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Dana Group International Investments: Half-year Report

CHAIRMAN’S INTERIM STATEMENT

DANA GROUP INTERNATIONAL INVESTMENTS LIMITED

(“the Group” or the “Company”)

I am pleased to present Dana Group International Investments Limited’s
consolidated interim financial results for the six months’ period from 1(st)
July 2016 to 31(st) December 2016. These consolidated financial statements
have not been reviewed by the Group’s auditors.

In 2016, the Company’s accounting reference date was changed from 31(st)
December to 30(th) June. These are thus the first interim results of the Group
for a period ended 31(st) December. Owing to the change of accounting
reference date, the figures presented below for the comparable period 1(st)
July 2015 to 31(st) December 2015 have been extracted from the audited
financial statements of the Company for the period 1(st) January 2015 to
30(th) June 2016 to make a like-for-like comparison. 

Financial results

The results for the first half of the current year were positive. The
comprehensive income for the six months’ period ended 31(st) December 2016
was USD 0.02 million (2015: comprehensive loss of USD 100.09 million) and the
net loss for the period was USD 0.04 million (2015: net loss of USD 74.83
million), giving rise to a basic loss per share of 0.01 US cents (2015: basic
loss per share of 5.90 US cents).

During the comparable period ended 31(st) December 2015, the comprehensive
loss of USD 100.09 million derived principally from the share of loss from an
associate company, Makkah & Madinah Commercial Investment Company JSC
(“MMCI”), of which the Company owned 34.12% prior to disposal on 30(th)
May 2016. The losses at MMCI were attributable to fair value changes in the
real estate investment assets held by MMCI and its subsidiary companies; and
from the realisation during the period of certain available-for-sale
investments.

Pursuant to the share exchange and cancellation transaction approved by the
shareholders on 30(th) May 2016, the Company disposed of its 34.12% interest
in MMCI in consideration for 21.68% interest in Bonyan International
Investment Group (Holding) LLC (“Bonyan”) and the delivery to the Company
for cancellation of 1,018,759,378 class A voting shares (“Cancellation
Shares”) of the capital of the Company.

The capital reduction, which was achieved through the surrender of
Cancellation Shares by the Bonyan vendors, was part of the consideration for
the sale of the MMCI stake and avoided the remaining shareholders having their
net assets per share diluted by the difference in values of the asset sold and
the asset acquired.

At 31(st) December 2016, the Company’s net assets stood at USD 77.69 million
(2015: USD 397.68 million); or US cents 31 per share (2015: US cents 31 per
share).

Board changes

During the current period, there were certain directorate changes to the Board
where I was appointed as Chairman following the resignation of Mr. Khaled Al
Husseini as Chairman and director of the Company. Further, Mr. Firas Mohammad
Baba, Chief Executive Officer of Bonyan Group, was appointed in October 2016 a
director.

New website

Following the change in the name of the Company from Makkah & Madinah Holdings
Limited to Dana Group International Investments Limited, the Company’s
website has migrated to new domain and shareholders will now be able to obtain
and download information about the company from www.dana-investments.com.

Post- Balance Sheet Events

Completion of share capital reduction

All of the Cancellation Shares mentioned above, which were scheduled for
cancellation, have now been surrendered to the Company's registrar and
cancelled. Following the cancellation, the total number of class A voting
shares and depository interests in the shares outstanding on the share
register is 249,289,747.

ISDX - Name change

From 3(rd) January 2017, ICAP Securities & Derivatives Exchange (ISDX) in
London, where the Group’s shares are quoted, was re-branded as Nex Exchange
in order to reflect the division of the businesses of Nex Exchange’s former
parent company, ICAP Plc, between two new holding companies.

Except as disclosed above, there have been no major post- balance sheet events
 and trading to date remains consistent with the directors’ expectations at
the beginning of the second half of the current financial year.

Muin El Saleh,

Chairman,

Dubai, 27(th) March 2017

 

Important: the Notes numbered 1 to 14 which appear after the condensed,
consolidated statement of cash flows below are an integral part of the
condensed, consolidated interim financial information, which should be read in
the context of these Notes.

Condensed, consolidated statement of comprehensive income
for the six months’ period ended 31(st) December 2016

                                                                                                                    Note     Six months’ period ended  31 December  2016  (unaudited)      Six months’ period ended 31 December 2015 (unaudited) 
                                                                                                                                                                                  USD                                                        USD 
 Revenue                                                                                                             13                                                       114,441                                                    750,000 
 Employee costs                                                                                                                                                             (137,066)                                                  (475,890) 
 Other operating expenses                                                                                                                                                    (56,294)                                                   (60,488) 
 Legal and professional expenses                                                                                                                                             (52,104)                                                   (61,627) 
 Other income                                                                                                                                                                  63,706                                                          - 
 Depreciation                                                                                                                                                                 (2,868)                                                    (3,947) 
 Operating (loss) / income                                                                                                                                                   (70,185)                                                    148,048 
 Share of loss from an associate                                                                                      6                                                             -                                              (100,248,703) 
 Recycling of available for sale fair valuation reserve on disposal of available for sale investment                 11                                                             -                                                 25,256,483 
 Finance income - net                                                                                                                                                          33,146                                                      9,952 
 Loss for the period                                                                                                                                                       ( 37,039 )                                               (74,834,220) 
 Other comprehensive income  Items that are or may be reclassified subsequently to the consolidated income or loss                                                                                                                               
 Recycling of available for sale fair valuation reserve on disposal of available for sale investment                 11                                                             -                                               (25,256,483) 
 Change in fair value of available for sale financial asset                                                           7                                                        52,471                                                          - 
 Total comprehensive income/(loss) for the period                                                                                                                              15,432                                            ( 100,090,703 ) 

   

 Loss per share attributable to the equity holders of the parent during the period                          
 Basic loss per share for the period                                                5   (0.0001)    (0.059) 
 Diluted loss per share for the period                                              5          -    (0.059) 

 

Condensed, consolidated statement of financial position
as at 31(st) December 2016

                                                     Note   31 December  2016  (unaudited)    31 December 2015 (unaudited) 
                                                                                       USD                             USD 
 ASSETS                                                                                                                    
 Non-current assets                                                                                                        
 Property and equipment                                                              2,278                           8,983 
 Investment in an associate                            6                                 -                     397,374,856 
 Available for sale financial asset                    7                        78,233,975                               - 
                                                                                78,236,253                     397,383,839 
 Current assets                                                                                                            
 Trade receivables                                    13                            19,074                         823,818 
 Short term loan                                       8                         4,700,000                               - 
 Prepayments, advances and other receivables           9                           706,718                         753,520 
 Cash and bank                                                                      36,819                         135,466 
                                                                                 5,462,611                       1,712,804 
 Total assets                                                                   83,698,864                     399,096,643 
                                                                                                                           
 EQUITY                                                                                                                    
 Share capital                                        10                         2,010,490                      10,226,655 
 Share premium                                        10                        83,862,586                     395,146,685 
 Available for sale fair valuation reserve            11                            52,471                               - 
 Retained losses                                                              ( 8,226,656)                     (7,691,573) 
                                                                                77,698,891                     397,681,767 
 LIABILITIES                                                                                                               
                                                                                                                           
 Non-current liabilities                                                                                                   
 Provision for employees’ end of service benefits                                   21,203                         146,788 
                                                                                    21,203                         146,788 
 Current liabilities                                                                                                       
 Trade and other payables                             12                         5,978,770                       1,268,088 
                                                                                 5,978,770                       1,268,088 
 Total liabilities                                                               5,999,973                       1,414,876 
 Total equity and liabilities                                                   83,698,864                     399,096,643 

 

Condensed, consolidated statement of changes in equity
for the six months’ period ended 31(st) December 2016

                                               Share  capital  Share premium  Available for sale fair valuation reserve  Retained (losses) /  earnings         Total 
                                                          USD            USD                                        USD                            USD           USD 
                                                                                                                                                                     
 At 1 (st)July 2015 (unaudited)                    10,226,655    395,146,685                                 25,256,483                     67,142,647   497,772,470 
 Total comprehensive income for the period                                                                                                                           
                                                                                                                                                                     
 Loss for the period                                        -              -                                          -                   (74,834,220)  (74,834,220) 
 Other comprehensive loss for the period                    -              -                              ( 25,256,483)                              -  (25,256,483) 
 Balance at 31 (st)December 2015 (unaudited)       10,226,655    395,146,685                                          -                  ( 7,691,573 )   397,681,767 
                                                                                                                                                                     
 At 1 (st)July 2016 (audited)                       2,010,490     83,862,586                                          -                    (8,189,617)    77,683,459 
 Total comprehensive income for the period                                                                                                                           
                                                                                                                                                                     
 Loss for the period                                        -              -                                          -                       (37,039)      (37,039) 
 Other comprehensive income for the period                  -              -                                     52,471                              -        52,471 
 Balance at 31 (st)December 2016 (unaudited)        2,010,490     83,862,586                                     52,471                  ( 8,226,656 )    77,698,891 
                                                                                                                                                                     

 

Condensed, consolidated statement of cash flows
for the six months’ period ended 31(st) December 2016

                                                                                                         Six months’ period ended  31 December  2016 (unaudited)      Six months’ period ended 31 December 2015 (unaudited) 
                                                                                                                                                             USD                                                        USD 
                                                                                                                                                                                                                            
 Cash flows from operating activities                                                                                                                                                                                       
 Loss for the period                                                                                                                                    (37,039)                                               (74,834,220) 
 Adjustments for:                                                                                                                                                                                                           
 Share of loss from an associate                                                                                                                               -                                                100,248,703 
 Recycling of available for sale fair valuation reserve on disposal of available for sale investment                                                           -                                               (25,256,483) 
 Finance income - refer note 8                                                                                                                         (166,077)                                                          - 
 Finance cost - refer note 12                                                                                                                            150,979                                                          - 
 Depreciation                                                                                                                                              2,868                                                      3,947 
 Provision for employees’ end of service benefits                                                                                                         11,646                                                     17,778 
 Working capital changes:                                                                                                                                                                                                   
 Trade and other receivables                                                                                                                             112,976                                                  (139,133) 
 Trade and other payables                                                                                                                              4,649,278                                                     25,367 
 Net cash generated from operating activities                                                                                                          4,724,631                                                     65,959 
                                                                                                                                                                                                                            
 Cash flows from financing activities                                                                                                                                                                                       
 Short term loan                                                                                                                                   ( 4,700,000 )                                                          - 
 Net cash used in financing activities                                                                                                             ( 4,700,000 )                                                          - 
                                                                                                                                                                                                                            
 Net increase in cash and cash equivalents                                                                                                                24,631                                                     65,959 
 Cash and cash equivalents at beginning of the period                                                                                                     12,188                                                     69,507 
 Cash and cash equivalents at end of the period                                                                                                           36,819                                                    135,466 

Notes to the condensed, consolidated interim financial information
for the six months’ period ended 31(st) December 2016

1.      Legal status and activity

Dana Group International Investments Limited (“the Company”) was
incorporated on 29(th)  May 2007 under the International Business Companies
Act, 2000, in the Commonwealth of the Bahamas under registration number 148728
(B).

The registered office address of the Company is Ocean Centre, East Bay Street,
P.O. Box SS19084, Nassau, Bahamas.

During the current period, the Company’s Board of Directors resolved to
change the financial reporting period end of the Company from 31(st) May 2016
to 30(th) June 2016 to allow the Company extracting accurate financial
information to determine the fair value of Bonyan at intervening reference
dates i.e. June and December. Accordingly, these condensed, consolidated
interim financial information have been prepared for the six months’ period
from 1(st) July 2016 to 31(st) December 2016, whereas corresponding figures
were for six months’ period from 1(st) July 2015 to 31(st) December 2015 for
comparable purposes.

The unaudited condensed consolidated interim financial information of the
Company for the period ended 31(st) December 2016 comprises the Company and
its subsidiaries (collectively referred to as “the Group”). There has been
no change in the Group structure since the date of most recent annual
consolidated financial statements for the year ended 30(th) June 2016.

The principal activities of the Group are property and real estate
investments, development and advisory services for projects related to the
real estate and infrastructure sectors.

2.      Basis of preparation

The unaudited condensed consolidated interim financial information for the six
months’ ended 31(st) December 2016 has been prepared in accordance with IAS
34, ‘Interim Financial Reporting’. The condensed, consolidated interim
financial information should be read in conjunction with the annual audited
consolidated financial statements for the year ended 30(th) June 2016, which
have been prepared in accordance with International Financial Reporting
Standards.

3.      Estimates and assumptions

The preparation of condensed, consolidated interim financial information
requires management to make judgements, estimates and assumptions that affect
the application of accounting policies and the reported amounts of assets and
liabilities, income and expenses. Actual results may differ from these
estimates.

In preparing the condensed, consolidated interim financial information, the
significant judgements made by the management in applying the Group’s
accounting policies and the key sources of estimation uncertainty were the
same as those that were applied to the consolidated financial statements for
the year ended 30(th) June 2016.

4.      Significant accounting policies

The accounting policies adopted in the preparation of the condensed,
consolidated interim financial information are consistent with those followed
in the preparation of the Group’s annual consolidated financial statements
for the year ended 30(th) June 2016.

5.      Loss per share

a)     Basic loss per share

Basic loss per share are calculated by dividing the profit attributable to
equity holders of the parent by the weighted average number of ordinary shares
in issue during the period.

                                                            Period ended 31 December     Period ended 31 December  
                                                                       2016                         2015           
                                                                   (unaudited)                  (unaudited)        
 Loss attributable to equity holders of the parent (USD)                   ( 37,03 9 )              ( 74,834,220 ) 
 Weighted average number of ordinary shares in issue (No.)                 249,289,747               1,268,049,125 

b)   Diluted loss per share

Diluted loss per share are calculated by adjusting the weighted average number
of ordinary shares outstanding by the estimated conversion of all dilutive
instruments. The Company has one category of potentially dilutive instruments:
share warrants. For the share warrants, a calculation is performed to
determine the estimated number of shares that could have been acquired at a
pre-determined price. The number of shares calculated as above, is compared
with the number of share that would have been issued assuming the exercise of
the share warrants.

                                                                        Period ended 31 December  2016    Period ended 31 December 2015  
                                                                                  (unaudited)                      (unaudited)           
 Loss attributable to equity holders of the parent (USD)                                     ( 37,039 )                   ( 74,834,220 ) 
 Weighted average number of ordinary shares in issue (No.)                                  249,289,747                    1,268,049,125 
 Adjustments for:                                                                                                                        
 Assumed conversion of share warrants (refer note (i) below)                                          -                                - 
 Weighted average number of ordinary shares for diluted loss per share                      249,289,747                    1,268,049,125 

(i)   All the share warrants were expired during the current period. The
Company has no dilutive instruments at the reporting date.

6.     Investment in an associate

 Name                                                   Country of incorporation    Proportion of voting  rights held at    
                                                                                     31 December  2016    31 December  2015 
 Makkah & Madinah Commercial Investment Company (MMCI)  Kingdom of Saudi Arabia                      -             34.121 % 

The Group’s investment in an associate accounted for on the equity basis is
summarised as follows:

                                                                                        
                                                                  2016             2015 
                                                     USD  (unaudited )  USD (unaudited) 
 Balance as at 1 (st)July                                            -      497,623,559 
 Share of loss from an associate during the period                   -    (100,248,703) 
 Balance as at 31 (st)December                                       -      397,374,856 

7.     Available for sale financial asset

                                                        31 December      31 December 
                                                               2016             2015 
                                                  USD  (unaudited )  USD (unaudited) 
 Opening balance – refer note (i) below                  78,181,504                - 
 Change in fair value – refer note (ii) below                52,471                - 
 Closing balance                                         78,233,975                - 

(i)    During the latest financial year ended 30(th) June 2016, the Company
acquired 21.68% interest in Bonyan pursuant to shares exchange and
cancellation transaction. The Company assessed the initial recognition of
investment in Bonyan at its fair value determined by an independent
professional valuer by using discounted cash flow model.

(ii)   Change in fair value represents the difference in the fair value of
Bonyan during the period of six months from 1(st) July 2016 to 31(st) December
2016.

8.     Short term loan

                                                31 December      31 December 
                                                       2016             2015 
                                          USD  (unaudited )  USD (unaudited) 
 Short term loan - refer note (i) below           4,700,000                - 
                                                  4,700,000                - 

(i)   During the current period, the Group’s subsidiary has provided a
short-term loan of USD 4.7 million to a related party (common shareholders).
The short-term loan is unsecured and carries profit rate of 11% per annum. 
The term of the loan is 6 months from the date of disbursement which may be
extended by mutual agreement of the parties.

(ii)  During the current period, the Company has earned the finance income of
USD 166,077 from the short term loan and is recognised in the statement of
comprehensive income.

9.    Prepayments, advances and other receivables

                                                         31 December      31 December 
                                                                2016             2015 
                                                   USD  (unaudited )  USD (unaudited) 
 Receivable from related parties (refer note 13)             657,047          703,600 
 Prepayments and other receivables                            49,671           49,920 
                                                             706,718          753,520 

10.     Share capital and share premium

Movement in share capital during the period:

The share capital of the Company has been allotted and issued of the following
classes of shares:

                                       Number of  shares  Ordinary  shares  Share  Premium        Total 
                                                                       USD             USD          USD 
 At 1 (st)July 2015 (unaudited)            1,268,049,125        10,226,655     395,146,685  405,373,340 
 Additional capital issued                             -                 -               -            - 
 At 31 (st)December 2015 (unaudited)       1,268,049,125        10,226,655     395,146,685  405,373,340 
                                                                                                        
 At 1 (st)July 2016 (audited)                249,289,747         2,010,490      83,862,586   85,873,076 
 Additional capital issued                             -                 -               -            - 
 At 31 (st)December 2016 (unaudited)         249,289,747         2,010,490      83,862,586   85,873,076 

The nominal value per share is GBP 0.005.

(i)   During the financial year ended 30(th) June 2016 and pursuant to the
share exchange and cancellation transaction, the Company cancelled its
1,018,759,378 class A voting shares as part-consideration for the disposal of
its investment in an associate - MMCI. All of the 1,018,759,378 class A voting
shares of the capital of the Company which were scheduled for cancellation
have now been surrendered to the Company's registrar, Computershare Investor
Services (Jersey) Limited, and were cancelled.

Share warrants

All the share warrants issued by the Company were expired during the current
period. No warrant holder exercised his right to convert his share warrant
into ordinary share capital.

11.  Available for sale fair valuation reserve

(i)   At 31(st) December 2016, available for sale fair valuation reserve
represented the change in fair value of Group’s investment in Bonyan which
was classified as available for sale financial assets.

(ii)  At 1(st) July 2015, available for sale fair valuation reserve
represented the change in fair value of MMCI’s investment in the equity of
an entity, which was classified as available for sale investment. During the
comparable period ended 31(st) December 2015, the reserve was recycled to the
consolidated statement of comprehensive income upon disposal of this
investment.

12.  Trade and other payables

                                                   31 December       31 December    
                                                       2016              2015       
                                                USD  (unaudited )  USD (unaudited)  
 Due to related parties (refer note (i) below)           5,327,510          336,921 
 Other payables                                            651,260          931,167 
                                                         5,978,770        1,268,088 

During the current period, the Group has received a short term loan of USD 4.7
million from a related party (common shareholders). The short-term loan is
unsecured and carries profit rate of 10% per annum. The term of the loan is 6
months from the date of disbursement which may be extended by mutual agreement
of the parties. During the current period, the Company has accrued finance
expense of USD 150,979 which is recognised in the statement of comprehensive
income.

13. Related party transactions and balances

The Group enters into transactions in the normal course of business with
related parties at market rates and terms agreed between the parties.

During the current period, the Group entered into the following transactions
with related parties:

 Revenue                                                                                                                              
                                              Six months’ period ended 31 December  2016    Six months’ period ended 31 December 2015 
                                                                             (unaudited)                                  (unaudited) 
                                                                                     USD                                          USD 
                                                                                                                                      
 Real estate advisory and consultancy fee                                        114,441                                      750,000 

       Key management
compensation                      

                                            Six months’ period ended 31 December  2016    Six months’ period ended 31 December 2015 
                                                                           (unaudited)                                  (unaudited) 
                                                                                   USD                                          USD 
 Salaries and other short-term benefits                                         76,295                                      352,500 

Included in the statement of financial position are the following balances
with related parties:

                                               31 December  2016  31 December 2015 
                                                     (unaudited)         (audited) 
                                                             USD               USD 
 Trade receivables                                        19,074           823,818 
 Short term loan                                       4,700,000                 - 
 Prepayments, advances and other receivables             657,047           703,600 
 Trade and other payables                              5,327,510           336,921 

14. Comparative figures

The comparative information for the previous period has been reclassified,
where necessary, in order to conform to the current period’s presentation.
Such reclassifications do not affect the previously reported profit, net
assets or equity of the Group.

This announcement has been made after due and careful enquiry; the directors
of the Group accept responsibility for its content.

Enquiries:

Dana Group International Investments Ltd:
Mustafa Saifuddin, Finance Manager: tel: +971 (0)4 430 9355; e-mail:
ir@dana-investments.com; further information on Dana Group International
Investments Ltd. is available from the Company’s website: www.dana-
investments.com 

Keith, Bayley, Rogers & Co. Limited:
Graham Atthill-Beck: tel: +44 (0)20 7464 4092; mobile: +971 (0)50 856 9408/+44
(0)750 643 4107; e-mail: Graham.Atthill-Beck@kbrl.co.uk
Hugh Oram: tel: +44 (0)20 7464 4096; e-mail: Hugh.Oram@kbrl.co.uk



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