LULUAT AL KHALEEJ FURNISHED APARTMENTS

Ajman - United Arab Emirates

Auditor's Report & Financial Statements

For the year ended December 31, 2022

Audited By:

Abdul Azeez Hamzah Haji Auditing of Accounts

Audit & Accounts
Dubai, UAE
 LULUAT AL KHALEEJ FURNISHED APARTMENTS
Table of Contents

Pages

Company general information 1

Manager's report 2

Independent auditor's report 3-5

Statement of financial position 6

Statement of profit or loss and other comprehensive income 7

Statement of changes in equity 8

Statement of cash flows 9

Notes to the financial statements 10-20

 LULUAT AL KHALEEJ FURNISHED APARTMENTS
Company general information

Principal office address : LULUAT AL KHALEEJ FURNISHED APARTMENTS

Ajman - United Arab Emirates

Financial year : For the year ended December 31, 2022

License number : 101196

Legal status : Sole establishment

Date of incorporation : 07/May/2019

Shareholders : Name Nationality

RASHEED ABDULLA RASHED BUHASSAN ALSHAMSI UAE

Activities : Hotel Appartments - Regular Category

Auditor : Abdul Azeez Hamzah Haji Auditing of Accounts

Audit & Accounts
Dubai, UAE
Office: +971-4-2981127
Email: [email protected]
Web: www.ahauditing.com

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LULUAT AL KHALEEJ FURNISHED APARTMENTS
Manager's report for the year ended December 31, 2022
The Manager has pleasure in submitting their report and the audited financial statements of M/s. LULUAT AL
KHALEEJ FURNISHED APARTMENTS for the year ended December 31, 2022.

Principal activity
The principal activity of the Company is Hotel Appartments - Regular Category.

Results of operations
The financial results of the Company for the year ended December 31, 2022 are as follows:
31/12/2022 31/12/2021
AED AED

Revenue 1,058,376 1,189,703

Profit/ (Loss) for the year 101,686 258,720

Events after the reporting period

In the opinion of the Manager, no transaction or event of a material and unusual nature has occurred between
the end of the year and the date of this report, that is likely to affect, substantially the result of the operations or
the financial position of the Company.

Role of the Manager

The Manager has the company’s principal decision making authority. The Manager has the overall
responsibility for leading and supervising the company for delivering sustainable shareholder value through his
guidance and supervision of the company’s business. The Manager sets the strategies and policies of the
company. The Manager monitors performance of the company’s business, guides and supervise its
management.

Going Concern

The attached financial statements have been prepared on a going concern basis. While preparing the financial
statements the management has assessed the company’s ability to continue as a going concern. The management
has not come across any evidence that causes it to believe that material uncertainties related to the events or
conditions existed, which may cast significant doubt on the company’s ability to continue as a going concern.

Auditors
To reappoint Abdul Azeez Hamzah Haji Auditing of Accounts as auditors for the ensuing year will be put to
the members at the Director’s meeting.

Signed on behalf of the Board

Manager

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 INDEPENDENT AUDITOR’S REPORT

To,
The Shareholders
LULUAT AL KHALEEJ FURNISHED APARTMENTS
Ajman - United Arab Emirates

Our opinion

We have audited the accompanying financial statements of M/s. LULUAT A KHALEEJ FURNISHED
APARTMENTS, Ajman, United Arab Emirates which comprise the statement of financial position as of December
31, 2022, the statement of profit or loss and other comprehensive income, statement of changes in equity, statement of
cash flows for the year from January 01, 2022 to December 31, 2022 and notes to the financial statements, which
include a summary of significant accounting policies and other explanatory information.

In our opinion, the financial statements of the company present fairly, in all material respects, the financial position of
the company as of December 31, 2022 and its financial performance and cash flows for the year from January 01, 2022
to December 31, 2022 in accordance with International Financial Reporting Standards (“IFRSs”).

Basis for opinion

We conducted our audit by the International Standards on Auditing (“ISAs”). Our responsibilities under those
standards are further described in the Auditor’s responsibilities for the audit of the financial statements section of our
report. We are independent of the company by the International Ethics Standards Board for Accountants’ Code of
Ethics for Professional Accountants (the “IESBA Code”) together with the ethical requirements that are relevant to
our audit of the financial statements in the United Arab Emirates, and we have fulfilled our other ethical
responsibilities by these requirements and the IESBA Code. We believe that the audit evidence we have obtained is
sufficient and appropriate to provide a basis for our opinion.

Other information

Management is responsible for the other information.The other information comprises the Manager's report (but does
not include the financial statements and our auditor’s report thereon).

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

In connection with our audit of the financial statements, our responsibility is to read the other information identified
above and, in doing so, consider whether the other information is materially inconsistent with the financial statements
or our knowledge obtained in the audit, or otherwise appears to be materially misstated.

If, based on the work we have performed, we conclude that there is a material misstatement of this other information,
we are required to report that fact. We have nothing to report in this regard.

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Responsibilities of Management and the Partners for the financial statements
Management is responsible for the preparation and fair presentation of the financial statements by IFRSs and in
compliance with the applicable provisions of the UAE Federal Law No. (2) of 2015, and for such internal control as
management determines is necessary to enable the preparation of financial statements that are free from material
misstatement, whether due to fraud or error.
In preparing the financial statements, management is responsible for assessing the Company’s ability to continue as a
going concern, disclosing, as applicable, matters related to going concern, and using the going concern basis of
accounting unless management either intends to liquidate the Company or to cease operations or has no realistic
alternative but to do so.
Those charged with governance are responsible for overseeing the company’s financial reporting process.

Auditor’s responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from
material misstatement, whether due to fraud or error and to issue an auditor’s report that includes our opinion.
Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted by ISAs will always
detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material
if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users
taken based on these financial statements.
As part of an audit by ISAs, we exercise professional judgment and maintain professional skepticism throughout the
audit. We also:

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

• Obtain an understanding of internal control relevant to the audit to design audit procedures that are appropriate in the
circumstances, but not to express an opinion on the effectiveness of the company’s internal control.

• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related
disclosures made by management.
• Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the
audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant
doubt on the Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are
required to draw attention in our auditor’s report to the related disclosures in the financial statements or, if such
disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the
date of our auditor’s report. However, future events or conditions may cause the company to cease to continue as a
going concern.
• Evaluate the overall presentation, structure, and content of the financial statements, including the disclosures, and
whether the financial statements represent the underlying transactions and events in a manner that achieves fair
presentation.

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

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

Report on other legal and regulatory requirements

Further as required by the UAE Federal Law No. (2) of 2015, we report that:

i) we have obtained all the information and explanations we considered necessary for the purposes of our audit;

ii) the financial statements have been prepared and comply, in all material respects, with the applicable provisions of
the UAE Federal Commercial Companies Law No. 2 of 2015;

iii) proper books of accounts have been maintained by the company;

iv) the financial information included in the Manager’s report is consistent with the books of account and records of
the company; and

For Abdul Azeez Hamzah Haji Auditing of Accounts,

Professional License No: 805957

Auditor’s Registration No: 509
Dubai, UAE

Date: May 1, 2023

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LULUAT AL KHALEEJ FURNISHED APARTMENTS
Ajman - United Arab Emirates

Statement of financial position as of December 31, 2022

(In Arab Emirates Dirham)

Notes 2022 2021

Assets
Non-current assets
Total non-current assets - -
Current assets
Accounts and other receivables 4 56,169 32,251
Advances, Deposits & Prepayments 5 221,298 163,252
Cash and bank balances 6 108,564 101,938
Total current assets 386,030 297,441
Total assets 386,030 297,441

Equity and liabilities

Shareholder's Capital Account 7 600,000 600,000
Shareholder's Current Account 8 (772,916) (738,677)
Retained earnings 9 491,971 390,285
Total shareholders' equity 319,055 251,608
Non-current liabilities
Total non-current liabilities - -
Current liabilities
Accounts & Other payables 10 66,975 45,832
Total current liabilities 66,975 45,832
Total liabilities 66,975 45,832
Total shareholders' equity and liabilities 386,030 297,440

The accompanying notes form an integral part of these financial statements.

The report of the auditors is set out on pages 3 to 5.

The financial statements on pages 6 to 21 were approved on May 1, 2023 and signed on behalf of the Company
by:

Manager

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LULUAT AL KHALEEJ FURNISHED APARTMENTS
Ajman - United Arab Emirates

Statement of profit or loss and other comprehensive income for the year ended December 31, 2022
(In Arab Emirates Dirham)

Notes 2022 2021

Revenue 11 1,058,376 1,189,703

Cost of revenue 12 (142,588) (214,491)
Gross profit 915,789 975,212
Administrative expenses 13 (805,192) (711,876)
Finance Cost 14 (9,140) (4,765)
Other Income 15 229 148
Total comprehensive income for the year 101,686 258,720

The accompanying notes form an integral part of these financial statements.

The report of the auditors is set out on pages 3 to 5.

The financial statements on pages 6 to 21 were approved on May 1, 2023 and signed on behalf of the Company
by:

Manager

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LULUAT AL KHALEEJ FURNISHED APARTMENTS
Ajman - United Arab Emirates

Statement of changes in Owner equity for the year ended December 31, 2022
(In Arab Emirates Dirham)

Particulars Capital Account Current Account Retained Earnings Total Capital

Balance as of January 01, 2021 600,000 (584,705) 131,565 146,860

Profit for the year - - 258,720 258,720
Net movements during the year - (153,972) - (153,972)
Balance as of December 31, 2021 600,000 (738,677) 390,285 251,608
Profit for the year - - 101,686 101,686
Net movements during the year - (34,239) - (34,239)
Balance as of December 31, 2022 600,000 (772,916) 491,971 319,055

The accompanying notes form an integral part of these financial statements.

The report of the auditors is set out on pages 3 to 5.

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LULUAT AL KHALEEJ FURNISHED APARTMENTS
Ajman - United Arab Emirates

Statement of cash flows for the year ended December 31, 2022
(In Arab Emirates Dirham)

2022 2021
Cash flows from operating activities
Profit for the year 101,686 258,720
Depreciation - -
Operating profit before changes in operating assets and liabilities 101,686 258,720
(Increase)/decrease in current assets
Accounts and other receivables (23,918) (15,968)
Advance, Deposit & Prepayment (58,046) (69,854)
Increase/(decrease) in current liabilities
Accounts and Other payables 21,143 14,611
Net cash (used in) operating activities 40,865 187,509
Cash flows from investing activities
Acquisition of property, plant and equipment - -
Net cash (used in) investing activities - -
Cash flows from financing activities - -
Shareholders' current account (34,239) (153,972)
Net cash from financing activities (34,239) (153,972)
Net increase in cash and cash equivalents 6,626 33,537
Cash and cash equivalents, beginning of the year 101,938 68,401
Cash and cash equivalents, end of the year 108,564 101,938

Cash and cash equivalents

Cash in hand and at bank 108,564 101,938
108,564 101,938

The accompanying notes form an integral part of these financial statements.

The report of the auditors is set out on pages 3 to 5.

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LULUAT AL KHALEEJ FURNISHED APARTMENTS
Ajman - United Arab Emirates

Notes to the financial statements for the year ended December 31, 2022

1 Legal status and principal activities

M/s. LULUAT AL KHALEEJ FURNISHED APARTMENTS (the “Company”) is a sole establishment registered on
07 May 2019, in the Emirate of Ajman. The Company is operating under Commercial License No. 101196 issued by the
Department of Economic Development, Ajman, United Arab Emirates. The company's registered office and principal
business place are in Ajman, United Arab Emirates.

The principal activities of the Company as per Commercial License No. 101196 is Hotel Appartments - Regular Category.

These financial statements relate to the period from January 01, 2022 to December 31, 2022.

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

2.1 New standards, interpretations and amendments effective for the current year
The following new and revised standards and interpretations have been adopted in the current year with no material impact
on the disclosures and amounts reported for the current and previous years but may affect the accounting for future
transactions or arrangements:
International Accounting Standards (IAS/IFRSs) Effective date
Definition of Material (Amendments to IAS 1 & IAS 8) 01/Jan/2020
Definition of Business (Amendments to IFRS 3) 01/Jan/2020
Revised Conceptual Framework for Financial Reporting 01/Jan/2020
Interest Rate Benchmark Reform (Amendments to IFRS 9, IAS 39 & IFRS 7) 01/Jan/2020
COVID-19 Related Rent Concessions (Amendment to IFRS 16) 01/Jun/2020

2.2 New standards, interpretations and amendments in issue but are not yet effective
Standards, amendments and interpretations issued but not yet effective at the date of authorisation of these financial
statements are listed below. The Company intends to adopt those standards when they become effective.
International Accounting Standards (IAS/IFRSs) Effective date
Interest Rate Benchmark Reform-Phase 2 (Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 & IFRS 16) 01/Jan/2021
Onerous Contracts-Cost of fulfilling a Contract (Amendments to IAS 37) 01/Jan/2022
Annual improvements to IFRS Standards 2018-2020 (Amendments to IFRS 1, IFRS 9, IFRS 16 & IAS 4 01/Jan/2022
Property, Plant and Equipment - Proceeds before intended use (Amendments to IAS 16) 01/Jan/2022
Reference to the conceptual framework (Amendments to IFRS 3) 01/Jan/2022
Classification of Liabilities as current or non current (Amendments to IAS 1) 01/Jan/2023
IFRS 17 Insurance Contracts and amendments to IFRS 17 Insurance Contracts 01/Jan/2023
Sale or contribution of assets between an investor & its associate or joint venture (amendment to IFRS
To be determined
10 & IAS 28)
The management believes that the adoption of the above amendments are not likely to have any significant impact on the
financial statements of the Company for future periods.

3 Summary of Significant accounting policies

3.1 Statement of compliance
The financial statements have been prepared in accordance with International Financial Reporting Standards (IFRSs)
including International Accounting Standards and Interpretations, issued or adopted by the International Accounting
Standards Board (IASB) and applicable provisions of United Arab Emirates laws that are relevant to the operations of the
Company for the year ended December 31, 2022 (the “reporting date”).

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LULUAT AL KHALEEJ FURNISHED APARTMENTS
Ajman - United Arab Emirates

Notes to the financial statements for the year ended December 31, 2022

3 Significant accounting policies (continued)

3.2 Basis of preparation
These separate financial statements have been prepared under the historical cost convention, except for the revaluation of
certain financial instruments that are measured at fair values at the end of each reporting period, as explained in the
accounting policies below. Historical cost is generally based on the fair value of the consideration given in exchange for
assets. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction
between market participants at the measurement date, regardless of whether that price is directly observable or estimated
using another valuation technique.

3.3 Fair value measurement

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between
market participants at the measurement date. The fair value measurement is based on the presumption that the transaction
to sell the asset or transfer the liability takes place either:
The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing
the asset or liability, assuming that market participants act in their economic best interest.
A fair value measurement of a non-financial asset takes into account a market participant's ability to generate economic
benefits by using the asset in its highest and best use or by selling it to another market participant that would use the asset
in its highest and best use.
3.4 Foreign currencies

The financial statements are presented in UAE Dirham (AED), which is the Company’s functional and presentation
currency and all values are rounded to the nearest dirham. Transactions in foreign currencies are translated into the
functional currency using the exchange rates prevailing at the transaction dates. Monetary assets and liabilities expressed
in foreign currencies at the reporting date are translated at rates of exchange ruling at the reporting date. Exchange
differences arising in these cases are dealt with in the statement of comprehensive income. Non-monetary items carried at
fair value that are denominated in foreign currencies are retranslated at the rates prevailing at the date when the fair value
was determined. Non-monetary items that are measured in terms of historical cost in foreign currency are not retranslated.

3.5 Property, plant and equipment

Property, plant and equipment are initially recorded at cost together with any incidental expenses of acquisition or
construction. Subsequently they are stated at cost less accumulated depreciation and accumulated impairment losses.
Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it
is probable that future economic benefits associated with the item will flow to the Company and the cost of the item can be
measured reliably. All other repairs and maintenance expenses are charged to the statement of comprehensive income
during the financial period in which they are incurred.
Depreciation is calculated using the straight-line method to write off the cost of property, plant and equipment less their
estimated residual values over their estimated useful lives, as follows:
Years
The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at each reporting date, with the effect
of any changes in estimate accounted for on a prospective basis. An asset’s carrying amount is written down immediately
to its recoverable amount if the asset’s carrying amount is greater than its estimated recoverable amount. Gains and losses
on disposals are determined by comparing the proceeds with the carrying amount and are recognised in the statement of
comprehensive income.

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LULUAT AL KHALEEJ FURNISHED APARTMENTS
Ajman - United Arab Emirates

Notes to the financial statements for the year ended December 31, 2022

3 Significant accounting policies (continued)

3.6 Related party transactions
The Company enters into various transactions in the normal course of business with related parties. Related parties include
the shareholders, key management personnel, fellow subsidiaries, associates, joint ventures, directors and entities which
are controlled directly or indirectly by the shareholders or directors or over which they exercise significant management
influence.

3.7 Employees' terminal benefits

Provision is made for employees’ terminal benefits on the basis prescribed under the UAE Labour Law based on current
remuneration and their period of service at the end of the reporting period. Accordingly, the Company has no expectation
of settling its employees' terminal benefits obligation in the near future.
3.8 Accounts and other receivables
Accounts receivable are amounts due from customers for merchandise sold or services performed in the ordinary course of
business. 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. Accounts and other receivable are initially
recognised at fair value and subsequently measured at amortised cost reduced by appropriate allowance for estimated
doubtful debts.
3.9 Accounts and other payables
Accounts payable are obligations to pay for goods or services that have been acquired in the ordinary course of business
from suppliers. Accounts payable 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. Accounts and other
payable are recognised initially at fair value and subsequently are measured at amortised cost using effective interest
method.
3.10 Finance charges
Finance charges that are directly attributable to the acquisition and constructing of property and equipment are capitalized
as part of the cost of those assets. Other finance charges are recognized as an expense in the year in which they are
incurred.

3.11 Cash and cash equivalents

Cash and cash equivalents consist of unrestricted cash and bank balances and other short-term highly liquid investments
that are readily convertible to a known amount of cash and are subject to an insignificant risk of changes in value.
3.12 Provisions
Provisions are recognised when the Company has a present obligation as a result of a past event, it is probable that the
Company will be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation.
The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at
the end of the reporting period, taking into account the risks and uncertainties surrounding the obligation.

3.13 Financial instruments

Financial assets and financial liabilities are recognised on the Company’s statement of financial position when the
Company becomes a party to the contractual provisions of the instrument.

Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are directly attributable
to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at
fair value through profit or loss) are added to or deducted from the fair value of the financial assets or financial liabilities,
as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or
financial liabilities at fair value through profit or loss recognised immediately in profit or loss.

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LULUAT AL KHALEEJ FURNISHED APARTMENTS
Ajman - United Arab Emirates

Notes to the financial statements for the year ended December 31, 2022

3 Significant accounting policies (continued)

3.14 Impairment
Financial assets
At each reporting date, the Company assesses if there is any objective evidence indicating impairment of financial assets or
non collectability of receivables.
An impairment loss, if any, arrived at as a difference between the carrying amount and the recoverable amount, is
recognized in the statement of comprehensive income. The recoverable amount represents the present value of expected
future cash flows discounted at original effective interest rate. Cash flows relating to short term receivables are not
discounted.
If, in a subsequent period, amount of the impairment loss decreases and the decrease can be related objectively to an event
occurring after the impairment loss was recognised, the reversal of previously recognised impairment loss is recognised in
the profit or loss.
Non financial assets
At each reporting date, the Company assesses if there is any indication of impairment of non financial assets. If an
indication exists, the Company estimates the recoverable amount of the asset and recognizes an impairment loss in the
statement of comprehensive income. The resultant impairment loss or reversals are recognized immediately in the
statement of comprehensive income.
3.15 Revenue Recognition
Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Company and the revenue
can be reliably measured, regardless of when the payment is being made. Revenue is measured at the fair value of the
consideration received or receivable, excluding discounts, rebates, customer returns and other sales taxes or duty
The Company recognises revenue based on a five step model as set out in IFRS 15:
1. Identify the contract(s) with a customer: A contract is defined as an agreement between two or more parties that creates
enforceable rights and obligations and sets out the criteria for every contract that must be met.
2. Identify the performance obligations in the contract: A performance obligation is a promise in a contract with a
customer to transfer a good or service to the customer.
3. Determine the transaction price: The transaction price is the amount of consideration to which the Company expects to
be entitled in exchange for transferring promised goods or services to a customer, excluding amounts collected on behalf of
third parties.
4. Allocate the transaction price to the performance obligations in the contract: For a contract that has more than one
performance obligation, the Company will allocate the transaction price to each performance obligation in an amount that
depicts the amount of consideration to which the Company expects to be entitled in exchange for satisfying each
performance obligation.
5. Recognise revenue when (or as) the Company satisfies a performance obligation at a point in time or over time.

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

• The customer simultaneously receives and consumes the benefits provided by the Company’s performance as the
Company performs; or
• The Company’s performance creates or enhances an asset that the customer controls as the asset is created or enhanced;
or
• The Company’s performance does not create an asset with an alternative use to the Company and has an enforceable
right to payment for performance completed to date.
For performance obligations where any one of the above conditions are not met, revenue is recognised at a point in time at
which the performance obligation is satisfied.
The company activities are Hotel Appartments - Regular Category. Revenue from these activities is recognized in the
accounting period in which the services are rendered.

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LULUAT AL KHALEEJ FURNISHED APARTMENTS
Ajman - United Arab Emirates

Notes to the financial statements for the year ended December 31, 2022

3 Significant accounting policies (continued)

3.16 Contingent liabilities and contingent assets
A contingent liability is a possible obligation that arises from past events and whose existence will only be confirmed by
the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Company. It
can also be a present obligation arising from the past events that is not recognized because it is not probable that outflow of
economic resources will be required or the amount of obligation cannot be measured reliably
Contingent liabilities are not recognized but are disclosed in the notes to the accounts. When a change in the probability of
an outflow occurs so that outflow is probable, it will then be recognized as provision.
A contingent asset is a possible asset that arises from past events and whose existence will be confirmed only by the
occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Company.
Contingent assets are not recognized but are disclosed in the notes to the accounts when an inflow of economic benefits is
probable. When an inflow is virtually certain, an asset is recognized.
The preparation of the Company’s financial statements requires management to make judgments, estimates and
assumptions that affect the reported amounts of revenue, expenses, assets and liabilities, and the disclosure of contingent
liabilities, at the end of the reporting period. However, uncertainty about these assumptions and estimates could result in
outcomes that require a material adjustment to the carrying amount of the asset or liability affected in future periods

3.17 Critical accounting judgements, estimates and assumptions

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. Actual results may differ from
The key assumptions concerning the future and other key sources of estimation uncertainty at the end of the reporting
period, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within
the next financial year are discussed below:
a) Depreciation of property, plant and equipment
Management assigns useful lives and residual values to property, plant and equipment based on the intended use and the
economic lives of those assets. Subsequent changes in circumstances could result in the actual useful lives or residual
values differing from initial estimates. Where management determines that the useful life or residual value of an asset
requires amendment, the net book amount in excess of the residual value is depreciated over the revised remaining useful
life.
b) Impairment of trade receivables and due from related parties
An estimate of the collectible amount of trade receivables and due from related parties are made when collection of the full
amount is no longer probable. For individually significant amounts, this estimation is performed on an individual basis.
Amounts which are not individually significant, but which are past due, are assessed collectively and an allowance applied
according to the length of time past due, based on historical recovery rates. The difference between the estimated
collectible amount and the book amount is recognised as an expense in the statement of comprehensive income. Any
difference between the amounts actually collected in future periods and the amounts expected to be collected will be
recognized in the statement of comprehensive income.
c) Inventories
Inventories are stated at the lower of cost or net realizable value. Adjustments to reduce the cost of inventory to its
realizable value, if required, are made for estimated obsolescence or impaired balances. Factors influencing these
adjustments include changes in demand, product pricing, physical deterioration and quality issues.
d) Fair value measurement
For the purpose of fair value disclosures, the Company has determined classes of assets and liabilities on the basis of the
nature, characteristics and risks of the asset or liability and the level of the fair value hierarchy. The fair value of financial
instruments that are not traded in an active market (for example, over-the-counter derivatives) is determined by using
valuation techniques. The Company uses its judgement to select a variety of methods and make assumptions that are
mainly based on market conditions existing at the end of each reporting period.
The Company has an established control framework with respect to the measurement of fair values. This includes a
valuation team that has overall responsibility for overseeing all significant fair value measurements

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LULUAT AL KHALEEJ FURNISHED APARTMENTS
Ajman - United Arab Emirates

Notes to the financial statements for the year ended December 31, 2022
(In Arab Emirates Dirham)

4 Accounts and other receivables 2022 2021

Accounts receivables 56,169 32,251
56,169 32,251

5 Advances, Deposits & Prepayments 2022 2021

Advance to staff 3,913 112
Other Advances 207,613 154,603
Prepayments 9,772 8,537
221,298 163,252

6 Cash and bank balances 2022 2021

Cash in hand 28,161 30,075
Cash at Bank 80,403 71,863
108,564 101,938

7 Shareholder's Capital Account

Name Percentage 2022 2021
RASHEED ABDULLA RASHED BUHASSAN ALSHAMSI 100 600,000 600,000
100 600,000 600,000

8 Shareholder's Current Account 2022 2021

Balance at the beginning of the year (738,677) (584,705)
Net movements during the year (34,239) (153,972)
Balance at the end of the year (772,916) (738,677)

9 Retained earnings 2022 2021

Balance at the beginning of the year 390,285 131,565
Profit for the year 101,686 258,720
Balance at the end of the year 491,971 390,285

10 Accounts & Other payables 2022 2021

Accounts payable 42,553 31,427
Accrued expenses 20,753 8,716
Other payables 3,669 5,689
66,975 45,832
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LULUAT AL KHALEEJ FURNISHED APARTMENTS
Ajman - United Arab Emirates

Notes to the financial statements for the year ended December 31, 2022
(In Arab Emirates Dirham)

11 Revenue 2022 2021

Revenue 1,058,376 1,189,703
1,058,376 1,189,703

12 Cost of revenue 2022 2021

Cost of Revenue 142,588 214,491
142,588 214,491

13 Administrative expenses 2022 2021

Salaries & Allowances 109,618 105,283
Rent 400,000 400,000
Visa and other related expenses 11,567 13,450
Legal, License and Professional charges 143,447 28,005
Repairs & Maintanance 12,024 23,407
Staff Insurance & Welfare expenses 6,637 1,264
Telephone expense 20,636 21,823
Electricity & Water charges 78,129 90,958
Transportation expenses 401 3,741
Printing & Stationary 1,315 1,477
Other expenses 1,239 9,232
Office expenses 20,178 13,236
805,192 711,876

14 Finance Cost 2022 2021

Bank charges 9,140 4,765
9,140 4,765

15 Other Income 2022 2021

Other Income 229 148
229 148

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LULUAT AL KHALEEJ FURNISHED APARTMENTS
Ajman - United Arab Emirates

Notes to the financial statements for the year ended December 31, 2022
(In Arab Emirates Dirham)

16 Financial instruments

a) Significant accounting policies

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

The following table shows the carrying amount and fair value of financail assets and liabilities inlcude their levels in the
b)
fair value hierarchy.

Carrying Amount Fair Value

Other
Amortised
Particulars Financial Total Level 1 Level 2 Level 3 Total
Cost
Liabilities
As of December 31, 2022
Financial assets
Measured at fair Value
Investments in FVTPL - - - - - - -
- - - - - - -
Financial assets
Not measured at fair Value
Accounts and other receivable 56,169 - 56,169 - - - -
Advance, Deposit & Prepayment 221,298 - 221,298 - - - -
Cash and bank balances 108,564 - 108,564 - - - -
386,030 - 386,030 - - - -
Financial liabilities
Accounts and other payable 66,975 - 66,975 - - - -
66,975 - 66,975 - - - -

Carrying Amount Fair Value

Other
Amortised
Particulars Financial Total Level 1 Level 2 Level 3 Total
Cost
Liabilities
As of December 31, 2021
Financial assets
Measured at fair Value
Investments in FVTPL - - - - - - -
- - - - - - -
Financial assets
Not measured at fair Value
Accounts and other receivable 32,251 - 32,251 - - - -
Advance, Deposit & Prepayment 163,252 - 163,252 - - - -
Cash and bank balances 101,938 - 101,938 - - - -
297,441 - 297,441 - - - -
Financial liabilities
Accounts and other payable 45,832 - 45,832 - - - -
45,832 - 45,832 - - - -

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LULUAT AL KHALEEJ FURNISHED APARTMENTS
Ajman - United Arab Emirates

Notes to the financial statements for the year ended December 31, 2022
(In Arab Emirates Dirham)

16 Financial instruments (continued)

c) Valuation premise for financial instruments that are not measured at fair value on recurring basis.

The following methods and assumptions were used to estimate the fair values:

Long-term fixed-rate and variable-rate borrowings or receivables are evaluated by the Company based on parameters such
as interest rates and individual creditworthiness of the customer. Based on this evaluation, allowances are taken into account
for the expected losses of these receivables. As of December 31, 2022, the carrying amounts of such receivables, were not
materially different from their calculated fair values.

Fair value of the quoted instruments or bonds is based on price quotations at the reporting date. The fair value of unquoted
instruments, loans from banks and other financial liabilities, obligations under finance leases, as well as other non-current
financial liabilities is estimated by discounting future cash flows using rates currently available for debt on similar terms,
credit risk and remaining maturities.

17 Financial risk management objectives

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

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

a) Foreign currency risk management

The Company undertakes certain transactions denominated in foreign currencies. Hence, exposures to exchange rate
fluctuations arise.

b) Interest rate risk management

The Company’s exposure to the risk of changes in market interest rates relates primarily to the Company’s borrowings with
floating interest rates. The Company’s policy is to manage its interest cost using a mix of fixed and variable rate debts.
Interest on financial instruments having floating rates is re-priced at intervals of less than one year and interest on financial
instruments having fixed rate is fixed until the maturity of the instrument.

c) Credit risk management

Credit risk refers to the risk that the counterparty will default on its contractual obligations resulting in financial loss to the
Company. The Company has adopted a policy of only dealing with creditworthy counterparties. The Company’s credit
exposure is continuously monitored and regularly reviewed by the management and the Company maintains an allowance
for doubtful debts based on expected collectability of all accounts receivable.

Accounts receivable consist of a large number of customers. Ongoing credit evaluation is performed on the financial
condition of accounts receivable. Further details of credit risks on accounts and other receivables are discussed in notes to
the financial statements.

The credit risk on liquid funds is limited because the counterparties are banks with high credit-ratings assigned by
international credit-rating agencies.

The carrying amounts of the financial assets recorded in the financial statements, which is net of impairment losses,
represents the Company’s maximum exposure to credit risks.

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Ajman - United Arab Emirates

Notes to the financial statements for the year ended December 31, 2022
(In Arab Emirates Dirham)

17 Financial risk management objectives (continued)

d) Liquidity risk management

Ultimate responsibility for liquidity risk management rests with the management which has built an appropriate liquidity
risk management framework for the management of the Company’s short, medium and long-term funding and liquidity
management requirements. The Company manages liquidity risk by maintaining adequate reserves, continuously monitoring
forecast and actual cash flows and matching the maturity profiles of financial assets and liabilities.

The Company’s objective is to maintain a balance between continuity of funding and flexibility through the use of bank
loans and equity from shareholders through their current accounts or loans.

Liquidity and interest risk tables:

The table below summarises the maturity profile of the Company’s financial assets and financial liabilities. The contractual
maturities of the financial assets and financial liabilities have been determined on the basis of the remaining period at the
financial position date to the contractual maturity date. The maturity profile of the assets and liabilities at the financial
position date based on contractual repayment arrangements were as follows:

Interest bearing Non Interest bearing

Less than Within 1 More than Less than Within 1 More than
Particulars Total
3 months year 1 year 3 months year 1 year
As of December 31, 2022
Financial assets
Accounts and other receivable - - - - 56,169 - 56,169
Advance, Deposit & Prepayment - - - - 221,298 - 221,298
Cash and bank balances - - - 108,564 - - 108,564
- - - 108,564 277,466 - 386,030
Financial liabilities
Accounts and other payable - - - - 66,975 - 66,975
- - - - 66,975 - 66,975

Interest bearing Non Interest bearing

Less than Within 1 More than Less than Within 1 More than
Particulars Total
3 months year 1 year 3 months year 1 year

As of December 31, 2021

Financial assets
Accounts and other receivable - - - - 32,251 - 32,251
Advance, Deposit & Prepayment - - - - 163,252 - 163,252
Cash and bank balances - - - 101,938 - - 101,938
- - - 101,938 195,503 - 297,441
Financial liabilities
Accounts and other payable - - - - 45,832 - 45,832
- - - - 45,832 - 45,832

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Ajman - United Arab Emirates

Notes to the financial statements for the year ended December 31, 2022
(In Arab Emirates Dirham)

18 Capital risk management

The Company’s objectives when managing capital are to safeguard the Company's ability to continue as a going concern, so
that it can continue to provide returns for shareholders by pricing products and services commensurately with the level of
risk.

The Company sets the amount of capital funds in accordance with the planned level of operations and in proportion to the
levels of risk. The Company manages the equity and makes adjustments to it in the light of changes in economic conditions
and the risk characteristics of the underlying assets. In order to maintain or adjust the equity, the Company may adjust the
amount of dividends paid to shareholders, return funds to shareholders, issue new shares, or sell assets to reduce its
exposure to debt.

19 Contingent liabilities As of December 31,

Letters of guarantee 2022 2021
- -
- -

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

20 Commitments

Except for the ongoing business obligations which are under normal course of business against which no loss is expected,
there has been no other known commitment on the Company's financial statements as of the reporting date.

21 Comparative amounts

Certain amounts for the prior year were reclassified to conform to current year's presentation. However, such
reclassifications do not have any impact on the Company's previously reported financial result or equity.

22 COVID - 19

On 11 March 2020, the World Health Organization declared the outbreak of the coronavirus (COVID-19) as a global
pandemic. As a result, economic uncertainties have arisen in many parts of the world and many businesses are facing
significant operational disruptions. These events have a marginal impact on the Company's operations now and may have
an increased implication on the Company's results of operations if the weakened economic environment continues. To
alleviate the negative impact of COVID-19 pandemic, the UAE Government, Central Bank and other independent
jurisdictions and regulators have taken measures and issued directives to support businesses and the UAE economy at large.

Given the uncertainty related to the duration and effect of this pandemic, the impact on the Company's financial statements
cannot be currently fully estimated and could impact future financial results, cash flows and financial position.

20