ANNUAL REPORT 2009 Drake Scull International PJSC Sunrise waits just on the edge of dawn An oak rests in every acorn Drake Scull International PJSC ANNUAL REPORT 2009

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ANNUAL REPORT 2009 Drake Scull International PJSC Sunrise waits just on the edge of dawn An oak rests in every acorn Drake Scull International PJSC ANNUAL REPORT 2009 Powered By Docstoc
					ANNUAL REPORT 2009
Drake & Scull International PJSC
Sunrise waits just on the edge of dawn.
     An oak rests in every acorn.


    Drake & Scull International PJSC
     ANNUAL REPORT 2009
                       DSI completes works on the prestigious
          1987         Emirates Golf Club, the first PGA-approved
                       golf course in the Middle East.




    1976        DSI is incorporated in Dubai, UAE.




        DSI completes works on Intercontinental
 1975   Hotel & Conference Center, Riyadh, KSA.




         DSI completes works on King
 1967    Hussein Medical City in Jordan
         and Gulf Hotel in Bahrain.




        1966
                   DSI is established
                   in Abu Dhabi, UAE.




                          Drake & Gorham and Arthur Scull
            1964          & Son merge to form Drake & Scull
                          engineering in the UK.




                               Bernard Drake founds Drake & Gorham,
                  1893         a new electrical company with colleague
                               Marshall Gorham.




                         1881
                                      Arthur Scull starts his plumbing
                                      business in Bristol.




THE DRAKE & SCULL HISTORY
                    DSI completes work on the Dubai Chamber of
                    Commerce and Baynunah Tower Abu Dhabi,
       1994         an unprecedented structure, commissioned by
                    the Abu Dhabi Royal family.




                      1997
                                       DSI completes work on Jumeirah
                                       Beach Hotel.




                        2001            DSI completes work on Sultan Qaboos
                                        Grand Mosque in Oman.




                           2005
                                          DSI completes work on West Bay Complex - Four
                                          Seasons Hotel in Doha, Qatar.




                                    - DSI establishes an Infrastructure,
                                      Water & Power (IWP) operations
                     2006           - Completes work on Kuwait State Audit
                                      Bureau, Kuwait




                    2007
                                     DSI acquires ‘Gulf Technical Construction
                                     Company’ (GTCC).




              DSI offers 55% of its shares to the public through its IPO,
 2008         which was 101 times oversubscribed.




        On March 16th 2009, DSI PJSC becomes the first
2009    multi-service contracting company to be listed on the
        Dubai Financial Market (DFM).
We stand tall. Growing stronger through time.
We stand tall. Growing stronger through time.
                                                                                            & Scull
                                                                                   5 Drake REPORT 2009
                                                                                     ANNUAL




  GROWTH.
  STRENGTH.
  HERITAGE.


From an oak tree that had blossomed in the           The oak’s grandeur renders its attribute of
UK in 1964, an acorn was planted in the rich         resilience in the face of turbulent weather. In the
and nurturing soils of Abu Dhabi in 1966.            face of a whirlwind financial storm, that made
During the course of over 40 years and with          strong headwinds in the world by the end of
abundance of sunlight, good fortune and              2008, our solid foundations helped us stave off
hard work, Drake & Scull has thrived to              a barrage of challenges that plagued the
blossom into a full grown thick and mighty           regional economy. The strength of our
oak tree of its own, with its roots stretched        management team and the resilience of our
across the Middle East and North Africa.             business model, the innovation of our
                                                     integration engineering and our heritage and
Guided by our values of Innovation, People
                                                     history have helped us withstand the hostile
and Passion, and over the past 40 years, we
                                                     economic environment as we come out standing
have extended our branches, expanded our
                                                     tall defying gravity, in the midst of faded trees.
roots and grew taller and thicker. Starting as
a single disciplinary niche contractor raising       As we restate our mark on the UAE skyline
the region’s exclusive landmarks, we have            we aimed to grow vertically and horizontally,
exceptionally increased in size reach and            for our limbs to stretch and our branches to
capabilities to become the region’s leading          slant upward, marking infirmity of purpose,
end to end engineering company offering              and enabling us to venture into different
seamless design and build capabilities for           disciplines of engineering services and
sustaining the growth of communities.                cultivating an undisputable leading position
                                                     in integrated engineering across the Middle
Business environments, similarly to forests,
                                                     East and North Africa.
constantly    evolve.    Forests’    caregivers,
similarly to business leaders, mistakenly            During the journey, we have gained much
believe that if they do nothing to their forest it   strength and much endurance. As we learn
will remain in its current state indefinitely.        from our experiences, we begin to prepare
Unfortunately, the eternal variation of light,       for the new cycle which is about to begin. It
water, and growing space is constantly               will bring with it renewed strength and
shaping and reshaping the composition of             courage to any situation and restore faith, so
forests and business environments alike.             that we can go ahead and aim for more
                                                     projects, ventures and new opportunities.
                                            6   Drake & Scull
                                                ANNUAL REPORT 2009




By capitalising on our heritage
and brand values, we will invest to grow
organically and inorganically in order to
become global market leaders, providing
engineering excellence to clients
while achieving optimum shareholder
value, through commitment in delivering
best practices in corporate
governance and transparency.
                                                                                                                7 Drake & Scull
                                                                                                                     ANNUAL REPORT 2009




 CHAIRMAN’S
 MESSAGE

                                           times. Our recognition of the impending        achieved its organizational goals,
                                           financial headwinds prompted us to             namely to increase revenue and to
                                           shift focus from commercial to industrial      focus on new markets, horizontal
                                           projects and steered us towards                growth and deployment of cash in
                                           opportunities in new markets where we          beneficial acquisitions. Our success
                                           successfully applied our regional              was streamlined by the strength of
                                           expertise to secure projects in Bahrain,       the management team, the resilience
                                           Sudan, Jordan, Thailand and Libya.             of the business model and our
                                                                                          engineering capabilities.
                                           Despite     market    conditions,    our
DEAR SHAREHOLDERS,                         successful Initial Public Offering (IPO)       We constantly strive to achieve best
                                           received a phenomenal response                 practices and accountability across all
Drake & Scull international PJSC (DSI)     defying our own forecasts to become            our DSI offices and projects. During the
has continued its mission as a regional    101 times oversubscribed. The event            last year, we established three executive
market leader delivering world class       revealed the immense trust and                 committees and an internal audit
integrated construction services to        confidence that our investors share with       department to continue to promote
substantial complex projects for           us regarding the bright future of DSI,         our ongoing perseverance towards
private and public clients in the Middle   and continues to provide a solid               transparency and equity.
East and North Africa Region. With this    foundation from which DSI can take its
unique business model, we are the          next step towards growth.                      As we enter 2010, we remain optimistic
only end to end service provider                                                          to invest in our growth strategy and
specializing in Mechanical, Electrical &   We began 2009, by becoming the only            engineering capabilities for the benefit of
Plumbing (MEP) services along with         specialist contractor to list on the Dubai     our employees, clients and shareholders
Infrastructure, Water, Power and Civil     Financial Market (DFM), closed the             with planned acquisitions in Qatar and
Construction Services.                     year with a healthy balance sheet and          Saudi Arabia, along with organic growth
                                           more than AED 1 Billion in cash                in Oman and Egypt. We also plan on
The aftershock of the Global Economic      reserves. Our Annual profit totaled            investing in research, development and
downturn effectively halved the growth     AED 283 Million for the calendar year          innovative solutions to be able to offer
rate of developing oil exporters from      starting January 1, 2009 and ending            competitive engineering services.
2.9% in 2008 to 1.6% in 2009, a            December 31, 2009, recording a year
decrease that produced widespread          on year profit increase of 32%, up from        The future looks bright for DSI and we
erosion of profits across majority of      AED 212 Million in 2008. The annual            look forward with great enthusiasm,
industries in the region, In particular,   revenue totaled AED 1.91 Billion, up           tenaciousness and confidence that our
the construction and real estate           from AED 1.72 Billion in 2008, marking         diversified portfolios will generate
sectors have been heavily impacted by      a year over year increase by 10%.              exceptional returns to our shareholders.
record decreases in asset values and
availability of financing.                 Given our Company’s strong financial           Finally, I would like to thank our staff for
                                           performance,        the     Board       has    their determination, dedication and
DSI PJSC withstood the hostile             recommended an exceptional dividend            passion that enables us to take on
economic environment, emerging as          of AED 0.07 per share. This is to be           challenges and opportunities in the future.
one of the region’s remarkable success     distributed after it is approved by
stories. We are not immune to the          shareholders at the AGM and is not             Sincerely,
environment around us, but our             indicative of future dividend distributions.
business experience, forward thinking
and corporate strategy helped us           The positive financial results reflected       Majid Al Ghurair - Chairman,
navigate successfully through difficult    the fact that DSI has executed and             Drake & Scull International PJSC (DSI)
                                            8   Drake & Scull
                                                ANNUAL REPORT 2009




We will safely deliver world- class
projects, providing integrated design and
engineering in Mechanical, Electrical &
Plumbing (MEP), Civil Contracting and
Infrastructure, Water & Power (IWP)
through our value system - Innovation,
People and Passion - while promoting
environmental protection and
sustainable communities development.
                                                                                                                9 Drake & Scull
                                                                                                                    ANNUAL REPORT 2009




  CEO’S
  MESSAGE

                                            With our IPO cash, we actively sought         Jordan, Libya and Thailand and success
                                            out acquisitions which would most             in winning projects in Saudi Arabia,
                                            effectively   advance      our    target      Bahrain and Sudan.
                                            disciplines, while providing entrance
                                            into new target markets. These                Our company is now organized along the
                                            acquisitions were executed following          major service lines of MEP, IWP, WWT,
                                            stringent technical, financial and legal      Telecom and Civil Contracting in targeted
                                            due diligence process.                        segments of major commercial, industrial,
                                                                                          governmental, and institutional service
                                            - Our acquisition of Passavant-Roediger,      sectors, launching the company into a new
DEAR SHAREHOLDERS,                          a Germany-based global developer of           stratosphere of diversification that allows
                                            wastewater, water and sludge treatment        us to align with multiple client needs.
Drake & Scull International PJSC (DSI)      technologies,     provided     us    with
has been able to make phenomenal            immediate entrance into the international     In conclusion, the year 2009 brought
progress through ‘Innovation, People        arena as a market-leading EPC                 immense changes and success to DSI.
and Passion’, the values upon which         contractor, able to compete for big           We went public, we shifted our position
our company is built. It’s these very       business globally.                            in domestic markets, and we expanded
same values that we bring to our                                                          horizontally and vertically to create new
clients, which differentiates us from our   - Our acquisition of Drake & Scull            business streams. Our goal is to build
competitors and which fuelled our           International for Electrical Contracting      upon our success in the UAE to become
remarkable recent growth.                   (DSIEC) in Kuwait, brought us immediate       among the top three multi-disciplinary
                                            entrance      to    Kuwait’s     booming      EPC companies in every country in
2009 was a year of great transformation     infrastructure sector which is expected to    which we operate.
in which we established a strong            witness major developments following the
foundation for future growth, not only      announcement earlier this year of a USD       After winning seven projects valued at
through a diversification of our business   104 Billion, four-year economic stimulus      AED 2 Billion in the GCC, Sudan and
streams and geographies but with a          plan that includes spending on major          Thailand, and closing the year with a
streamlining of our internal operations.    infrastructure development throughout         backlog of AED 3.3 Billion, 2009 is
We restructured our IT, HR and QHSE         Kuwait and building of roads, airports,       proof that DSI is not only on track, but
operations and policies, automated key      hospitals and schools – estimated to be       poised for unprecedented growth,
business processes and developed            worth over USD 20 Billion in contract         promising exceptional returns for all of
shared services and back office support     revenue – in addition to the residential      our shareholders.
to    complement        our    expansion    and commercial projects that will be
strategies, creating a framework for        needed to meet the demands of the             I have nothing but unquestionable faith
integrated communications across all        country’s rapid population growth.            in DSI, our people and our capabilities,
our subsidiaries.                                                                         and I am sure that our efforts in 2009
                                            Along with our new acquisitions and           will serve as a launching pad for
As the global financial crises began to     diversified portfolio of services, we’ve      reaching new heights in 2010.
shake the foundations of almost every       been able to leverage our past
major industry in 2008, we progressed       successes and vast experience in              Sincerely,
with our initial public offering. The       turnkey MEP contracting – from the
enthusiastic response from investors        construction of high-rise buildings, to the
gave us the liquidity needed to act on      design and build of the world’s largest
our long term corporate strategy to         district cooling plants to win new
enter new geographies and tackle new        business in these regions. Our growth         Khaldoun Tabari
opportunities that will add value to our    strategy continued with the establishment     Vice-Chairman and CEO
integrated portfolio of services.           of offices in key growth areas such as        Drake & Scull International PJSC (DSI)
                                                                                          10    Drake & Scull
                                                                                                ANNUAL REPORT 2009




BOARD OF
DIRECTORS



       Majid Saif Al Ghurair - Chairman
       In addition to his role as Chairman of DSI, Majid      Moreover, Mr. Al-Ghurair is a Board Member in
       Saif Al Ghurair is the Chief Executive Officer of Al   Government Bodies like Dubai Statistics Centre,
       Ghurair Private Company, one of the largest            Dubai Economic Council and Dubai Financial
       family-owned conglomerates in the United Arab          Support Fund and is an active member in
       Emirates, with businesses in a variety of industry     International Organizations such as the World
       sectors, including retail, industrial manufacturing    Economic Forum & Young Global Leaders.
       and real estate.




       Khaldoun Tabari - Vice Chairman

       Khaldoun Tabari is the Vice Chairman and CEO           Under Mr. Tabari's leadership, DSI has expanded
       of Drake & Scull International (DSI) PJSC and          the business to include Engineering, Procurement
       has led the development of the company from a          & Construction (EPC), civil contracting in addition
       local Mechanical, Electrical & Plumbing (MEP)          to the development of design and build
       contractor to a regional leader in the construction    engineering expertise in Infrastructure, Water &
       industry.                                              Power (IWP).




       Mohammed Reda Al-Hashemi - Board Member
       A renowned Islamic finance expert, Mohammed            empowerment and education, particularly early
       Reda Al-Hashimi founded Zabeel Investments in          childhood development – and was consequently
       February 2006 and has been responsible for its         named one of the Young Global Leaders in 2008,
       rapid strategic expansion.                             recognising his professional accomplishments,
                                                              commitment to society and potential to contribute
       As a member of the Young Arab Leaders                  to shaping the world’s future.
       organisation, Mr. Al-Hashemi believes in youth




       Talal Jassim Al Bahar - Board Member
       With over six years in the investment sector,          At present, Mr. Al-Bahar has been serving as the
       Mr. Talal Jassim Al-Bahar has served in various        Chairman of International Financial Advisors
       positions during his career, starting as Chairman      (IFA), one of the largest investment companies
       and Managing Director of Kuwait Invest                 listed on the Kuwait Stock Exchange, since 1987
       Holding Company.                                       and on the Dubai Financial Market since 2005.
                                                              He is also Vice Chairman and CEO of IFA Hotels
                                                              & Resorts.
                                                                                     11 Drake & Scull
                                                                                          ANNUAL REPORT 2009




Yusuf Al-Nowais - Board Member
With more than twenty-five years of project             After undertaking various roles during his career in
development experience in banking, finance,             the Abu Dhabi National Oil Company (ADNOC)
investment, hotels and tourism industries Yusuf         and the Emirates Holding Group – Mr. Al-Nowais
Al-Nowais has been actively involved in the             currently holds the position of Chairman and
setting up and acquisition of businesses, primarily     Managing Director of Arab Development, a
in the Gulf and the Middle East.                        family-owned business group.



Saleh Muradweij - Board Member
With nearly 20 years of successful professional         identifying opportunities for expansion, along with
experience throughout the GCC and the Levant,           stimulating demand for the company’s solutions.
Saleh Muradweij is Executive Director of Drake &        Prior to joining DSC, Mr. Muradweij has held
Scull Construction L.L.C (DSC), the civil               numerous managerial, positions in consulting,
construction arm of Drake & Scull International         project     management,         and    operational
(DSI). As Executive Director of DSC, he is              management within the and contracting sectors of
responsible for developing and maintaining strong       the UAE, KSA, Jordan, Lebanon and Kuwait.
relationships with business partners and


Tawfiq Abu Soud - Board Member
Tawfiq Abu Soud, the Executive Director of Drake &      complex projects under challenging circumstances.
Scull Water and Power (DSWP) - the IWP division         As the company's longest serving executive with
of DSI - has over 25 years of experience in the Oil &   13 years behind him, Mr. Abu Soud has had the
Gas and MEP contracting field. In this time he has      opportunity to build, diversify and expand the
overseen multiple areas including leading the           divisions and departments that he developed and is
regional expansion effort and delivering highly         now directing.



Jamal Saeed Saleh Al-Nuaimi - Board Member
Since beginning his career 16 years ago, Jamal          In addition to his role on the DSI Board of
Al-Nuaimi has undertaken various roles within the       Directors, Mr. Al-Nuaimi has served as a board
operations division of Abu Dhabi-based Amiri            member for companies spanning across a number
Flight. More recently, Mr. Al-Nuaimi was appointed      of industries – such as the Abu Dhabi Tatween
General Manager of Etisalat in 2008, providing          Council Al Jazeera Capital Sports Club and Siraj
comprehensive leadership and direction for              Islamic Financing.
effective operations in the region.



Ivor Mark Goldsmith - Board Member
Ivor Mark Goldsmith is an engineering                   Mr. Goldsmith has experience in all of the major
construction industry professional with 40 years'       roles within the construction industry both in the
experience, having undertaken leading strategic         UK and overseas, including consultancy, prime
business and technical development initiatives          contractor, major project design and build,
over the past 20 years.                                 technology solutions and long-term facilities
                                                        management and outsourcing.
 TABLE OF
 CONTENTS


Company Overview                        15
   Values                                16
   Evolution of DSI PJSC                 17
   End-to-End Capabilities               19
   Corporate Strategy                    20
   Competitive Advantage                 22
   Corporate Governance                  23
   CSR & Sustainability                  25
   HR and IT Strengths                   26

Accomplishments in 2009                 29
   Listing in March                      30
   Number of Projects Won in the Year    30
   Organic Growth                        31
   Acquisitions Growth                   32
   Recruitment Drive                     33

Business Streams Review                 35
   MEP                                   37
   IWP                                   41
   Civil                                 46
   Backlog                               48
   Market Challenges                     50
   2010 Outlook                          51


Financial Highlights                    53
   Financial Overview                    54
   Directors Message                     56
   Auditor’s Report                      57
   Financial Statements                  58


Other information                       111
   Shareholder Distribution             112
   Offices
   Contact Information
We sow. Even as we harvest.
                                                                                      & Scull
                                                                            15 Drake REPORT 2009
                                                                               ANNUAL
                                                                                 ANNUAL REPORT 2009




  COMPANY
  OVERVIEW


We are Drake & Scull International PJSC            We’ve completed many prestigious buildings
(DSI), a regional market leader delivering         in the region, helping to shape its skyline
world-class integrated engineering through         from within. Our portfolio of landmarks in the
the design and build disciplines of                UAE includes the Baynunah Tower in Abu
Mechanical, Electrical & Plumbing (MEP),           Dhabi, the Dubai Chamber of Commerce
Civil Contracting & Infrastructure and Water       and Jumeirah Beach Hotel in Dubai, the
& Power (IWP) solutions. We provide our            Shangri-La Abu Dhabi Hotel, the Kuwait
engineering procurement and construction           State Audit Bureau, the Four Seasons Hotel
services for complex projects, to private and      in Qatar and the Sultan Qaboos Great
public clients principally in the Middle East      Mosque in Oman, amongst others.
and North Africa region.
                                                   Our Integrated Management Systems,
We design the installations; we determine the      certified to ISO 9001:2000 standards,
technical specifications; we procure the           ensure full compliance with building, health
necessary materials and we construct the           and safety regulations, as well as sound
project on hand. Our integrated disciplines        environmental and energy management
and    end-to-end     solutions    capabilities    procedures.
minimise the project risk for our clients and
reduce the delivery schedule via overlaps in       Our expertise has made us market leaders in
the design and construction phases of a project.   providing    integrated    engineering    and
Through our distinctive operational model, we      contracting services to the private and public
                                                   sectors. With the experience and support of a
have achieved an indisputable prominence and
                                                   dedicated, professional workforce, our
a renowned regional reputation for delivering
                                                   performance-based services, combined with
fast track projects, as per the client’s
                                                   our expert knowledge, processes and
requirements of time, cost and quality.
                                                   systems, help customers achieve optimum
Our engineers have extensive international         asset performance.
experience on projects of complex size and
                                                   We are a leader through experience, and we
scope. We provide technologies and
                                                   have established our regional leadership
world-class project management skills,
                                                   position over 44 years of successfully
combined with our proven business consulting
                                                   completing the most complex projects.
and industry-leading safety programs, to
ensure schedule certainty and long-term value
on our clients' most challenging projects.
                                                                                              16      Drake & Scull
COMPANY OVERVIEW                                                                                      ANNUAL REPORT 2009




Our Values   Evolution of    End to End    Corporate    Competitive     Corporate           CSR &           Human
               DSI PJSC     Capabilities    Strategy     Advantage     Governance    Sustainability      Resources



    16            17             19            20             22            23              25                26

                                INNOVATION
                                We encourage innovation to cultivate originality and pursue new
                                ideas and technologies, while introducing the right processes and
                                models to put them to work safely, quickly and efficiently, in order to
                                continuously improve the standards and the diversity of our
                                services for the common benefit of all stakeholders.



                                PEOPLE
                                We recognise that our people are the heart of our organisation. We
                                strive to provide an environment that attracts, motivates, and
                                develops individuals, and while encouraging cooperative efforts at
                                every level and across all activities in the company. We create and
                                implement a succession/ career progression planning program that
                                clearly articulates corporate expectations while charting a course for
                                employee development.



                                PASSION
                                We believe that great success requires heart and dedication. We
                                embrace and foster passion in every aspect of our business from
                                innovation and learning, to management and customer satisfaction,
                                to employee and skills development.
                                                                                                                  17 Drake & Scull
COMPANY OVERVIEW                                                                                                        ANNUAL REPORT 2009




Our Values   Evolution of    End to End          Corporate       Competitive       Corporate                CSR &            Human
               DSI PJSC     Capabilities          Strategy        Advantage       Governance         Sustainability       Resources



    16            17               19                 20                22                23                   25               26
                        The Evolution Of Drake & Scull                            Headquarters and Zayed University in 1996, and

                        International PJSC (1881 – Present)                       Jumeirah Beach Hotel in Dubai in 1997. All these
                                                                                  projects have since become timeless and iconic
                        Our history began over 100 years ago with the             symbols of grandeur and magnificence, of which we
                        foundation of two companies – Drake & Gorham,             believe our company’s original founders from over a
                        electrical engineers, and Arthur Scull & Son, sanitary    century ago - Bernard Drake, Marshall Gorham and
                        engineers. Both of these companies were founded by
                                                                                  Arthur Scull - would have indeed been very proud.
                        Victorian-era entrepreneurs with inventive minds, a
                        talent for business, and remarkable drive and energy.
                                                                                  With the population of the United Arab Emirates
                                                                                  expanding at an average rate of 4.6 percent per
                        Although the two companies grew separately until
                                                                                  annum since 2000, a growing need for infrastructure
                        1964, they shared a remarkably similar outlook and
                                                                                  projects of all kinds has emerged. The residents of
                        history, with considerable experience in working on
                                                                                  the United Arab Emirates are among the highest per
                        large, complex projects: both had been in existence
                                                                                  capita water users in the world, consuming an
                        for more than 70 years, and both possessed a long
                                                                                  average of 550 litres per day, as reported by the
                        tradition of training apprentices to a very high
                                                                                  Environment Agency - Abu Dhabi (EAD), compared to
                        standard of craftsmanship. Thus, their merger not
                                                                                  350 liters per day in America and 200 litres per day in
                        only made strategic and economical sense, but was
                                                                                  Europe, as per the World Water Council.
                        cemented in the shared value of constantly striving to
                        be the best - through best practices, a commitment to
                                                                                  Over USD 340 Billion in liquidity flowed into the
                        innovation, and working with the best talent.
                                                                                  region in 2005 and 2006. This has fueled double-digit
                                                                                  economic growth (18% in 2005; 12% in 2006) and
                        Towards the end of the 1960s, the Middle East market
                                                                                  raised per capita incomes. High liquidity meant low
                        had begun to open up, and the newly merged Drake &
                                                                                  borrowing/carrying costs for developers, which
                        Scull Company started acquiring significant amounts
                                                                                  fuelled the real estate industry and resulted in a
                        of work. Following an appointment by the Saudi
                                                                                  construction boom.
                        Arabian Ministry of Finance, Drake & Scull carried out
                        the electrical contract of the Intercontinental Hotel &
                        Conference Centre – a beautiful development               In   2006,     recognising     the     potential    for
                        designed by a British architect following an              infrastructure-related activities, our management
                        international competition.                                implemented a strategy to diversify the company’s
                                                                                  activities vertically by venturing into Infrastructure,
                        Subsequently, Drake & Scull was established in Abu        Water & Power (IWP) solutions, with a specific focus
                        Dhabi in 1966 and Dubai in 1976, leading to a number      on the design & build of district cooling, water and
                        of high-profile projects being completed in the region    wastewater treatment plants, and power generation
                        that include King Hussein Medical City in Jordan, Gulf    and distribution. By 2007, IWP was working in Dubai
                        Hotel in Bahrain in 1967, Al Bustan Hotel in Oman in      on the two largest district cooling schemes in the
                        1985, Emirates Aviation Training Centre in Dubai in       world at the time, the 60,000 TR Jumeirah Beach
                        1993, Baynunah Tower in Abu Dhabi and Dubai               Residence District Cooling Scheme and the 50,000
                        Chamber of Commerce in 1994, the Dubai Police             TR Dubai Festival City District Cooling Scheme.
                                                                                                           18    Drake & Scull
COMPANY OVERVIEW                                                                                                 ANNUAL REPORT 2009




              In 2006, following the establishment of IWP                  and contractors, we then needed further capital to
              operations, an increased number of potential pipeline        progress our growth strategy and secure raw material
              projects and an ever-growing demand on                       supplies to continue our long history of delivering
              infrastructure in the region, we acquired, a civil           strong returns. Therefore, in mid 2008, we announced
              contracting enterprise Gulf Technical Construction           our intention to float (ITF), and in July 2008, we
              Company (GTCC), to compliment our IWP operations             launched our Initial Public Offering (IPO), with 55% of
              and capitalise on the underserviced construction             the company offered to the public. Our IPO was
              industry in the region. From design to construction,         tremendously well received by the public with around
              GTCC is involved in turnkey projects providing               45,600 subscribers appling for our shares and
              innovative solutions through value engineering and           investing funds of approximately AED 124 Billion.
              effective resourcing to expedite and optimise the
              delivery of turnkey projects. Over the last few years,       Eventually our IPO was 101 times oversubscribed.
              GTCC has rapidly grown in size and scale to become           According to a report by Ernst & Young, our IPO was
              one of the most reputable civil contracting companies        among the top 20 global IPOs by funds raised in Q3
              in the UAE, offering, innovative solutions to its clients.   2008. On 16th November, 2008 we were incorporated
              GTCC’s increasing turnover rate and manpower is              as a public joint stock company (PJSC) and
              proof of the high level of performance and                   subsequently on the 16th of March, 2009 we were
              professionalism offered to its clients. The company’s        listed on the Dubai Financial Market.
              commitment and expertise has positioned GTCC as
              the contractor of choice for many clients seeking value      We were delighted by the extremely strong response
              engineering and state of the art solutions.                  to our IPO. It was a direct reflection of our successful
                                                                           40 years history in the UAE, and an indication of
              With the UAE real estate sector growing strongly and         investors’ trust in our ambitious growth strategy and
              by being a complete end-to-end engineering provider          underlying financial and technical strength.
              in the construction industry, we played an integral
              part in many of the country’s most prestigious               The key elements of our growth strategy are to
              development projects. Supported by our leading               expand geographically across the Middle East &
              market position, strong brand recognition, proven            North Africa region and into new customer segments
              financial and management strength, successful track          through selective acquisitions and joint ventures, as
              record of delivering complex projects to demanding           well as internally to develop new opportunities in our
              quality, time and budget requirements, all meant             industry, to further reduce our exposure to periodic
              that we were well placed to capitalise on future             downturns in individual markets.
              growth opportunities.
                                                                           All throughout 2009 we have worked towards
              By 2008, the total value of projects under construction      realising our strategic growth plan and therefore
              in the GCC was estimated at USD 1.5 Trillion. The UAE        expanded our geographic and services reach
              had the largest construction market in the GCC, Taib         organically and inorganically.
              Research estimated the total value of active projects at
              USD 350 Billion; according to data published in early        From our humble beginnings, we have developed into
              2008 by the UAE Ministry of Economy, the nation’s            a world-class, end-to-end solutions provider that is
              construction industry had grown by 17% since 2007.           now a publicly-listed company. With great confidence
                                                                           derived from our previous successes, we look towards
              As we were increasingly becoming a preferred                 the challenges and opportunities of the 21st century
              provider to some of the most respected developers            with tenacity, optimism and enthusiasm.
                                                                                                                19 Drake & Scull
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                        End to End Capabilities                                   These business streams are backed up by
                                                                                  engineering that includes design and implementation,
                        While our company was historically purely involved        operational support that includes procurement,
                        in MEP engineering solutions, our vision to provide       projects control and commercial, in addition to
                        integrated engineering disciplines, ultimately for the    Quality, Health and Safety (QHSE) estimation
                        optimum benefit of our clients, prompted a                and finance.
                        diversification of our business lines that continually
                        evolves in search of new opportunities.                   With our MEP, Civil, and IWP capabilities we are
                                                                                  exploiting more than 95% of the construction
                        At present, we are involved in every stage of a           industry as a whole, taking into account that civil
                        project, from the design stage, at the drawing board,     construction takes up around 50% of the entire
                        to handing over the keys, at project completion,          industry, MEP accounts for 30%, in addition to water
                        focusing on all structural work, electrical work,         and power projects which account for 15% out of the
                        plumbing, air conditioning, heating, in addition to the   remaining 20%. The total value of contracts awarded
                        infrastructure work, such as district cooling, sewage     in 2009 in the Gulf was about USD 70 Billion.
                        treatment and water treatment.
                                                                                  Our 3 business streams complement each other by
                        To achieve integrated project engineering, our            providing exceptional value to our customers through
                        business model is divided into 3 distinct and yet         seamless engineering and procurement capabilities.
                        coherent business streams, “MEP”, “Civil” and
                        “IWP”. Our business streams share a common                With this unique business model, we are truly the
                        characteristic: an inherent ability to build and          only end-to-end service provider in the engineering
                        maintain lasting customer relationships through           and construction industry.
                        integrated process-synergies that begin with
                        management capabilities and extend into the work
                        ethic of our ground teams, bringing our customers
                        superior service, anytime, anywhere.
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               DSI PJSC      Capabilities               Strategy          Advantage       Governance         Sustainability      Resources



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                        Growth Strategy                                                  We continue to evaluate numerous acquisition
                                                                                         candidates to acquire MEP and general contracting
                        The key element of our growth strategy is to expand              firms to expand our presence.
                        geographically across the Middle East & North
                        Africa region and into new customer segments                     In addition, we will continue to seek acquisitions in
                        through selective acquisitions and joint ventures as             geographic markets in which we are not presently
                        well as developing new skills internally to capitalise           located to take advantage of growth opportunities
                        on   new       opportunities     in     the   industry.   Such   and to follow customers as they expand into new
                        expansion should further reduce our exposure to                  markets. As we look ahead, we will continue to
                        periodic downturns in individual markets. This                   evaluate numerous companies that would be able
                        expansion will be accomplished through organic                   to compliment our business model & provide us
                        growth as we intend to expand our existing Civil                 with intellectual property rights, which will give us a
                        Contracting and MEP services business to respond                 competitive edge.
                        to growth in existing markets and to add capabilities
                        to enhance opportunities for growth. As a result of
                        synergies created and further integration of its
                        services, we are focused on growing our market
                        share while maintaining profitability standards.

                        Acquisition Growth
                        In November 2009, we announced the acquisition of
                        Passavant -Roediger a global expertise in wastewater,
                        water and sludge treatment technologies with over                     Jumeirah Beach Hotel, 1997, Dubai - UAE
                        5,000 installations and presence in 13 countries
                        across Europe, Middle East, North Africa and Asia.
                        Under the acquisition agreement, DSI now owns 82%
                        of Passavant-Roediger in partnership with Bilfinger
                        Berger,    a    publically     listed    German      company
                        internationally active in construction services. We then
                        continued our growth by acquiring 75% of Drake &
                        Scull International for Electrical Contracting - a
                        prominent Mechanical, Electrical and Plumbing (MEP)
                        player in Kuwait which was previously owned by Drake
                        & Scull Group and Kuwait Holding Company.
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Capitalising on our            Integrated Engineering                                    Strong Management Team
history of excellence                                                                    Our experienced management team also puts us at
                               We are a premium contractor that is involved in
and achievement and            the projects from the initial design phase and            an advantage as each of the members not only have
investing in a brighter        procurement, all the way to construction, offering        stellar track records and added to the value of the
                                                                                         company in their own right, but they work
future since 1966, we          quality end-to-end construction services backed
                               by over 40 years of successful experience in the          exceptionally well together, whether it is: Khaldoun
have earned our                                                                          Tabari, Vice Chairman and CEO and has led the
                               region. Through our subsidiaries and business
privileged stature as a        streamlines, we offer our capabilities as a               development of the company from a local MEP
preferred partner for          multi-service engineering contractor to bring every       contractor to a regional leader in the construction
                                                                                         industry since 1998; Tawfiq Abu Soud’s, member of
many of the premium            customer the best in technical services and project
                               management. We have a unique business model               the BOD and DSWP Executive Director whose key
developers in the region                                                                 responsibility is to expand water & power operations
                               and a competitive solution offering that allows the
and highly reputable           customers to have only one point of contact for all       for DSI, both vertically and horizontally, is the
public institutions. Our       their contracting services, meaning a customer            company’s longest serving executive with 14 years
                                                                                         behind him, and has had the opportunity to build,
long list of repeat clients    doesn’t have to look for, appoint or manage several
                               communications channels and is able to offer a cost       diversify and expand the divisions and departments
value our experience,                                                                    that he developed and is now directing; award
                               effective end product to his customers. In addition,
expertise and                  our portfolio of diversified engineering allows us to     winning Charles Lever, Chartered Engineer and
commitment to quality,         manage our way out of a downturn by expanding             Fellow of the Chartered Institute of Building Service

safety, time and cost.         abroad and catering into new industry segments.           Engineers Patrons, Director of MEP; Michael
                                                                                         Salmon, Chief Commercial Officer, with over forty
We stand out as a                                                                        years experience in the engineering and construction
leading regional player,       Financial Strength
                                                                                         industry who joined from DSI UK; Zeina Tabari, Chief
due to a combination           Our Initial Public Offering (IPO) proceeds of AED         Corporate Affairs Officer and principal spokespeople
of our technical,              1.2 Billion have made us financially stable, which,       for the company, whose key responsibility is to
                               during these uncertain times have proven to be            manage all communication between DSI, the
operational and
                               vital. Our cash rich position provides us with better     financial community, and other stakeholders; and
management                     access to capital with leading financial institutions,    finally Saleh Muradweij, Executive Director of the
capabilities.                  which is a significant advantage when bidding for         company’s civil construction arm, with nearly 20
                               large projects. Our current backlog of projects is        years of successful professional experience
                               valued at AED 3.3 Billion as of 31 December and           throughout the GCC and the Levant. This “dream
                               we are currently bidding on a multitude of projects       team” as we like to call them is guaranteed to keep
                               in the region, especially KSA and Libya to ensure         the company at the forefront of the industry
                               we remain in this privileged position                     regardless of the prevailing economic circumstances.
                                                                                                                         Drake & Scull
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                        Relations with Shareholders                                We have chosen to focus on two equally important
                                                                                   aspects, one being the environment as we must be
                        Communication with shareholders, institutional
                                                                                   cognisant of the responsibility placed upon us to
                        investors, the financial community, the media, and
                                                                                   safeguard the environment and provide commercially
                        other third parties is at the cornerstone of our
                                                                                   viable solutions, and second, which is directly related
                        operations. We operate a structured program of
                                                                                   to the nature of our business, is the welfare of our
                        investor relations, based on formal announcements
                                                                                   workforce. Since our inception in the UAE in 1966,
                        relating to share price sensitive information,
                                                                                   implementing the highest standards of health, safety
                        significant events and financial results, in compliance
                                                                                   and welfare has always been an important
                        with ESCA and DFM regulations. To ensure fair
                                                                                   management responsibility that is on a par with
                        disclosure to all stakeholders at the same time, we
                                                                                   production and profitability. This commitment enabled
                        refrain from disclosing any information specifically
                                                                                   us to complete more than 27 Million man-hours on our
                        designated to financial analysts, financial institutions
                                                                                   on-going projects without one serious injury or fatality.
                        or other parties before disclosing the information to
                        the market as a whole. Information is kept confidential    We are members of the Emirates Environmental
                        unless disclosure is authorized or legally mandated.       Group, an NGO devoted to protecting the
                        We have appointed a Chief Corporate Affairs Officer        environment through education, action programs and
                        whose responsibility is to provide information and         community involvement, as well as the Emirates
                        answer queries of stock exchange officials,                Green Building Council (EGBC), a non-profit
                        shareholders and institutional investors. We also have     organization formed with the goal of advancing green
                        a market disclosure policy that dictates what type of      building principles for protecting the environment and
                        information is shared, when and how to safeguard           ensuring sustainability in the United Arab Emirates.
                        shareholder rights and in compliance with ESCA.            We are actively involved in the yearly Clean-Up UAE
                                                                                   Day where our staff volunteers for the coordinated
                        In addition, we at DSI maintain a dialogue with
                                                                                   clean-up effort of Dubai Investment Park where we
                        representatives of institutional and other shareholders
                                                                                   are headquartered. We are also members of Build
                        regarding long-term business strategies, financial
                                                                                   Safe UAE (BSU), a not-for-profit organisation aimed
                        performance and corporate governance in order to
                                                                                   at improving the health, safety and welfare conditions
                        establish a mutual understanding of objectives.
                                                                                   of all construction industry stakeholders through the
                        Corporate Social Responsibility                            free exchange and sharing of information between
                                                                                   organisations working in the UAE.
                        We at DSI are committed to exercising responsibility
                        for society in every country in which we operate, so as    We have a dedicated Quality, Health & Safety, and
                        to help create a secure future for all. Corporate          Environment (QHSE) department which reviews,
                        responsibility is one of the levers by which we seek to    maintains and implements QHSE policies across all
                        promote sustainable business development. We view          divisions in line with strict international standards and
                        corporate responsibility as a strategic, management-       regulations, while promoting a positive health and
                        driven task that integrates our business, environmental    safety culture, and we are honored to be part of BSU
                        and citizenship activities to create sustained tangible    and look forward to sharing our experience with the
                        and intangible value for our company and our               other members and promoting the right of every
                        stakeholders by ethically sound means.                     worker to have an injury free work place.
                                                                                                                             Drake & Scull
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                            Our corporate governance philosophy at Drake &             Code of Conduct
                            Scull envisages adherence to the highest levels of
                                                                                       We also adopted a Code of Conduct and other
                            transparency, accountability and equity, in all areas of
                                                                                       internal policies and guidelines, consistent with our
                            its operations and in all interactions with its
                                                                                       purpose and values, which comply with the laws, rules
                            stakeholders, including shareholders, employees,
                                                                                       and regulations that govern our business operations.
                            government and other agencies.
                                                                                       The Code of Conduct applies to all employees,
                            We developed corporate governance policies and             temporary workers and other independent contractors
                            guidelines that define the interrelationships between      and consultants when engaged by, or otherwise
                            the management levels of the company and                   representing, us and our interests.
                            authorities in compliance to the direction and
                            requirements of Emirates Securities & Commodities
                                                                                       Board of Directors
                            Authority (ESCA), Dubai Financial Market (DFM) and         Our Board of directors is responsible for setting the
                            Commercial Companies Law Federal Law No (8).               company’s    strategic   aims,    ensuring   that   the
                                                                                       necessary financial and human resources are in place
                            Our Corporate Governance Framework spans across
                                                                                       for us to meet our objectives and that management is
                            three different levels to cover shareholders, board of
                                                                                       focused on implementing the approved strategy. It is
                            directors and executive management. Shareholders
                                                                                       accountable to our shareholders and seeks to ensure
                            represent the highest level of governance and set the
                                                                                       that our business objectives are aligned with the
                            framework within which DSI operates as a Public
                                                                                       expectations of shareholders and that all our
                            Joint Stock Company.
                                                                                       operations are effectively managed in a manner that is
                            The board of directors is accountable to our               properly focused on those objectives as well as
                            shareholders and seeks to ensure that our business         conforming to regulatory and ethical requirements of
                            objectives are aligned with the expectations of            ESCA and DFM.
                            shareholders and that all operations are being             Board meetings are held 6 times a year with a
                            effectively managed in a manner that is properly           maximum interval of 2 months between meetings.
                            focused on those objectives, as well as conforming to
                                                                                       It consists of nine prominent executive and
                            regulatory and ethical requirements.
                                                                                       non-executive       directors    (independent       and
                            The executive level implements the corporate               non-independent) with extensive experience.
                            strategy   and   manages     our   day-to-day    affairs
                                                                                       The board agenda is carefully considered by the
                            according to the business plan approved by the board
                                                                                       chairman, CEO and company secretary to ensure
                            while   taking   into   account    the   protection   of
                                                                                       that there is a balance between operating decisions,
                            shareholder funds, international best practice as well
                                                                                       performance reporting and more forward looking
                            as the pragmatic day-to-day operational needs.
                                                                                       strategic issues.
                                                                                                                  24      Drake & Scull
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              Board Committees                                           Risk Control Programme and Risk Financing Strategy
                                                                         to address the impact of significant risk which may
              Our Board established three committees to assist it in
                                                                         otherwise cause loss or impact, as well as overseeing
              discharging its oversight responsibilities: Executive,
                                                                         the     management            of    credit,    market       liquidity,
              Remuneration and Audit. The executive committee,
                                                                         operational, legal and other risks, within a framework
              chaired by the Chairman and comprising of the CEO,
                                                                         of prudent and effective business controls and
              Executive Directors and key officers develops
                                                                         processes which enable “risk” to be assessed and
              strategies and policies for recommendation to the
                                                                         managed.         The     committee            recommends           risk
              board and implements the strategy approved by the
                                                                         philosophy and tolerance for board approval, defines
              board. The Remuneration committee, comprised of
                                                                         the Company’s risk appetite and reviews risk
              independent non-executive directors and, when
                                                                         management processes. The application of Risk
              needed, the Head of HR, considers matters relating
                                                                         Management techniques is a minimum requirement
              to executive reward, including policy for executive
                                                                         for all Business Units and Projects and is monitored
              directors’ and senior managers’ remuneration and
                                                                         by the Risk Management Committee.
              their annual individual remuneration awards. The
              committee also is tasked with approving changes to         Internal Auditing
              incentive and benefits plans applicable to senior
                                                                         Our      management            at    DSI      has      established,
              managers and may also review strategic HR issues
              including     employee     retention,   motivation   and   implemented,           and     continues        to     maintain      a
              commitment, and succession planning for senior             documented internal audit procedure which ensures
              manager positions. The functions of the Audit              that all departments and project sites are regularly
              committee, comprising of independent non-executive         audited in order to determine whether their
              directors, and the external auditor in attendance, and     management conforms to the requirements of DSI
              when needed the Internal Audit Director, heads of          PJSC          manuals,        policies        and      procedures,
              internal audit, risk and compliance, is approving the      international standards, local laws & regulations
              appointment of external auditors; overseeing their         and contractual agreements. The audit is conducted
              relationship with the Company; monitoring the              twice a year by a trained independent internal
              effectiveness of, and receiving regular reports from       auditor for each function being audited in order to
              the internal audit and compliance functions; reviewing     ensure impartiality and objectivity of the audit
              financial statements, procedures and systems of            results. We are also subject to an external audit by
              internal control over financial reporting; reviewing       a     third    party    for    Quality        Health      Safety     &
              arrangements for compliance with the requirements          Environment (QHSE) and financial auditing to
              of regulators; receiving reports on the operation of the   ensure compliance to the international standards
              Company’s whistle blowing arrangements; and                and global best practices.                     In the case of
              monitoring compliance with the Code of Conduct.            inter-company acquisitions, such as the recent
                                                                         acquisition of “Drake & Scull International for
              Risk Management                                            Electrical Contracting”, a prominent player in
              In the spirit of entrepreneurial leadership, we            Mechanical        Electrical        and       Plumbing       (MEP)
              established     a   Risk    Management       Committee     contracting in Kuwait previously owned by Drake &
              comprising a representative group of employees             Scull Group and Kuwait Holding Company in
              including the Chief Commercial Officer, Chief              December 2009, strict due diligence was adhered to
              Financial Officer, Corporate Finance Manager and at        and coordinated with a third party auditor (in this
              least one Area General Manager or Business Stream          case          PricewaterhouseCoopers)                to      ensure
              Director from each Business Stream. This committee         compliance with the highest standards, a process
              was established to identify exposures and develop a        that can last up to 9 months.
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                        Sustainability                                                  experience and dedication our people bring to their jobs
                                                                                        every day, and to help them succeed, we strive to provide
                        In all our operations, we pursue a strategy of                  a positive and productive work environment. We are
                        sustainability. The driving force behind this strategy is the   privileged with our talented, hard working and passionate
                        firm belief that, not only governments and international        employees and in recognition of their many extraordinary
                        organizations, but also companies with their power of           efforts; in 2009 we have initiated the 1st annual “DSI
                        innovation and investment bear a special responsibility to      PJSC Employee Excellence Awards” which was open
                        ensure the future viability of global development.              across all our subsidiaries divisions and areas, to
                                                                                        recognize some of the best talents in our company. The
                        We apply sustainable engineering designs to all our
                                                                                        categories were; Safest Project of the Year; Project
                        projects and were recently awarded the prestigious
                                                                                        Manager of the Year; Engineer of the Year; Department
                        Middle East MEP “The Sustainable Design of The Year”
                                                                                        Manager of the Year; and Employee of the Year.
                        award in recognition of our contributions to the King
                        Abdullah University of Science and Technologu                   The strength of our Human Resources (HR) lies in our
                        (KAUST) in KSA. This project was designed to be                 conscious focus on overseeing the adequacy of our
                        environmentally friendly and aimed to be the first in the       12,000 employee-strong workforce and managerial
                        region to achieve the LEED Platinum Certificate and a           assets to ensure there is ample depth of resources
                        hundred year sustainability. This meant that we had to          and appropriate succession planning that will ensure
                        abide by strict LEED regulations such as incorporating          continuity for the next generation. We recruit, train,
                        the use of photovoltaic cells, solar water heaters, solar       promote and develop talent by identifying internal
                        towers, recyclable products and low-carbon emissions            personnel with the potential to fill key positions. Our
                        into their engineering plans.                                   succession planning ensures the availability of
                                                                                        experienced and capable employees that are
                        In the future, we will intensify our focus on sustainability
                                                                                        prepared to assume these roles as they become
                        as an increasingly more important part of responsible
                                                                                        available, and takes into account the challenges and
                        corporate governance. We use our technical
                                                                                        opportunities facing us as a company and what skills
                        innovations to spur positive and ethical economic
                                                                                        and expertise are needed in the future. Leadership
                        growth in all countries we operate in – and thereby
                                                                                        needs are regularly reviewed to ensure our continued
                        open new markets. This strategy will maintain our
                                                                                        ability to compete effectively in the marketplace. By
                        success over the long term. We firmly believe that
                                                                                        doing so, we not only improve our work-force
                        sustainable management is the only way to meet our
                                                                                        capabilities and overall performance, but also our
                        responsibility as a global player toward all parties
                                                                                        employee committment and therefore retention.
                        involved: our shareholders, the global community and
                        the generations to come.                                        We encourage our employees to continue
                                                                                        developing their skills through management,
                        Human Resources
                                                                                        technical and professional training, and by doing so,
                        One of our core values is our commitment to our                 many of our managers have progressed from
                        employees. Our success directly reflects the skills,            apprentice to director level.
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                       Management Training                                          Succession happens through a rigorous training and
                                                                                    promotions programme that may span years. An
                       We provide managers with the training they need to
                                                                                    example of this is one of our newly appointed
                       reach the highest professional levels to ensure that
                                                                                    Operations Director based in Oman who started with
                       our managers have the skills needed to handle the
                                                                                    us 5 years ago as site engineer and was promoted to
                       most demanding circumstances.
                                                                                    Operations Manager. There are several similar
                       Technical Training                                           examples where our staff are trained in Dubai and
                                                                                    groomed for international posts in our offices around
                       We provide specialist mechanical and electrical and
                                                                                    the world. This allows fast mobilization and
                       health and safety training.
                                                                                    operations turnaround in our new regional offices, in
                       Professional Training                                        addition to uniformity of our policies and procedures
                                                                                    and values which eventually translate into direct
                       We provide job-specific training wherever it is required,
                                                                                    benefit to clients and ultimately to projects.
                       and we will help identify and finance appropriate courses.

                       Health and Safety/ Environmental                             To keep up with the high demands of hiring as we
                                                                                    expand geographically, a contract has been signed
                       Training                                                     with Bond International Software - a worldwide
                       Through the provision of a continuous health and             provider of software solutions in the field of Human
                       safety training programme, via our integrated                Capital Management – to deploy Bond Talent, a
                       Quality, Health and Safety and Environment                   fully-hosted    online   recruitment     and    talent
                       (QHSE) management systems, we have one of the                management software solution. The solution
                       best safety records in the industry. We provide              provides an online web portal-based recruitment
                       information, instruction, training and supervision to        application and applicant tracking system throughout
                       our staff and encourage a responsible attitude. Our          DSI regional operations. This gives the recruitment
                       goal is to promote a positive health and safety              team more time to concentrate on development
                       culture, so we can prevent accidents and avoid               rather than administrative tasks.
                       hazards. To further showcase our commitment we
                       have become members in Build Safe UAE which is
                       a not-for-profit organization consisting of major
                       international and local companies in the
                       construction industry that share a common cause:                We recruit, train, promote and develop talent
                       worker welfare and safety. The organization aims to             by identifying internal personnel with the
                       promote an agreed minimum of health and safety                  potential to fill key positions.
                       standards for the benefit of all workers in the
                       construction industry in Dubai and the UAE as a
                       whole. The        organization     also   seeks    to
                       communicate best practice and the importance of
                       construction safety to all project stakeholders.
                                                                                                            27 Drake & Scull
COMPANY OVERVIEW                                                                                                  ANNUAL REPORT 2009




              Information Technology                                        Our corporate IT constantly designs and implements
                                                                            new tools and seeks technologies that help top
              The Information Technology (IT) we use is best                management and end users to be instantly updated with
              described as the latest in engineering software,              easy to use and user-friendly developed applications.
              acquired with the main purpose of streamlining                Standard policies and procedures have been
              operations. Much time and effort is spent yearly on           developed, adopted and implemented in all branches
              updating our IT systems to be at the forefront of cutting     and subsidiaries of the corporation. This not only saves
              edge technology in terms of knowledge management,             time and money, but keeps us at the forefront of
              knowledge transfer, and maximizing the efficiency of          international markets.
              internal and external communication. IT strategies are
              set at the board level and applied at each division,          2010 Snapshots
              operation and unit.
                                                                            In 2010, our expansion efforts continue with the
              During the past year, our corporate IT operations have        establishment of two new subsidiaries: “Drake & Scull
              expanded to cover all the geographical areas where            Water and Power L.L.C” (DSWP), which was
              we exist. With the rapid growth of our company, it was        established to manage and control all of our new and
              necessary for the IT operations to create and adopt           existing Water & Power activities across the MENA
              different technologies to keep up with our rapid              region, and “Drake & Scull Construction L.L.C”
              growth. Our IT is becoming the corporate backbone             (DSC), which was established to manage and control
              and serves as a hub where all communications,                 all our regional civil construction activities outside
              system applications and technologies are centralized          Dubai and Abu Dhabi.
              and initiated.

              In order to achieve maximum support from
              headquarters to all branches and subsidiaries, the need
              to standardize the different technologies has become a             With the rapid growth of
              major necessity. The major components of the IT
              operations environment revolves around maintaining                 our company, it was
              the servers that are built using the latest technologies
              which host major applications and services such as the             necessary for the IT
              ERP and the mail systems. Through the implementation
              of servers check applications and software as well as
                                                                                 operations to create and
              smart ‘UPS’, the corporate IT has a true visibility of what        adopt different
              is occurring at any given time. It monitors the
              availability and performance of any IP enabled device              technologies to keep up
              such as routers, switches, firewalls, servers and even
              alerts on data center high temperatures.
                                                                                 with our rapid growth.
Each branch adds to our strength.
                                    & Scull
                          29 Drake REPORT 2009
                             ANNUAL
                              ANNUAL REPORT 2009




ACCOMPLISHMENTS IN 2009
                                                                                                         30    Drake & Scull
ACCOMPLISHMENTS IN 2009                                                                                        ANNUAL REPORT 2009




DFM Listing   Projects Completed         Growth Strategy             Acquisitions Growth            Recruitment Drive
                        and Won



     30                     30                           31                           32                              33


                     DFM Listing

                     In 2008, we offered the public 55% of our shares
                     and collected proceeds of AED 1.2 Billion. DSI is
                     listed on the DFM, commenced trading in March
                     2009 and is currently the second listed contractor.
                     Our IPO was 101 times oversubscribed, bringing
                     in around 45,600 shareholders who invested             In 2008, we offered the public 55% of our shares
                                                                            and collected proceeds of
                     funds of approximately AED 124 Billion.

                     According to a report by Ernst & Young, we were
                     among the top 20 global IPOs by funds raised in
                     Q3 2008. Currently, we are contracted to work on
                                                                           AED 1.2Bn
                     major projects in the region with a combined value
                     exceeding AED 6 Billion.

                                                                            Kuwait State Audit Bureau,
                                                                            2006, Kuwait City - Kuwait
                     Projects Completed and Won

                     Our completed projects include Shangri La Hotel
                     Abu Dhabi, Abu Dhabi National Exhibition Center
                     (ADNEC) Abu Dhabi, Zayed University Dubai,
                     Jumeirah Beach Hotel Dubai and district cooling
                     plants for both Jumeirah Beach Residence and
                     Dubai Festival City.

                     By the end of 2009, the total projects won were
                     accumulated at AED 2.2 Billion with geographical
                     spread from the GCC, Europe, and South East
                     Asia to the Levant Region.
                                                                                       31 Drake & Scull
ACCOMPLISHMENTS IN 2009                                                                      ANNUAL REPORT 2009




DFM Listing   Projects Completed   Growth Strategy   Acquisitions Growth            Recruitment Drive
                        and Won



     30                   30                 31                       32                             33


                                                        Growth Strategy

                                                        The key elements of our growth is to expand
                                                        geo-graphically across the Middle East, North
                                                        Africa and other regions through selective
                                                        acquisitions and joint ventures.

                                                        We intend to diversify on revenues, profits and
                                                        backlog which should reduce exposure to periodic
                                                        downturn and domestic market challenges.




                                                          Dubai Creek Golf and Yacht Club,
                                                          1995, Dubai - UAE
                                                                                                     32   Drake & Scull
ACCOMPLISHMENTS IN 2009                                                                                   ANNUAL REPORT 2009




DFM Listing   Projects Completed         Growth Strategy             Acquisitions Growth       Recruitment Drive
                        and Won



     30                     30                           31                         32                          33

                     Acquisitions Growth
                     In November 2009, we announced the acquisition
                     Passavant-Roediger a global expertise in
                     wastewater, water and sludge treatment
                     technologies with over 5000 installations and a
                     presence in 13 countries across Europe, Middle
                                                                            Under the acquisition agreement, we own




                                                                            82%
                     East, North Africa and Asia. Under the acquisition
                     agreement,      DSI      now    owns      82%     of
                     Passavant-Roediger in partnership with Bilfinger
                     Berger, a publically listed German company
                     internationally active in construction services. We
                                                                            of Passavant-Roediger.
                     then continued our growth by acquiring 75% of
                     Drake & Scull International for Electrical
                     Contracting – a prominent Mechanical, Electrical
                     and Plumbing (MEP) player in Kuwait which was
                     previously owned by Drake & Scull Group and
                     Kuwait Holding Company.

                     As we look ahead, we will continue to evaluate
                     numerous companies that would be able to
                     compliment our business model and provide
                     intellectual property rights which would give us the
                     competitive edge.
                                                                                           33 Drake & Scull
ACCOMPLISHMENTS IN 2009                                                                         ANNUAL REPORT 2009




DFM Listing   Projects Completed   Growth Strategy     Acquisitions Growth             Recruitment Drive
                        and Won



     30                   30                 31                           32                           33




                                                     Recruitment Drive
                                                     Through our ongoing efforts to identify promising talent,
                                                     skills and develop such competencies into exceptional
                                                     careers, we regularly carry out recruitment drives to give
                                                     prospective employees the opportunity to work under the
                                                     DSI umbrella. Over the last year, our business streams
                                                     have recruited approximately 220 new staff to fill positions
                                                     ranging from back office operations to project managers
                                                     and directors.
We have survived the test of time.
                          35 Drake & Scull
                              ANNUAL REPORT 2009




BUSINESS STREAMS REVIEW
                                                        36 Drake & Scull
BUSINESS STREAMS REVIEW                                     ANNUAL REPORT 2009




         Having entered into the industry as MEP
         specialists, we have implemented
         progressive growth strategies in 2009 to
         expand into Thailand, Jordan, Libya and
         Kuwait. We aim to build upon our already
         sterling reputation to position ourselves in
         the top-tier of any market we operate in.
                                                                                         37 Drake & Scull
   MECHANICAL,                                                                                ANNUAL REPORT 2009



   ELECTRICAL &
   PLUMBING
   (MEP)

Our expertise in Mechanical, Electrical & Plumbing        To ensure successful project delivery, we utilise
(MEP) contracting spans over one hundred years and        project management tools, CAD-led design teams
started when British entrepreneurs Drake & Gorham         and highly-skilled, internally trained and developed
and Arthur Scull & Son founded their electrical and       installation teams, complemented by prefabrication
sanitary engineering companies. Today, our MEP            off-site manufacturing options and long-standing
contracting services are provided to a broad range of     supply chain relationships. Our work force has
commercial, industrial and residential projects. It was   grown sustainably, starting in 1966 with 25
some 40 years ago when we began operating in              employees as an MEP company and reaching
the MEP discipline in the Middle East, and our            12,000 employees accumulatively by 2009.
sustained accomplishments confirm our company’s
recognition as an industry leader in the fields of         With the benefit of our international experience we
innovation and value engineering.                         are well versed to offer customised and specialised
                                                          solutions for a range of industries. Our projects
Our MEP services are delivered through highly             range from hospitals, which require complete
sector-experienced       engineers     and      project   hygienic construction and occupancy environments
management teams who measure their success by             that command sanitised ventilation systems and
exceeding expectations and meeting the client’s           zero electricity downtime, to airports that need a
time, cost and quality requirements. Our MEP              different set of operational requirements that
business has established an enviable reputation for       ensure the safety of passengers and personnel
sustained excellence built on delivering complex          along with reliability of flight schedules.
projects for the benefit of our clients. DSI MEP offers
an integrated approach, providing diverse packaged        We are qualified to deliver MEP services to any
                                                          type of facility for any industry because of our
services delivered from one integrated source.
                                                          experience and track record. Examples of our
Our MEP operation specialises in the design,
                                                          projects that attest to the diversity of our portfolio
procurement, installation and commissioning of:
                                                          include the AED 27 Million International Airport
                                                          Terminal of Abu Dhabi completed in 1969, and the
– Distribution systems for electrical power
                                                          Hong Kong HACTL Super terminal Phase 1 worth
– Lighting systems
                                                          AED 401 Million completed in 1996, the AED 45
– Low-voltage systems, such as fire alarm,
  security, communications and process                    Million Rashid Hospital Accident, Emergency and
  control systems                                         Trauma Center in Dubai completed in 2006, and
– Heating, ventilation, air conditioning, and             the most recent AED 220 Million Abu Dhabi
  refrigeration systems                                   National Exhibition Center Phase II that was
– Plumbing, process and high-purity piping systems        completed in 2009.
                                                                                                       38     Drake & Scull
BUSINESS STREAMS REVIEW                                                                                       ANNUAL REPORT 2009




               Throughout the years, we have been presented             PROJECT WINS
               with several Middle East MEP Awards, including
               the “MEP Contractor of The Year” and the                 2009 witnessed many project wins, the first being
               “Medium MEP Project of The Year” awards in 2007          the Mangrove Place project on Al Reem Island in
               for our works on the Kuwait State Audit Bureau           Abu Dhabi with a contract value worth AED 100
               and the “MEP Contractor of the Year” again in            Million. Winning the Kingdom of Sheba Hotel &
               2008, for the second year in a row. In December          Resort development, worth AED 226 Million, on
               2009 we were awarded “The Sustainable Design             Palm Jumeirah in Dubai saw us crowned as the
               of The Year” award in recognition of our                 MEP contractor with the most projects on the
               contributions to the King Abdullah University of         Palm. Kingdom of Sheba became our sixth
               Science and Technology (KAUST) in KSA.                   separate project on Palm Jumeirah, increasing the
                                                                        total built-up area of our projects on the man-made
               2009 REVIEW                                              island to 1.2 Million square metres. This also
                                                                        brought the total value of DSI MEP contracts on
               Despite tough market conditions, our MEP operations      the Palm to over AED 1.4 Billion.
               successfully sustained a steady income, partly due
               to the acquisition of Drake & Scull International for    Market movement showed a real potential for
               Electrical Contracting in Kuwait, and yielded            growth in Abu Dhabi and we seized this
               improvement in the top-line. The MEP business            opportunity, particularly during Q3 when we
               demonstrated a healthy order book in 2009 reflecting      successfully won the Al Muneera project for Aldar.
               a 30% increase in backlog including acquisitions and     This project consists of an office building,
               positive financial results in terms of contribution to    apartment buildings, townhouses and luxury villas,
               income and profit. Our annual revenue in 2009             as well as various commercial spaces worth
               generated from MEP was in excess of AED 1 Billion,       AED 420 Million.
               constituting roughly 57% of total the company revenue.

               PROJECTS COMPLETED

               During 2009, our MEP business delivered a number
               of successful projects. Most notable was the King
               Abdullah University of Science and Technology            Shangri-La Hotel, Qaryat Al Beri, 2007, Abu Dhabi - UAE

               (KAUST) with a contract value of SR 750 Million.
               KAUST is an international, graduate-level research
               university dedicated to inspiring a new age of
               scientific achievement in the Kingdom. The project –
               which is an example of sustainable construction – is
               the largest LEED platinum project to be delivered in
               the world. Other projects included the Abu Dhabi
               National Exhibition Centre and the Park Rotana and
               Park Arjaan Hotels, which are part of the Rotana
               Park Complex, in addition to the YAS Island Rotana
               Resort & Centro in Abu Dhabi.
                                                                                                     39 Drake & Scull
BUSINESS STREAMS REVIEW                                                                                  ANNUAL REPORT 2009




                                                                     GROWTH

              Earlier this year, the Government                      Building on our post DFM listing growth strategy,
                                                                     we expanded geographically and established
              of Kuwait announced a USD 104
                                                                     offices in Jordan, Libya and Thailand.
              Billion four-year economic
              stimulus plan which made                               As a result, we won our first project in Thailand,
                                                                     a AED 130 Million contract for The River
              proposals to invest in major                           development – a luxury condominium building
              infrastructure development                             located on the Chaophraya River, which will not
                                                                     only be the tallest building in Bangkok, but the
              throughout the State, including
                                                                     tallest building in Thailand.
              the building of roads, airports,
              hospitals and schools – estimated                      This contract incorporates the supply, installation,
                                                                     testing and commissioning of complete MEP
              to be worth over USD 20 Billion in                     works including: Air Conditioning, Ventilation,
              contract revenue – in addition to                      Plumbing & Drainage, Automatic Fire Fighting,
                                                                     Transformers, Cabling, Small Power & Lighting
              the residential and commercial
                                                                     Systems, Busbar Risers, Earthing & Lightning
              projects that will be needed to                        Protection, Dimming System, Digital Interactive
              meet the demands of Kuwait’s                           TV System, CCTV and an Access Control
                                                                     System. We are considered the only fully-
              rapid population growth.
                                                                     integrated MEP contractor in Thailand and in
                                                                     the Far East, as market currently suffers
                                                                     fragmentation in its productive offering as other
                Total value of DSI MEP contracts on the Palm over    contractors do not provide full service of MEP



               AED1.4Bn
                                                                     under one umbrella.


                                                                     Moving ahead with our horizontal and vertical
                                                                     growth strategy with the aim of expanding our
                                                                     MEP business stream across the Gulf States and
                                                                     MENA region, we acquired 75% of Drake & Scull
                                                                     International for Electrical Contracting – a
                                                                     prominent player in MEP contracting in Kuwait,
                                                                     and previously owned by Drake & Scull Group
                                                                     and   Kuwait    Holding    Company.     This   was
                                                                     considered an integral step in the company’s
                                                                     development and execution of its long-term
                                                                     strategy to expand geographically in the region.


                                  Four Seasons, 2005, Doha - Qatar
                                                       40   Drake & Scull
BUSINESS STREAMS REVIEW                                     ANNUAL REPORT 2009




   Our engineering knowledge and experience,
            We see a vast opportunity for growth in
   combined with our servicecapacity, geographical
   reach and financial strength allowed us to expand
            the Infrastructure, Water & Power and
   the DSI brand into new areas and attract and
   retain important clientele

            Telecommunications sectors. The
            consistent demand stemming from these
            essential elements has urged us to
            diversify our services, to progress with
            Drake & Scull Water and Power as our
            focal point in the years to come.
                                                                                     41    Drake & Scull
                                                                                           ANNUAL REPORT 2009



   INFRASTRUCTURE,
   WATER & POWER
   (IWP)


The creation of Drake & Scull Water & Power LLC        as the UAE, Bahrain, KSA, Algeria and Sudan, with
(DSWP) was a natural progression in the life cycle     potential growth areas in Libya, Egypt, and Oman.
of DSI and has fueled our expansion while              DSWP’s operations specialise in Design & Build,
demonstrating wider capabilities and market            Engineering, Procurement & Construction (EPC)
offering. Our engineering knowledge and                and Engineering, Procurement & Construction
experience, combined with our service capacity,        Managment (EPCM) basis and their services include:
geographical reach and financial strength allowed us
to expand the DSI brand into new areas and attract     – District Cooling
and retain important clientele such as EMPOWER         – Water, Waste Water and Sludge Treatment
and TABREED from the utility provider sector. One      – Telecommunications Infrastructure
of the motivating factors in deciding to form a        – Power Infrastructure
business stream dedicated to managing and              – Oil and Gas Infrastructure
controlling Infrastructure, Water & Power (IWP)
works was the surety that we would continuously        Building on our MEP knowledge, experience and
have a demand in the market to cater to. This has      brand recognition, DSWP has been involved in
indeed been the case due to the non-diminishing        developing some of the largest district cooling
demand for water and power; both constituting basic    projects in the world, such as those for Jumeirah
elements needed in any community.
                                                       Beach Residence and Dubai Festival City in 2006
                                                       with a combined value of AED 685 Million. Other
DSWP is a wholly owned subsidiary of Drake & Scull
                                                       distinct projects completed in the past ten years
International PJSC, providing efficient solutions and
                                                       include the AED 24 Million Dafza Offices district
innovative technologies which reduce overall
                                                       cooling system and the AED 25 Million Sheikh Zayed
electrical demand and toxic emissions and offering
                                                       Road Tabreed district cooling plant in Dubai. We
customised, integrated service solutions to its
                                                       were also responsible for designing and completing
clients. Commencing operation in Abu Dhabi in
                                                       various major projects in Abu Dhabi, such as two
2006 the division, previously designated as DSI
                                                       district cooling plants in Mussafah worth AED 92
IWP, was established as a separate entity under the
                                                       Million, the complete infrastructure works for the
name DSWP in 2009.
                                                       Ruwais Housing Complex Expansion valued at AED
                                                       39 Million, and Al Ain Diesel Power Station valued at
The DSWP Headquarters is based in Dubai and
                                                       AED 25 Million.
operates through projects in the MENA region such
                                                                                                    42    Drake & Scull
BUSINESS STREAMS REVIEW                                                                                   ANNUAL REPORT 2009




               2009 REVIEW                                            PROJECT WINS

               Despite the market challenges, the revenue from        2009 marked the company’s largest project win
               the DSWP business stream increased to AED 361          to date – a 65,000 tonne Design & Build district
               Million. This was due to continued spending by         cooling plant in Durrat Al Bahrain valued at a
               countries in the region on infrastructure projects.    total AED 596 Million. The business stream was
                                                                      also awarded a AED 36.7 Million district cooling
               PROJECTS COMPLETED                                     project in Wahat Al Khartoum in Sudan, where
                                                                      we designed a Central Utility Plant comprising a
               During 2009, DSWP successfully completed the           Chilled Water Generation Plant, which will be
               Nad Al Sheba District Cooling Plant, a project worth   able to cool 45,000 tons of water, and a 10MW
               AED 158 Million. DSWP was responsible for              Power       Generation   Plant     and    Electrical
               completing the project from the design stages          Substation to serve the whole development
               through to the construction of the building, taking    including     transformers,      switchgear    and
               into consideration that this plant would provide       synchronisation system.
               cooling for the entire Meydan City in its current
               state and would adapt to meet its future
               requirements. DSWP completed two plant rooms at
               Motor City in Dubailand. Valued at AED 329 Million,
               this project was awarded by Emirates District
               Cooling Company (Emicool) to a joint venture that
               was established between DSI and Thermo.



                  Meydan, 2010, Dubai - UAE
                                                                                                             43     Drake & Scull
BUSINESS STREAMS REVIEW                                                                                             ANNUAL REPORT 2009




                GROWTH                                                       cost and energy efficient industry standard setting
                                                                             technology. The enterprise value of this acquisition
                Over the past year, DSWP expanded its existing               was AED 145 Million, and the acquisition was
                IWP operations to encompass infrastructure                   funded by 50% cash from IPO and 50% Bank
                solutions for the telecommunication sector. The              financing. Passavant–Roediger’s backlog stood at
                addition of these turnkey services, built around             AED 410 Million on December 31, 2009.
                the company’s core strengths in the Design &
                Build, Civil Contracting, and MEP fields, was a               The company develops and provides leading
                natural progression for DSWP operations and                  unrivalled     technologies      and      processes   in
                complemented       the     portfolio   of        utilities   wastewater        treatment,      sludge      treatment
                infrastructure which the company has been                    including     thickening,    dewatering,      digesting,
                delivering for many years.                                   drying,     pasteurisation     and   water    treatment
                                                                             covering      mechanical       treatment,     biological
                Forming strategic partnerships is integral to the            treatment, water and waste air management, and
                future   development      of   DSWP.        We      thus     waste to energy (WTE) plants, including the
                established an alliance with Assyce Group to                 company’s        unique        in-house      developed,
                develop alternate energy products for the telecom            world-renowned sludge digestion technology,
                sector in the Middle East and Africa. The alliance           which is a pioneering system for the production of
                has been agreed based on the two companies’                  usable materials from sewage sludge.
                recent activities in the development of a grid-free
                telecom solution and will focus on expanding the
                portfolio of products through custom-made value                   The enterprise value
                engineered solutions.
                                                                                  of this acquisition was
                On the acquisitions front, DSI has acquired 82% of                AED 145 Million, and the
                Passavant-Roediger, a German global developer
                of water, wastewater and sludge treatment
                                                                                  acquisition was funded
                technologies with a presence in 13 countries                      by 50% cash from IPO and
                across Europe, MENA and Asia and with over
                5,000 worldwide installations, thus strengthening
                                                                                  50% Bank financing.
                the presence and participation of DSI in this sector.             Passavant–Roediger’s
                Passavant–Roediger commands an undisputed,
                                                                                  backlog stood at
                worldwide, market-leading position in the niche of                AED 410 Million on
                sludge digestion for municipal and industrial
                                                                                  December 31, 2009.
                wastewater treatment plants, introducing a new
                                                                                                                   & Scull
                                                                                                         44 Drake REPORT 2009
BUSINESS STREAMS REVIEW                                                                                     ANNUAL




                PASSAVANT-ROEDIGER

                Passavant-Roediger            currently     operates    in
                Romania, Hungary, Poland, Croatia, Germany,
                UAE, Turkey and China, with projects around the
                world including Algeria, Jordan, Lebanon, Egypt,
                UAE and KSA. With this acquisition, DSI will own
                intellectual property rights and become a key
                regional player in the wastewater treatment
                industry, bringing to the Middle East truly
                innovative global solutions backed by 40 years’
                worth      of    local   experience    in   procurement,
                engineering and construction capabilities.


                DSI will expand Passavant-Roediger in the
                Middle East and GCC region by integrating back


                to bring every customer the best in technical
                                                                                The acquisition will give DSI technology
                services        and      project   management.         The      driven solutions which provides us with
                acquisition will give DSI technology driven                     a competitive edge
                solutions which provide us with a competitive
                edge and global expertise to compete in niche                Future Passavant-Roediger projects will also
                markets. Through experienced onsite teams and                ensure the generation of revenues for all DSI
                expertise        in      management,        co-ordination,   business streams including MEP, and Civil
                planning, controlling, and purchasing quality                Contracting, as water and wastewater treatment
                control,        we    guarantee    that     projects   are   plants require engineering, procurement and
                completed as per the clients’ requirements of                construction    disciplines,    which     can   be
                time, cost and quality.                                      accumulatively provided internally.
                                                           Drake & Scull
BUSINESS STREAMS REVIEW                               45   ANNUAL REPORT 2009




        Initially established to complement the
        services offered by our MEP and IWP
        business streams, Drake & Scull Construction
        looks to the future for opportunities to venture
        into new geographical markets by embodying
        both development and construction capacities,
        through technical excellence and experience.
                                                                                       46 Drake & Scull
 CIVIL
                                                                                           ANNUAL REPORT 2009




 CONSTRUCTION


As the real estate and infrastructure boom evolved      As part of our own expansion plans to undertake civil
in the UAE, DSI saw the opportunity to expand its       works projects outside of the UAE, established a new
product offerings by acquiring a local civil            construction subsidiary in 2010 under the name
contracting company in 2007. Gulf Technical             Drake & Scull Construction L.L.C (DSC), to act as its
Construction Company (GTCC) is a general                Civil Contracting arm throughout the Middle East.
contracting company involved in the execution of a      DSC will control, manage and oversee the operations
vast array of civil and building projects specialised   of already existing civil construction companies under
in Oil & Gas, district cooling, water purification and   DSI Gulf Technical Construction Company (GTCC)
power generation.                                       Dubai and GTCC Abu Dhabi, in addition to any Civil
                                                        Contracting companies that would be acquired by DSI
The move allowed DSI to become an end-to-end            in the future.
provider of integrated engineering services. Over
the last few years, GTCC has rapidly grown in size      From design to construction, DSC provides
and scale to become one of the most reputable           innovative solutions through expediting delivery,
Civil Contracting companies in the UAE offering         value engineering and effective resourcing to
innovative solutions to its clients.                    optimise    delivery   of   turnkey   projects.    The
                                                        company operates in a lucrative niche market
The company’s turnover increased from AED 50            strategically     positioned      between         large
Million in 2005 to AED 457 Million in 2009. The         contractors. We provide quality engineering
business stream also won projects worth AED 966         services that include:
Million in 2009, which constituted 28% of revenue
to DSI as a whole. Additionally, the number of          – Turnkey execution of high-rise towers,
employees increased from only 150 people in               hotels and residential schemes
2005, to a work force of 3000 people in 2009.           – Detailed design contract plans & specification
These figures are proof of the high level of GTCC’s      – Construction, planning, scheduling
performance and professionalism offered to its            & specification
clients. The company’s commitment and expertise         – Materials, equipment, procurement & expediting
has positioned GTCC as the contractor of choice         – Construction management, inspection and
for many clients seeking value engineering and            quality control
state-of-the-art solutions.
                                                                                                     47    Drake & Scull
BUSINESS STREAMS REVIEW                                                                                    ANNUAL REPORT 2009




               2009 REVIEW                                             Tower in Dubai Marina. This contract is for the
                                                                       design & build of the residential tower that has an
               In 2009, our Civil Contracting stream expanded in       approximate total built-up area of 51,113 square
               the UAE through the establishment of a GTCC             meters, and includes superstructure and single
               office in Abu Dhabi, fully-equipped to take on           core, masonry and dry wall partitions, floor, wall
               different projects. We were successful in bidding for   and ceiling finishes, fittings, services including
               projects in the UAE and beyond, sustaining our          electrical, mechanical, ventilation and plumbing,
               business and maintaining profitability. In targeting     fire fighting installations, lifts, BMU, cladding and
               new markets, we diversified our presence share and       rubbish chutes.
               solidified our regional and international outreach.
                                                                       GROWTH
               GTCC also received ISO certification and won a
               number of awards, of which the most prominent is        In addition to the establishment of offices in Abu
               the Construction Week Magazine “Project                 Dhabi, GTCC intensified its business development
               Management Award” of the year in 2009.                  activities in the region by bidding on several major
                                                                       projects in KSA, Libya and Jordan.
               PROJECTS COMPLETED
                                                                       DSC will continue to expand its operations in new
               GTCC successfully completed the Nad Al Sheba            markets by emphasising inorganic growth, and it has
               District Cooling Plant, a contract valued at of AED     also identified a potential company to acquire in KSA.
               67 Million. In this project, GTCC complimented
               DSWP’s design engineering of the plant and was
               responsible for completing the construction of the
               entire structure. 2009 also marked the completion
               of the construction of two plant rooms at Motor City
               in Dubai with a contract value of AED 76 Million.

                                                                          Royal Amwaj - Palm Jumeirah, 2010, Dubai - UAE
               PROJECT WINS

               In recent years, we have gone from strength to
               strength with diverse business opportunities and a
               strong pipeline of projects that provide a string
               platform from which to expand. We won an AED
               400 Million Abu Dhabi contract for the Mangrove
               Place project on Al Reem Island, which is
               considered to be one of the largest mixed use
               developments in Abu Dhabi We were also
               awarded an AED 250 Million contract for the KPM
                                                                                           48     Drake & Scull
                                                                                                  ANNUAL REPORT 2009




   BACKLOG


The company backlog stood at AED 3.3 Billion at the        the business while remaining focused on our core
end of the financial year 2009 compared to AED 3.2          end-to- end services.
Billion at the end of 2008.
                                                           Contracts that we have signed and not yet recognised
This healthy sustainable growth was accomplished by        as backlog, but rather Letter of Intents (LOIs), are an
winning seven projects in 2009 with a total value of       indication of projects we will be working on in the
AED 2 Billion in the GCC, Sudan and Thailand, along        future. These provide solid management insight into
with the acquisitions of both Drake & Scull                future opportunities and growth markets.
International for Electrical Contracting in Kuwait and
Passavant-Roediger.                                        DSI defines backlog as Letters of Awards (LOAs),
                                                           which is the remaining value of work for projects we
The development of the backlog in terms of segment         have and are currently executing. As such, backlog
and    geographical     distribution   illustrates   the   generates immediate direct revenue, with an average
company’s long-term commitment to diversifying             duration of 24 months.



BACKLOG BY BUSINESS STREAM


       MEP 42%                                                      MEP 43%

       IWP 41%                                                      IWP 34%

       CIVIL 17%                                                    CIVIL 23%




       Business Stream Contribution As Of Dec 31, 2008              Business Stream Contribution As Of Dec 31, 2009
                                                                                                     49 Drake & Scull
BUSINESS STREAMS REVIEW                                                                                    ANNUAL REPORT 2009




               Over the past decade, the real estate and                able to capitalise on opportunities in an efficient
               infrastructure sector in the Middle East has             manner and win more projects in our dedicated
               transformed from a nascent and unorganised sector        infrastructure division, DSWP. We plan to continue
               to one that is professionally organised, and has         expanding this business stream with the support of
               become a significant contributor to many nations’         Passavant-Roediger’s technology and Research &
               GDP. As a leader in the industry in terms of revenues,   Development capabilities.
               earnings and market capitalisation, DSI has been



               BACKLOG BY GEOGRAPHY




                         Dubai 46%                                                Dubai 32%

                         Abu Dhabi 18%                                            Abu Dhabi 26%

                         Other UAE 4%                                             Other UAE 4%

                         GCC 30%                                                  GCC 27%

                         North Africa 2%                                          Asia 5%

                                                                                  Europe 5%
                                              Backlog - By Location               North Africa 1%    Backlog - By Location
                                                 As Of Dec 31, 2008                                     As Of Dec 31, 2009
                                                                                         50 Drake & Scull
                                                                                               ANNUAL REPORT 2009




In 2009, our business faced a number of challenges        remarkably successful, as we were awarded a
due to the global economic crisis, ranging from           number of projects during Q3 and Q4 of 2009 in Abu
project delays and poor cash collection, to the
slowdown of project awards and increased
competition. By recognising the changing conditions       backlog at the end of 2008. On the upside of the
early on and taking immediate action, we minimised        economic downturn, tough market forces drove down
the impact on the overall performance of our              contract prices considerably during 2009, the costs of
business in the following ways:

To offset delays in cash collection, we switched from
                                                          contracting is now between 8% - 9%, while Civil
mode, whereby all our efforts were concentrated on cash

put a cap on our expenditures, matching them to our
accounts receivables revenue, and we worked closely       and competitive advantage created by our
with our clients and suppliers to extend the dates of     fully-integrated services along all engineering
our expenditures and receivables through the              disciplines.
creation of flexible payment and re-payment plans. As
a result, we maintained good relations with our           The economic downturn affected some of the regional
suppliers and improved our outstanding receivable         markets, but Abu Dhabi, KSA and Kuwait remained
dates from 180 days in Q1 of 2009 to approximately 120    lucrative; we thus witnessed an increase in
days by Q4 of 2009.                                       competition in some geographies. However, due to
                                                          our strong presence in Abu Dhabi, which we had
In response to economic conditions, a number of           concentrated on developing and maintaining over the
projects slowed down during 2009, each one was            past few years, along with our positive track record
closely monitored to enable immediate action in
adjusting labour and materials requirements. This
helped us to meet the ever-changing project demands

                                                          processes, enabling us to compete strongly in all
                                                          sectors and levels in the market.
The number of projects being awarded domestically
decreased during Q4 of 2008 and Q1 and Q2 of 2009,
thus competition increased. Our company stood a           operated successfully in the regional markets where
better chance of winning new projects due to the          increased spending on projects was witnessed, and
safety net created by our cash reserves. Banks found

collateral. In turn, we utilized our IPO funds entirely   Defying the odds, our end of year results for the
for our horizontal growth strategy and focused on         calendar year starting January 1, 2009 and ending
expanding our geographical reach by searching for         December 31, 2009 showed a 10% increase in
appropriate opportunities in new markets

The immediate activation of our growth strategy           concentration in one market compared to a 46%
                                                          concentration in the end of 2008.
                                                                                        51 Drake & Scull
                                                                                                ANNUAL REPORT 2009




   2010 OUTLOOK

A closer look at international GDP statistics builds      The execution of our growth strategy that was
an even stronger case for our positive outlook:           planned by our board of directors in 2007 has
despite the trimming of projects from USD 1.66            been aided by our IPO in 2008 and DFM listing in
Trillion in contract revenue down to USD 1.17             2009, and greatly worked to our benefit in
Trillion, the GCC remains one of the most                 countering the recent difficulties facing our
lucrative construction markets in terms of relative       industry. In less than two years we were able to
project values and concentration.                         achieve tremendous horizontal growth by setting
                                                          up offices in Jordan, Libya and Thailand and
This is because the GCC enjoys an average                 acquiring two companies that gave us extended
project/GDP of 139%, significantly higher than             reach into Kuwait, Europe, India and China.
peers such as China and India who are only at
102%, and clearly outperforming the US and UK             Our vertical growth also witnessed remarkable
on an average of 46%.                                     development following the establishment of
                                                          separate entities for IWP and Civil Contracting to
On a per capita basis, announced construction             support our MEP business stream, in addition to
contract   values   in   the   GCC       adjusted   for   the acquisition of a global water, wastewater &
cancellations and delays came in at USD 49                sludge treatment company. We will further
Billion, compared to USD 28 Billion in the USA            expand in the year to come as we utilize 50% of
and USD 3 Billion in China. Bahrain and Qatar, in         our AED 1 Billion cash reserves in acquiring a
particular, enjoy the highest project penetration         company in Qatar in the first quarter of 2010 and
rates in the GCC, if not in the world . Individually,
                                     5
                                                          two others in KSA by the third and fourth quarter
Qatar enjoys the highest per capita value in the          of the same year respectively.
GCC and worldwide, ranking in at USD 117
Billion, followed by USD 58 Billion in the UAE.           These advantages put us in a strong position to
                                                          defy market challenges in 2010 and the years to
In conclusion, all of these forecasts spell out           come, driving us forward towards achieving our
more opportunities for us, as our different               goal of becoming one of the top contractors in the
business streams are well placed to seize these           countries in which we operate.
opportunities and make good progress in 2010.
We enthusiastically expect to deliver results in
line with our set targets and objectives to enter
new markets and gain more market share.

                                                                              5 - According to Deutsche Bank’s analysis
We have focus. We have clarity.
                                 & Scull
                       53 Drake REPORT 2009
                          ANNUAL




FINANCIAL HIGHLIGHTS
                                                                                        Drake & Scull
                                                                                54      ANNUAL REPORT 2009




  FINANCIAL
  OVERVIEW


As the market witnessed unprecedented            AMORTISATION
turbulence in the wake of the global slowdown,
it has been a successful year for Drake &        In accordance with IFRS 3, the management
Scull International PJSC as we were able to      through an independent third party expert
achieve strong financial results.                 carried out a Purchase Price Allocation
                                                 exercise for the business combinations.
Our total revenues on a consolidated basis
from the date of the incorporation as a Public   The purpose of the engagement was to
Joint Stock Company (PJSC) on the 17th of        establish the estimated fair value of the
November, 2008 to the period that ended 31       acquiree’s property, plant, equipment, and
December, 2009 reached AED 2,211,706             intangibles.
Million, with a strong bottom line reporting a
net profit of AED 336,537 Million after           The fair values of other assets, liabilities and
adjusting for provisions, amortisation and       contingent liabilities are estimated by                 the
taxes. The net profit attributable to the         management based on the discounted cash
company shareholders after minority interest     flow projections of future expected                    cash
is AED 334,390 Million. The company              inflows arising as a result of realising such
reported a Gross Margin of 19.7% and a Net       assets and cash outflows expected on
Margin of 15.2%.                                 settlement      of    liabilities    and         contingent
                                                 liabilities.
We have taken aggressive steps to meet the
challenges of the difficult times through         During the period that ended 31 December,
major initiatives in sustaining growth such as   2009 the company had an amortisation
cost-optimisation, process improvement and       charge of AED 37,750 Million towards
efficient management of working capital.          the    identified      intangible           of    Customer
The commitment to meet these challenges          Relationships. This will be amortised over a
resulted in an optimistic start to the fiscal     period     of   ten     year        with        an   annual
year 2010.                                       amortisation charge of AED 33,555 Million.
                                                                                                                & Scull
                                                                                                      55 Drake REPORT 2009
FINANCIAL HIGHLIGHTS                                                                                     ANNUAL




FINANCIAL OVERVIEW


                CONTRACT RECEIVABLES                                   FOREIGN CURRENCY AND
                AND RETENTIONS                                         INTEREST RATE RISK MANAGEMENT

                The company’s total receivables as of December         Our    acquisition   of     Passavant-Roediger    in
                31, 2009 stood at AED 983 Million, which include       Germany and other new organic markets has
                contract retentions to the tune of AED 368 Million     increased the group’s exposure to risk on foreign
                and a provision for receivables of AED 14.3 Million.   currencies, monetary assets and liabilities which
                Out of the total receivables of the company, AED       are denominated in Euro, Thai Baht and Kuwaiti
                527 Million were neither past due nor impaired.        Dinar. The group utilises matching principles and
                The company’s management periodically reviews          market tools as needed to hedge significant future
                the outstanding receivables to assess whether a        transactions and cash flow. Foreign currency risk
                provision for impairment should be recorded in the     is    managed   on    the    basis   of   continuous
                statement of income. The company assesses the          assessment of the company’s open position.
                creation of provision against receivables across
                the following parameters: client’s ability to pay,     DIVIDENDS
                ageing of the receivable, amount and timing of
                future cash flows.                                      The Board of Directors are recommending a final
                                                                       dividend of 7% of the share value, AED 0.07 per
                CASH AND BANK FACILITIES                               share, which contributes to a total of AED
                                                                       152,444 Million to be distributed as cash
                The company maintains a healthy balance sheet          dividends subject to shareholder approval at the
                with the bank and cash balance at AED 1,160            annual general meeting. This should not be
                Million out of which AED 1,027 Million are in time     indicative of future dividend payments.
                deposits. With AED 327 Million worth time
                deposits under lien and AED 90 Million bank            SHARE BUYBACK
                overdraft, the net cash and cash equivalent
                position stands at AED 743 Million. DSI also           On May 31, 2009, the company received
                raised some short term acquisition financing and        regulatory approval to purchase up to 10% of its
                met its operating requirements with prudent            shares which amounts to AED 217,777. As of
                internal cash flow management.                          theend of December 31, 2009, DSI purchased
                                                                       32,400 shares at an average price of AED 0.88
                                                                       per share. The share buyback approval will
                                                                       expire on May 31, 2010.
                                                                                    & Scull
                                                                          56 Drake REPORT 2009
                                                                             ANNUAL




  DIRECTORS’
  MESSAGE


Dear Shareholders,



It is with great pleasure that the Board of Directors of Drake & Scull International (DSI)
presents their consolidated financial statements for the period that ended 31 December, 2009.

We would like to thank our esteemed shareholders for their kind support and trust.
Furthermore, we would like to take this opportunity to thank the group’s management and
employees for their efforts, support and commitment.

We will continue to deliver strong financial results and a healthy balance sheet with a low
debt-to-equity ratio and a strong cash position, giving us substantial leverage to support the
company’s development and expansion plan for 2010.



On behalf of the Board of Directors,




Majid Al Ghurair                                         Khaldoun R. Tabari
Chairman                                                 Vice Chairman & CEO
                                                                                                                              Drake & Scull
                                                                                                                        57
  INDEPENDENT AUDITOR’S                                                                                                       ANNUAL REPORT 2009




  REPORT TO THE SHAREHOLDERS
  OF DRAKE & SCULL INTERNATIONAL
  PJSC

REPORT ON THE FINANCIAL                          these financial statements based on our           as at 31 December 2009, and its financial
STATEMENTS                                       audit. We conducted our audit in accordance      performance and its cash flows for the
                                                 with International Standards on Auditing.        period then ended in accordance with
We have audited the accompanying
                                                 Those standards require that we comply with      International Financial Reporting Standards.
consolidated financial statements of Drake &
                                                 ethical requirements and plan and perform
Scull International PJSC (“the PJSC”) and its                                                     REPORT ON OTHER LEGAL AND
                                                 the audit to obtain reasonable assurance
subsidiaries (collectively “the Group”) which                                                     REGULATORY REQUIREMENTS
                                                 whether the financial statements are free
comprise the consolidated statement of
                                                 from material misstatement.                      We also confirm that, in our opinion, the
financial position as at 31 December 2009,
and the consolidated statement of income,                                                         consolidated financial statements include, in
                                                 An audit involves performing procedures to
consolidated statement of comprehensive                                                           all material respects, the applicable
                                                 obtain audit evidence about the amounts and
income, consolidated statement of changes                                                         requirements of the UAE Commercial
                                                 disclosures in the financial statements. The
in equity and consolidated statement of cash                                                      Companies Law of 1984 (as amended) and
                                                 procedures selected depend on the auditor’s
flows for the period from 17 November 2008                                                         the articles of association of the PJSC,
                                                 judgment, including the assessment of the
to 31 December 2009, and a summary of                                                             proper books of account have been kept by
                                                 risks of material misstatement of the financial
significant accounting policies and other                                                          the PJSC, an inventory was duly carried out
                                                 statements, whether due to fraud or error. In
explanatory notes.                                                                                and the contents of the report of the
                                                 making those risk assessments, the auditor
                                                                                                  directors relating to these consolidated
                                                 considers internal control relevant to the
DIRECTORS’ RESPONSIBILITY FOR                                                                     financial statements are consistent with the
                                                 entity’s preparation and fair presentation of
THE FINANCIAL STATEMENTS                                                                          books of account. We have obtained all the
                                                 the financial statements in order to design
                                                                                                  information and explanations, which we
The directors are responsible for the            audit procedures that are appropriate in the
                                                                                                  required for the purpose of our audit and, to
preparation and fair presentation of these       circumstances, but not for the purpose of
                                                                                                  the best of our knowledge and belief, no
financial statements in accordance with           expressing an opinion on the effectiveness of
                                                                                                  violations of the UAE Commercial
International Financial Reporting Standards      the entity’s internal control. An audit also
                                                                                                  Companies Laws of 1984 (as amended) or
and the applicable provisions of the articles    includes evaluating the appropriateness of
                                                                                                  of the articles of association of the PJSC
of association of the PJSC and the UAE           accounting     policies    used     and   the
                                                                                                  have occurred during the period ended 31
Commercial Companies Law of 1984 (as             reasonableness of accounting estimates
                                                                                                  December 2009 which would have had a
amended). This responsibility includes:          made by management, as well as evaluating
                                                                                                  material effect on the business of the PJSC
designing, implementing and maintaining          the overall presentation of the financial
                                                                                                  or on its financial position.
internal control relevant to the preparation     statements.
and fair presentation of financial statements
that are free from material misstatement,        We believe that the audit evidence we have
whether due to fraud or error; selecting and     obtained is sufficient and appropriate to
applying appropriate accounting policies;        provide a basis for our audit opinion.
and making accounting estimates that are                                                                         Signed by
                                                 OPINION
reasonable in the circumstances.                                                                                 Edward B. Quinlan
                                                 In our opinion, the consolidated financial                       Partner
AUDITORS’ RESPONSIBILITY
                                                 statements present fairly, in all material                      Registration No. 93
Our responsibility is to express an opinion on   respects, the financial position of the Group                    15 March 2010, Dubai
                                                                     58    Drake & Scull
FINANCIAL HIGHLIGHTS                                                       ANNUAL REPORT 2009




CONSOLIDATED STATEMENT OF INCOME
Period ended 31 December 2009


                                               17 November 2008 to 31 December 2009

                                                          Notes                AED'000

Contract revenues                                                              2,211,706
Contract costs                                                              (1,775,942)
                                                                          -----------------------
GROSS PROFIT                                                                     435,764

Other income                                                  5                   113,835
Selling, general and administrative expenses                                    (182,640)
Finance cost                                                                      (17,119)
Amortisation of intangible assets                             9                   (37,750)
Management fee                                               16                   (16,650)
                                                                          -----------------------
PROFIT FOR THE PERIOD BEFORE PRE - INCORPORATION PROFIT                          295,440
Pre-incorporation profit                                       6                     41,956
                                                                          -----------------------
PROFIT FOR THE PERIOD BEFORE TAX                              7                  337,396
Income tax                                                   22                        (859)
                                                                          -----------------------
PROFIT FOR THE PERIOD                                                            336,537
                                                                            ===========
                                                                          ===
Attributable to:
Parent company                                                                    334,390
Minority interest                                                                      2,147
                                                                          -----------------------
                                                                                 336,537
                                                                            ===========
                                                                          ===
EARNINGS PER SHARE - BASIC AND DILUTED (AED)                 26                       0.154
                                                                            ===========
                                                                          ===
                                                                                            & Scull
                                                                                  59 Drake REPORT 2009
FINANCIAL HIGHLIGHTS                                                                 ANNUAL




CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Period ended 31 December 2009


                                                            17 November 2008 to 31 December 2009

                                                                                          AED'000

PROFIT FOR THE PERIOD                                                                    336,537
                                                                                      ===========
                                                                                     ===
OTHER COMPREHENSIVE INCOME
Exchange differences on translation of foreign operations                                     (6,710)
                                                                                     -----------------------
Other comprehensive loss for the period                                                       (6,710)
                                                                                     -----------------------
TOTAL COMPREHENSIVE INCOME FOR THE PERIOD                                                   329,827
                                                                                       ===========
                                                                                     ===
Attributable to:
Parent company                                                                              327,680
Minority interest                                                                                2,147
                                                                                     -----------------------
                                                                                            329,827
                                                                                       ===========
                                                                                     ===
                                               60   Drake & Scull
FINANCIAL HIGHLIGHTS                                ANNUAL REPORT 2009




CONSOLIDATED STATEMENT OF FINANCIAL POSITION
At 31 December 2009


                                                                 2009

                                       Notes             AED'000
ASSETS
Non current assets
Property, plant and equipment              8                211,529
Goodwill and other intangible assets       9               821,828
Investments                               10               197,713
Loans and advances                        11                  21,727
Long term prepayments                     16                  29,600
                                                    -----------------------
                                                        1,282,397
                                                    -----------------------
Current assets
Development properties                    12                  39,363
Inventories                                                   12,884
Contract receivables and retentions       13               983,866
Contract work-in-progress                 14               405,143
Prepayments and other receivables         15               245,994
Due from related parties                  16                  39,559
Loans and advances                        11                  95,929
Investments                               10               135,143
Bank balances and cash                    17            1,160,310
                                                    -----------------------
                                                        3,118,191
                                                    -----------------------
TOTAL ASSETS                                            4,400,588
                                                       ===========
                                                     ===
EQUITY AND LIABILITIES
Equity
Share capital                             18            2,177,778
Treasury shares                           18               (28,622)
Statutory reserve                         19                  33,654
Retained earnings                                          300,736
Foreign currency translation reserve                         (6,710)
                                                    -----------------------
                                                        2,476,836
Minority interest                                             38,587
                                                    -----------------------
                                                        2,515,423
                                                    -----------------------
                                                                             61 Drake & Scull
FINANCIAL HIGHLIGHTS                                                             ANNUAL REPORT 2009




CONSOLIDATED STATEMENT OF FINANCIAL POSITION
At 31 December 2009


                                                                                             2009

                                                                                     AED'000

Non-current liabilities
Employees’ end of service benefits          20                                             34,551
Term loans                                 21                                          159,882
Deferred tax liability                     22                                             29,795
                                                                                -----------------------
                                                                                       224,228
                                                                                -----------------------
Current liabilities
Accounts payable and accruals              23                                          785,503
Due to related parties                     16                                             75,151
Advances received from customers                                                       198,498
Excess billings                            14                                             98,317
Term loans                                 21                                          381,281
Due to banks                               24                                          122,187
                                                                                -----------------------
                                                                                    1,660,937
                                                                                -----------------------
TOTAL LIABILITIES                                                                 1, 885,165
                                                                                -----------------------
TOTAL EQUITY AND LIABILITIES                                                        4,400,588
                                                                                  ===========
                                                                                ===



These financial statements were approved by the Board of Directors on 15 March 2010 and signed
on its behalf by:




________________________________                    ___________________________________
Chairman                                                            Chief Executive Officer
                                                                                                                                                                  62       Drake & Scull
FINANCIAL HIGHLIGHTS                                                                                                                                                       ANNUAL REPORT 2009




CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Period ended 31 December 2009


                                                                                                           Attributable to equity holders of the parent

                                                                                                Foreign currency
                                       Share              Treasury          Statutory              Retained             translation                               Minority
                                      capital              shares           reserve                 earnings              reserve                Total            interest              Total
                                     AED‘000             AED‘000            AED‘000                 AED‘000              AED‘000             AED‘000              AED‘000            AED‘000


Capital introduced                2,177,778                           -                   -                       -                    -     2,177,778                         - 2,177,778


Minority interest arising on
business combinations (note 3)                    -                   -                   -                       -                    -                    -        28,440              28,440
Minority interest contribution
to subsidiary’s capital                           -                   -                   -                       -                    -                    -          8,000               8,000


Profit for the period                              -                   -                   -          334,390                           -       334,390                 2,147           336,537


Other comprehensive loss                          -                   -                   -                       -         (6,710)              (6,710)                       -         (6,710)
                                      ---------------     ---------------    ---------------         ---------------      ---------------      ---------------     ---------------     ---------------
Total comprehensive
income for the period                             -                   -                   -          334,390                (6,710)            327,680                 2,147           329,827


Transfer to statutory reserve                     -                   -        33,654               (33,654)                           -                    -                  -                    -


Purchase of treasury shares                       -      (28,622)                         -                       -                    -      (28,622)                         -       (28,622)
                                 --------------------- -----------------    -----------------       -----------------    -----------------    -----------------   ----------------- -----------------
Balance at
31 December 2009                  2,177,778              (28,622)              33,654                300,736                (6,710)          2,476,836               38,587 2,515,423
                                 ========= ======== ========                                       ========             ========             ========             ======== ========


The Board of Directors has proposed a cash dividend of AED 152,444 thousand at the rate of AED 0.07 per share through board
resolution dated 15 March 2010. This dividend is subject to the approval of the shareholders at the Annual General Meeting.
                                                                                     & Scull
                                                                           63 Drake REPORT 2009
FINANCIAL HIGHLIGHTS                                                          ANNUAL




CONSOLIDATED STATEMENT OF CASH FLOWS
Period ended 31 December 2009


                                                     17 November 2008 to 31 December 2009

                                                             Notes                 AED'000
ACTIVITIES

Profit for the period                                                                   337,396

Adjustments for:
 Depreciation                                                    8                        32,338
 Amortisation of intangible assets                               9                        37,750
 Gain on sale of trading securities                                                          (124)
 Change in fair value of trading securities                                                  (194)
 Provision for employees’ end of service benefits                20                        13,506
 Management fee expense                                                                   16,670
 Interest income                                                 5                  (138,949)
 Negative goodwill                                                                       (9,478)
 Impairment loss on available-for-sale investments                                          2,208
 Finance charges                                                                          17,119
                                                                                -----------------------
                                                                                       308,242
Working capital changes:
 Development properties                                                              (15,307)
 Inventories                                                                           54,879
 Contract work-in-progress                                                            (8,534)
 Contract receivables and retentions                                                (296,276)
 Due from related parties                                                            (18,553)
 Prepayments and other receivables                                                   (31,424)
 Accounts payable and accruals                                                       (64,707)
 Due to related parties                                                              (18,050)
 Advances received from customers                                                    (96,564)
 Excess billings                                                                       70,769
                                                                              -----------------------
Net cash used in operations                                                        (115,525)
                                                                                64    Drake & Scull
FINANCIAL HIGHLIGHTS                                                                  ANNUAL REPORT 2009




CONSOLIDATED STATEMENT OF CASH FLOWS
Period ended 31 December 2009


                                                          17 November 2008 to 31 December 2009

                                                                  Notes                   AED'000
Management fee paid                                                                          (74,000)
Employees’ end of service benefits paid                               20                       (3,596)
Income tax paid                                                                               (1,391)
                                                                                     -----------------------
NET CASH USED IN OPERATING ACTIVITIES                                                    (194,512)
                                                                                     -----------------------
INVESTING ACTIVITIES
Purchase of property, plant and equipment                             8                    (20,870)
Proceeds from disposal of property, plant and equipment                                       1,894
Trading securities – net                                                                      5,721
Investments                                                                               (315,795)
Loans and advances                                                                        (117,656)
Interest received                                                                            78,727
Net cash inflow on business combination                                3                      53,760
Purchase of treasury shares                                          18                    (28,622)
                                                                                     -----------------------
NET CASH USED IN INVESTING ACTIVITIES                                                    (342,841)
                                                                                     -----------------------
FINANCING ACTIVITIES
Loan to a shareholder recovered                                                               45,000
Movement in time deposits under lien                                                      (281,442)
Share capital received in cash                                                            1,197,778
Movement in due to banks                                                                    (21,290)
Proceeds from term loans                                                                    491,457
Repayments of term loans                                                                  (138,871)
Interest paid                                                                               (17,119)
Minority interest                                                                              8,000
                                                                                     -----------------------
NET CASH FROM FINANCING ACTIVITIES                                                       1,283,513
                                                                                     -----------------------
INCREASE IN CASH AND CASH EQUIVALENTS                                                       746,160
Net foreign currency translation difference                                                   (2,946)
                                                                                     -----------------------
CASH AND CASH EQUIVALENTS AT 31 DECEMBER 2009                        17                     743,214
                                                                                       ===========
                                                                                     ===
                                                                                                                    & Scull
                                                                                                          65 Drake REPORT 2009
FINANCIAL HIGHLIGHTS                                                                                         ANNUAL




NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
At 31 December 2009


1.   ACTIVITIES
Drake & Scull International PJSC (the “PJSC”) was incorporated on 17 November 2008 and registered on 21 January 2009
as a Public Joint Stock Company in accordance with UAE Federal Law No. 8 of 1984 (as amended). The PJSC is primarily
engaged in carrying out contracting work relating to the construction industry, such as electrical, plumbing, air-conditioning
and sanitation work. The PJSC’s registered head office is at P.O. Box 65794, Dubai, United Arab Emirates.



The PJSC and its following subsidiaries are referred to as “the Group” in the consolidated financial statements.


                                                     Beneficial           Country of
Name                                                 ownership         incorporation             Principal activities

Drake & Scull International L.L.C.                      100%                 UAE              Contracting work relating
(Abu Dhabi)                                                                                     to construction industry

Gulf Technical Construction Company L.L.C.               80%                 UAE              Mechanical, electrical and
                                                                                                civil construction work

Drake & Scull International for                          75%               Kuwait             Electrical contracting and
Electrical Contracting WLL                                                                      repairing work relating
                                                                                               to construction industry

Passavant Engineering Limited                           100%                 BVI                   Holding company
                                                                                                    and Subsidiary

Drake & Scull Contracting S.P.C.                        100%               Bahrain            Contracting work relating
                                                                                               to construction industry

Drake & Scull International                             100%              Thailand            Contracting work relating
(Thailand) Limited                                                                              to construction industry



The Group, through Gulf Technical Construction Company L.L.C., also has a 50% interest in Ranya Test Joint Venture, a
joint venture with Ranya General Contracting Company (L.L.C.) under a joint venture agreement dated 12 August 2005;
and through Drake and Scull International L.L.C (Abu Dhabi), a 50% interest in King Abdullah University of Science and
Technology project, a joint venture with Drake & Scull (W.L.L) –Saudi Arabia under a joint venture agreement dated 15
January 2008.
                                                                                            66    Drake & Scull
FINANCIAL HIGHLIGHTS                                                                              ANNUAL REPORT 2009




NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
At 31 December 2009




                 2. SIGNIFICANT ACCOUNTING                      Subsidiaries are fully consolidated from the
                    POLICIES                                    date of acquisition, being the date on which
                                                                the Group obtains control, and continue to be
                                                                consolidated until the date that such control
                 2.1 BASIS OF PREPARATION                       ceases. Control is achieved where the Group
                                                                has the power to govern the financial and
                 Statement of compliance                        operating policies of an investee entity so as to
                 The consolidated financial statements           obtain benefits from its activities. In assessing
                 have been prepared in accordance with          control, potential voting rights that presently
                 International Financial Reporting Standards    are exercisable are taken into account. All
                 and applicable requirements of the UAE laws.   intra-group balances, income and expenses
                                                                and unrealised gains or losses are eliminated
                 The consolidated financial statements have      in full on consolidation.
                 been presented in United Arab Emirates
                 Dirhams and all values are rounded to the      Minority interests represent the portion of
                 nearest thousand (AED’000), except where       profit or loss and net assets not held by the
                 otherwise stated.                              Group and are presented separately in
                                                                consolidated statement of income and within
                 Accounting convention                          equity in the consolidated statement of
                 The consolidated financial statements have      financial position, separately from parent
                 been prepared under the historical cost        shareholders’ equity.
                 convention.

                                                                2.2 SIGNIFICANT ACCOUNTING
                 Basis of consolidation
                                                                    JUDGMENTS AND ESTIMATES
                 The consolidated financial statements
                 comprise the financial statements of the        The preparation of the Group's consolidated
                 PJSC and its subsidiaries as at 31 December    financial statements requires management to
                 2009. The financial statements of the           make judgments, estimates and assumptions
                 subsidiaries are prepared for the same         that affect the reported amounts of revenues,
                 reporting period as the PJSC, using            expenses, assets and liabilities, and the
                 consistent accounting policies.                disclosure of contingent liabilities, at the
                                                                reporting date. However, uncertainty about
                 Where necessary, adjustments are made to
                                                                these assumptions and estimates could result
                 the financial statements of subsidiaries to
                                                                in outcomes that could require a material
                 bring their accounting policies in line with
                                                                adjustment to the carrying amount of the
                 those used by the PJSC.
                                                                asset or liability affected in the future.
                                                                                                               & Scull
                                                                                                     67 Drake REPORT 2009
FINANCIAL HIGHLIGHTS                                                                                    ANNUAL




NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
At 31 December 2009




                  Judgment                                            • Percentage of completion: The Group uses
                  In the process of applying the Group’s                the percentage of completion method when
                  accounting policies, the management has               accounting for contracting revenue. Use of
                  made the following judgment, apart from those         the percentage of completion method
                  involving estimates, which has the most               requires the Group toaccuracy of this
                  significant effect on the amounts recognised in        estimate has a material impact on the amount
                  the consolidated financial statements:                 of revenue and related profits recognised.
                  Classification of investments                          Any revision to profit arising from changes in
                  At the time of acquisition of investments, the        estimates is accounted for in the period when
                  management makes judgment, based on their             the changes become known.
                  intention, of the nature of investment. The         • Useful lives and depreciation of property,
                  classification of investment will change its           plant and equipment: The management
                  treatment in the financial statements.                 periodically reviews estimated useful lives
                  Use of estimates                                      and the depreciation method to ensure that
                  The preparation of the consolidated financial          the method and period of depreciation are
                  statements, in conformity with International          consistent with the expected pattern of
                  Financial Reporting Standards, requires that          economic benefits from the assets.
                  management make estimates and assumptions
                                                                      • Purchase price allocation: The Group
                  that affect the amounts reported in the
                                                                        allocates the cost of business combinations
                  consolidated     financial   statements     and
                                                                        by recognising the acquiree’s identifiable
                  accompanying notes. Actual results could differ
                                                                        assets, liabilities, and contingent liabilities
                  from these estimates. Estimates and their
                                                                        that satisfy the recognition criteria, at their fair
                  underlying assumptions are reviewed on an
                                                                        values on the date of acquisition. The Group
                  ongoing basis. Revisions to accounting
                                                                        uses third party experts to establish the
                  estimates are recognised in the period in which
                                                                        estimated fair value of the acquiree’s
                  the estimates are revised and in any future
                                                                        property, plant and equipment, and
                  periods affected.
                                                                        intangibles. The fair values of other assets,
                  The key assumptions concerning the future and         liabilities and contingent liabilities are
                  other key sources of estimation uncertainty at        estimated by the management based on the
                  the statement of financial position date, that         discounted cash flow projections of future
                  have a significant risk of causing a material          expected cash inflows arising as a result of
                  adjustment to the carrying amounts of assets          realising such assets and cash outflows
                  and liabilities within the next financial year are     expected on settlement of liabilities and
                  discussed below:                                      contingent liabilities.
                                                                                                    68   Drake & Scull
FINANCIAL HIGHLIGHTS                                                                                     ANNUAL REPORT 2009




NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
At 31 December 2009




                 • Impairment indicators: The recoverable               individually significant, but which are old or
                   amounts of cash-generating units and                 obsolete, are assessed collectively and a
                   individual assets have been determined               provision applied according to the inventory
                   based on the higher of value-in-use                  type and the degree of ageing or obsolescence
                   calculations and fair values less costs to sell.     based on historical selling prices.
                   These calculations require the use of
                   estimates and assumptions. It is reasonably        • Income taxes: The Group recognises the net
                   possible that the assumption used to                  future tax benefit related to deferred income
                   calculate the value-in-use may change                 tax assets to the extent that it is probable that
                   which may then require a material                     the deductible temporary differences will
                   adjustment to the carrying value of goodwill,         reverse in the foreseeable future. Assessing
                   intangible and tangible assets. The Group             the recoverability of deferred income tax
                   monitors internal and external indicators of          assets requires the Group to make significant
                   impairment relating to its tangible and               estimates related to expectations of future
                   intangible assets.                                    taxable income. Estimates of future taxable
                                                                         income are based on forecast cash flows
                 • Impairment of accounts receivable: An                 from operations and the application of
                   estimate of the collectible amount of trade           existing tax laws in each jurisdiction. To the
                   accounts receivable is made when collection           extent that future cash flows and taxable
                   of the full amount is no longer probable. For         income differ significantly from estimates, the
                   individually   significant    amounts,     this        ability of the Group to realise the net deferred
                   estimation is performed on an individual              tax assets recorded at the statement of
                   basis. Amounts which are not individually             financial position date could be impacted.
                   significant, but which are past due, are
                   assessed collectively and a provision
                   applied according to the length of time past              Additionally, future
                   due, based on historical recovery rates.                  changes in tax laws in
                 • Impairment of inventories: Inventories are                the jurisdictions in
                    held at the lower of cost and net realisable             which the Group
                    value.    When inventories become old or
                    obsolete, an estimate is made of their net
                                                                             operates could limit the
                    realisable value. For individually significant            ability of the Group to
                    amounts this estimation is performed on an
                                                                             obtain tax deductions in
                    individual basis. Amounts which are not
                                                                             future periods.
                                                                                                  69   Drake & Scull
FINANCIAL HIGHLIGHTS                                                                                   ANNUAL REPORT 2009




NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
At 31 December 2009




                  • Impairment of non-financial assets: The            (a) Property, plant and equipment
                    Group assesses whether there are any                The fair value of property, plant and
                    indicators of impairment for all non-financial       equipment recognised as a result of a
                    assets at each reporting date. Goodwill and         business combination is based on market
                    other indefinite life intangibles are tested for     values. The market value of property is the
                    impairment annually and at other times              estimated amount for which a property could
                    when     such     indicators    exist.   Other      be exchanged on the date of valuation
                    non-financial assets are tested for                  between a willing buyer and a willing seller in
                    impairment when there are indicators that           an arm’s length transaction after proper
                    the carrying amounts may not be                     marketing wherein the parties had each
                    recoverable. When value in use calculations         acted knowledgeably, prudently and without
                    are undertaken, management must estimate            compulsion.
                    the expected future cash flows from the
                    asset or cash-generating unit and choose a        (b) Trade and other receivables / payables
                    suitable discount rate in order to calculate        The fair value of trade and other receivables
                    the present value of those cash flows.               and trade and other payables approximates
                                                                        to book value due to the short term maturity
                  • Determination of fair values: A number of           of these instruments.
                    the Group’s accounting policies and
                    disclosures require the determination of fair
                    value, for both financial and non-financial
                    assets and liabilities. Fair values have been
                    determined for measurement purposes
                    based on the following methods:
                                                                                               70    Drake & Scull
FINANCIAL HIGHLIGHTS                                                                                 ANNUAL REPORT 2009




NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
At 31 December 2009




                 2.3 NEW ACCOUNTING                               disclosures about fair value measurement and
                     STANDARDS AND                                liquidity risk. Fair value measurements related
                     INTERPRETATIONS                              to items recorded at fair value are to be
                                                                  disclosed by source of inputs using a three level
                 The Group has early adopted the following
                 IFRS and IFRIC interpretations as of 17          fair value hierarchy, by class, for all financial
                 November 2008:                                   instruments recognised at fair value. In
                                                                  addition, a reconciliation between the beginning
                 IAS 1 Presentation of Financial Statements       and ending balance for level 3 fair value
                 A revised IAS 1 Presentation of Financial        measurements is now required, as well as
                 Statements was issued in September 2007          significant transfers between levels in the fair
                 and becomes effective for the annual periods     value hierarchy. The amendments also clarify
                 commencing on or after 1 January 2009. The       the requirements for liquidity risk disclosures
                 revised Standard separates owner and             with respect to derivative transactions and
                 non-owner changes in equity. The statement       assets used for liquidity management.
                 of changes in equity includes only details of
                 transactions with owners, with non-owner         IFRS 3 Business Combinations and IAS 27
                 changes in equity presented as a single line.    Consolidated and separate financial statements
                 In addition, the Standard introduces the         A revised IFRS 3 Business Combinations and a
                 statement of comprehensive income. It            revised IAS 27 Consolidated and separate
                 presents all items of recognised income and      financial statements are effective from 1 July
                 expense, either in one single statement, or in   2009. These revisions to IFRS 3 and IAS 27
                 two linked statements. The Group has             impact the manner in which business
                 elected to present two statements.               combinations are identified and accounted for.
                                                                  The revised IAS 27 will impact the Group, when its
                 IFRS 8 Operating Segments                        percentage holdings in subsidiaries decrease or
                 IFRS 8 Operating Segments was issued by the      increase without resulting in a loss of control, by
                 IASB in November 2006, becoming effective        taking the gains and losses directly to equity
                 for periods commencing on or after 1 January     instead of through the consolidated income
                 2009. IFRS 8 replaces IAS 14 Segment             statement. Further, there is a choice on an
                 Reporting (IAS 14) upon its effective date.      acquisition-by-acquisition basis to measure the
                 The Group has not adopted other accounting       non-controlling interest in the acquiree either at
                 standards and interpretations which have         fair value or at the non-controlling interest’s
                 been issued but are not yet effective. The       proportionate share of the acquiree’s net assets.
                 following changes are relevant to the Group:     All acquisition-related costs should be expensed.
                 IFRS 7 Financial Instruments: Disclosures        The Group will apply these revisions prospectively
                 The amended standard requires additional         to all business combinations from 1 January 2010.
                                                                                                            & Scull
                                                                                                  71 Drake REPORT 2009
FINANCIAL HIGHLIGHTS                                                                                 ANNUAL




NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
At 31 December 2009




                                                                       IFRS 9 Financial instruments
                                                                       On 12 November 2009, the IASB published
                                                                       the first phase of IFRS 9 Financial
                                                                       Instruments, the accounting standard that will
                                                                       eventually   replace   IAS    39    Financial
                                                                       Instruments: Recognition and Measurement.




                                                                       This standard becomes effective from 1st
                                                                       January 2013 and is applicable to all financial
                                                                       assets within the scope of IAS 39.




                  IFRIC 15 Agreement for the Construction              Improvements to IFRSs
                  of Real Estate                                       In May 2008 IASB issued its first omnibus of
                  IFRIC 15 was issued in July 2008 and                 amendments to its Standards primarily with a
                  becomes effective for financial years beginning       view to removing inconsistencies and
                  on or after 1 January 2009. The Interpretation       clarifying wordings.
                  is to be applied retrospectively. It clarifies when   There are separate transitional provisions for
                  and how revenue and related expenses from            each Standard. All such improvements are
                  the sale of a real estate unit should be             applicable from future dates and none of them
                  recognised if an agreement between a                 are considered significant by the Group. The
                  developer and a buyer is reached before the          Group has also concluded that there is no
                  construction of the real estate is complete.         significant impact of any changes made by
                  Furthermore the Interpretation provides              IASB in its Standards as part of such
                  guidance on how to determine whether an              improvements.
                  agreement is within the scope of IAS 11 or IAS
                  18. IFRIC 15 does not have an impact on the
                  current consolidated financial statement
                  because the Group has not recognised any
                  profit on development properties.
                                                                                             72   Drake & Scull
FINANCIAL HIGHLIGHTS                                                                              ANNUAL REPORT 2009




NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
At 31 December 2009




                2.4 SUMMARY OF SIGNIFICANT                        Interest
                    ACCOUNTING POLICIES                           Interest income is recognised as the interest
                                                                  accrues (using the effective interest rate that
                REVENUE                                           is the rate that exactly discounts estimated
                                                                  future cash receipts through the expected life
                Contract revenues and cost                        of the financial instrument) to the net carrying
                Revenue on contracts is recognised using the      amount of the financial asset.
                percentage of completion method. When the
                outcome of the contract can be reasonably         TAXES
                estimated, revenue is recognised by
                reference to the proportion of the costs          Income tax expense represents the sum of
                incurred to the period end as compared to the     the current tax and deferred tax. Income tax
                estimated total contract costs. When the          expense also includes any interest, fines and
                contract is at an early stage or its outcome      penalties payable to Tax Authorities.
                cannot be reliably estimated, contract
                revenue is recognised to the extent of contract   (a) Current tax
                costs that are considered recoverable.            Current tax assets and liabilities for the
                Provisions for foreseeable losses are made in     current and prior periods are measured at the
                full as soon as they are anticipated. The         amount expected to be recovered from or
                excess of costs over progress billings on         paid to the taxation authorities. The tax rates
                individual jobs in progress is recorded as        and tax laws used to compute the amount are
                contract    work-in-progress.     Where     the   those that are enacted or substantively
                payments received and receivable for any          enacted by the balance sheet date.
                contract exceed the cost plus attributable
                profit or less anticipated losses, the excess is   (b) Deferred tax
                shown as excess billings. Claims are only         Deferred income tax is provided using the
                recognised when the outcome can be                liability method on temporary differences at
                determined with reasonable certainty.             the balance sheet date between the tax bases
                                                                  of assets and liabilities and their carrying
                Costs include direct materials, subcontractors’   amounts for financial reporting purposes.
                costs and labour plus attributable overheads      Deferred tax liabilities are recognised for all
                based on a normal level of activity.              taxable temporary differences except:
                                                                                                              & Scull
                                                                                                    73 Drake REPORT 2009
FINANCIAL HIGHLIGHTS                                                                                   ANNUAL




NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
At 31 December 2009




                  • where the deferred tax liability arises from        Deferred income tax assets and liabilities are
                    the initial recognition of goodwill or of an        measured at the tax rates that are expected to
                    asset or liability in a transaction that is not a   apply to the year when the asset is realised or
                    business combination and, at the time of the        the liability is settled, based on tax rates (and
                    transaction, affects neither the accounting         tax laws) that have been enacted or
                    profit nor taxable profit or loss; and                substantively enacted at the balance sheet
                  • in respect of taxable temporary differences         date. Deferred tax assets and deferred tax
                     associated with investments in subsidiaries,       liabilities are offset if a legally enforceable
                     associates and interests in joint ventures,        right exists to set off current tax assets
                     where the timing of the reversal of the            against current tax liabilities and the deferred
                     temporary differences can be controlled and        taxes relate to the same taxable entity and
                     it is probable that the temporary differences      the same taxation authority.
                     will not reverse in the foreseeable future.
                                                                        INTERESTS IN JOINT VENTURES
                  Deferred income tax assets are recognised for
                  all deductible temporary differences (other           The Group’s interests in jointly controlled
                  than those mentioned above), carry-forward of         entities are accounted for by proportionate
                  unused tax credits and unused tax losses, to          consolidation. The Group combines its share
                  the extent that it is probable that taxable profit     of the joint ventures’ individual assets and
                  will be available against which the deductible        liabilities on a line-by-line basis with similar
                  temporary differences and the carry-forward of        items in the Group’s statement of financial
                  unused tax credits and unused tax losses can          position. The Group recognises the portion of
                  be utilised.The carrying amount of deferred           gains or losses on the sale of assets by the
                  income tax assets is reviewed at each balance         Group to the joint venture that is attributable
                  sheet date and reduced to the extent that it is       to the other venturers. The Group does not
                  no longer probable that sufficient taxable profit       recognise its share of profits or losses from
                  will be available to allow all or part of the         the joint venture that result from the Group’s
                  deferred income tax asset to be utilised.             purchase of assets from the joint venture until
                  Unrecognised deferred income tax assets are           it resells the assets to an independent party.
                  reassessed at each balance sheet date and             However, a loss on the transaction is
                  are recognised to the extent that it has become       recognised immediately if the loss provides
                  probable that future taxable profit will allow the     evidence of a reduction in the net recognised
                  deferred tax asset to be recovered.                   value of current assets, or an impairment loss.
                  Income tax relating to items recognised directly
                  in equity is recognised directly in equity and not
                  in the consolidated income statement.
                                                                                                   74   Drake & Scull
FINANCIAL HIGHLIGHTS                                                                                    ANNUAL REPORT 2009




NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
At 31 December 2009




                  PROPERTY, PLANT AND EQUIPMENT                        The estimated useful lives, residual values
                                                                       and depreciation method are reviewed at each
                  Property, plant and equipment are stated at          period end, with the effect of any changes in
                  cost less accumulated depreciation. Land and         estimate accounted for on a prospective basis.
                  capital work-in-progress are not depreciated.
                                                                       An item of property, plant and equipment is
                  Depreciation is calculated on a straight line        derecognised upon disposal or when no future
                  basis over the estimated useful lives of other       economic benefits are expected to arise from
                  assets as follows:                                   the continued use of the asset. Any gain or loss
                                                                       arising on derecognition of the asset (calculated
                  PLANT AND EQUIPMENT               OVER 3 YEARS       as the difference between the net disposal
                  MOTOR VEHICLES                    OVER 3 YEARS       proceeds and the carrying amount of the item) is
                  FURNITURE AND FIXTURES       OVER 2 TO 3 YEARS       included in the consolidated statement of
                  BUILDINGS                         OVER 5 YEARS       income in the period the item is derecognised.
                                                                       Fully depreciated fixed assets are retained in
                  The carrying values of property, plant and           the financial statements until they are no longer
                  equipment are reviewed for impairment when           in use and no further charge for depreciation is
                  events or changes in circumstances indicate the      made in respect of these assets.
                  carrying value may not be recoverable. If any
                  such indication exists and where the carrying        BUSINESS COMBINATION AND
                  values exceed the estimated recoverable              MINORITY INTERESTS
                  amount, the assets are written down to their
                  recoverable amount, being the higher of their fair   Acquisitions of subsidiaries and businesses
                  value less costs to sell and their value in use.     are accounted for using the purchase method.
                                                                       The cost of the business combination is
                  Expenditure incurred to replace a component          measured as the aggregate of the fair values
                  of an item of property, plant and equipment          (at the date of exchange) of assets given,
                  that is accounted for separately is capitalised      liabilities incurred or assumed, plus any
                  and the carrying amount of the component             costs directly attributable to the business
                  that is replaced is written off. Other               combination. Identifiable assets acquired and
                  subsequent expenditure is capitalised only           liabilities and contingent liabilities assumed in
                  when it increases future economic benefits of         a business combination are measured initially
                  the related item of property, plant and              at their fair values at the acquisition date. The
                  equipment. All       other   expenditure      is     excess of the cost of acquisition over the fair
                  recognised in the consolidated statement of          value of the Group’s share of the identifiable
                  income as the expense is incurred.                   net assets acquired is recorded as goodwill.
                                                                                                             & Scull
                                                                                                   75 Drake REPORT 2009
FINANCIAL HIGHLIGHTS                                                                                  ANNUAL




NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
At 31 December 2009




                  GOODWILL                                             INTANGIBLE ASSETS

                  Goodwill acquired in a business combination          Intangible assets acquired separately are
                  is initially measured at cost, being the excess      measured on initial recognition at cost. The
                  of the cost of the business combination over         cost of intangible assets acquired in business
                  the Group’s interest in the net fair value of the    combinations is the fair value at the date of
                  identifiable assets and liabilities.                  acquisition.     Following initial recognition,
                                                                       intangible assets are carried at cost less any
                  Following initial recognition, goodwill is           accumulated        amortisation    and     any
                  measured at cost less any accumulated                accumulated impairment losses. The useful
                  impairment losses. Goodwill is reviewed for          lives of intangible assets are assessed to be
                  impairment, annually or more frequently if           either finite or indefinite.
                  events of changes in circumstances indicate
                  that the carrying value may be impaired.             Intangible assets with finite lives are
                                                                       amortised over the useful economic life and
                  For the purpose of impairment testing,               assessed for impairment whenever there is
                  goodwill is allocated to each of the Group’s         an indication that the intangible asset may be
                  cash-generating units expected to benefit             impaired. The amortisation period and the
                  from the synergies of the combination.               amortisation method for an intangible asset
                  Cash-generating units to which goodwill has          with a finite useful life is reviewed at least at
                  been allocated are tested for impairment             each financial year-end.
                  annually, or more frequently when there is an
                  indication that the unit may be impaired.            Changes in the expected useful life or the
                                                                       expected pattern of consumption of future
                  If the recoverable amount of the cash-               economic benefits embodied in the asset is
                  generating unit is less than the carrying amount     accounted for by changing the amortisation
                  of the unit, the impairment loss is allocated first   period or method, as appropriate, and treated
                  to reduce the carrying amount of any goodwill        as changes in accounting estimates. The
                  allocated to the unit and then to the other          amortisation expense on intangible assets
                  assets of the unit pro-rata on the basis of the      with finite lives is recognised in the
                  carrying amount of each asset in the unit. An        consolidated statement of income in the
                  impairment loss recognised for goodwill is not       expense category consistent with the function
                  reversed in a subsequent period.                     of the intangible asset.
                                                                                                   76   Drake & Scull
FINANCIAL HIGHLIGHTS                                                                                    ANNUAL REPORT 2009




NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
At 31 December 2009



                  Intangible assets with indefinite useful lives are    items. Costs, including an appropriate portion
                  tested for impairment annually either                of fixed and variable overhead expenses
                  individually or at the cash generation unit level.   incurred in bringing the inventories to their
                  Such intangible assets are not amortised. The        present location and condition.
                  useful life of an intangible asset with an
                  indefinite life is reviewed annually to determine     Net realisable value represents the estimated
                  whether indefinite life assessment continues to       selling price for inventories less all estimated
                  be supportable. If not, the change in the useful     costs of completion and costs necessary to
                  life assessment from indefinite to finite is made      make the sale.
                  on prospective basis.
                                                                       DEVELOPMENT PROPERTIES
                  The Group’s intangible assets consist of
                  assets acquired on business combination and          Properties acquired, constructed or in the
                  their useful lives are as follows:                   course of construction for sale are classified
                                                                       as development properties. Such properties
                  GOODWILL                              INDEFINITE     are stated at the lower of cost or net
                  TRADE NAME                            INDEFINITE     realisable value. The cost of development
                  CUSTOMER RELATIONSHIPS                  10 YEARS     properties includes the cost of land and other
                                                                       related expenditure which are recognised as
                  INVENTORIES                                          and when activities that are necessary to get
                                                                       the properties ready for sale are in progress.
                  Inventories are stated at the lower of cost and      Net realisable value represents the estimated
                  net realisable value after making due                selling price less costs to be incurred in
                  allowance for any obsolete and slow moving           completing and selling the property.
                                                                                                            & Scull
                                                                                                  77 Drake REPORT 2009
FINANCIAL HIGHLIGHTS                                                                                 ANNUAL




NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
At 31 December 2009



                      IMPAIRMENT OF NON-FINANCIAL ASSETS               statement of icnome. Impairment losses on
                                                                       goodwill are not reversed.
                      At each statement of financial position date,
                      the Group reviews the carrying amounts of its    IMPAIRMENT AND UNCOLLECTIBILITY
                      assets to assess whether there is an             OF FINANCIAL ASSETS
                      indication that those assets may be impaired.
                      If any such indication exists, the Group         An assessment is made at each statement of
                      makes an estimate of the asset’s recoverable     financial position date to determine whether
                      amount. The recoverable amount is the            there is objective evidence that a specific
                      higher of an asset’s fair value less costs to    financial asset may be impaired.
                      sell and its value in use. In assessing value
                      in use, the estimated future cash flows           If such evidence exists, any impairment loss is
                      attributable to the asset are discounted to      recognised in the consolidated statement of
                      their present value using a pre-tax discount     income. Impairment is determined as follows:
                      rate that reflects current market assessments
                      of the time value of money and the risks         (a) For assets carried at fair value,
                      specific to the asset.                                impairment is the difference between
                                                                           cost and fair value, less any impairment
                      If the recoverable amount of an asset is             loss previously recognised in the
                      estimated to be less than its carrying amount,       consolidated statement of income.
                      the carrying amount of the asset is reduced to
                      its recoverable amount and an impairment         (b) For assets carried at cost, impairment is
                      loss is recognised immediately in the                the difference between cost and the
                      consolidated statement of income.                    present value of future cash flows
                                                                           discounted at the current market rate of
                      Where an impairment loss subsequently                return for a similar financial asset.
                      reverses, the carrying amount of the asset is
                      increased       to the revised estimate of its   (c) For assets carried at amortised cost,
                      recoverable amount, but only to the extent           impairment is the difference between
                      that the increased      carrying amount does         carrying amount and the present value
                      not exceed the carrying amount that would            of future cash flows discounted at the
                      have been determined had no impairment               original effective interest rate.
                      loss been recognised for the asset in prior
                      years. Reversal of an impairment loss is
                      recognised immediately in the consolidated
                                                                                                78    Drake & Scull
FINANCIAL HIGHLIGHTS                                                                                  ANNUAL REPORT 2009




NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
At 31 December 2009




                  ACCOUNTS RECEIVABLE                               value, plus, in the case of investments not at
                                                                    fair value through profit or loss, directly
                  Accounts receivable are stated at original        attributable transaction costs. All regular way
                  invoice less provision for impairment. A          purchases and sales of financial assets are
                  provision for impairment of accounts              recognised on the trade date, which is the date
                  receivable is established when there is           that the Group commits to purchase the asset.
                  objective evidence that the Group will not be
                  able to collect all amounts due according to      Investments carried at fair value through
                  the original terms of the receivables.            profit or loss
                  Significant financial difficulties of the debtor,    Financial assets at fair value through profit or
                  probability that the debtor will enter            loss includes financial assets held for trading
                  bankruptcy or financial reorganization, and        and financial assets designated upon initial
                  default or delinquency in payments (more than     recognition as at fair value through profit and
                  60 days past due) are considered indicators       loss. Financial assets are classified as held
                  that the accounts receivable is impaired.         for trading if they are acquired for the purpose
                                                                    of selling in the near term.
                  The carrying amount of the asset is reduced
                  through the use of an allowance account, and      Gains or losses and change in fair value on
                  the amount of the loss is recognised in the       investments held for trading are recognised in
                  statement of income. When a receivable is         statement of income. Interest and other
                  uncollectible, it is written off against the      revenues generated from trading securities
                  allowance      account     for    receivables.    are included in other income in the
                  Subsequent       recoveries    of    amounts      consolidated statement of income.
                  previously written off are credited in the
                  statement of income.                              Held-to-maturity investments

                  INVESTMENTS AND OTHER FINANCIAL                   Where the Group has a positive intent and
                  ASSETS                                            ability to hold debt securities to maturity, then
                                                                    these are classified as held-to-maturity.
                  Financial assets within the scope of IAS 39 are   Held-to-maturity investments are measured
                  classified as either financial assets at fair       at amortised cost using the effective interest
                  value through profit or loss, loans and            method, less any impairment losses. Gains
                  receivables, held to maturity investments, and    and losses are recognised in the consolidated
                  available for sale financial assets, as            statement of income when the investments
                  appropriate. When financial assets are             are derecognised or impaired, as well as
                  recognised initially, they are measured at fair   through the amortisation process.
                                                                                                            & Scull
                                                                                                  79 Drake REPORT 2009
FINANCIAL HIGHLIGHTS                                                                                 ANNUAL




NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
At 31 December 2009




                  Available-for-sale investments                     ACCOUNTS PAYABLE AND ACCRUALS

                  Available-for-sale investments are recognised      Liabilities are recognised for amounts to be
                  and derecognised, on a trade date basis, when      paid in the future for goods or services
                  the Group becomes, or ceases to be, a party        received, whether billed by the supplier or not.
                  to the contractual provisions of the instrument.
                                                                     TERM LOANS
                  Investments designated as available-for-sale
                  investments are initially recorded at cost and     Loans are initially recognised at the fair value
                  subsequently measured at fair value, unless this   of the consideration received less directly
                  cannot be reliably measured. Changes in fair       attributable transaction costs.
                  value are reported as a separate component of
                  equity. Upon impairment any loss, or upon          Subsequent to initial recognition, interest -
                  derecognition any gain or loss, previously         bearing loans and borrowings are measured at
                  reported as “cumulative changes in fair value”     amortised cost using the effective interest
                  within equity is included in the consolidated      method. Gains and losses are recognised in
                  statement of income for the period.                consolidated statement of income when the
                                                                     liabilities are derecognised as well as through
                  CASH AND CASH EQUIVALENTS                          the amortisation process.

                  For the purpose of the consolidated cash flow       PROVISIONS
                  statement, cash and cash equivalents consist
                  of cash in hand, bank balances and short term      Provisions are recognised when the Group has
                  deposits with an original maturity of three        a present obligation (legal or constructive)
                  months or less, net of outstanding bank            where, as a result of a past event, it is probable
                  overdrafts.                                        that an outflow of resources embodying
                                                                     economic benefits will be required to settle the
                  EMPLOYEES’ END OF SERVICE BENEFITS                 obligation and a reliable estimate can be made
                                                                     of the amount of the obligation.
                  The Group provides end of service benefits to
                  its employees. The entitlement to these            Provisions are reviewed at each statement of
                  benefits is based upon the employees’ salary        financial position date and adjusted to reflect
                  and length of service, subject to the              the current best estimate. If it is no longer
                  completion of a minimum service period. The        probable that an outflow of resources
                  expected costs of these benefits are accrued        embodying economic benefits will be required to
                  over the period of employment.                     settle the obligation, the provision is reversed.
                                                                                                 80    Drake & Scull
FINANCIAL HIGHLIGHTS                                                                                   ANNUAL REPORT 2009




NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
At 31 December 2009




                  BORROWING COSTS                                     in the consolidated financial statements but
                                                                      disclosed when an inflow of economic benefits
                  Borrowing costs include interest and direct costs   is probable.
                  such as underwriting, stamp duty, legal and other
                  related costs in connection with borrowings.        FOREIGN CURRENCY TRANSLATION

                  Borrowing costs, net of interest received on        Transactions and balances
                  term deposits that are directly attributable to     in foreign currencies
                  acquisition, construction or production of an
                  asset, are included in the cost of that asset,      The consolidated financial statements are
                  until such time as the asset is substantially       presented in AED, which is the PJSC’s
                  ready for its intended use or sale. Borrowing       presentation currency. Each entity in the
                  costs also include the effect of interest payable   Group determines its own functional currency
                  or receivable on any interest rate swaps and        and items included in the financial statements
                  collars entered into by the Group to hedge its      of each entity are measured using that
                  exposure to interest rate risk. Other borrowing     functional currency.
                  costs are recognised as an expense in the
                  year in which they are incurred.                    Transactions in foreign currencies are initially
                                                                      recorded at the functional currency rate ruling
                  LEASES                                              at the date of the transaction. Monetary
                                                                      assets and liabilities denominated in foreign
                  Leases where the lessor retains substantially all   currencies are retranslated at the functional
                  the risks and benefits of ownership of the asset     currency rate of exchange ruling at the
                  are classified as operating leases. Operating        statement of financial position date.         All
                  lease payments are recognised as an expense         differences are taken to the consolidated
                  in the consolidated statement of income on a        statement of income.
                  straight-line basis over the lease term.
                                                                      Non monetary items that are measured in
                  CONTINGENCIES                                       terms of historical cost in a foreign currency
                                                                      are translated using the exchange rates as at
                  Contingent liabilities are not recognised in the    the dates of the initial transactions. Non
                  consolidated financial statements. They are          monetary items measured at fair value in a
                  disclosed unless the possibility of an outflow of    foreign currency are translated using the
                  resources embodying economic benefits is             exchange rates at the date when the fair value
                  remote. A contingent asset is not recognised        is determined.
                                                                                                                 & Scull
                                                                                                       81 Drake REPORT 2009
FINANCIAL HIGHLIGHTS                                                                                      ANNUAL




NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
At 31 December 2009




                      Foreign group companies                              Foreign exchange gains and losses arising
                                                                           from a monetary item receivable from or
                      The results and financial position of all the Group   payable to a foreign operation, the settlement
                      entities that have a functional currency different   of which is neither planned nor likely in the
                      from the presentation currency are translated        foreseeable future, are considered to form
                      into the presentation currency as follows:           part of a net investment in a foreign operation
                                                                           and are recognised in other comprehensive
                      (a) assets and liabilities for each statement of     income.
                          financial position presented are translated
                          at the closing rate at the date of that          Any goodwill arising on the acquisition of a
                          statement of financial position;
                                                                           foreign operation and any fair value
                                                                           adjustments to the carrying amounts of
                      (b) income and expenses for each statement
                                                                           assets and liabilities arising on the acquisition
                          of income are translated at average
                          exchange rates; and                              are treated as assets and liabilities of the
                                                                           foreign operation and translated at the
                      (c) all resulting exchange differences are           closing rate.
                          recognised in other comprehensive income.
                                                                                                     82   Drake & Scull
FINANCIAL HIGHLIGHTS                                                                                      ANNUAL REPORT 2009




NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
At 31 December 2009




3. BUSINESS COMBINATIONS

3.1 ACQUISITION OF DRAKE & SCULL INTERNATIONAL (LLC) AND ITS SUBSIDIARIES

As at 17 November 2008, assets and liabilities of Drake & Scull International (LLC) and its subsidiaries (the “LLC”) were
transferred to the PJSC as an in-kind contribution for 45% interest in the PJSC.


The fair values of the identifiable assets and liabilities of the LLC and corresponding carrying amounts as at the date of
acquisition are as follows:


                                                               FAIR VALUE                      CARRYING VALUE
                                                                     AED’000                                 AED’000


ASSETS
Property, plant and equipment                                           217,679                                  171,530
Intangible assets                                                       385,052                                                -
Available-for-sale investments                                             12,576                                  12,576
Development properties                                                     24,056                                  21,106
Inventories                                                                  2,064                                    2,064
Contract work-in-progress                                               226,187                                  226,187
Contract receivables and retentions                                     520,041                                  520,041
Due from related parties                                                   14,667                                  14,667
Prepayments and other receivables                                        115,137                                 115,137
Trading securities                                                         12,096                                  12,096
Loan to a shareholder                                                      45,000                                  45,000
Bank balances and cash                                                  162,328                                  162,328
                                                                  -----------------------                 -----------------------
                                                                   1,736,883                               1,302,732
                                                                    ===========
                                                                   ===                                      ===========
                                                                                                           ===
                                                                                                   & Scull
                                                                                         83 Drake REPORT 2009
FINANCIAL HIGHLIGHTS                                                                        ANNUAL




NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
At 31 December 2009




                                                          Fair value                    Carrying value
                                                            AED’000                              AED’000


LIABILITIES
Employees’ end of service benefits                               (19,779)                             (19,779)
Term loans                                                    (178,096)                           (178,096)
Due to related parties                                          (16,951)                             (16,951)
Accounts payable and accruals                                 (531,861)                           (531,861)
Advances received from customers                              (280,879)                           (280,879)
Due to banks                                                    (83,754)                             (83,754)
Excess billings                                                 (27,548)                             (27,548)
                                                          -----------------------             -----------------------
                                                         (1,138,868)                         (1,138,868)
                                                          -----------------------             -----------------------
NET IDENTIFIABLE ASSETS                                        598,015                             163,864
                                                             ===========
                                                           ===                                 ===========
                                                                                              ===
Total fair value of the LLC (note 18)                            980,000
Net assets acquired, as above                                 (598,015)
Minority interest acquired                                          23,811                         14,328
                                                          -----------------------              ===========
                                                                                              ===
GOODWILL (NOTE 9)                                              405,796
                                                            ===========
                                                           ===
Cash flow on business combination:
Net cash acquired on business combination                        162,328
Less: Time deposits under lien                                  (45,803)
Less: Bank overdrafts                                           (31,893)
                                                          -----------------------
NET CASH INFLOW                                                  84,632
                                                           ===========
                                                          ===

From the date of acquisition, the acquired entities have contributed AED 2,055,174 thousand to the revenue
of the Group and AED 326,500 thousand to overall profit of the Group.

Intangible assets comprise customer relationships and trade name which were determined to have finite and
infinite useful lives respectively. The fair value of the intangible assets was determined on an income
approach using the discounted cash flow analysis.
                                                                                                  84   Drake & Scull
FINANCIAL HIGHLIGHTS                                                                                   ANNUAL REPORT 2009




NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
At 31 December 2009




3.2 ACQUISITION OF PASSAVANT ROEDIGER GMBH AND ITS SUBSIDIARIES

On 30 November 2009, the Group acquired a 100% interest in Passavant Roediger GmbH and its subsidiaries
(“Passavant”) through its 100% owned subsidiary, Passavant Engineering Limited. The principal activities of Passavant
are developing waste water, water and sludge treatment plants.


The Group has provisionally recorded tangible assets and liabilities at the value they were carried in the books of
Passavant on the date of transfer, as summarised below:


                                                                                                 Carrying value
                                                                                                       AED’000

TANGIBLE ASSETS
Property, plant and equipment                                                                                      7,270
Inventories                                                                                                      65,699
Contract work-in-progress                                                                                     139,197
Contract receivables and retentions                                                                            116,009
Due from related parties                                                                                           6,203
Other receivables                                                                                                11,481
Bank balances and cash                                                                                           14,693
                                                                                                       -----------------------
TOTAL TANGIBLE ASSETS                                                                                       360,552

Liabilities:
Employees’ end of service benefits                                                                               (3,708)
Deferred tax liability (note 22)                                                                              (30,327)
Provisions                                                                                                      (5,435)
Due to related parties                                                                                        (72,261)
Accounts payable and accruals                                                                              (165,559)
                                                                                                       -----------------------
TOTAL LIABILITIES                                                                                        (277,290)
                                                                                                       -----------------------
BOOK VALUE OF NET TANGIBLE ASSETS ACQUIRED                                                                     83,262
                                                                                                        ===========
                                                                                                       ===
                                                                                                                 & Scull
                                                                                                       85 Drake REPORT 2009
FINANCIAL HIGHLIGHTS                                                                                      ANNUAL




NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
At 31 December 2009




                                                                                                     Carrying value
                                                                                                           AED’000

Total consideration                                                                                                 73,784
Book value of net tangible assets acquired, as above                                                              (83,262)
                                                                                                          -----------------------
NEGATIVE GOODWILL                                                                                                  (9,478)
                                                                                                            ===========
                                                                                                           ===


Cash flow on acquisition:
Net cash acquired on acquisition                                                                                    14,693
Less: paid on acquisition                                                                                         (48,526)
                                                                                                          -----------------------
NET CASH OUTFLOW                                                                                                (33,833)
                                                                                                            ===========
                                                                                                           ===

Negative goodwill has been recognised as other income (note 5).


From the date of acquisition, Passavant has contributed AED 30,618 thousand to the revenue of the Group and AED
1,765 thousand to overall profit of the Group. Had the acquisition taken place on 1 January 2009, Passavant would have
contributed AED 11,223 thousand to the profit of the Group.


Adjustments to the provisional values will be recognised within twelve months of the transfer date as allowed by
International Financial Reporting Standard 3 “Business Combinations”


Of the interest acquired, 82% has been transferred to the Group. The Group has both put option and call option for the
remaining 18% interest in Passavant exercisable on 31 December 2011 at a predetermined price. Accordingly, the full 100%
has been accounted for as acquired and the fair value of the option has been recognised under other liabilities (note 23).
                                                                                                    86   Drake & Scull
FINANCIAL HIGHLIGHTS                                                                                     ANNUAL REPORT 2009




NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
At 31 December 2009




3.3 ACQUISITION OF DRAKE & SCULL INTERNATIONAL FOR CONTRACTING WLL

In December 2009, the Group formalised the acquisition of a 75% interest in Drake & Scull International for Contracting
WLL (the “Company”) effective 1 January 2009, from a related party (note 16).

The Group has provisionally recorded tangible assets and liabilities at the value they were carried in the books of the
Company prior to the transfer, as summarised below:


                                                                                                   Carrying value
                                                                                                            AED’000


TANGIBLE ASSETS
Property, plant and equipment                                                                                           278
Contract work-in-progress                                                                                         31,225
Contract receivables and retentions                                                                               51,540
Due from related parties                                                                                                136
Bank balances and cash                                                                                               3,948
                                                                                                         -----------------------
TOTAL TANGIBLE ASSETS                                                                                            87,127


LIABILITIES
Employees’ end of service benefits                                                                                 (1,154)
Loans                                                                                                          (10,481)
Due to related parties                                                                                            (3,989)
Accounts payable and accruals                                                                                  (37,040)
Advances                                                                                                       (14,183)
Due to banks                                                                                                      (1,765)
                                                                                                         -----------------------
TOTAL LIABILITIES                                                                                             (68,612)
                                                                                                         -----------------------
BOOK VALUE OF NET TANGIBLE ASSETS ACQUIRED                                                                       18,515
                                                                                                          ===========
                                                                                                         ===
                                                                                                                   & Scull
                                                                                                         87 Drake REPORT 2009
FINANCIAL HIGHLIGHTS                                                                                        ANNUAL




NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
At 31 December 2009




                                                                                                        Carrying value
                                                                                                              AED’000

Total consideration paid or payable                                                                                    85,057
Book value of net tangible assets acquired, as above                                                                (18,515)
Minority interest acquired                                                                                                4,629
                                                                                                              -----------------------
GOODWILL AND OTHER INTANGIBLE ASSETS                                                                                  71,171
                                                                                                               ===========
                                                                                                              ===
Cash flow on acquistion:
Net cash acquired on business combination                                                                                 2,961
                                                                                                              -----------------------
NET CASH INFLOW                                                                                                          2,961
                                                                                                               ===========
                                                                                                              ===


The goodwill has been allocated to MEP unit. The acquisition was undertaken to expand the operations of the Group to
the State of Kuwait. The goodwill represents expected synergies and intangible assets acquired. Adjustments to the
provisional values to record separately identifiable intangible assets, if any, will be recognised within twelve months of the
transfer date as allowed by International Financial Reporting Standard 3 “Business Combinations”.


The Company has contributed AED 125,217 thousand to the revenue of the Group and AED 8,582 thousand to overall
profit of the Group since 1 January 2009.


The Group has also written a put option to acquire the remaining 25% interest in the Company excisable between 1
January to 31 December 2014. The fair value of the put option has been recognised under other liabilities (Note 23).
                                                                                                                                 88   Drake & Scull
FINANCIAL HIGHLIGHTS                                                                                                                  ANNUAL REPORT 2009




NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
At 31 December 2009




4. OPERATING SEGMENT INFORMATION
BUSINESS SEGMENT

For management purposes, the Group is organised into business units based on their services and has three reportable
operating segments; i.e. M.E.P., I.W.P. and Civil works.

The M.E.P. segment carries out contracting work relating to the construction industry, such as mechanical, electrical,
plumbing and sanitation work.

The I.W.P. segment carries out 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.Income from sources other than the above business segments is included in
other operating income.


                                                                                Period from 17 November 2008 to 31 December 2009

                                        M.E.P                     I.W.P           Civil works              Eliminations                         Total
                                  AED’000                 AED’000                    AED’000                   AED’000                   AED’000

Revenue
External customers               1,268,205                  416,572                    526,929                                  -       2,211,706
Internal - segment                     37,926                              -              61,598                 (99,524)                                 -
                                ---------------------   ---------------------      ---------------------     ---------------------    ---------------------
                                1,306,131                  416,572                    588,527                  (99,524)               2,211,706
                                 ==========
                                ==                       ==========
                                                        ==                          ==
                                                                                     ==========               ==========
                                                                                                             ==                         ==========
                                                                                                                                       ==
SEGMENT PROFIT                     257,349                   51,670                     27,518                                 -         336,537
                                 ==========
                                ==                       ==========
                                                        ==                          ==
                                                                                     ==========               ==========
                                                                                                             ==                         ==========
                                                                                                                                       ==
Depreciation                           19,527                    1,174                    11,637                                -            32,338
Capital expenditure                    14,603                    3,914                      2,353                               -            20,870


SEGMENT ASSETS


AT 31 DECEMBER 2009             3,596,748                  679,221                    481,756                (357,137)                4,400,588
                                 ==========
                                ==                       ==========
                                                        ==                          ==
                                                                                     ==========               ==========
                                                                                                             ==                         ==========
                                                                                                                                       ==
                                                                                                                      & Scull
                                                                                                            89 Drake REPORT 2009
FINANCIAL HIGHLIGHTS                                                                                           ANNUAL




NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
At 31 December 2009




Transfer price between operating segments are on an arm length’s basis in a manner similar to transaction with third parties.
Interest income and interest expense have not been disclosed by segment as these items are managed on a group basis.




GEOGRAPHIC SEGMENTS

The Group is presently engaged in carrying out contracting work relating to the construction industry in the United Arab
Emirates, Saudi Arabia, Kuwait, Germany and Thailand.



                                                                    Period from 17 November 2008 to 31 December 2009

                                      U.A.E               Other                 Total     Eliminations                 Total
                                   AED’000            AED’000              AED’000             AED’000             AED’000


Revenue from external
customers                         1,782,451            429,255             2,211,706                    –         2,211,706


NON CURRENT ASSETS               1,544,467                8,358          1,552,825           (270,428)           1,282,397
                                  ==========
                                 ==                   ==========
                                                     ==                   ==
                                                                           ==========         ==========
                                                                                             ==                    ==========
                                                                                                                  ==


The above revenue information is based on the location of the contract site.

Revenue from two largest customers amounted to AED 272,725 thousand and AED 155,286 thousand relating to MEP and
IWP segment respectively.
                                                                                                    90   Drake & Scull
FINANCIAL HIGHLIGHTS                                                                                     ANNUAL REPORT 2009




NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
At 31 December 2009




5. OTHER INCOME

                                                                 Period from 17 November 2008 to 31 December 2009

                                                                                                               AED'000

Interest income                                                                                                   93,914
Exchange gain                                                                                                        3,887
Negative goodwill (note 3.2)                                                                                         9,478
Others                                                                                                               6,556
                                                                                                          ----------------------
                                                                                                              113,835
                                                                                                            ==========
                                                                                                           ==
6. PRE-INCORPORATION PROFIT
This represents the income earned on investing the money received from IPO subscriptions between the first day of
public subscription and the date of incorporation of the PJSC, net of expenses related to its incorporation as follows:

                                                                 Period from 17 November 2008 to 31 December 2009

                                                                                                               AED'000

Interest income from deposits                                                                                      45,035
Offering fee                                                                                                       43,556
                                                                                                          ----------------------
                                                                                                                 88,591
Pre incorporation expenses                                                                                     (46,635)
                                                                                                          ---------------------
                                                                                                                 41,956
                                                                                                            ==========
                                                                                                           ==


7. PROFIT FOR THE PERIOD
                                                                 Period from 17 November 2008 to 31 December 2009

                                                                                                              AED'000


THE PROFIT FOR THE PERIOD IS STATED AFTER CHARGING
Staff costs                                                                                                   169,317
                                                                                                            ==========
                                                                                                           ==
RENTAL EXPENSES                                                                                                  10,242
                                                                                                             ==========
                                                                                                             =
                                                                                                                                   & Scull
                                                                                                                         91 Drake REPORT 2009
FINANCIAL HIGHLIGHTS                                                                                                        ANNUAL




NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
At 31 December 2009




8. PROPERTY, PLANT AND EQUIPMENT
                                                                      Plant and        Motor           Furniture      Capital
                                        Land          Buildings       equipment       vehicles        and fixtures work-in-progress            Total
                                     AED’000          AED’000         AED’000         AED’000          AED’000          AED’000            AED’000

COST
Transfer from the LLC (note 3.1)   140,416             23,615         21,651          13,310              3,234         15,453            217,679
Acquisition on business combinations     -                897           1,097            128                798           4,628              7,548
Additions                                -              2,992         14,718             352              1,421           1,387            20,870
Transfers                                -                   -          2,892               -                  -        (2,892)                  -
Disposals                                -                   -        (2,086)          (300)              (454)               -            (2,840)
Translation adjustment                   -                (46)            (46)            (5)               (35)          (204)              (336)
                                      -------------   -------------   -------------   -------------     -------------   -------------      -------------
AT 31 DECEMBER 2009                  140,416           27,458          38,226          13,485              4,964         18,372            242,921
                                      -------------   -------------   -------------   -------------     -------------   -------------     -------------
DEPRECIATION
Charge for the period                            -      8,410          15,232           6,827             1,869                    -        32,338
Disposals                                        -          -           (709)           (140)               (97)                   -         (946)
                                      -------------   -------------   -------------   -------------     -------------   -------------      -------------
At 31 December 2009                              -       8,410         14,523            6,687             1,772                   -         31,392
                                      -------------   -------------   -------------   -------------     -------------   -------------      -------------
NET CARRYING AMOUNT
AT 31 DECEMBER 2009                  140,416           19,048          23,703            6,798             3,192         18,372            211,529
                                      =
                                     =======           =
                                                      =======          =
                                                                      =======         =======
                                                                                       =                =
                                                                                                       =======           =
                                                                                                                        =======             =
                                                                                                                                           =======
Motor vehicles and equipment with a net book value of AED 4,905 thousand and AED 1,980 thousand respectively are
mortgaged as security for term loans. Title deeds for properties with a net book value of AED 23.5 million are held in name
of other party on behalf of the Group.
The depreciation charge has been allocated in the consolidated statement of income as follows:


                                                                              Period from 17 November 2008 to 31 December 2009

                                                                                                                                        AED'000

Contract costs                                                                                                                             16,774
Selling, general and administrative expenses                                                                                               15,564
                                                                                                                                   --------------------
                                                                                                                                          32,338
                                                                                                                                   ===========
                                                                                                                      92        Drake & Scull
FINANCIAL HIGHLIGHTS                                                                                                            ANNUAL REPORT 2009




NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
At 31 December 2009




9. GOODWILL AND OTHER INTANGIBLE ASSETS

                                                   Trade                       Customer
                                                 Goodwill                          name relationships                               Total
                                                 AED’000                        AED’000      AED’000                              AED’000

COST
Acquired through business combinations               476,967                            49,500               335,552                862,019
Translation adjustment                                 (2,441)                                      -                      -        (2,441)
                                                 --------------------             --------------------   -------------------- --------------------
At 31 December 2009                                474,526                                49,500           335,552                 859,578
                                                 --------------------             --------------------   -------------------- --------------------
AMORTISATION
Amortisation charge for the period                                 -                                -           37,750                   37,750
                                                 --------------------             --------------------   --------------------
At 31 December 2009                                               -                                -          37,750                     37,750
                                                 --------------------             --------------------   --------------------    --------------------
Net carrying amount:
At 31 December 2009                                474,526                                49,500           297,802                  821,828
                                                 ===========
                                                 =                                ===========
                                                                                  =                      =========== =
                                                                                                         =           ===========

Impairment testing of goodwill and intangibles with indefinite useful lives

Goodwill and trade name acquired have been allocated to the following cash generating units:


                                                                  Goodwill                                  Trade name
                                                                  AED'000                                      AED'000

CASH GENERATING UNITS RELATING TO
MEP                                                                     324,256                                          36,571
IWP                                                                     100,249                                          12,929
Civil                                                                    52,462                                                      -
                                                                   --------------------                           --------------------
At 31 December 2009                                                     476,967                                         49,500
                                                                  ==========
                                                                  =         =                                     ===========
                                                                                                                  =
                                                                                                        & Scull
                                                                                              93 Drake REPORT 2009
FINANCIAL HIGHLIGHTS                                                                             ANNUAL




NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
At 31 December 2009




                  KEY ASSUMPTIONS USED IN VALUE IN                Discount rates
                  USE CALCULATIONS                                These represent the weighted average cost of
                                                                  capital for the cash generating units adjusted
                  The recoverable amount of the cash              for the respective location risk factors.
                  generating units (CGU) has been determined
                  based on their value in use, calculated using   Cost inflation
                  cash flows projections based on the financial     The basis used to determine cost inflation is
                  budgets approved by management covering         the forecast general price index during the
                  a period of 5 years and the discount rates      budget year for the cash generating units.
                  applied are 19.1%, 18.1% and 20% for MEP,
                  IWP and Civil respectively. The other key       Terminal growth rate
                  assumptions used in the value in use            The terminal growth rate has been assumed to
                  calculations are as follows:                    be 2%. In management’s view, the terminal
                                                                  growth rate is the minimum growth rate expected
                  Budgeted gross margins                          to be achieved beyond the five year period.
                  The basis used to determine the value
                  assigned to the budgeted gross margin is the    Sensitivity to changes in assumptions
                  average gross margin achieved in the year
                  immediately before the budgeted year,           With regard to the assessment of value in use
                  adjusted      for     expected     efficiency    of the cash generating units, management
                  improvements,     price   fluctuations    and    believe that no reasonably possible change
                  manpower costs.                                 would cause the carrying values of the units to
                                                                  materially exceed their recoverable amount.
                                                                                                                     94    Drake & Scull
FINANCIAL HIGHLIGHTS                                                                                                       ANNUAL REPORT 2009




NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
At 31 December 2009




10. INVESTMENTS


                                                                                            NOTES                             AED’000


Held-to-maturity investments                                                                     10.1                             315,795
Available-for-sale investments                                                                   10.2                               10,368
Investments carried at fair value through profit or loss                                                                                6,693
                                                                                                                           -----------------------
                                                                                                                                332,856
                                                                                                                           ============
                                                                                                                          ===
Current                                                                                                                           135,143
Non-current                                                                                                                       197,713
                                                                                                                           -----------------------
                                                                                                                                332,856
                                                                                                                           ============
                                                                                                                          ===

10.1 HELD-TO-MATURITY INVESTMENTS

Unquoted debt securities held to maturity carry interest rates ranging from three months LIBOR plus 1.20% to three months
LIBOR plus 2.60% maturing upto 3 November 2014. At 31 December 2009, there is no impairment on held to maturity debt
securities. These investments are placed as collateral against amount borrowed from a financial institution (note 21). The
maximum exposure to credit risk is the carrying value of the debt securities classified as held to maturity. Investments
classified as current are expected to mature within twelve months after the statement of financial position date.


10.2 AVAILABLE FOR SALE INVESTMENTS

THIS COMPRISES
- AED 5,214 thousand representing the acquisition cost of the investment in Deera Real Estate LLC, a company based in
  the Kingdom of Jordan, in which the Group holds less than 5% of the issued share capital.
- AED 5,154 thousand representing the acquisition cost, net of impairment, of the investment in Ajman Real Estate Holding
  Ltd., in which the Group holds less than 10% of the issued share capital.
These investments are carried at cost as their fair value cannot be reliably determined due to the unpredictable nature of future cash flows.
                                                                                                                & Scull
                                                                                                      95 Drake REPORT 2009
FINANCIAL HIGHLIGHTS                                                                                     ANNUAL




NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
At 31 December 2009




11. LOANS AND ADVANCES


                                                                                                              AED’000


Current (i)                                                                                                         95,929

Non-current (ii)                                                                                                    21,727

                                                                                                           -----------------------

                                                                                                                117,656
                                                                                                             =
                                                                                                            =============

(i) Amounts due from a customer for construction contracts are converted into a twelve month advance. The amounts are
    unsecured and carry interest rate of 10% per annum.

(ii) These amounts carry interest rates ranging from 7% to 10% per annum and are due on 31 December 2012. The amounts
     are secured by property units under development in Thailand and the Group also has an option to purchase those units.




12. DEVELOPMENT PROPERTIES

Development properties amounting to AED 39,363 thousand comprise parcels of land acquired and held for future
development and sale and the related development cost. These projects are likely to be completed and sold by the year
2011. These properties are held in the name of a shareholder on behalf of the Group. To date, no revenue has been
recognised on development properties. The development properties have been classified as current as they are
expected to be realised in the Group’s operating cycle.
                                                                                                    96   Drake & Scull
FINANCIAL HIGHLIGHTS                                                                                     ANNUAL REPORT 2009




NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
At 31 December 2009




13. CONTRACT RECEIVABLES AND RETENTIONS


                                                                                                             AED’000


Contract receivables                                                                                            630,386
Retentions receivable                                                                                           367,738
Provision for receivables                                                                                      (14,258)
                                                                                                           ---------------------
                                                                                                              983,866
                                                                                                             =
                                                                                                          ============




Contract receivables and retentions receivable include AED 15,572 thousand due from certain customers of Drake & Scull
International L.L.C (Abu Dhabi). The subsidiary commenced legal proceedings against these customers claiming
compensation of AED 19,700 thousand for the work performed and delays caused by the customers. The legal cases are
yet to be decided upon by the concerned court. Management, based on advice received from the subsidiary’s legal advisor,
expects a favorable outcome and is confident of recovering at least the amount recorded as receivable at the statement of
financial position date.


Gross contract receivables and retentions receivable include AED 207,776 thousand and AED 145,410 thousand respectively
assigned in favor of the Group’s bankers as security against facilities granted to the Group (note 24).


Retentions receivable represent contract retentions due from customers. Retentions receivable include AED 161,463
thousand due more than twelve months after the statement of financial position date.
                                                                                                                                     & Scull
                                                                                                                           97 Drake REPORT 2009
FINANCIAL HIGHLIGHTS                                                                                                          ANNUAL




NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
At 31 December 2009




As at 31 December 2009, contract and retention receivables at nominal value of AED 14,258 thousand were doubtful
and provided for. Movements in the allowance for doubtful contract and retention receivables were as follows:


                                                                                                                                      AED’000

Transferred from LLC (note 3.1)                                                                                                             12,964
Acquisition on business combination (note 3.2 & 3.3)                                                                                          2,600
Provided during the period                                                                                                                    5,027
Unused amounts reversed                                                                                                                    (2,034)
Written off during the period                                                                                                              (4,299)
                                                                                                                                  -----------------------
                                                                                                                                          14,258
                                                                                                                                    =      =
                                                                                                                                   =============

At the statement of financial position date, the ageing of unimpaired contract and retention receivables is as follows:


                                                    Neither                 Past due but not impaired
                                                  past due                  ----------------------------------------------------------------------------
                                                        nor             <30                 30-60                       60-90                        >90
                                   Total          impaired             days                   days                        days                     days
                                AED’000           AED’000           AED’000           AED’000                     AED’000                  AED’000

31 DECEMBER 2009                983,866           526,980           147,447                111,454                   25,892             172,093
                                  = =
                                 =========         =
                                                  ==========         =
                                                                    ==========            ===========
                                                                                           =                         =      =
                                                                                                                    =========            =
                                                                                                                                        ==========



Unimpaired receivables are expected, on the basis of past experience, to be fully recoverable. It is not the
practice of the Group to obtain collateral over receivables.
                                                                           98    Drake & Scull
FINANCIAL HIGHLIGHTS                                                             ANNUAL REPORT 2009




NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
At 31 December 2009




14. CONTRACT WORK-IN-PROGRESS

                                                                                     AED’000


Costs and estimated earnings                                                          5,241,852
Less: Progress billings                                                            (4,935,026)
                                                                                  -----------------------
                                                                                       306,826
                                                                                    =
                                                                                   =============

Disclosed in the consolidated statement of financial position as follows:
Contract work-in-progress                                                                405,143
Excess billings – Billings in excess of value of work executed                           (98,317)
                                                                                  -----------------------
                                                                                       306,826
                                                                                    =
                                                                                   =============



15. PREPAYMENTS AND OTHER RECEIVABLES

                                                                                     AED’000

Advances to suppliers                                                                      86,605
Interest receivable                                                                        60,222
Prepayments and other receivables                                                          99,167
                                                                                -----------------------
                                                                                       245,994
                                                                                   =
                                                                                 =============
                                                                                                                  & Scull
                                                                                                        99 Drake REPORT 2009
FINANCIAL HIGHLIGHTS                                                                                       ANNUAL




NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
At 31 December 2009




16. RELATED PARTY TRANSACTIONS AND BALANCES

Related parties represent major shareholders, directors and key management personnel of the Group, and entities
controlled, jointly controlled or significantly influenced by such parties. Pricing policies and terms of these transactions
are approved by the Group’s management.


Transactions between the PJSC and its subsidiaries have been eliminated on consolidation and are not disclosed in this
note. Details of transactions between the Group and other related parties included in the consolidated statement of income
are as follows:
                                                                   Period from 17 November 2008 to 31 December 2009

                                                                                     Joint               Other related
                                                                                  ventures                     parties
                                                                                  AED’000                    AED’000


Sales                                                                                              -                      230
Purchases                                                                                          -                   5,403
Management fee income                                                                     1,598                                -
Management fee expenses                                                                     -                     16,650
                                                                                  ===========
                                                                                  =                           ===========
                                                                                                              =


Balances with related parties included in the consolidated statement of financial position are as follows:

                                                                                 Due from                       Due to
                                                                           related parties              related parties
                                                                                 AED’000                      AED’000

Joint ventures                                                                          14,649                      16,289
Other related parties                                                                   24,910                      58,862
                                                                                 --------------------        --------------------
                                                                                     39,559                     75,151
                                                                                  ===========               ===========
                                                                                                            =
                                                                                                      100     Drake & Scull
FINANCIAL HIGHLIGHTS                                                                                          ANNUAL REPORT 2009




NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
At 31 December 2009




THE GROUP HAD FOLLOWING TRANSACTION WITH DRAKE AND SCULL GROUP (DSG), AN
ENTITY OWNED BY THE CHIEF EXECUTIVE OFFICER:


• The Group paid AED 74 million to DSG as management fee for the period upto 31 December 2012. The agreement for
  the payment which was referred to in the prospectus for offering of shares was subsequently amended with the approval
  of the board of directors. The amendments did not result in any change to the total amount payable to DSG. Long term
  prepayments represent such fee for the period from 1 January 2011 to 31 December 2012.

• The Group acquired 49% of Drake & Scull International for Contracting (W.L.L.) – Kuwait from parties who were
  beneficially holding the interest on behalf of DSG (note 25).

• One of the Group’s subsidiaries is a partner in a joint venture in Saudi Arabia with a subsidiary of DSG.


For the period ended 31 December 2009, the Group has not recorded any impairment of amounts owned by related parties.


Compensation of key management personnel
The remuneration of directors and other members of key management during the period was as follows:


                                                                    Period from 17 November 2008 to 31 December 2009

                                                                                                                AED'000


Short-term benefits                                                                                                  39,909
Employees’ end of service benefits                                                                                      1,863
                                                                                                              --------------------
                                                                                                                     41,772
                                                                                                              ===========
                                                                                                              =
                                                                                                                   & Scull
                                                                                                        101 Drake REPORT 2009
FINANCIAL HIGHLIGHTS                                                                                        ANNUAL




NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
At 31 December 2009




17. CASH AND CASH EQUIVALENTS
Cash and cash equivalents in the consolidated statement of cash flows consist of the following statement of financial
position amounts:


                                                                                                                AED’000

Cash on hand                                                                                                             1,147
Cash at bank                                                                                                        131,196
Time deposits                                                                                                    1,027,967
                                                                                                                --------------------
Bank balances and cash                                                                                          1,160,310
Time deposits under lien                                                                                         (327,245)
Bank overdrafts (note 24)                                                                                          (89,851)
                                                                                                              --------------------
CASH AND CASH EQUIVALENTS                                                                                         743,214
                                                                                                              ===========
                                                                                                              =

18. SHARE CAPITAL

                                                                                                                AED’000

Authorised, issued and fully paid
1,197,777,778 shares of AED 1 each paid in cash                                                                 1,197,778
980,000,000 shares of AED 1each paid in kind                                                                      980,000
                                                                                                              --------------------
                                                                                                               2,177,778
                                                                                                              ===========
                                                                                                              =
As noted in note 3.1, assets and liabilities of Drake & Scull International LLC and its subsidiaries, were transferred to the
PJSC as an in-kind contribution for 45% interest in the PJSC by the shareholders.

During the period, the PJSC 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 0.88 per share amounting to AED
28,622 thousand.
                                                                                                   102     Drake & Scull
FINANCIAL HIGHLIGHTS                                                                                       ANNUAL REPORT 2009




NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
At 31 December 2009




19. STATUTORY RESERVE
In accordance with the Commercial Companies Law of 1984 (as amended) and the PJSCs Articles of Association, 10% of
the annual net profit of the PJSC is required to be transferred to a statutory reserve. This reserve is not available for
distribution except as stipulated by the law.


20. EMPLOYEES’ END OF SERVICE BENEFITS
Movements in the provision recognised in the consolidated statement of financial position are as follows:


                                                                                                             AED’000

Transfer from the LLC (note 3.1)                                                                                    19,779
Acquired through business combinations                                                                                4,862
Provided during the period                                                                                          13,506
End of service benefits paid                                                                                        (3,596)
                                                                                                             --------------------
PROVISION AS AT END OF THE PERIOD                                                                                   34,551
                                                                                                           ===========
An actuarial valuation has not been performed as the net impact of discount rates and future increases in benefits is not
likely to be material.


21. TERM LOANS

                                                                                                             AED’000

Loans (i)                                                                                                         49,199
Loan (ii)                                                                                                         78,949
Loans (iii)                                                                                                      256,900
Loan (iv)                                                                                                        156,115
                                                                                                             --------------------
                                                                                                               541,163
                                                                                                            ===========
                                                                                                            =
Term loans                                                                                                    541,163
NON- CURRENT PORTION                                                                                           159,882
                                                                                                             --------------------
CURRENT PORTION OF TERM LOANS                                                                                  381,281
                                                                                                            ===========
                                                                                                            =
                                                                                                                 & Scull
                                                                                                      103 Drake REPORT 2009
FINANCIAL HIGHLIGHTS                                                                                      ANNUAL




NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
At 31 December 2009




(i) These loans carry interest rates ranging between 7.5% and 8.25% per annum and are repayable in 12 to 60 monthly
installments. Installments due within one year are disclosed under current liabilities. These loans are secured by lien on
the motor vehicles and equipment purchased and on certain receivables.

(ii) This represents loan equivalent to Euro 15 million obtained to finance the working capital requirements of the
subsidiary. The loan carries interest at variable rates of three months EURIBOR plus 1% per annum and is repayable on
31 October 2010.

(iii) This represents loans equivalent to USD 70 million obtained to finance the working capital requirements and
investments. The loan carries interest at variable rates of three months LIBOR plus 1.25% to 2.5% per annum and is
repayable within 12 months.

(iv) This represents loan of AED 156 million (equivalent to US$ 42.5 million) obtained to finance the held-to-maturity
investments. The loan carries interest at variable rates of three months LIBOR plus 0.5% per annum and is repayable on
12 August 2011. The loan is secured by pledge on the unquoted bonds (note 10.1).


22. INCOME TAX AND DEFERRED TAX
The major components of income tax expense for the period ended 31 December 2009 are:

INCOME TAX EXPENSE


                                                                                                              AED’000

Current income tax expense:
Current income tax charge                                                                                                  44

Deferred tax expense:
Relating to origination and reversal of temporary differences                                                             815
                                                                                                             --------------------
INCOME TAX EXPENSE                                                                                                      859
                                                                                                             ==========
                                                                                                             =         =


The tax expense and deferred tax liability relate to the Group’s subsidiary in Germany (note 3.2). Deferred tax liability
relates to temporary difference on the subsidiary in accordance with the taxation laws and regulations of Germany.
                                                                                                       104   Drake & Scull
FINANCIAL HIGHLIGHTS                                                                                         ANNUAL REPORT 2009




NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
At 31 December 2009




DEFERRED TAX
Movement in the deferred tax liability in the consolidated statement of financial position is as follows:

                                                                                                                AED’000

Acquired through business combinations (note 3.2)                                                                    30,327
Tax expense provided during the period                                                                                   815
Translation adjustment                                                                                               (1,347)
                                                                                                             --------------------
DEFERRED TAX LIABILITY AS AT END OF THE PERIOD                                                                      29,795
                                                                                                             ==========
                                                                                                             =                 =
Deferred income tax at 31 December relates to the following:

                                                       Consolidated statement                  Consolidated statement
                                                          of financial position                              of income
                                                                     AED’000                                 AED’000

Deferred tax liabilities
Accelerated depreciation for tax purposes                                         889                                        38
Contract receivables and retention                                             16,216                                       445
End of service benefits                                                          (163)                                         -
Inventories and contract work-in-progress                                      12,853                                       332
                                                                        --------------------                 --------------------
                                                                              29,795                                      815
                                                                        ==========
                                                                        =                 =                  ==========
                                                                                                             =                 =
The relationship between the tax expense and the accounting profit can be explained as follows:

                                                                     Period from 17 November 2008 to 31 December 2009

                                                                                                                 AED'000

Profit for the period                                                                                               336,537
Profit not subject to tax                                                                                        (333,913)
                                                                                                               --------------------
ACCOUNTING PROFIT BEFORE TAX                                                                                            2,624
                                                                                                               ==========
                                                                                                               =                 =
INCOME TAX EXPENSE                                                                                                       (859)
                                                                                                               ==========
                                                                                                               =                 =
EFFECTIVE TAX RATE BASED ON ACCOUNTING PROFIT                                                                          32.7%
                                                                                                               ==========
                                                                                                               =                 =
APPLICABLE TAX RATE                                                                                                        31%
                                                                                                               ==========        =
                                                                                              & Scull
                                                                                   105 Drake REPORT 2009
FINANCIAL HIGHLIGHTS                                                                   ANNUAL




NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
At 31 December 2009




23. ACCOUNTS PAYABLE AND ACCRUALS



                                                                                             AED'000

Due to suppliers and subcontractors                                                            390,071
Retention payable                                                                                72,687
Provision for maintenance                                                                        20,168
Accrued expenses and other payables                                                            302,577
                                                                                         --------------------
                                                                                             785,503
                                                                                         ==========
                                                                                         =                 =

24. DUE TO BANKS

                                                                                             AED'000

Trust receipts and other borrowings                                                              32,336
Bank overdrafts                                                                                  89,851
                                                                                         --------------------
                                                                                             122,187
                                                                                         ==========
                                                                                         =                 =




The banking facilities carry interest at prevailing market rates and are secured by one or more of
the following:
• Assignment of project receivables and insurance policy over the asset financed.
• Assignment of guarantees issued by subcontractors.
• Lien over time deposits.
• Guarantees of certain related parties.
                                                                                                         106    Drake & Scull
FINANCIAL HIGHLIGHTS                                                                                            ANNUAL REPORT 2009




NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
At 31 December 2009




25. INVESTMENT IN JOINT VENTURES

The Group, through Gulf Technical Construction Co. L.L.C. has a 50% interest in Ranya Test Joint Venture, a joint venture
with Ranya General Contracting Company (L.L.C.) under a joint venture agreement dated 12 August 2005.

The Group through its subsidiary Drake & Scull International LLC (Abu Dhabi) has a 50% interest in King Abdullah
University of Science and Technology project, a joint venture with Drake & Scull (W.L.L) – Saudi Arabia under a joint
venture agreement dated 15 January 2008.

The Group’s share in the joint ventures’ assets and liabilities included in the consolidated financial statements is as follows:


                                                                                                                    AED’000

Current assets                                                                                                       192,701
Non-current assets                                                                                                        2,963
Current liabilities                                                                                                  (87,262)
                                                                                                                 --------------------
NET ASSETS                                                                                                           108,402
                                                                                                                 ==========
                                                                                                                 =                 =
The Group’s share in the operating results of the joint ventures included in the consolidated financial statements is as follows:
                                                                      Period from 17 November 2008 to 31 December 2009
                                                                                                                    AED’000

Revenue                                                                                                             358,597
                                                                                                                 ==========
                                                                                                                 =         =
PROFIT FOR THE PERIOD                                                                                                84,427
                                                                                                                 ==========
                                                                                                                 =         =

26. EARNINGS PER SHARE
                                                                      Period from 17 November 2008 to 31 December 2009

                                                                                                                    AED’000

EARNINGS
Profit For The Period Attributable To Equity Holders Of The Parent (AED’000)                                          334,390
                                                                                                                  ==========
                                                                                                                  =         =
SHARES
Weighted Average Number Of Shares Outstanding During The Period                                             2,165,835,593
                                                                                                             ===============
                                                                                                             =              =
Basic And Diluted Earnings Per Share (AED)                                                                                0.154
                                                                                                                  ==========
                                                                                                                  =         =
                                                                                                                         & Scull
                                                                                                              107 Drake REPORT 2009
FINANCIAL HIGHLIGHTS                                                                                              ANNUAL




NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
At 31 December 2009




27. EXPENDITURE COMMITMENTS
                                                                                                                        AED’000

Operating lease commitments
Future minimum lease payments:
Within one year                                                                                                                 24,896
After more than one year                                                                                                           6,908
More than five years                                                                                                                1,633
                                                                                                                     ----------------------------
TOTAL OPERATING LEASE EXPENDITURE CONTRACTED
FOR AT THE STATEMENT OF FINANCIAL POSITION DATE                                                                               33,437
                                                                                                                     ============


28. CONTINGENCIES
                                                                                                                        AED’000

Performance bonds                                                                                                            626,769
Labour and other guarantees                                                                                                  405,621
                                                                                                                    ==========
                                                                                                                    =         =

29. RISK MANAGEMENT

INTEREST RATE RISK
The Group is exposed to interest rate risk on its interest bearing assets and liabilities (bank deposits, interest bearing loans and
advances, due to banks, and term loans). The Group’s interest-bearing financial assets and financial liabilities expose it to risks
associated with the effects of fluctuations in the prevailing levels of market interest rates on its financial position and cash flows.


The sensitivity analyses below have been determined based on the exposure to interest rates for bank deposit, interest bearing
loans and advances, due to banks and term loans at the statement of financial position date. For bank deposits, interest bearing
loans and advances, due to banks and term loans, the analysis is prepared assuming the amount of deposit with banks, interest
bearing loans and advances, amount due to banks and term loans outstanding at the statement of financial position date was
outstanding for the whole period. A 50 basis point increase or decrease is used when reporting interest rate risk internally to key
management personnel and represents management’s assessment of the reasonably possible change in interest rates.
                                                                                                             Drake& Scull
                                                                                                        108 Drake REPORT 2009
                                                                                                                    & Scull
FINANCIAL HIGHLIGHTS
 FINANCIAL HIGHLIGHTS                                                                                       ANNUAL REPORT 2009
                                                                                                             ANNUAL




NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
At 31 December 2009
At 31 December 2009




There is no direct impact on the Group’s equity other than the impact resulting from the effect on profit for the period.
 There is no direct impact on the Group’s equity other than the impact resulting from the effect on profit for the period.

                                                                                                  Effect on period from
                                                                                                   Effect on period from
                                                 Increase/decrease
                                                  Increase/decrease                               17 November 2008 to
                                                                                                   17 November 2008 to
                                                     in basis points
                                                      in basis points                                 31 December2009
                                                                                                       31 December2009

                                                                                                                 AED’000
                                                                                                                 AED’000

AED
 AED                                                               +50
                                                                    +50                                              44,891
                                                                                                                      44,891
AED
 AED                                                               -50
                                                                    -50                                            (44,891)
                                                                                                                    (44,891)


CURRENCY RISK
CURRENCY RISK
The Group is exposed to currency risk on foreign currencies monetary assets and liabilities which are denominated in Euro
 The Group is exposed to currency risk on foreign currencies monetary assets and liabilities which are denominated in Euro
and Kuwaiti Dinar. The transactions relating to the joint venture in Saudi Arabia are in Saudi Arabian Riyals. Both Saudi
 and Kuwaiti Dinar. The transactions relating to the joint venture in Saudi Arabia are in Saudi Arabian Riyals. Both Saudi
Arabian Riyals and Arab Emirates Dirhams are pegged to US Dollars.
 Arabian Riyals and Arab Emirates Dirhams are pegged to US Dollars.

The table below indicates the Group’s foreign currency exposure at 31 December, as aaresult of its monetary assets and
 The table below indicates the Group’s foreign currency exposure at 31 December, as result of its monetary assets and
liabilities. The analysis calculates the effect of aareasonably possible movement of the AED currency rate against the Euro
  liabilities. The analysis calculates the effect of reasonably possible movement of the AED currency rate against the Euro
and Kuwaiti Dinar, with all other variables held constant, on the statement of income (due to the fair value of currency
  and Kuwaiti Dinar, with all other variables held constant, on the statement of income (due to the fair value of currency
sensitive monetary assets and liabilities).
  sensitive monetary assets and liabilities).


                                                 Increase/decrease
                                                  Increase/decrease                                       Effect on profit
                                                                                                           Effect on profit
                                                  in rate to the AED
                                                   in rate to the AED                                            AED’000
                                                                                                                  AED’000

Euro
 Euro                                                             +5%
                                                                   +5%                                              (1,001)
                                                                                                                     (1,001)
                                                                  -5%
                                                                   -5%                                                1,001
                                                                                                                       1,001

Kuwaiti Dinar
 Kuwaiti Dinar                                                    +5%
                                                                   +5%                                              (4,179)
                                                                                                                     (4,179)
                                                                  -5%
                                                                   -5%                                                4,179
                                                                                                                       4,179


CREDIT RISK
CREDIT RISK
The Group seeks to limit its credit risk with respect to customers by setting credit limits for individual customers and
 The Group seeks to limit its credit risk with respect to customers by setting credit limits for individual customers and
monitoring outstanding receivables and retentions due from the customers. The Group limits its credit risk with regard to
 monitoring outstanding receivables and retentions due from the customers. The Group limits its credit risk with regard to
bank deposits by dealing with reputable banks only. With respect to credit risk arising from the other financial assets of the
 bank deposits by dealing with reputable banks only. With respect to credit risk arising from the other financial assets of the
Group, including cash and cash equivalents, the Group’s exposure to credit risk arises from default of the counterparty, with
 Group, including cash and cash equivalents, the Group’s exposure to credit risk arises from default of the counterparty, with
aamaximum exposure equal to the carrying amount of these instruments.
   maximum exposure equal to the carrying amount of these instruments.
                                                                                                                                        & Scull
                                                                                                                             109 Drake REPORT 2009
FINANCIAL HIGHLIGHTS                                                                                                             ANNUAL




NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
At 31 December 2009




LIQUIDITY RISK
The Group limits its liquidity risk by ensuring bank facilities and funding from the shareholders are available.

The table below summarises the maturities of the Group’s undiscounted financial liabilities at 31 December 2009, based
on contractual payment dates and current market interest rates.


                                           Less than                 3 to 12                 1 to 5
                                           3 months                  months                  years                >5 years                  Total
                                            AED’000                 AED’000                AED’000                AED’000                 AED’000


Accounts payable and accruals                  412,887                276,370                  96,246                            -         785,503
Due to related parties                           58,423                 16,728                            -                      -            75,151
Due to banks                                   115,758                    7,190                           -                      -         122,948
Term loans                                       43,670               348,103                165,865                             -         557,638
                                          --------------------   --------------------   --------------------   --------------------   --------------------
TOTAL                                         630,738                648,391                262,111                              -    1,541,240
                                          ==========
                                          =         =            ==========
                                                                 =         =            =
                                                                                        ===========            ========== =
                                                                                                               =         = ===========

Capital management
The primary objective of the Group’s capital management is to ensure that it maintains a healthy capital ratio in order to
support its business and maximise shareholder value.

The Group has raised capital through public subscription. Capital comprises share capital, treasury shares, statutory
reserve and retained earnings and is measured at AED 2,483,546 thousand at 31 December 2009.


30. FAIR VALUES OF FINANCIAL INSTRUMENTS

Financial instruments comprise financial assets and financial liabilities.

Financial assets consist of contract receivables, due from related parties, investments, other receivables, bank balances
and cash. Financial liabilities consist of due to banks, due to related parties, term loans and payables. The fair values of
financial instruments are not materially different from their carrying values.
We stand tall. Consolidating, and growing.
                    111 Drake & Scull
                        ANNUAL REPORT 2009




OTHER INFORMATION
                                                       112   Drake & Scull
                                                             ANNUAL REPORT 2009




SHAREHOLDER
DISTRIBUTION




HSBC/KRT II Limited                    9.1837%

KRT3 Limited                           8.629%

Khaldoun Rashid Tabari                 8.2522%

Al Mal Capital                         5.2068%

Drake & Scull Group Limited            4.5408%

SHUAA CAPITAL/ CLIENTS                 4.2746%

HSBC/OCEAN FUND                        2.5619%

HSBC/Middle East North                 1.603%
Africa Opportunit

Drake & Scull International PJSC       1.4878%

KRT1 LIMITED                           1.4639%

HSBC Bank PLC A/C IB Main Account      1.3798%

Zabeel Investments                     1.3728%

HSBC/CREDIT Suisse International       1.3321%

STANDARD Bank Jersey Limited           0.9347%

VAIL Limited                           0.9014%

H.H. Sheikh Tahnoon Bin Zayed Al Nahyan 0.704%

H.H. Sheikha Shiekha Bin Zayed Al Nahyan 0.6658%

Others                                 45.5%
                                                   As of 31 December 2009
                                                                                          113 Drake & Scull
OTHER INFORMATION                                                                              ANNUAL REPORT 2009




                                                    IPO                                   CURRENT
 SHAREHOLDER COMPOSITION
 (% of Identified Outstanding Shares)

 • Strategic investors have more than                                  Retail 44%
   doubled their holdings
 • 75% increase in holdings by                                         Strategic 34%
   institutional investors
                                                                       Inst 20%

                                                                       Comp 2%




 GEOGRAPHY
 (% of Identified Institutional Shares)
 Stable geographical distribution post IPO                             UAE 86%

 • The majority of investors, 86%, are located in                      UK 6%
   the UAE, and has decreased by 6% since IPO.      UAE 94%            BAHRAIN 3%
 • Percentage of identified shareholders in the
   UK increased from 0% to 6%. There are            KUWAIT 2%          KUWAIT 2%
   currently no investors in the USA or other
   Western countries, apart from the UK.            Rest of World 3%   Rest of World 3%




 INVESTMENT STYLE                                                      OTHER 89%
 (% of Identified Institutional Shares)
                                                                       GROWTH 8%
 • Of the institutional investors, Growth and       OTHER 94%
   Value investors have increased since the                            VALUE 2%
   IPO to 8% and 2%, respectively.                  GROWTH 5%
   Hedge funds hold 1% of identified shares,                            HEDGE FUND 1%
   all are located in London.                       VALUE 1%



 CONCENTRATION
 (% of Free Float Shares)

 Increased shareholder concentration

 • Shareholding became much more
   concentrated since the IPO, with the
   top 50 investors holding 49% of the
   free float, compared to 27% previously.
                                                                                    As of 31 December 2009
                                                                                                                                    114      Drake & Scull
OTHER INFORMATION                                                                                                                            ANNUAL REPORT 2009




FOUNDERS SHAREBOOK

                                                                                                                  SHARES                    % OF TOTAL
 SHAREHOLDER NAME                                                  CLIENT TYPE                 ORIGIN            ALLOCATED                   CAPITAL

 THE FIRST DUBAI CORPORATION LLC                                         Corporate                UAE                 284,437,333                  13.06%
 KHALDOUN RASHID TABARI                                                  Individual              Jordan               179,714,812                   8.25%
 DRAKE AND SCULL GROUP LIMITED                                           Corporate               JAFZA                108,888,889                   5.00%
 AL MAL CAPITAL PSC                                                      Corporate                UAE                 103,975,415                   4.77%
 SHUAA CAPITAL PSC                                                       Corporate                UAE                  60,000,000                   2.76%
 ZABEEL INVESTMENTS LLC                                                  Corporate                UAE                  29,895,811                   1.37%
 KRT2 LIMITED                                                            Corporate               JAFZA                 26,568,890                   1.22%
 KRT1 LIMITED                                                            Corporate               JAFZA                 26,132,333                   1.20%
 KRT3 LIMITED                                                            Corporate               JAFZA                 17,422,223                   0.80%
 H.H. SHEIKH TAHNOON BIN ZAYED ALNEHYAN                                  Individual               UAE                  15,331,185                   0.70%
 ABU DHABI COMMERCIAL BANK LTD.                                          Corporate                UAE                  11,498,389                   0.53%
 ZAMIL INDUSTRIAL INVESTMENT Co. (JSC)                                   Corporate                KSA                   9,581,991                   0.44%
 ABDULMONEM RASHED A ALRASHED                                            Individual               KSA                   9,581,991                   0.44%
 DAMAC GLOBAL INVESTMENT COMPANY                                         Corporate               JAFZA                  7,665,592                   0.35%
 GLOBAL INVESTMENT HOUSE K.S.C.C.                                        Corporate               Kuwait                 7,665,592                   0.35%
 DUBAI INVESTMENT PJSC                                                   Corporate                UAE                   7,665,592                   0.35%
 AL MAZAYA HOLDING Co.                                                   Corporate               Kuwait                 7,665,592                   0.35%
 NATIONAL BONDS CORPORATION PJSC                                         Corporate                UAE                   6,515,754                   0.30%
 GULF GENERAL INVESTMENTS CO. (PSC)                                      Corporate                UAE                   5,749,194                   0.26%
 ABDULLA AHMED ALMOOSA                                                   Individual               UAE                   5,749,194                   0.26%
 FANAR GROUP LLC                                                         Corporate                UAE                   3,832,796                   0.18%
 ENSHAA PSC                                                              Corporate                UAE                   3,832,796                   0.18%
 KUWAIT HOLDING COMPANY                                                  Corporate               Kuwait                 3,832,796                   0.18%
 H.H. SHEIKH RASHID HUMAID RASHID ALNOAIMI                               Individual               UAE                   3,832,796                   0.18%
 H.E. ABDULRAHMAN MOHAMED N ALOWAIS                                      Individual               UAE                   2,682,957                   0.12%
 THE FIRST ARABIAN CORPORATION LLC                                       Corporate                UAE                   2,299,678                   0.11%
 SPECIAL PROJECT COMPANY (WLL)                                           Corporate                Qatar                 2,299,678                   0.11%
 H.H. SHEIKH SUROOR BIN MOHAMMAD ALNEHYAN                                Individual               UAE                   2,299,678                   0.11%
 AL JALLAF INVESTMENT LLC                                                Corporate                UAE                   1,916,398                   0.09%
 AL AMJAAD INVESTMENT CO. LLC                                            Corporate                UAE                   1,916,398                   0.09%
 AMJAD MOHAMED YUSRI MAHMOUD SALMAN ALDWAIK                              Individual               UAE                   1,916,398                   0.09%
 HUSSAIN JASIM AL NOWAIS                                                 Individual               UAE                   1,916,398                   0.09%
 ISMAIL AQIL ABDULRAHIM JANAHI                                           Individual               UAE                   1,916,398                   0.09%
 JUMA AHMAD MAJID ALGHURAIR                                              Individual               UAE                   1,916,398                   0.09%
 MOHD AMIN MOHD SEDDIQ MOHD AQIL ALKAZEM                                 Individual               UAE                   1,916,398                   0.09%
 ELIA NUQUL AND SONS COMPANY LTD                                         Corporate               Jordan                 1,533,118                   0.07%
 ARZAQ HOLDINGS PRIVATE JSC                                              Corporate                UAE                   1,533,118                   0.07%
 SHEIKH TARIK FAISAL KHALID ALQASSEMI                                    Individual               UAE                   1,533,118                   0.07%
 THEMAAR INVESTMENT LLC                                                  Corporate                UAE                    766,559                    0.04%
 AL BUHAIRA NATIONAL INSURANCE COMPANY                                   Corporate                UAE                    766,559                    0.04%
 FAISAL JUMA KHALFAN BELHOUL ALFALASI                                    Individual               UAE                    766,559                    0.04%
 H.E. MOHAMMED ALI REDHA ALI ALHASHIMI                                   Individual               UAE                    766,559                    0.04%
 KHALID JASSIM MOHD. BIN KALBAN                                          Individual               UAE                    766,559                    0.04%
 MOHAMED ABDULLA JUMAA AL QUBAISI                                        Individual               UAE                    766,559                    0.04%
 SHEIKH MISHAL KHALID M BINHETHLAIN                                      Individual               KSA                    766,559                    0.04%
 DSESOP LIMITED                                                          Corporate               JAFZA                    1,000                     0.00%



As per the UAE laws, shares held by the founders will be subject to mandatory lock up period extending from the date of the incorporation of the company until the
announcement until the announcement of the company’s audited financial statements relating to the second financial year following such incorporation. A founder
will not be allowed to sell or transfer shares during such period, except to another founder(s).
DSI ACROSS THE GLOBE
                                                                                                                             ALG




DSI ACROSS THE GLOBE

BUSINESS STREAMS
  MEP Offices                                            MEP Projects
  (Dubai, Abu Dhabi, Thailand, Kuwait, Libya, Jordan)   (Dubai, Abu Dhabi, Sharjah, Kuwait City, Riyadh, Bangkok)

  DSWP Offices                                           DSWP Projects
  (Dubai)                                               (Dubai, Abu Dhabi, Khartoum, Riyadh, Manama)

  DSC Offices                                            DSC Projects
  (Dubai, Abu Dhabi, Riyadh)                            (Dubai, Abu Dhabi)


  PASSAVANT Offices                                      PASSAVANT Projects
  (UAE, Algeria, Poland, Hungary, Croatia,              (Fujeirah, Romania, Turkey, Germany, Hungary, Algeria, China,
  Bulgaria, Romania, Turkey, China)                     Saudi Arabia, Poland, Taiwan, Croatia, Russia, Lebanon, Bulgaria )
                                                                                                   RUSSIA




          GERMANY      POLAND




                      HUNGARY
                                ROMANIA
            CROATIA

                                BULGARIA



                                            TURKEY
                                                                                                            CHINA
                                                     LEBANON



                                                               KUWAIT
                                                      JORDAN
ALGERIA
                        LIBYA
                                                                  BAHRAIN
                                                                        Manama

                                                          SAUDI
                                                          ARABIA
                                                                                 UAE
                                                                                 (HEAD QUARTERS)
                                                                                                                                TAIWAN




                                           SUDAN                                                                     THAILAND
                                                                                                                    BANGKOK




                                                                                   UAE
                                                                                   HEADQUARTERS
Contact Details

Drake & Scull International PJSC Corporate Office   Drake & Scull International Jordan
PO Box : 65794 Dubai, UAE                           PO Box: 940237, Amman 11194 Jordan
Tel : +971 4 8112300                                Tel: +962 6 5544824
Fax : +971 4 8112315                                Fax: +962 6 5544825

Drake & Scull International Dubai                   Drake & Scull Water & Power
PO Box : 65794 Dubai, UAE                           PO Box:65794, Dubai,UAE,
Tel : +971 4 8112300                                Tel: +971 4 811 2400,
Fax : +971 4 8112315                                Fax: +971 4 811 2401

Drake & Scull International Abu Dhabi               Passavant Roediger
PO Box : 44325, Abu Dhabi, UAE                      PO Box: 65794 Dubai, UAE
Tel : +971 2 6226005                                Tel : +971 4 8112300
Fax : +971 2 6227404                                Fax: +971 4 8112305

                                                    Drake & Scull Construction
Drake & Scull International Kuwait                  PO Box: 65794, Dubai, UAE
PO Box:1990,Safat 13020, Kuwait                     Tel : +971 4 8112400
Tel : +965 24313012                                 Fax: +971 4 8850967
Fax: +965 24338171
                                                    Gulf Technical Construction Company Dubai
Drake & Scull International Thailand                PO Box: 66123, Dubai , UAE
PO Box : 10330, Bangkok, Thailand                   Tel: +971 4 8112400
Tel : +66 2 651 8232                                Fax: +971 4 8850967
Fax: +66 2 651 8233
                                                    Gulf Technical Construction Company Abu Dhabi
Drake & Scull International Libya                   PO Box: 44325, Abu Dhabi, UAE
Tel : +218 21 3636969                               Tel: +971 2 6760511
Fax : +218 21 3636969                               Fax: +971 2 6760722



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