the equity method of accounting, interests in joint ventures
are initially recognised at cost and adjusted thereafter to recognise
the Groups share of the post-acquisition profits or losses and
movements in other comprehensive income. When the Groups share
of losses in a joint venture equals or exceeds its interests in the joint
ventures (which includes any long-term interests that, in substance,
form part of the Groups net investment in the joint ventures), the
Group does not recognise further losses, unless it has incurred
obligations or made payments on behalf of the joint ventures.
Annual Report

2.3
Segment reporting
Operating segments are reported in a manner consistent with the internal
reporting provided to the Chief Operating decision-maker. The Chief
Operating decision-maker, who is responsible for allocating resources and
assessing performance of the operating segments, has been identified
as the executive management that makes strategic decisions. The Chief
Operating decision-maker of the Group is the Executive Management.
2.4
Foreign currency translation
(a) Functional and presentation currency
Items included in the financial statements of each of the Groups
entities are measured using the currency of the primary economic
environment in which the entity operates (the functional currency).
The consolidated financial statements are presented in United Arab
Emirates Dirhams (AED), which is the Groups presentation currency.
(b) Transactions and balances
Foreign currency transactions are translated into the functional
currency using the exchange rates prevailing at the dates of the
transactions or valuation where items are re-measured. Foreign
exchange gains and losses resulting from the settlement of
such transactions and from the translation at year-end exchange
rates of monetary assets and liabilities denominated in foreign
currencies are recognised in the consolidated income statement.
Foreign exchange gains and losses that relate to borrowings and
cash and cash equivalents are presented in the consolidated income
statement within finance income or costs. All other foreign exchange
gains and losses are presented in the consolidated income statement.
Translation differences on non-monetary financial assets and liabilities
such as equities held at fair value through profit or loss are recognised
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 available for sale, are included in other comprehensive income.
(c) Group entities
The results and financial position of all the Group entities (none
of which has the currency of a hyper-inflationary economy)
that have a functional currency different from the presentation
currency are translated into the presentation currency as follows:
i. assets and liabilities for each balance sheet presented are
translated at the closing rate at the date of that balance sheet;
ii. income and expenses for each income statement are translated
at average exchange rates (unless this average is not a reasonable
approximation of the cumulative effect of the rates prevailing on
the transaction dates, in which case income and expenses are
translated at the rate on the dates of the transactions); and
iii. all resulting exchange differences are recognised
in other comprehensive income.
Annual Report
Goodwill and fair value adjustments arising on the acquisition of

a foreign entity are treated as assets and liabilities of the foreign
entity and translated at the closing rate. Exchange differences
arising are recognised in other comprehensive income.
2.5
Property and equipment
Property and equipment are stated at historical cost less depreciation.
Historical cost includes expenditure that is directly attributable
to the acquisition of the items. Cost may also include transfers
from equity of any gains/losses on qualifying cash flow hedges
of foreign currency purchases of property and equipment.
Subsequent costs are included in the assets carrying amount or
recognised as a separate asset, as appropriate, only when it is probable
that future economic benefits associated with the item will flow to
the Group and the cost of the item can be measured reliably. The
carrying amount of the replaced part is derecognised. All other repairs
and maintenance costs are charged to the consolidated income
statement during the financial period in which they are incurred.
Land is not depreciated. Depreciation on other assets is calculated on the
straight-line method, at rates calculated to allocate the cost of assets less
their estimated residual value over their expected useful lives as follows:
Type of assets
Years
Buildings
5 to 10 years
Machinery
2 to 5 years
Furniture, fixtures and office equipment
2 to 5 years
Motor vehicles
3 to 5 years
The assets residual values and useful lives are reviewed, and
adjusted if appropriate, at the end of each reporting period.
Capital work-in-progress is stated at cost. When commissioned, capital
work-in-progress is transferred to property and equipment or intangible
assets and depreciated or amortised in accordance with Group policies.
An assets carrying amount is written down immediately to its
recoverable amount if the assets carrying amount is greater
than its estimated recoverable amount (Note 2.7).
Gains and losses on disposals are determined by
comparing the proceeds with the carrying amount and are
recognised within the consolidated income statement.
Specific borrowing costs directly attributable to the construction
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.
All other borrowing costs are recognised in the consolidated
income statement in the period in which they are incurred.
033

2.6
Intangible assets
(a) Goodwill
Goodwill arises on the acquisition of subsidiaries and represents
the excess of the consideration transferred over the Parent
Companys interest in net fair value of the net identifiable
assets, liabilities and contingent liabilities of the acquiree and
the fair value of the non-controlling interest in the acquiree.
amount may not be recoverable. An impairment loss is recognised

for the amount by which the assets carrying amount exceeds its
recoverable amount. The recoverable amount is the higher of an
assets fair value less costs to sell and value in use. For the purposes
of assessing impairment, assets are grouped at the lowest levels for
which there are largely independent cash inflows (cash-generating
units). Prior impairments of non-financial assets (other than
goodwill) are reviewed for possible reversal at each reporting date.
For the purpose of impairment testing, goodwill acquired in a

business combination is allocated to each of the Cash Generating
Units (CGUs), or Groups of CGUs, that is expected to benefit from
the synergies of the combination. Each unit or Group of units to
which the goodwill is allocated represents the lowest level within the
entity at which the goodwill is monitored for internal management
purposes. Goodwill is monitored at the operating segment level.
2.8
Financial assets
Goodwill impairment reviews are undertaken annually or more

frequently if events or changes in circumstances indicate a potential
impairment. The carrying value of goodwill is compared to the
recoverable amount, which is the higher of value in use and the
fair value less costs of disposal. Any impairment is recognised
immediately as an expense and is not subsequently reversed.
(b) Trade names
Trade names are shown at historical cost. Trade names
acquired in a business combination are recognised at fair
value at the acquisition date. Trade names have infinite lives
and are not amortised due to the minimal cost of renewal.
(c) Customer relationships
Acquired contractual customer relationships are initially recognised
at fair value at the time of acquisition and subsequently
carried at cost less accumulated amortisation. The contractual
customer relationships have a finite useful life. Amortisation
is calculated using the straight-line method to allocate the
cost of customer relationships over its estimated useful life
of 10 years, which is the estimated period of benefit.
(d) Orders backlog
Acquired orders backlog is arrived at by calculating the present
value of the expected future economic benefits to arise from
those orders after deducting the contributory asset charge.
Subsequently, orders backlog is carried at cost less accumulated
amortisation. Amortisation is calculated using the straight-line
method to allocate the cost of orders backlog over its estimated
useful life of 4 years, which is the estimated period of benefit.
2.7
Impairment of non-financial assets
Assets that have an indefinite useful life for example, goodwill or
intangible assets not ready to use are not subject to amortisation
and are tested annually for impairment. Assets that are subject to
amortisation/depreciation are reviewed for impairment whenever
events or changes in circumstances indicate that the carrying
034
2.8.1
Classification
The Group classifies its financial assets in the following categories:
at fair value through profit or loss, loans and receivables, availablefor-sale and held-to-maturity. The classification depends on the
purpose for which the financial assets were acquired. Management
determines the classification of its financial assets at initial recognition.
(a) Financial assets at fair value through profit or loss
Financial assets at fair value through profit or loss are financial
assets held for trading. A financial asset is classified in this category
if acquired principally for the purpose of selling in the short term.
Assets in this category are classified as current assets if expected to be
settled within 12 months, otherwise they are classified as non-current.
(b) Loans and receivables
Loans and receivables are non-derivative financial assets with fixed or
determinable payments that are not quoted in an active market. They
are included in current assets, except for maturities greater than 12
months after the end of the reporting period. These are classified as
non-current assets. The Groups loans and receivables comprise trade
and other receivables, due from related parties, and cash and cash
equivalents in the balance sheet (Notes 8, 23 and 16 respectively).
(c) Available-for-sale financial assets
Available-for-sale financial assets are non-derivatives that are
either designated in this category or not classified in any of the
other categories. They are included in non-current assets unless
the investment matures or management intends to dispose
of it within 12 months of the end of the reporting period.
(d) Held-to-maturity
Held-to-maturity financial assets are non-derivative financial assets
with fixed or determinable payments and fixed maturities that the
Groups management has the positive intention and ability to hold
to maturity. If the Group were to sell other than an insignificant
amount of held-to-maturity financial assets, the whole category would
be tainted and reclassified as available for sale. Held-to-maturity
financial assets are included in non-current assets, except for those
with maturities less than 12 months from the end of the reporting
period, which are classified as current assets. The Group assesses
at each balance sheet date where there is objective evidence
that a financial asset or group of financial assets is impaired.
Annual Report

2.8.2
Recognition and measurement
Regular purchases and sales of financial assets are recognised
on the trade-date the date on which the Group commits to
purchase or sell the asset. Investments are initially recognised at
fair value plus transaction costs for all financial assets not carried
at fair value through profit or loss. Financial assets carried at fair
value through profit or loss are initially recognised at fair value,
and transaction costs are expensed in the consolidated income
statement. Financial assets are derecognised when the rights to
receive cash flows from the investments have expired or have been
transferred and the Group has transferred substantially all risks
and rewards of ownership. Available-for- sale financial assets and
financial assets at fair value through profit or loss are subsequently
carried at fair value. Loans and receivables are subsequently
carried at amortised cost using the effective interest method.
Gains or losses arising from changes in the fair value of the
financial assets at fair value through profit or loss category are
presented in the consolidated income statement within other gains/
(losses) in the period in which they arise. Dividend income from
financial assets at fair value through profit or loss is recognised
in the consolidated income statement as part of other income
when the Groups right to receive payments is established.
When securities classified as available for sale are sold or
impaired, the accumulated fair value adjustments recognised
in equity are included in the consolidated income statement
as Gains and losses from investment securities.
Interest on available-for-sale securities calculated using the
effective interest method is recognised in the consolidated
income statement as part of other income. Dividend on
available-for-sale equity instruments are recognised in the
consolidated income statement as part of other income when
the Groups right to receive payments is established.
2.9
Impairment of financial assets
(a) Assets carried at amortised cost
The Group assesses at the end of each reporting period whether
there is objective evidence that a financial asset or Group of
financial assets is impaired. A financial asset or a group of
financial assets is impaired and impairment losses are incurred
only if there is objective evidence of impairment as a result of
one or more events that occurred after the initial recognition of
the asset (a loss event) and that loss event (or events) has an
impact on the estimated future cash flows of the financial asset
or group of financial assets that can be reliably estimated.
Evidence of impairment may include indications that the debtors or a
group of debtors is experiencing significant financial difficulty, default
or delinquency in interest or principal payments, the probability
that they will enter bankruptcy or other financial reorganisation,
and where observable data indicate that there is a measurable
Annual Report
decrease in the estimated future cash flows, such as changes in

arrears or economic conditions that correlate with defaults.
For loans and receivables category, the amount of the loss is measured
as the difference between the assets carrying amount and the present
value of estimated future cash flows (excluding future credit losses
that have not been incurred) discounted at the financial assets original
effective interest rate. The carrying amount of the asset is reduced
and the amount of the loss is recognised in the consolidated income
statement. If a loan or held-to-maturity investment has a variable
interest rate, the discount rate for measuring any impairment loss is
the current effective interest rate determined under the contract. As
a practical expedient, the Group may measure impairment on the
basis of an instruments fair value using an observable market price.
If, in a subsequent period, the amount of the impairment loss decreases
and the decrease can be related objectively to an event occurring
after the impairment was recognised (such as an improvement in
the debtors credit rating), the reversal of the previously recognised
impairment loss is recognised in the consolidated income statement.
(b) Assets classified as available-for-sale
The Group assesses at the end of each reporting period whether there
is objective evidence that a financial asset or a Group of financial assets
is impaired. For debt securities, the Group uses the criteria referred to
in (a) above. In the case of equity investments classified as available
for sale, a significant or prolonged decline in the fair value of the
security below its cost is also evidence that the assets are impaired.
If any such evidence exists for available-for-sale financial assets, the
cumulative loss measured as the difference between the acquisition
cost and the current fair value, less any impairment loss on that financial
asset previously recognised in profit or loss is removed from equity
and recognised in profit or loss. Impairment losses recognised in the
consolidated income statement on equity instruments are not reversed
through the consolidated income statement. If, in a subsequent period,
the fair value of a debt instrument classified as available for sale increases
and the increase can be objectively related to an event occurring after
the impairment loss was recognised in profit or loss, the impairment
loss is reversed through the consolidated income statement.
2.10
Offsetting financial instruments
Financial assets and liabilities are offset and the net amount reported
in the balance sheet when there is a legally enforceable right to offset
the recognised amounts and there is an intention to settle on a net
basis or realise the asset and settle the liability simultaneously.
2.11
and hedging activities
Derivatives are initially recognised at fair value on the date the
derivative contract is entered into and are subsequently re-measured
at their fair value. The method of recognising the resulting gain or
loss depends on whether the derivative is designated as a hedging
035

instrument, and if so, the nature of the item being hedged. The
Group designates certain derivatives as hedges of a particular risk
associated with a recognised asset or liability (cash flow hedge).
If an investment property becomes owner-occupied, it is reclassified

as property and equipment. Its fair value at the date of reclassification
becomes its cost for subsequent accounting purposes.
The Group does not document at the inception of the transaction the
relationship between hedging instruments and hedged items, as well
as its risk management objectives and strategy for undertaking various
hedging transactions. The Group does not also document its assessment,
both at hedge inception and on an ongoing basis, of whether the
derivatives that are used in hedging transactions are highly effective
in offsetting changes in fair values or cash flows of hedged items.
Accordingly, the derivative is not designated as a hedging instrument
Where an investment property undergoes a change in use,

evidenced by commencement of development with a view to
sale, the property is transferred to development properties. A
propertys deemed cost for subsequent accounting as development
properties is its fair value at the date of change in use.
The fair values of various derivative instruments used for are disclosed
in Note 13. The full fair value of a derivative is classified as a noncurrent asset or liability when the remaining maturity of the hedged
item is more than 12 months and as current asset or liability when
the remaining maturity of the hedged item is less than 12 months.
Trading derivatives are classified as a current asset or liability.
The gain or loss relating to the change in fair value is recognised
immediately in the consolidated income statement within
Other gains/(losses).
2.12
Investment property
Property that is held for long-term rental yields or for capital
appreciation or both, and that is not occupied by the companies
in the Group, is classified as investment property. Investment
property also includes property that is being constructed
or developed for future use as investment property.
Investment property is measured initially at its cost, including related
transaction costs and where applicable borrowing costs. After initial
recognition, investment property is carried at fair value. The fair value
of investment property reflects, among other things, rental income
from current leases and other assumptions market participants would
make when pricing the property under current market conditions.
Subsequent expenditure is capitalised to the assets carrying amount
only when it is probable that future economic benefits associated
with the expenditure will flow to the Group and the cost of the item
can be measured reliably. All other repairs and maintenance costs
are expensed when incurred. When part of an investment property is
replaced, the carrying amount of the replaced part is derecognised.
Changes in fair values are recognised in the consolidated income
statement. Investment properties are derecognised when they have
been disposed.
Where the Group disposes of a property at fair value in an arms
length transaction, the carrying value immediately prior to the
sale is adjusted to the transaction price, and the adjustment
is recorded in the consolidated income statement within net
gain from fair value adjustment on investment property.
036
2.13
Properties acquired, constructed or in the course of construction
for sale are classified as development properties. Such properties
are stated at the lower of cost and net realisable value. The cost of
development properties includes the cost of land and other related
expenditure which are recognised as and when activities that are
necessary to get the properties ready for sale are in progress. Net
realisable value represents the estimated selling price less costs to be
incurred in completing and selling the property. Any gains or losses on
sale of development properties are included in other (losses)/gains.
2.14
Inventories
Inventories are stated at the lower of cost and net realisable
value. Cost is determined using the weighted average method.
Net realisable value is the estimated selling price in the ordinary
course of business, less applicable variable selling expenses.
2.15
Trade receivables
Trade receivables are amounts due from customers for billing
in the ordinary course of business for construction contracts.
If collection is expected in one year or less (or in the normal
operating cycle of the business if longer), they are classified as
current assets. If not, they are presented as non-current assets.
Trade and other receivables are recognised initially at fair
value and subsequently measured at amortised cost using the
effective interest method, less provision for impairment.
A provision for impairment of trade receivables is established
when there is objective evidence that the Group will not be able
to collect all amounts due according to the original terms of
receivables. The amount of the provision is the difference between
the assets carrying amount and the present value of estimated
future cash flows, discounted at the original effective interest rate.
The carrying amount of the asset is reduced through the use of an
allowance account, and the amount of the loss is recognised in the
consolidated income statement within General and administrative
expenses. When a trade receivable is uncollectible, it is written off
against the allowance account for trade receivables. Subsequent
recoveries of amounts previously written off are credited to the
consolidated income statement.
Annual Report

2.16
Cash and cash equivalents
In the consolidated statement of cash flows, cash and
cash equivalents include cash in hand, deposits held at
call with banks, other short-term highly liquid investments
with original maturities of three months or less and bank
overdrafts. In the consolidated balance sheet, bank overdrafts
are shown within bank borrowings in current liabilities.
2.20
Bank borrowings
Borrowings are recognised initially at fair value, net of
transaction costs incurred. Borrowings are subsequently carried
at amortised cost; any difference between the proceeds (net
of transaction costs) and the redemption value is recognised
in the consolidated income statement over the period of
the borrowings using the effective interest method.
2.17
Share capital
Ordinary shares are classified as equity.
Fees paid on the establishment of loan facilities are

recognised as transaction costs of the loan to the extent that
it is probable that some or all of the facility will be drawn
down. In this case, the fee is deferred until the draw-down
occurs. To the extent there is no evidence that it is probable
that some or all of the facility will be drawn down, the fee
is capitalised as a pre-payment for liquidity services and
amortised over the period of the facility to which it relates.
Incremental costs directly attributable to the issue of new ordinary shares or

options are shown in equity as a deduction, net of tax, from the proceeds.
Where any Group company purchases the Companys equity
share capital (treasury shares), the consideration paid, including
any directly attributable incremental costs (net of income
taxes) is deducted from equity attributable to the Companys
equity holders until the shares are cancelled or reissued.
Where such ordinary shares are subsequently reissued, any
consideration received, net of any directly attributable incremental
transaction costs and the related income tax effects, is included
in equity attributable to the Companys equity holders.
2.18
Trade payables
Trade payables are obligations to pay for goods or services that have
been acquired in the ordinary course of business from suppliers.
Trade 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.
Trade payables are recognised initially at fair value and subsequently
measured at amortised cost using the effective interest method.
2.19
Provisions
Provisions are recognised when the Group has a present legal or
constructive obligation as a result of past events, it is probable that an
outflow of resources embodying economic benefits will be required
to settle the obligation, and a reliable estimate of the amount can be
made. Provisions are not recognised for future operating losses.
Provisions are measured at the present value of the expenditures expected
to be required to settle the obligation using a pre-tax rate that reflects
current market assessments of the time value of money and risks specific
to the obligation. The increase in provisions due to the passage of time
are recognised as interest expense. Where there are a number of similar
obligations, the likelihood that an outflow will be required in settlement
is determined by considering the class of obligations as a whole. A
provision is recognised even if the likelihood of an outflow with respect
to any one item included in the same class of obligation may be small.
Annual Report
2.21
Current and deferred income tax
The tax expense for the period comprises current and
deferred tax. Tax is recognised in the consolidated income
statement, except to the extent that it relates to items
recognised in other comprehensive income or directly
in equity. In this case, the tax is also recognised in other
comprehensive income or directly in equity, respectively.
The current income tax charge is calculated on the basis of the
tax laws enacted or substantively enacted at the balance sheet
date in the countries where the company and its subsidiaries
operate and generate taxable income. Management periodically
evaluates positions taken in tax returns with respect to situations
in which applicable tax regulation is subject to interpretation.
It establishes provisions where appropriate on the basis of
amounts expected to be paid to the tax authorities.
Deferred income tax is recognised, using the liability
method, on temporary differences arising between
the tax bases of assets and liabilities and their carrying
amounts in the consolidated financial statements.
However, deferred tax liabilities are not recognised if they
arise from the initial recognition of goodwill; deferred income
tax is not accounted for if it arises from initial recognition
of an asset or liability in a transaction other than a business
combination that at the time of the transaction affects neither
accounting nor taxable profit or loss. Deferred income tax is
determined using tax rates (and laws) that have been enacted
or substantially enacted by the balance sheet date and are
expected to apply when the related deferred income tax asset
is realised or the deferred income tax liability is settled.
Deferred income tax assets are recognised only to the extent
that it is probable that future taxable profit will be available
against which the temporary differences can be utilised.
037

Deferred income tax liabilities are provided on taxable temporary

differences arising from investments in subsidiaries, associates and
joint arrangements, except for deferred income tax liability where the
timing of the reversal of the temporary difference is controlled by
the Group and it is probable that the temporary difference will not
reverse in the foreseeable future. Generally the Group is unable to
control the reversal of the temporary difference for associates. Only
where there is an agreement in place that gives the group the ability
to control the reversal of the temporary difference not recognised.
Deferred income tax assets are recognised on deductible temporary
differences arising from investments in subsidiaries, associates and
joint arrangements only to the extent that it is probable the temporary
difference will reverse in the future and there is sufficient taxable
profit available against which the temporary difference can be utilised.
Deferred income tax assets and liabilities are offset when there
is a legally enforceable right to offset current tax assets against
current tax liabilities and when the deferred income taxes assets
and liabilities relate to income taxes levied by the same taxation
authority on either the same taxable entity or different taxable entities
where there is an intention to settle the balances on a net basis.
2.22
Borrowing costs
General and specific borrowing costs 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 capitalisation.
All other borrowing costs are recognised in profit or loss in the
period in which they are incurred.
2.23
Employee benefits
A provision is made for the estimated liability for employees
entitlements to annual leave and related benefits as a result of
services rendered by the employees up to the balance sheet date.
Provision is also made, using actuarial techniques, for the end of
service benefits due to employees in accordance with the Labour
Laws applicable in the countries in which the Group operates,
for their periods of service up to the balance sheet date.
The provision relating to annual leave and leave passage
is disclosed as a current liability and included in trade
and other payables, while that relating to end of service
benefits is disclosed as a non-current liability.
in the other comprehensive income in the period in which

they arise. Past-service costs are recognised immediately
in consolidated statement of comprehensive income.
2.24
Contract revenue
Contract revenue is recognised under the percentage-ofcompletion method. When the outcome of the contract can
be reliably estimated, revenue is recognised by reference to
the proportion that accumulated costs up to the year end
bear to the estimated total costs of the contract. When the
contract is at an early stage and its outcome cannot be reliably
estimated, revenue is recognised to the extent of costs incurred
up to the year end which are considered recoverable.
Revenue related to variation orders is recognised when it is probable
that the customer will approve the variation and the amount of
revenue arising from the variation can be reliably measured.
A claim is recognised as contract revenue when settled
or when negotiations have reached an advanced stage
such that it is probable that the customer will accept the
claim and the amount can be measured reliably.
Losses on contracts are assessed on an individual contract basis
and provision is made for the full amount of the anticipated
losses, including any losses relating to future work on a
contract, in the period in which the loss is first foreseen.
The aggregate of the costs incurred and the profit/loss recognised
on each contract is compared against progress billings at the
year end. Where the sum of the costs incurred and recognised
profit or recognised loss exceeds the progress billings, the
balance is shown under trade and other receivables as amounts
due from customers on contracts. Where the progress billings
exceed the sum of costs incurred and recognised profit or
recognised loss, the balance is shown under trade and other
payables as amounts due to customers on contracts.
In determining contract costs incurred up to the year end,
any amounts incurred including advances paid to suppliers
and advance billings received from subcontractors relating to
future activity on a contract are excluded and are presented
as amounts due from customers on contracts.
2.25
Interest income
Interest income is recognised in the consolidated income statement
on a time proportion basis using the effective interest method.
2.26
Dividend income
Dividend income is recognised when the right to receive payment
is established.
Actuarial gains and losses arising from experience adjustments

and changes in assumptions are charged or credited to equity
038
Annual Report

2.27
Leases
Leases in which a significant portion of the risks and rewards of
ownership are retained by the lessor are classified as operating
leases. Payments made under operating leases (net of any
incentives received from the lessor) are charged to the income
statement on a straight-line basis over the period of the lease.
2.28
Dividend distribution
Dividend distribution to the Groups shareholders is recognised
as a liability in the Groups financial statements in the period in
which the dividend are approved by the Groups shareholders.
Financial risk management

3.1
Financial risk factors
The Groups activities expose it to a variety of financial risks:
market risk (including currency risk, fair value interest rate
risk, cash flow interest rate risk and price risk), credit risk and
liquidity risk. These risks are evaluated by management on
an ongoing basis to assess and manage critical exposure. The
Groups liquidity and market risks are managed as part of the
Groups treasury activities. Treasury operations are conducted
within a framework of established policies and procedures.
(a) Market risk
(i) Foreign exchange risk
The Groups foreign currency monetary assets and liabilities are
denominated mainly in Saudi Arabian Riyals, Qatari Riyals, Euro,
Kuwaiti Dinars, Omani Riyal, Indian Rupee and Algerian Dinar.
As Saudi Arabian Riyals, Qatari Riyals, Omani Riyals and United Arab
Emirates Dirhams (AED) are pegged to US Dollars, the sensitivity
considers the effect of a reasonably possible movement of the
AED currency rate against the Euro, Kuwaiti Dinars, Indian Rupee,
Algerian Dinars and Thailand Baht with all other variables held
constant, on the consolidated statement of income (due to the
fair value of currency sensitive monetary assets and liabilities).
At 31 December 2013, if these five currencies had weakened/
strengthened by 5% against the AED, the profit for the year
would have been higher/lower by AED 1,478 thousand
(2012: AED 237 thousand).
(ii) Price risk

The Group is not exposed to equity security price risk.
Its investments classified on balance sheet as availablefor-sale are carried at cost and investments classified as
fair value through profit or loss are not material.
(iii) Cash flow and fair value interest rate risk
The Group holds its surplus funds in short term bank deposits. During
the year ended 31 December 2013, if interest rates on deposits
had been 0.5% higher/lower, the interest income would have been
higher/lower by AED 1,350 thousand (2012: AED 2,209 thousand).
The Group also earns interest on long-term trade receivables
and loans and advances, which are generally at higher
than market rates. A 0.5% shift in these interest rates
would have resulted in a higher/lower interest income by
AED 566 thousand (2012: AED 1,059 thousand).
The Groups interest rate risk arises from long-term borrowings.
Borrowings issued at variable rates expose the group to cash flow
interest rate risk which is partially offset by cash held at variable
rates. During the year ended 31 December 2013, if interest rates on
borrowings had been 0.5% higher/lower, the interest expense would
have been higher/lower by AED 6,113 (2012: AED 6,643 thousand).
(b) Credit risk
The Group has a policy for dealing with customers with an appropriate
credit history. The Group has policies that limit the amount of credit
exposure to any financial institution and this is regularly monitored.
Credit risk is managed on group basis. Credit risk arises from
cash and bank balances, available-for-sale financial assets,
financial assets carried at fair value through profit or loss, trade
and other receivables and amounts due from related parties.
The table below shows the rating and balance of
the major counterparties at the balance sheet date:

2013
Counterparty
2012
External
rating*
AED
000
External
rating*
AED
000
A1
497,919
A1
459,886
Bank A
Bank B
A1
37,129
A1
192,257
Bank C
Baa1
12,667
Baa1
63,701
Bank D
A1
154
A1
6,066
Bank E
BB+
6,188
BB+
5,911
Bank F
A1
A1
97
*Based on Moodys ratings
Annual Report
039

The Group has a formal procedure of monitoring and follow-up of customers for outstanding trade receivables. The Group assesses internally the
credit quality of each customer, taking into account its financial position, past experience and other factors.
At 31 December 2013, the Group had a significant concentration of credit risk with ten customers accounting for 55% of the trade receivables (2012:
57%). Management believes that this concentration of credit risk is mitigated as the Group has long-standing relationships with these customers.
The other categories of financial assets do not result in significant credit risk.
(c) Liquidity risk
Prudent liquidity risk management implies maintaining sufficient cash and the availability of funding through an adequate amount of committed
credit facilities. Due to the nature of the underlying business through progress billings, the Group maintains adequate bank balances and credit
facilities to fund its operations.
Management monitors the forecast of the Groups liquidity position on the basis of expected cash flow.
The Group is currently financed from shareholders equity and bank borrowings. The table below analyses the Groups nonderivative financial liabilities into relevant maturity groupings based on the remaining period at the balance sheet date to
the contractual maturity date. The amounts disclosed in the table are the contractual undiscounted cash flows:
Less than 1 year

AED000
Between 1 year
and 2 years
AED000
Between 2 years
and 5 years
AED000
Total
AED000
At 31 December 2013
Bank borrowings
1,071,174
22,367
30,161
1,123,702
Trade payables and accruals
2,035,469
2,035,469
19,445
19,445
Bank borrowings
1,209,374
70,505
48,879
1,328,758
1,517,923
1,517,923
11,699
11,699

At 31 December 2012
3.2
Capital management
The Groups objectives when managing capital are to safeguard the
Groups ability to continue as a going concern in order to provide
returns for shareholders and benefits for other stakeholders and to
maintain an optimal capital structure to reduce the cost of capital.
In order to maintain or adjust the capital structure, the Group may
adjust the dividend paid to shareholders or manage its working
capital requirements. Consistent with others in the industry,
the Group monitors capital on the basis of the gearing ratio.
This ratio is calculated as net debt divided by total capital.
Net debt is calculated as total borrowings (including current
and non-current borrowings as shown in the consolidated
balance sheet) less cash and bank balances (including short
term deposits). Total capital is calculated as Total equity as
shown in the consolidated balance sheet plus net debt.
040
The gearing ratios at 31 December 2013 and 2012 were as follows:
2013
AED000
2012
AED000
Total borrowings (Note 20)
1,116,470
1,328,758
Less: Cash and bank balances

(Note 16)
(558,217)
(730,700)
558,253
598,058
Total equity
Net debt
2,974,826
2,768,782
Total capital
3,533,079
3,366,840
16%
18%
Gearing ratio
The gearing ratio has decreased by 2% compared to last year

due to the decrease in net debt and increase in total equity.
Annual Report

3.3
Fair value estimation
The table below analyses financial instruments carried at fair value, by valuation method. The different levels have been defined as follows:
Quoted prices (unadjusted) in active markets for identical assets or liabilities (Level 1);
Inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly (that is, as prices) or indirectly
(that is, derived from prices) (Level 2); and
Inputs for the asset or liability that are not based on observable market data (that is, unobservable inputs) (Level 3).
The Groups financial assets at fair value through profit or loss is based on net asset values provided by the fund managers. The fair market value of
these investments, as indicated by the fund managers are based on:
a) For listed investments, current bid prices in an active market; and
b) For unlisted investments, valuations based on fundamentals and rationale of the portfolio performed by independent valuers.
The following table presents the Groups assets and liabilities that
are measured at fair value at 31 December 2013. See Note 10 for
disclosures of the investment property that are measured at fair value.
Level 1
AED
000
Level 2
AED
000
Level 3
AED
000
The following table presents the Groups assets and liabilities

that are measured at fair value at 31 December 2012.
Total
AED
000
Level 1
AED
000
Level 2
AED
000
Level 3
AED
000
Total
AED
000
31 December 2013
Assets
Assets
Financial assets at
fair value through
profit or loss
Financial assets at
fair value through
profit or loss
- Investment in
Real Estate fund
4,678
4,678
Available-for-sale
financial assets
- Equity securities
Total assets
- Investment in
Real Estate fund
4,821
4,821
1,631
753
2,384
1,631
4,821
753
7,205
Available-for-sale
financial assets
2,358
753
3,111
- Equity securities
2,358
4,678
753
7,789
Total assets
Liabilities
Liabilities
Financial liabilities
at fair value through
profit or loss
Financial liabilities
at fair value through
profit or loss
- Derivatives
financial
instruments
- Derivatives
financial
instruments
21,659
21,659
Total liabilities
Total liabilities
21,659
21,659
There were no transfers between Levels 1, 2 and 3 during the period.
Annual Report
041

(a) Financial instruments in Level 2

The fair value of financial instruments that are not traded in an
active market is determined by using valuation techniques. These
valuation techniques maximise the use of observable market
data where it is available and rely as little as possible on entity
specific estimates. If all significant inputs required to fair value an
instrument are observable, the instrument is included in level 2.
If one or more of the significant inputs is not based on
observable market data, the instrument is included in Level 3.
Specific valuation techniques used to value level 2
and level 3 financial instruments include:
Quoted market prices or dealer quotes for similar instruments;
The fair value of interest rate swaps is calculated as the present
value of the estimated future cash flows based on observable yield
curves;
impairment reviews. The key assumptions on which management

has based its cash flow projections when determining the
recoverable amount of the assets are as follows:
Managements projections have been prepared on the basis of
strategic plans, knowledge of the market, and managements views
on achievable growth in market share over the long term period of
four years;
The discount rates applied to cash flows are based on the Groups
weighted average cost of capital with a risk premium reflecting the
relative risks in the markets in which the businesses operate; and
Growth rate estimates are based on a conservative view of the
long-term rate of growth.
The key assumptions used for value-in-use calculations in 2013
are as follows:
Growth rate: 5% to 10%,
Other techniques, such as discounted cash flow analysis, are used

to determine fair value for the remaining financial instruments.
Critical accounting estimates

and judgements
Estimates and judgements are continually evaluated and are based on
historical experience and other factors, including expectations of future
events that are believed to be reasonable under the circumstances.
4.1
Critical accounting estimates and assumptions
The Group makes estimates and assumptions concerning the
future. The resulting accounting estimates will, by definition,
seldom equal the related actual results. The estimates and
assumptions that have a significant risk of causing a material
adjustment to the carrying amounts of assets and liabilities
within the next financial year are addressed below.
(a) Estimated impairment of goodwill
Asset recoverability is an area involving management judgement,
requiring assessment as to whether the carrying value of assets
can be supported by the net present value of future cash
flows derived from such assets using cash flow projections
which have been discounted at an appropriate rate.
Discount rate: 11.4%,

Terminal growth rate: 3.55%
The goodwills value-in-use is higher than its carrying value by
AED 1.3 billion. Any sensitivity applied to the key assumptions
above will have no significant impact on the value-in-use.
(b) Revenue recognition
The Group uses the percentage-of-completion method in accounting
for its contract revenue. Use of the percentage-of-completion
method requires the Group to estimate the stage of completion
of the contract to date as a proportion of the total contract work to
be performed in accordance with the accounting policy set out in
Note 2.20. As a result, the Group is required to estimate the total
cost to completion of all outstanding projects at each period end.
The application of a 5% sensitivity to management estimates of the
total costs to completion of all outstanding projects at the year end
would result in the revenue and profit increasing/decreasing by AED
377 million (2012: increasing/decreasing by AED 362 million).
(c) Impairment of trade and other receivables
The impairment charge reflects estimates of losses arising from the
failure or inability of the parties concerned to make the required
payments. Managements judgement is required in evaluating
customers debts to determine if they will be collected. The charge
is based on the ageing of the customer accounts, the customers
credit worthiness and the historic write-off experience. Changes to
the estimated impairment charge may be required if the financial
condition of the customers were to improve or deteriorate.
Management considers that the current level of impairment charge
is appropriate and consistent with the loss estimated at year end.
In calculating the net present value of the future cash flows,

certain assumptions are required to be made in respect of the
042
Annual Report

Segment reporting
Information regarding the Groups operating segments is set out below in accordance with IFRS 8 Operating Segments. IFRS 8
requires operating segments to be identified on the basis of internal reports about components of the Group that are regularly reviewed
by the Executive management who are the Chief Operating decision-makers in order to allocate resources to the segment and to
assess its performance. Executive management assesses the performance of the operating segments based on revenue.
Business segments
For management purpose, the Group is organised into business units based on their services and has three reportable business
segments; Mechanical, Electrical and Plumbing (Engineering), Civil, Oil and Gas and others (corporate office).
The Engineering segment carries out contracting work relating to the construction industry, such as mechanical, electrical, plumbing and sanitation
work and contracting work relating to the construction industry, such as infrastructure, water treatment plants, district cooling plants and power plants.
The Civil works segment carries out contracting work relating to the construction industry, such as property construction, sanitation work
and real estate activities.
The Oil & Gas segment carries out contracting services relating to design and engineering, procurement of material, fabrication
and construction of complete plant and facilities.
Others segment represents corporate office which carries out strategic planning, management of all subsidiaries, treasury management, mergers
and acquisition, corporate branding and investor relations. For segment information disclosure, goodwill and other intangible assets and their
amortisation are disclosed under the relevant segment. Sales between segments are carried out at agreed terms. The revenue from external
parties reported to the Executive management is measured in a manner consistent with that in the consolidated income statement.
The amounts provided to the Executive management with respect to the total assets are measured in a manner consistent with
that of the consolidated financial statements. These assets are allocated based on the operations of the segment.
Geographical segments
Executive management considers the geographical distribution of the Groups operations into four main segments; UAE, Saudi Arabia,
Iraq and Others. The Group is presently engaged in carrying out contracting work relating to the construction industry mainly in the United
Arab Emirates, Saudi Arabia, Kuwait, Qatar, Egypt, Oman, Germany, Thailand, Algeria, Djibouti, India, Afghanistan, Iraq, and Jordan.
Annual Report
043

Information about business segments

All figures in AED000
Engineering
Civil
Oil and Gas
Other
Intersegment
elimination
Total
For the year ended 31 December 2013
Revenue
External customers
Inter- segment
2,320,896
2,010,900
430,245
117,148
254
(340,082)
117,402
(340,082)
4,879,189
334,088
5,740
2,654,984
2,016,640
430,245
4,879,189
Segment profit / (loss)
94,167
33,571
54,504
(507)
181,735
Depreciation and amortisation
23,116
18,692
1,478
41,852
85,138
Capital expenditure
29,735
46,600
5,975
4,423
86,733
2,665,938
(1,598,646)
7,162,298
At 31 December 2013
Segment total assets
3,185,972
Engineering
2,647,117
Civil
261,917
Oil and Gas
Other
Intersegment
elimination
Total
Revenue
External customers
Inter- segment
Segment profit / (loss)
2,032,571
1,115,408
41,214
132,075
3,321,268
229,395
82,404
2,612
(314,411)
2,261,966
1,197,812
41,214
134,687
(314,411)
3,321,268
158,867
4.941
3,289
(52,054)
115,043
Depreciation and amortisation
16,450
22,132
195
41,540
80,317
Capital expenditure
63,009
35,679
1,463
24,532
124,683
2,744,103
1,807,879
3,101,404
(1,297,976)
6,429,560
At 31 December 2012
Segment total assets
74,150
Revenue from one customer amounting to AED 1,174,361 thousand which exceeded 10% of the Group revenue was earned through
the Civil works segment. In 2012, one customer accounted for over 19% of the Group revenue which represents AED 647,708 thousand
relating to Civil works.
044
Annual Report

Information about geographical segments

All figures in AED000
UAE
Saudi
Arabia
Iraq
Others
Inter
segment
elimination
Total

Revenue from external customers
942,915
Revenue from external customers
950,062
2,515,880
397,316
4,879,189
761,073
3,321,268
81,756
(529,467)
2,025,082
55,420
(240,548)
1,834,848
1,023,078

1,568,919
41,214
At 31 December 2013
Non-current assets
2,223,251
233,424
16,118
At 31 December 2012
Non-current assets
Annual Report
1,896,175
120,512
3,289
045

Property and Equipment

Land and
buildings
AED000
Machinery
AED000
Furniture,
fixtures
and office
equipment
AED000
Capital
work-inprogress
AED000
Motor
vehicles
AED000
Total
AED000
Cost
At 1 January 2012
Additions
Disposals
Transfers from capital work-in-progress
Currency translation differences
At 31 December 2012
242,462
85,808
26,208
13,486
136,077
504,041
14,731
40,465
14,788
5,587
49,112
124,683
(6,054)
(2,204)
(7,802)
(16,060)
169,064
34
(169,098)
32
192
212
164
52
652
426,289
120,445
39,004
11,435
16,143
613,316
Additions
8,626
49,214
17,740
9,051
2,102
86,733
Disposals
(27,856)
(3,979)
(926)
(659)
(670)
(34,090)
(1,482)
787
750
350
(769)
(364)
405,577
166,467
56,568
20,177
16,806
665,595
At 31 December 2013
046
Annual Report

Land and
buildings
AED000
Machinery
AED000
Furniture,
fixtures
and office
equipment
AED000
Motor
vehicles
AED000
Capital
work-inprogress
AED000
Total
AED000
Depreciation
At 1 January 2012
25,743
40,849
12,462
1,575
80,629
Charge for the year
6,567
25,271
7,137
3,592
42,567
Disposals
(4,963)
(1,752)
(7,625)
(14,340)
92
128
37
260
32,313
61,249
17,975
(2,421)
109,116
8,872
23,768
10,252
4,496
47,388
Disposals
(276)
(2,072)
(225)
(270)
(2,843)
(432)
700
686
300
1,254
40,477
83,645
28,688
2,105
154,915
At 31 December 2013
365,100
82,822
27,880
18,072
16,806
510,680
At 31 December 2012
393,976
59,196
21,029
13,856
16,143
504,200
2013
AED000
2012
AED000
At 31 December 2012
Charge for the year
At 31 December 2013
Net book amount
The depreciation charge has been allocated in the consolidated income statement as follows:
Contract costs (Note 26)
29,269
31,560
General and administrative expenses (Note 28)
18,119
11,007
47,388
42,567
During the year, the Group has capitalised specific borrowing costs amounting to AED Nil (2012: 4.4 million) on qualifying assets.
Capital work-in-progress represents ERP license and implementation costs and other assets under construction.
Annual Report
047

Intangible assets
Goodwill
AED000
Trade name
AED000
Customer
relationships
AED000
Orders
backlog
AED000
Total
AED000
Cost
At 31 December 2012 and 2013
844,447
86,246
335,552
16,779
1,283,024
104,860
4,195
109,055
Amortisation
At 1 January 2012
Charge for the year
33,555
4,195
37,750
At 31 December 2012
138,415
8,390
146,805
Charge for the year
33,555
4,195
37,750
At 31 December 2013
171,970
12,585
184,555
At 31 December 2013
844,447
86,246
163,582
4,194
1,098,469
At 31 December 2012
844,447
86,246
197,137
8,389
1,136,219
Net book amount
Orders backlog are determined to have a finite life of 4 years.

The business units considered as Cash Generating Units (CGUs) of the Group, for the purposes of assessment of impairment in the
value of goodwill, are Mechanical, Electrical and Plumbing (Engineering), Infrastructure, Water and Power (IWP) and Civil.
The key assumptions used for value-in-use calculations in 2013 are as follows:
The recoverable amounts of CGUs have been determined based on their value-in-use, calculated using cash flows
projections based on the financial budgets approved by management covering a period of 4 years. The discount rate
applied is 11.4% (2012: 11.5%). The other key assumptions used in the value-in-use calculations are as follows:
Budgeted gross margins:
The basis used to determine the value assigned to the budgeted gross margin is the average gross margin achieved in the year
immediately before the budgeted year, adjusted for expected efficiency improvements, price fluctuations and manpower costs.
Discount rates:
These represent the weighted average cost of capital for the cash generating units adjusted for the respective geographical risk factors.
Cost inflation:
The basis used to determine cost inflation is the forecast general price index during the budget year for the cash generating units.
Terminal growth rate:
The terminal growth rate has been assumed to be 3.55% (2012: 3%). In managements view, the terminal
growth rate is the minimum growth rate expected to be achieved beyond the four year period.
048
Annual Report


2013
AED000
2012
AED000
Non-current
Trade receivables and retentions
224,257
183,570
Less: fair value adjustment
(11,754)
(9,155)
At 31 December
212,503
174,415
Current
Trade receivables and retentions
Prepayments and other
receivables
Amount due from customers on
contracts
Loans and advances
Less: provision for impairment
1,632,912
1,410,576
339,302
412,366
2,218,370
1,829,550
132,099
141,782
4,322,683
3,794,274
(66,360)
(52,413)
4,256,323
3,741,861
10,592,643
8,002,389
1,217,354
1,077,610
Amounts due from customers on

contracts comprise:
Costs incurred to date
Recognised profits
Less: Progress billings
11,809,997
9,079,999
(9,591,627)
(7,250,449)
2,218,370
1,829,550
An analysis of trade receivables

and retentions is as follows:
Fully performing
Past due but not impaired
Impaired
1,479,653
1,121,486
311,156
420,247
66,360
52,413
1,857,169
1,594,146
Certain non-current receivables bear interest at 5.5% per annum

(2012: 4.25% per annum) and are expected to be collected
in equal monthly instalments over a period of 4 years.
Trade receivables that are less than six months past due
are generally not considered impaired. As of 31 December
2013, trade receivables and retentions of AED 311,156
thousand (2012: AED 420,247 thousand) were past due
but not impaired. These relate to a number of independent
customers for whom there is no recent history of default.
The ageing analysis of these trade receivables and retentions
is as follows:
2013
AED000
2012
AED000
Six months to one year past due
186,553
250,183
Over one year past due
124,603
170,064
311,156
420,247
As of 31 December 2013, trade receivables and retentions

of AED 66,360 thousand (2012: AED 52,413 thousand)
were impaired and provided for. The individually impaired
receivables are over one year old and mainly relate to
customers who are in a difficult financial situation.
Movement in the provision for impairment of trade receivables
and retentions is as follows:
2013
AED000
2012
AED000
At 1 January
52,413
58,960
Provision for impairment

(Note 28)
25,999
53,275
Written off during the year as

uncollectible
(8,562)
(18,628)
Reversals (Note 28)
(3,490)
(41,194)
At 31 December
66,360
52,413
The creation and release of provision for impaired receivables

have been included in General and administrative expenses
in the consolidated income statement. Amounts charged
to the allowance account are generally written off, when
there is no expectation of recovering additional cash.
Annual Report
049

The gross carrying amount of the Groups trade receivables

and retentions are denominated in the following currencies:
2013
AED000
2012
AED000
UAE Dirham
845,056
701,014
Saudi Riyal
686,088
427,708
Euro
50,577
72,467
Kuwaiti Dinar
54,264
47,126
US Dollar
31,641
30,944
189,543
314,887
1,857,169
1,594,146
Others
Deferred tax
Deferred tax assets and liabilities are to be recovered
after one year from the balance sheet date.
The gross movement on the deferred income tax assets
is as follows:
2013
AED000
i. Amounts due from one particular customer for construction

contracts was converted into a twelve month receivable. Certain
balances due during the year have been rolled over for another
twelve months at interest rate of 9% (2012: 9% per annum).
Deferred income tax

assets
The above amounts are secured by property units under development

and the Group also has an option to purchase those units.
Deferred income tax assets

considered not recoverable
(Note 30)
The other classes within trade and other receivables

do not contain impaired assets.
The maximum exposure to credit risk at the reporting date is
the carrying amount of each class of receivable mentioned
above which approximates the fair value at the balance sheet
date. Except for those held against loans and advances,
the Group does not hold any collateral as security.
Arbitrations
During the year ended 31 December 2012, the Group had filed
arbitrations with certain customers for settlement of the receivables,
retentions and due from customers on contracts balances of AED
58 million, AED 36 million and AED 41.3 million respectively,
which related to projects that were completed and handed over
to those customers. At that time, the outcome of the arbitrations
was uncertain. Management was of the opinion that the balances
were fully recoverable. As at 31 December 2012, no provision for
impairment was made against these balances of AED 135.3 million.
At 1 January
2012
AED000
17,630
12,374
546
255
(12,530)
5,001
5,646
17,630
At 1 January
8,835
3,842
Exchange differences
(323)
320
(6,098)
4,673
2,414
8,835
Exchange differences
Income statement charge

(Note 30)
At 31 December
Deferred income tax

liabilities
Income statement charge

(Note 30)
At 31 December
During the current year, the Group has reached an amicable

resolution with one of the customers for settlement of the
receivables, retentions and due from customers on contracts
balances of AED 24 million, AED 10 million and AED 14.3 million
respectively. Currently, the remaining receivables, retentions
and due from customers on contracts balances of AED 34
million, AED 26 million and AED 27 million respectively, are still
under arbitrations. As at 31 December 2013, no provision for
impairment is made against these balances of AED 87 million.
050
Annual Report

10
11
Investment property
During the year, certain development properties were leased out
on a long term basis to earn rental yield. The fair value of these
properties was equivalent to the carrying value at balance sheet date.
The following table analyses the non-financial assets carried at fair
value, by valuation method. The different levels have been defined
as follows:
Quoted prices (unadjusted) in active markets for identical assets or
liabilities (Level 1).
Inputs other than quoted prices included within level 1 that are
observable for the asset or liability, either directly (that is, as prices)
or indirectly (that is, derived from prices) (Level 2).
Inputs for the asset or liability that are not based on observable
market data (that is, unobservable inputs) (Level 3).
Fair value measurements at 31 December 2013 using

Level 1
AED000
Level 2
AED000
Level 3
AED000
Total
AED000
Available-for-sale
financial assets
2013
AED000
At 1 January
2012
AED000
2,384
24,707
Additions
72,048
Disposals
(18,740)
727
(3,583)
75,159
2,384
Impairment reversal/(loss) on
available-for-sale financial assets
(Note 29)
At 31 December
Available-for-sale financial assets are classified as noncurrent assets in the consolidated financial statements. These
investments except those carried at fair value as disclosed in
Note 3.3, are carried at cost as their fair value cannot be reliably
determined. Available-for-sale financial assets comprise shares
in unlisted companies and shown net of impairment charge.
Additions comprise of following investments:
Recurring
fair value
measurements
Investment
property
29,376
29,376
Total assets
29,376
29,376
There were no transfers between Levels 1, 2 and 3 during the year.

Level 2 fair values have been derived using the sales
comparison approach. Sales prices of comparable units
in close proximity are adjusted for differences in key
attributes such as property size. The most significant input
into this valuation approach is price per square foot.
Name of investee
company
Lamar investments and real
estate development LLC
PSK Petrochemicals
Country
Percentage
held
AED
(000)
KSA
10%
53,308
Egypt
10%
18,740
72,048
The Group classified the above investments as available-forsale financial assets at the date of investment. Management
estimates that the cost of these financial assets approximates
their respective fair values at balance sheet date.
The rental income net of expenses, earned from investment

property is AED 1,020 thousand included in other income.
Annual Report
051

13
Available-for-sale financial assets are denominated

in the following currencies:
2013
AED000
2012
AED000
US Dollar
18,740
Saudi Riyal
53,308
3,111
2,384
75,159
2,384
Jordanian Dinar
12
Financial assets at fair value

through profit or loss
2013
AED000
Investment in a real estate
fund

2013
AED000
Non-current
liability
Equity warrants
485
Interest rate swaps
21,174
21,659
Equity warrants
146,960
Interest rate swaps
441,550
588,510
The notional principal amounts

outstanding are:
2012
AED000
4,678
4,821
The notional principal amounts outstanding are denominated in the

following currencies:
The movement in financial assets is as under:
2013
AED000
At 1 January
Disposal
Fair value loss (Note 29)
At 31 December
2012
AED000
Principal amount outstanding

(in thousands):
4,821
5,189
(368)
(143)
4,678
4,821
Changes in fair values of financial assets at fair value through

profit or loss are recorded in the consolidated income
statement within Other losses - net (Note 29).
052
2013
AED000
2012
AED000
Financial assets at fair value through profit or loss are

presented within operating activities as part of changes
in working capital in the statement of cash flows.
2012
AED000
USD denominated
(115,000 thousand)
422,395
AED
166,000
The Group issued equity warrants to Goldman Sachs International

(GSI) during the year ended 31 December 2012. These warrants
had a notional value of USD 40 million equivalents to AED 147
million which represented approximately 9% of the Companys
market capitalisation.
During the year, the Group settled all the derivative financial
liabilities in cash for an amount of AED 20,153 thousand and as
a result net fair value gain of AED 1,506 thousand was recognised
in the consolidated income statement under Other losses - net.
Annual Report

14
For the purpose of statement of cash flows, cash and cash

equivalents comprise the following:
2013
AED000
During the year, one of the development properties projects

amounting to AED 47,025 thousand was completed. An amount
of AED 17,649 thousand represents the total cost of the project
units that were sold to third parties and where the Group
recognised a loss of AED 5,160 thousand (Refer Note 29) at
the time of sale. The remaining units amounting to AED 29,376
thousand have been rented out and classified as investment
property (Refer Note 10). During the year, additions of AED
1,306 thousand were made to development properties. The
development properties have been classified as current as they
are expected to be realised in the Groups operating cycle.
15
Less: Term deposits under lien

Bank overdrafts (Note 20)
30,259
2012
AED000
26,510
16

2013
AED000
Cash on hand
Term deposits
2012
AED000
4,160
2,782
281,543
636,941
272,514
90,977
558,217
730,700
Term deposits carry an average interest rate

of 1% to 4% (2012: 1% to 5%).
Annual Report
(112,765)
(44,157)
(123,186)
(59,642)
(444,867)
322,266
182,034
17
Share capital
2013
AED000
Cash at bank
730,700
The movement in restricted cash represents release of cash on

repayment of the syndicated facility arrangement (Note 20).
Inventories
Materials and consumables
558,217
Restricted cash
2012
AED000
2013
AED000
2012
AED000
Authorised, issued and fully paid

1,197,777,778 shares of AED 1
each paid in cash
1,197,778
1,197,778
Bonus shares (See iii below)
107,269
107,269
980,000,000 shares of AED 1

each paid in kind (See ii below)
980,000
980,000
2,285,047
2,285,047
i. During the year ended 31 December 2009, the Company obtained

necessary regulatory approval to undertake a share buy-back program.
A total of 32,400 thousand shares were purchased from the market
at an average price of AED 0.8834 per share amounting to AED
28,622 thousand. During the year, these shares were re-issued at
an average price of AED 0.977 per share amounting to AED 31,648
thousand, recognising a share premium of AED 3,026 thousand.
ii. Assets and liabilities of Drake & Scull International (LLC) and its
subsidiaries, were transferred to Drake & Scull International PJSC as
in-kind contribution for a 45% shareholding in the Company.
iii. During the Annual General Meeting held on 26 April 2012, the
shareholders approved the cash dividend of 3% of the face
value of the issued shares and 5% bonus shares. The increase in
share capital was formally approved by the Ministry of Economy
on 25 June 2012. These dividends had been reflected in the
consolidated statement of changes in equity, accordingly.
053

18
Statutory reserve
In accordance with the applicable laws of the relevant jurisdictions
and the Companys Articles of Association, 10% of the profit for
the year in each limited liability registered Company is required to
be transferred to a statutory reserve. This reserve is not available
for distribution except as stipulated by the law. Transfers to this
reserve are required to be made until such times as it equals
at least 50% of the paid up share capital of the respective
companies. A transfer of AED 14,503 thousand was made
from retained earnings to this reserve at balance sheet date.
19
Other reserve
During the third quarter of the year ended 31 December 2011,
the Group acquired the remaining 20% of the shares relating to
the non-controlling interest in one of its subsidiaries, Gulf Technical
Construction Company LLC (GTCC). The fair value of the total
net identifiable assets of GTCC was AED 160,000 thousand. The
20% shares were owned equally by two individuals. The Group
paid one of the shareholders fully in cash and paid the other
shareholder partially in cash and settled the remaining balance
for 6% shares in another subsidiary, Drake and Scull Construction
LLC (a wholly owned subsidiary of the Parent Company).
The difference of AED 24,543 thousand between the total
consideration paid/equity transferred and contingent liability assumed
of AED 26,862 thousand and the carrying amount of non-controlling
interest of AED 51,405 thousand had been credited to other
reserves under the consolidated statement of changes in equity.
20
Bank borrowings
The Group has obtained bank borrowings (including
bank overdrafts) from several commercial banks, mainly
to fund the acquisition of new businesses and to meet
other working capital and investment requirements.
2013
AED000
2012
AED000
Non-current
Term loan
48,878
119,384
Term loan
128,400
611,203
Trust receipts and other borrowings
816,006
538,529
Bank overdrafts (Note 16)
123,186
59,642
1,067,592
1,209,374
Current
31 December
The movement in carrying value of term loan is as follows:
2013
AED000
At 1 January
2012
AED000
730,587
588,403
New term loan during the year
24,350
604,817
Repayment of term loan during

the year
(577,659)
(462,633)
177,278
730,587
31 December
The carrying amount of the Groups borrowings is primarily

denominated in AED, USD or currencies pegged to USD. The maturity
profile of borrowings based on the remaining period at the balance
sheet date is included in Note 3.1.
The Group entered into a syndicated facility agreement dated 13
November, 2012, amounting to USD 75,000 thousand (equivalent to
AED 278 million) and AED 166,800 thousand with local and international
banks. The facility was guaranteed by three subsidiaries in the United
Arab Emirates and two subsidiaries in the Kingdom of Saudi Arabia. In
addition, the two subsidiaries in the Kingdom of Saudi Arabia had issued
promissory notes of AED 178,503 thousand and USD 80,250 thousand.
During the year, the Group repaid all borrowing under this syndicated
loan facility of AED 444,867 thousand.
054
Annual Report

Interest rates on the term loans were at variable rates and ranging
between 2% to 6.5% (2012: 2% to 8.5%) per annum. Contractual
re-pricing dates are set on the basis of 3 months LIBOR/EIBOR.
The nature of securities provided in respect of certain
bank borrowings by the Group, are set out below:
Lien on motor vehicles and equipment purchased and on certain
receivables;
22
Provision for employees end

of service benefits
Mortgage over certain property and equipment; and

Pledge of all assets acquired through utilisation of credit facilities.
The fair value of current borrowings equals their carrying amount,
as the impact of discounting is not significant. The fair values
are based on cash flows discounted using a rate based on the
borrowing rate of 5.5% and are within level 2 of the fair value
hierarchy. Long-term borrowings are at market linked variable
interest rates and therefore the carrying amounts of non-current
borrowings approximate their fair value at the balance sheet date.
2013
AED000
2012
AED000
1,517,923
Amount due to customers on

contracts
104,253
80,112
Advances from customers
799,187
607,123
2,938,909
2,205,158
Amounts due to customers on

contracts comprise:
Less: Recognised profits
Annual Report
Transfer from a related party

Charge for the year
Payments during the year
2,035,469
Less: Cost incurred to date
84,669
65,108
4,195
41,665
29,537
(16,100)
(14,171)
110,234
84,669
2013
AED000
Progress billings
At 1 January
2012
AED000
End of service benefits charge has been allocated in the consolidated

income statement as follows:
21
2013
AED000
1,624,293
912,068
(1,278,104)
(801,749)
(241,936)
(30,207)
104,253
80,112
General and administrative

expenses (Note 28)
2012
AED000
36,542
25,533
5,123
4,004
41,665
29,537
In accordance with the provisions of IAS 19, management has carried

out an exercise to assess the present value of its obligations as at 31
December 2013 and 2012, using actuarial techniques, in respect of
employees end of service benefits payable under the UAE labour
Law and the Laws applicable in the countries in which the Group
operates, for their periods of service up to the balance sheet date.
Under this method an assessment has been made of the
employees expected service life with the Group and the
expected basic salary at the date of leaving the service. Future
salary increases have been estimated on a basis consistent with
the natural progression of an employees salary in line with the
Groups salary scales, past experience and market conditions.
Management has assumed average increment/promotion cost of
3.5% (2012: 3.5%). The expected liability at the date of leaving
the service has been discounted to its net present value using
a discount rate of 4.5% per annum (2012: 3% per annum).
055

23
Compensation of key management personnel

The remuneration of directors and other members
of key management are as follows:
Year ended 31 December
Related party transactions

and balances
2013
AED000
Related parties comprise the majority shareholders, key management

personnel, joint arrangements, directors and businesses which are
controlled directly or indirectly by the shareholders or directors or over
which they exercise significant management influence (hereinafter
referred as affiliates). In the normal course of business, the
Group has various transactions with its related parties. Transactions
are entered into with the related parties on terms and conditions
approved by either the Group management, or its Board of Directors.
From 1 January 2013 to 31 December 2013:
Significant related party transactions with affiliates
amount to AED 59,817 thousand and mainly
represent sub-contracting charges on contracts.
Salaries and short term benefits

2012
AED000
44,008
34,877
3,018
2,112
47,026
36,989
24
Finance (costs)/income net
From 1 January 2012 to 31 December 2012:

Significant related party transactions include management
fees charged by Drake & Scull Group (DSG), an
entity owned by the Chief Executive Officer of the
Company, amounting to AED 14,800 thousand.

2013
AED000
Interest income on term deposits
2012
AED000
9,908
9,136
13,239
20,492
The outstanding balances with related parties are given below:
Interest income on loans and

advances
Due from related parties:
Interest income on held-tomaturity investments
4,059
Total Finance income
2013
AED000
Joint arrangements
Affiliated entities
2012
AED000
216,548
22,408
52,080
3,582
268,628
25,990
23,147
33,687
Finance costs - Interest expense

on bank borrowings
(36,032)
(17,078)
Finance (costs)/income
net
(12,885)
16,609
Due to related parties:

2013
AED000
Drake and Scull Group
Joint arrangements
Affiliated entities
056
2012
AED000
818
842
4,314
14,313
10,857
19,445
11,699
Annual Report

25
27
Other income
Staff cost

2013
AED000
2012
AED000
2013
AED000
2012
AED000
Rent income
5,671
1,545
705,360
484,577
Scrap sale
4,224
6,299

expenses (Note 28)
155,494
134,261
982
1,218
860,854
618,838
Gain on disposal of property and

equipment
Others
9,781
3,061
20,658
12,123
26
28
General and
administrative expenses
Contract costs

2013
AED000

2013
AED000
Material costs
1,740,148
Sub-contracting costs
2012
AED000
1,098,975
Staff costs (Note 27)

Business development, legal and
professional fee
2012
AED000
155,494
134,261
58,385
31,474
1,141,128
911,397
Amortisation (Note 7)
37,750
37,750
Labour and staff costs (Note 27)
737,513
484,577
Depreciation (Note 6)
18,119
11,007
Overheads
697,696
386,312
Bank charges
7,978
10,235

expense (Note 22)
5,123
4,004
22,509
12,081

(Note 22)
36,542
25,533
Depreciation (Note 6)
29,269
31,560
4,382,296
2,938,354
Provision for impairment of trade

receivables and retentions
net of reversals (Note 8)
Management fees (Note 23)
Other expenses
Annual Report
14,800
23,223
9,681
328,581
265,293
057

29
30
Other losses - net
Income tax expense

The major components of income tax expense are as follows:

2013
AED000
Fair value gain on settlement of
share swaps
Loss on sale of development
properties (Note 14)
2012
AED000
2013
AED000
5,583
(5,160)
Impairment reversal/(loss) on
available-for-sale financial assets
(Note 11)
727
Gain on sale of available-for-sale

financial assets (Note 11)
8,815
Gain on sale of held-to-maturity

investments
4,450
(4,050)
(21,174)
(143)
(27)
(485)
(3,070)
(11,977)
Fair value loss on interest rate

swaps (Note 13)
Fair value loss on financial assets
at fair value through profit or loss
(Note 12)
Loss on settlement of equity
warrants
058
(3,583)
2012
AED000
Current income tax expense:

Current income tax charge
(48,891)
(19,661)
(6,432)
328
(55,323)
(19,333)
Deferred income tax credit/

(expense):
Relating to origination and reversal
of temporary differences
Annual Report

31
Financial instruments by category

The accounting policies for the financial instruments have been applied to the line items below:
Assets at
fair value
through
profit
or loss
AED000
Loans and
receivables
AED000
Availablefor-sale
financial
assets
AED000
Total
AED000
Assets as per balance sheet

31 December 2013
Trade and other receivables (excluding advances and prepayments)
4,278,202
4,278,202
4,678
4,678
Financial assets at fair value through profit or loss (Note 12)

Available-for-sale financial assets (Note 11)
75,159
75,159
Due from related parties (Note 23)
268,628
268,628
Cash and bank balances (Note 16)
558,217
558,217
5,105,047
4,678
75,159
5,184,884
3,774,494
3,774,494
Financial assets at fair value through profit or loss (Note 12)
4,821
4,821
Available-for-sale financial assets (Note 11)
2,384
2,384
Due from related parties (Note 23)
25,990
25,990
Cash and bank balances (Note 16)
730,700
730,700
4,531,184
4,821
2,384
4,538,389
Total
31 December 2012
Trade and other receivables (excluding advances and prepayments)
Total
Other financial liabilities at amortised cost
Other financial liabilities at amortised cost
AED000
31 December 2012
31 December 2013
Bank borrowings (Note 20)
Due to related parties (Note 23)
Trade payables and accruals excluding advances from
customers (Note 21)
1,116,470
19,445
2,139,722
Total
Annual Report
Bank borrowings (Note 20)

Due to related parties (Note 23)
Trade payables and accruals excluding advances from
customers (Note 21)
1,328,758
11,699
1,598,035
Other financial liabilities at fair value through

profit and loss
Other financial liabilities at fair value through

profit and loss
Derivative financial instruments (Note 13)
AED000
3,275,637
Derivative financial instruments (Note 13)
Total
21,659
2,960,151
059

32

The Groups share in the joint ventures assets and liabilities included in the consolidated financial statements is as follows:
2013
AED000
2012
AED000
Cost of investment
29,206
Share of profit
64,043
93,249
At 31 December
The joint venture listed below has share capital consisting solely of ordinary shares, which is held directly by the Group.
Nature of investment in joint ventures
Name
of entity
DSO Developments Limited
Country of
incorporation
% of
ownership
interest
Cayman Islands
Nature of
relationship
50
Measurement
method
Note 1
Equity
Note 1: The principal activity of DSO Development Limited is real estate investment and development.
DSO Developments Limited is a private company and there is no quoted market price available for its shares.
Commitments and contingent liabilities in respect of joint venture
The Group has no commitments and contingent liabilities relating to its joint venture.
Summarised financial information for joint venture
The summarised financial information for DSO Developments Limited which is accounted for using the equity method is shown overleaf.
060
Annual Report

Reconciliation of summarised financial information

Reconciliation of the summarised financial information presented
to the carrying amount of its interest in the joint venture
Summarised balance sheet
2013
AED000
2012
AED000
2013
AED000
Current assets
Total current assets
26,436
Share capital introduced
54
26,490
58,412
Profit for the year
128,086
Net assets at 31 December
186,498
93,249
93,249
Interest in joint venture at 50%
Carrying value
Current liabilities
40,661
329,354
Non-current asset
Investment property
Net assets
33
Earnings per share
Non-current
liability
Long term payable
128,685
186,498
Basic
Basic earnings per share is calculated by dividing the profit
attributable to the equity holders of the Company by the weighted
average number of ordinary shares in issue during the year
excluding ordinary shares purchased and held as treasury shares.
Summarised statement of comprehensive income
Year ended
31
December
2013
Period ended
31
December
2013
31
December
2012
AED000
AED000
(7,802)
Operating loss for the

period
(7,802)
Gain on revaluation of investment

property
122,878
Gain on fair valuation of long term

payables
13,010
128,086
128,086
Other comprehensive income
Total comprehensive
income for the period
Annual Report
31
December
2012
Earnings (AED000)

expenses
Profit for the period
2012
AED000
Earnings for the purposes of basic

earnings per share being profit
attributable to owners of the
parent
166,469
94,293
2,295,432,420
2,252,646,667
0.073
0.042
Number of shares
Weighted average number of
ordinary shares for the purposes of
basic earnings per share
Basic earnings per share

(AED)
Diluted
The Company has not issued any instruments which would
have a dilutive impact on earnings per share when exercised.
061

34
36
During the Annual General Meeting held on 26 April 2012, the

shareholders approved the cash dividend of 3% of the face
value of the issued shares and 5% bonus shares (AED 0.08 per
share). The increase in share capital was formally approved by the
Ministry of Economy on 25 June 2012. These dividends have been
reflected in the consolidated statement of changes in equity.
(a) Operating lease commitments

The Group has various operating lease agreements.
The future minimum lease payments payable
under operating leases are as follows:
Dividend
Expenditure commitments
35
2012
AED000
Future minimum lease payments:
Guarantees
No later than one year
10,457
26,009
Later than one year but no later

than five years
26,551
12,324
1,742
1,633
38,750
39,966
Later than five years
2013
AED000
2012
AED000
Performance bonds
1,004,345
921,909
Letter of guarantees
1,266,331
705,617
2,270,676
1,627,526
The various bank guarantees above were issued by the

Groups bankers in the ordinary course of business. In
the opinion of the Directors, the above bank guarantees
are unlikely to result in any liability to the Group.
062
2013
AED000
(b)
Other commitments
2013
AED000
Letters of credit for
purchase of materials and
operating equipment
687,121
2012
AED000
363,066
Annual Report


31 2013
34
36
26
2012 3%
5% ( 0.08 ) .
25

.2012 .
()
.

:
2013
35
2013
10,457
26,009
26,551
12,324
1,742
1,633
38,750
39,966
2012
1,004,345
921,909
1,266,331
705,617
2,270,676
1,627,526

.
.
050
2012
()
2013
2012
687,121
363,066
Annual Report

31 2013
2013
2012
26,436
54
26,490
40,661
329,354
2013
58,412
128,086
31
186,498

50%
93,249
93,249
33
128,685
186,498
31
2013
31
31
)(7,802
)(7,802
122,878
2013

2012
2012
31
2012
( )
166,469
94,293
13,010
2,295,432,420
2,252,646,667
128,086

()
0.073
0.042
128,086
Annual Report
049

31 2013
32
2013
2012
29,206
64,043
31
93,249
50
:1 .
.

.

.
048
Annual Report

31 2013
31
31 2013
)
(
4,278,202
4,278,202
( )12
4,678
4,678
( )11
75,159
75,159
( )23
268,628
268,628
( )16
558,217
558,217
5,105,047
4,678
75,159
5,184,884
)
(
3,774,494
3,774,494
( )12
4,821
4,821
( )11
2,384
2,384
31 2012
( )23
25,990
25,990
( )16
730,700
730,700
4,531,184
4,821
2,384
4,538,389
( )20
1,116,470
( )20
1,328,758
( )23
19,445
( )23
11,699

( )21
2,139,722

( )21
1,598,035
31 2013
31 2012

( )13
( )13
21,659
3,275,637
2,960,151
Annual Report
047

31 2013
30
29
-
31
2013
:
31
2012
5,583

( )14
)(5,160
( /)

( )11
727
)(3,583
( /)

( )11
8,815
4,450

( )13
)(4,050
)(21,174

( )12
)(143
)(27
)(485
)(3,070
)(11,977
046
2013
2012
)(48,891
)(19,661
)(6,432
328
)(55,323
)(19,333
Annual Report

31 2013
27
25

31
2013
31
2013
2012
5,671
1,545
( )26
4,224
6,299
(
)28
982
1,218
9,781
3,061
20,658
12,123
26
705,360
484,577
155,494
134,261
860,854
618,838

31
2013
31
2013
2012
1,740,148
1,098,975
1,141,128
911,397
( )27
737,513
484,577
697,696
386,312

( )22
36,542
25,533
( )6
29,269
31,560
4,382,296
2,938,354
Annual Report
28
2012
2012
( )27
155,494
134,261
58,385
31,474
( )7
37,750
37,750
( )6
18,119
11,007
7,978
10,235

( )22
5,123
4,004

-
( )8
22,509
12,081
( )23
14,800
23,223
9,681
328,581
265,293
045

31 2013
23

:
31

( ).

.
.
1 2013 31 :2013
59.817
.
1 2012 31 :2012

14.800 .
:
:
2013
2012
216,548
22,408
52,080
3,582
268,628
25,990
2013
44,008
34,877
3,018
2,112
47,026
36,989
24
() / -
31
2013
2012
9,908
9,136
13,239
20,492
4,059
23,147
33,687
)(36,032
)(17,078
() /
)(12,885
16,609
2012
818
842
4,314
14,313
10,857
19,445
11,699
044
2013
2012
Annual Report

31 2013
.
2% :2012( 6.5 )8.5%
() /

().

:

.
.

.
5.5%
.

.
2013
2012
84,669
65,108
4,195
41,665
29,537
)(16,100
)(14,171
110,234
84,669
21
2013

2013
2012
2,035,469
1,517,923
104,253
80,112
799,187
607,123
2,938,909
2,205,158
1,624,293
912,068
)(1,278,104
)(801,749
)(241,936
)(30,207
104,253
80,112
Annual Report
22
2012
( )26
36,542
25,533
(
)28
5,123
4,004
41,665
29,537
19
31 2013 2012

.

.

.
/ :2012( 3.5%
.)3.5%
).
(3 :2012
4.5
043

31 2013
18
20

10
.
.
50%
. 14.503
.
(
)
.
19
31 2011
20%
....

... 160.000 . 20%
.
6%

.. (
).
24.543
26.862

/
51.405
.
2013
2012
48,878
119,384
128,400
611,203
816,006
538,529

( )16
123,186
59,642
31
1,067,592
1,209,374
2013
2012
730,587
588,403
24,350
604,817
)(577,659
)(462,633
31
177,278
730,587
.

.3-1

13 2012
75.000 ( 278 ) 166.800
.

.
178.503
80.250 .

444.867 .
042
Annual Report

31 2013
14
2013

47.025 .
17.649
5.160 ( )29 .
29.376
( .)10
1.306 .

.
15
2013
558,217
730,700
)(112,765
)(44,157

( )20
)(123,186
)(59,642
)(444,867
322,266
182,034
17
2013
2012
30,259
26,510

2013
2012
4,160
2,782
281,543
636,941
272,514
90,977
558,217
730,700
1% 1% :2012( 4%
.)5%
2012
1.197.777.778 1
16
Annual Report
2012
1,197,778
1,197,778
( 3)
107,269
107,269
980.000.000 1
(

2)
980,000
980,000
2,285,047
2,285,047
1.1 31 2009
.
32.400 0.8834
28.622 .
0.977 31.648
3.026 .
2.2
(..) ..
45% .
3.3
26 2012 3%
5% .
25 .2012

.
041

31 2013
2013
2012
18,740
53,308
3,111
2,384
75,159
2,384
12

2013
13

2013

4,678
4,821
485
21,174
21,659
146,960
441,550
588,510
2012
2012
2013
2012
():
2013
2012
4,821
5,189
)(368
( )29
)(143
31
4,678
4,821

.

-
( .)29
040
( 115.000)
422,395
166,000

31 .2012
40 147 9%
20.153 1.506
-.
Annual Report

31 2013
11
10

.
.

. :

)
(

( )
.

( ) ( ) (
).

( ) (
)..
31 2013
29,376
29,376
29,376
29,376

.

.

.
.
2013
2012
2,384
24,707
72,048
)(18,740
( /)

( )29
727
)(3,583
31
75,159
2,384
3-3

.
:
()

..
10%
53,308
10%
18,740
72,048

.
.

1.020 .
Annual Report
039

31 2013
2013
2012
845,056
701,014
686,088
427,708
50,577
72,467
54,264
47,126
31,641
30,944
189,543
314,887
1,857,169
1,594,146
( )1
9 :2012( 9

).

.

:
2013
2012
17,630
12,374
546
255

( )30
)(12,530
( )30
5,001
31
5,646
17,630

.
.

31 2012

58 36
41.3
.
.
. 31 2012
135.3
.
8,835
3,842
)(323
320
( )30
)(6,098
4,673
31
2,414
8,835

24 10 14.3 .

34 26 27
.
31 2013
87 .
038
Annual Report

31 2013
(4.25 :2012
5.5
)
.

2013
2012
224,257
183,570
)(11,754
)(9,155
31
212,503
174,415
1,632,912
339,302
412,366
2,218,370
1,829,550
132,099
141,782
4,322,683
3,794,274
)(66,360
)(52,413
4,256,323
3,741,861

. 31 2013
311.156 (:2012
420.247 ) .

.
:
2013
186,553
250,183
124,603
170,064
311,156
420,247
1,410,576
31 2013
66.360 ( 52.413 :2012 )
.
.

:
2013
10,592,643
8,002,389
1,217,354
1,077,610
11,809,997
9,079,999
)(9,591,627
)(7,250,449
2,218,370
1,829,550
1,479,653
1,121,486
311,156
420,247
66,360
52,413
1,857,169
1,594,146
Annual Report
2012
2012
52,413
58,960

( )28
25,999
)(8,562
53,275
)(18,628
( )28
)(3,490
)(41,194
31
66,360
52,413

.
.
037

31 2013
844,447
86,246
335,552
16,779
31 20122013
1,283,024
1 2012
104,860
4,195
109,055
33,555
4,195
37,750
31 2012
138,415
8,390
146,805
33,555
4,195
37,750
171,970
12,585
184,555
31 2013
31 2013
31 2012
844,447
86,246
163,582
4,194
1,098,469
844,447
86,246
197,137
8,389
1,136,219
.

( ) .
2013 :

. .)11.5 :2012( 11.4
:
:

.

:
.

:
.
:
.)3 :2012( 3.55 .
036
Annual Report

31 2013
1 2012
25,743
40,849
12,462
1,575
80,629
6,567
25,271
7,137
3,592
42,567
)(4,963
)(1,752
)(7,625
)(14,340
92
128
37
260
31 2012
32,313
61,249
17,975
)(2,421
109,116
8,872
23,768
10,252
4,496
47,388
)(276
)(2,072
)(225
)(270
)(2,843
)(432
700
686
300
1,254
31 2013
40,477
83,645
28,688
2,105
154,915
31 2013
31 2012
365,100
82,822
27,880
18,072
16,806
510,680
393,976
59,196
21,029
13,856
16,143
504,200
2013
2012
( )26
29,269
31,560
( )28
18,119
11,007
47,388
42,567
( 4.4 :2012 ) .
.
Annual Report
035

31 2013

136,077
504,041
49,112
124,683
)(16,060
-
1 2012
242,462
85,808
26,208
13,486
14,731
40,465
14,788
5,587
)(6,054
)(2,204
)(7,802
169,064
34
)(169,098
32
192
212
164
52
652
31 2012
426,289
120,445
39,004
11,435
16,143
613,316
8,626
49,214
17,740
9,051
2,102
86,733
)(27,856
)(3,979
)(926
)(659
)(670
)(34,090
)(1,482
787
750
350
)(769
)(364
31 2013
405,577
166,467
56,568
20,177
16,806
665,595
034
Annual Report

31 2013
31 2013

942,915
950,062
1,568,919
2,223,251
233,424
1,896,175
2,515,880
397,316
1,023,078
4,879,189
31 2012
41,214
761,073
3,321,268
81,756
)(529,467
2,025,082
)(240,548
1,834,848
31 2013
16,118
31 2012
Annual Report
120,512
3,289
55,420
033

31 2013
31 2013
2,320,896
2,010,900
334,088
5,740
2,654,984
2,016,640
430,245
( /)
94,167
33,571
54,504
23,116
18,692
1,478
29,735
46,600
5,975
430,245
117,148
4,879,189
254
)(340,082
117,402
)(340,082
4,879,189
)(507
181,735
41,852
85,138
4,423
86,733
31 2013
3,185,972
2,647,117
261,917
2,665,938
)(1,598,646
7,162,298
31 2012
2,032,571
1,115,408
41,214
132,075
3,321,268
229,395
82,404
2,612
)(314,411
2,261,966
1,197,812
41,214
134,687
)(314,411
3,321,268
( /)
158,867
4.941
3,289
)(52,054
115,043
16,450
22,132
195
41,540
80,317
63,009
35,679
1,463
24,532
124,683
2,744,103
1,807,879
31 2012
74,150
3,101,404
)(1,297,976
6,429,560
1.174.361 10% . 2012

647.708 19% .
032
Annual Report

31 2013
8 .

.
.

.

( ) ( ).

.
.
.

.
.
.
.
.

: .

Annual Report
031

31 2013
.
.
()

.

.

.

2013 :
.

.

.

.
4-1

.

.

:
5% : 10%
11.4% :
3% :
1.3
.
.
()
.

.2-20

. 5%
/
377 ( :2012 / 362
).
()

.
.

.

.
.
()

.

.
:
030
Annual Report

31 2013
3-3

. :

) ( ).
(

( )

( )
( ).
( ) ( ).
.
:
) .
) .

31 .2013 10
.
31 2013

31 .2012
4,678
4,678
4,821
4,821
2,358
753
3,111
1,631
753
2,384
2,358
4,678
753
7,789
1,631
4,821
753
7,205
21,659
21,659
21,659
21,659
Annual Report
029

31 2013
()

.
.

.
.
:

1,071,174
22,367
30,161
1,123,702
2,035,469
2,035,469
19,445
19,445
31 2013

31 2012

1,209,374
70,505
48,879
1,328,758
1,517,923
1,517,923
11,699
11,699
3-2

.

.
.
.
(
)
( ) .

028
31 2013 2012 :
2013
2012
( )20
1,116,470
1,328,758
:
( )16
)(558,217
)(730,700
558,253
598,058
2,974,826
2,768,782
3,533,079
3,366,840
16%
18%
2%
.
Annual Report

31 2013

3-1

: (

) .
.

.
.

. 31 2013
/ 0.5
/ 6.113 ( 6.643 :2012 ).
()

.

:
()
( )1

.

(

).
31 2013
/ 5%
/ 1.478 ( 237 :2012 ).
( )2

.
( )3
.
31 2013
/ 0.5 /
1.350 ( 2.209 :2012 ).
2012
2013

A1
497,919
A1
459,886
A1
37,129
A1
192,257
Baa1
12,667
Baa1
63,701
A1
154
A1
6,066
BB+
6,188
BB+
5,911
A1
A1
97
*

.
31 2013
55% (:2012
.)57%
.
.
0.5 /
566 ( 1.059 :2012 ).
Annual Report
027

31 2013
2-22

.

.

.
2-23

.

.
.
.

.

.

2-25

.
2-26

.
2-27
.
)
(
.
2-28

.
2-24

.

.

.

.
/
026
Annual Report

31 2013
2-17

.

.

( )
( )
.

.
2-18

.

( ).
.

.
2-19

.
.

.
.

.
.
2-20

( )
.

.
.

Annual Report

.
2-21

.

.
.

.
.

.

.

()

.

.

.

.

.

.
025

31 2013

.
.
.13

12
.
12
.

( /) .
2-12

.
.

.
.

.

.

.
.
.
.

.

024
2-13

.
.

.
() /
.
2-14
.
.

.
2-15

.
(
) .
.
.

.

.
.
2-16

.

.
Annual Report

31 2013
2-8-2

.

.

.

.
.

( /) .

.

.

.

.
2-9

()

.

( )

( )

Annual Report

( )
.
.

.

.

)
(
.

()

.
() .

.

.

.
2-10

.
2-11
.

.

( ).

023

31 2013
2-6

()

.

.

. .

.

()

.

.
()
.

.

.
()

.

.
2-7

-
-
. /

.
022
( ) .
( )
.
2-8

2-8-1
:

.
.
.
()

.
.
12
()

.

12

.

( 8 23 16 ).
()

12
.
()

.

.

12
.

.
Annual Report

31 2013
2-3

.

.

.
2-4

()

(
) .
( ) .
()

.

.

.
.

.
()
(
)
:
1.1
.
2.2
(

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Annual Report
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Annual Report

31 2013
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Annual Report
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018
Annual Report

31
2013
2012
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16
.
18 50
Annual Report
017

31
2013
2012
237,058
134,376
32
)(64,043
47,388
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22
41,665
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Annual Report

31
24,543
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18 50
Annual Report
015

31
1 2013
2,285,047
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Annual Report

31
2013
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18 50
Annual Report
013

31
2013
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4,879,189
3,321,268
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18 50
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Annual Report

31
2013
2012
20
48,878
119,384
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21,659
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110,234
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31
2014 .
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18 50
Annual Report
Annual Report
011

31
2013
2012
510,680
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29,376
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Annual Report
Annual Report

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Annual Report
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Annual Report

2013

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Annual Report
PEOPLE
INNOVATION
PASSION

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Annual

Chairman Message ..............................................................................................................002

Directors Report ...................................................................................................................020

DSI has grown

to date. Our earnings per share is up 74% and we are

Majid Al Ghurair, Chairman

investments we made over the last two years are now

Today, the collaborative capabilities of our Engineering

Bank, ITCC and KAPSARC and we are very optimistic

Contracting, Oil and Gas, Rail and Infrastructure

I would like to thank every member of our Drake &

Khaldoun Tabari, Vice Chairman and CEO

Vice Chairman and CEO

Mr. Majid Saif Al Ghurair is

Mr. Khaldoun Rashid Tabari is

Mr. Talal Al-Bahar is an

Mr. Yusuf Al Nowais is an

Mr. Tawfiq Abu Soud

Mr. Jamal Saeed

Mr. Saleh Muradweij is an

Mr. Khalaf Sultan AlDaheri is an independent

Mr. Ivor Mark Goldsmith

In AED Billions as on 31st December 2013

In AED Millions as on 31st December 2013

In AED billions as on 31st december 2013

as on 31st december 2013

as on 31st december 2013

The Executive Committee, chaired by the Chairman and

connects all vital operations and business processes

The foundation develops public service campaigns that

To improve transparency, accountability and equity, we have

Social divides are a growing challenge in the world we

Reducing waste and recycle and reuse materials

to the employment of nationals. We strive to retain

We are dedicated to empowering our staff and creating

DSI is an Equal Employment Opportunity employer and

based on race, colour, religion, sex, nationality, age,

(ESOP). An ESOP is powerful retention, organisational

sector, we also won the Asset Enhancement Scheme

The growth continued in Q2 with Civil Engineering.

UAE Armed Forces in Sharjah worth AED 137 million, the

DIRECTORS REPORT and consolidated financial

DSI has been consistently achieving positive results and we have

Majid Al Ghurair, Chairman

On behalf of board of directors

Independent auditors report

Report on the consolidated financial statements

Consolidated balance sheet

Investment accounted for using the equity method

Deferred income tax assets

Trade and other receivables

Due from related parties

Financial assets at fair value through profit or loss

Cash and bank balances

EQUITY AND LIABILITIES

Foreign currency translation reserve

Consolidated balance sheet

Derivative financial instruments

Due to related parties

Total equity and liabilities

The consolidated financial statements were

Chief Executive Officer

Reducing waste and recycle and reuse materials