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RNS Number : 0607F Dar Global PLC 01 March 2024
1 March 2024
DAR GLOBAL PLC ('Dar Global', or the 'Company', or the 'Group')
Full-year results for the year ended 31 December 2023
Significant progress made in the Group's first year as a public company,
following a milestone listing in February 2023
Solid full-year financial performance delivering exceptional revenue growth, a
substantial increase in profit and a strong balance sheet
12 active projects with a GDV of USD 5.9 billion
Dar Global, the luxury international real estate developer, today announces
its audited full-year results for the year ended 31 December 2023.
Ziad El Chaar, Chief Executive Officer, commented:
"Dar Global has had an outstanding year following our successful listing on
the London Stock Exchange in February 2023. We have delivered strong revenue
growth, a significant increase in profits and we continue to deliver against
our ambitious strategy.
"We have created a unique offering focused on the development of luxury second
homes in some of the most desirable locations in the world for affluent,
internationally mobile, global citizens. This strategy sets us apart from
other developers and enjoys high and sustained demand from a customer base far
less exposed to economic cycles.
"Looking forward, our exciting pipeline of developments and strong capital
position means Dar Global is well placed to selectively enter new markets
where we see compelling opportunities including as recently announced in Saudi
Arabia. This positions us to achieve our strategic objectives in the coming
years with renewed confidence."
Strong growth delivered with exceptional revenue growth and continuing demand
· Total Revenue of USD 360.6 million (FY 2022: USD 80.0 million), +351%
year-on-year growth
· Significant increase in gross profit to USD 146.4 million (FY 2022: USD 28.7
million) - resulting in a 41% gross profit margin (FY 2022: 36%)
· Profit before tax for the period of USD 81.2 million (FY 2022: loss of USD 5.2
million)
· Portfolio Gross Domestic Value (GDV) increased to USD 5.9 billion across 12
active projects (31 December 2022: 10 active projects with GDV of USD 4.7
billion)
· Customer demand for both newly launched and existing projects remains strong
with contracted sales rising to 1,498 units, amounting to a total sales value
of c. USD 1,025 million (c. 46% of total launched GDV of c. USD 2.2 billion)
A strong balance sheet to pursue opportunistic growth
· Increased net asset value of USD 465.4 million compared to USD 281.4 million
at as of 31 December 2022
· Strong balance sheet with a cash position of USD 238.5 million, comprising of
free cash of USD 80.2 million and restricted cash balances (escrow and escrow
retention) of USD 158.3 million
· Total liquidity of USD 216.3 million (including undrawn debt facilities of USD
136.1 million), providing the flexibility to capitalise on project
opportunities in the year ahead
Financial highlights:
Summary Profit & Loss FY 2023 (USD M) FY 2022 (USD M) Change
Unaudited (%)
Revenue 360.6 80.0 351%
Gross profit 146.4 28.7 410%
Gross profit margin 41% 36% -
EBITDA 83.0 6.3 1,217%
EBITDA margin 23% 8% -
Profit/(loss) before tax 81.2 (5.2) -
Summary Financial Position As at 31 December 2023 (USD M) As at 31 December 2022 (USD M) Change (USD M)
Unaudited
Assets
Cash and cash equivalents 228.5 112.6 +115.9
Escrow retentions 10.0 5.9 +4.1
Trade and unbilled receivables 221.9 40.6 +181.3
Advances, deposits and other receivables 60.9 81.1 (20.3)
Development properties 216.9 302.3 (85.3)
Other assets 29.2 15.5 +13.7
Total 767.3 557.9 +209.5
assets
Liabilities
Trade and other payables 25.7 30.7 (5.0)
Advance from customers 57.5 94.5 (36.9)
Loans and borrowings 125.4 69.7 +55.7
Development property liability 78.6 72.5 +6.2
Other 14.7 9.2 +5.4
liabilities
Total liabilities 301.9 276.5 +25.4
Equity
Net asset value 465.4 281.4 +184.0
Net asset value per share (in USD)* 2.6 0.1 +2.5
*Net asset value per share is based on the number of shares outstanding as on
31(st) December 2023 of 180,021,612 and 2,239,510,913 as on 31(st) December
2022.
Group Operational Highlights
We are committed to providing a unique offering for global citizens, focusing
on second homes in prime locations targeted at affluent customers, which has
yielded positive results in a challenging global economic landscape.
Despite prevailing macroeconomic headwinds, we have continued our growth
trajectory and sales momentum across all active projects, while maintaining a
prudent and discerning approach to ongoing investment decisions. We are
pleased to provide an update on our project portfolio and contracted sales for
FY 2023.
Project Portfolio Update
UAE ROW*
No. of Projects 4 8
Total GDV (USD M) 1,033 4,877
Months since launch (avg.) 17 7
Launched GDV (USD M) 1,033 1,181
Launched GDV sold (%) 73% 23%
No. of units launched 1,158 920
No. of units sold 1,019 479
*Rest of the World
· The Dubai residential market saw robust activity in 2022 and 2023,
coming back from a dip during the COVID-19 pandemic. Dar Global is on track to
complete and handover its inaugural project, the Urban Oasis Tower in Dubai,
in Q1 this year which will be followed later in the year by the Da Vinci Tower
by Pagani
o Dar Global's other two projects in Dubai include W Residences, the
49-floor development situated in Downtown Dubai and DG1, Dar Global's first
own-brand project
· Dar Global launched its largest active project over the course of
2023, the AIDA masterplan in Oman, developed under a joint development
agreement with the OMRAN Group (Oman Tourism Development Company)
o AIDA represents c. 50% of Dar Global's total GDV and is expected to be
delivered over the next 8-10 years
· Progressing on delivery of Dar Global's strategy, the launch of
the Tierra Viva project in Spain brings the Group closer to its strategic
objective of building a geographically diversified portfolio with close to 50%
of projects in the Gulf Cooperation Council ("GCC") countries and the
remaining in the rest of the world
o Tierra Viva, in partnership with Automobili Lamborghini, marks Dar
Global's first European project in the ultra-luxury market of Marbella, Spain
o Dar Global's other Spanish projects include Marea, interiors by Missoni
and the Tabano project which is currently in the early permitting stage
· London's appeal to both a domestic and international audience
provides a significant opportunity for Dar Global. Situated on the corner of
Old Park Lane and Piccadilly, Dar Global is due to complete its exclusive unit
at 149 Old Park Lane in Q1 this year
o Dar Global's other two projects, located in Ealing, London, include
8mins-to-Central and Oh So Close, which offer a blend of quaint urban living
and proximity to central London
· Dar Global's first residential project in Qatar, Les Vagues with
interiors by Elie Saab, is currently under construction and scheduled for
completion in Q1 2027
Outlook and Guidance
Looking ahead to the remainder of 2024, the Group is committed to
consolidating its presence in the GCC region while actively pursuing expansion
opportunities beyond. Based on anticipated progress across the existing
portfolio of projects and current market conditions, Dar Global is targeting
to deliver at least USD 700 million of revenue in aggregate across the next
two financial years (FY 2024 and FY 2025). In addition, the Company is
targeting a similar sales rate and EBITDA margin to what was delivered in FY
2023.
Management Presentation
The Company's full year results presentation will be available on the Investor
Relations section of Dar Global's website (https://darglobal.co.uk/investor/
(https://darglobal.co.uk/investor/) ) at 07.30hrs GMT on 1 March 2024.
Analyst Q&A
There will be a live Q&A session at 09.30hrs GMT today, hosted by Ziad El
Chaar, Chief Executive Officer.
To join the Q&A session, please use the following link: Dar Global -
Management Q&A
(https://www.lsegissuerservices.com/spark/DARGLOBAL/events/11fba6a4-7659-480c-9964-a9ebd0017212)
2023 Annual Report and Accounts
The complete 2023 Annual Report and Accounts for the financial year ended 31
December 2023 will be available on our website
(https://darglobal.co.uk/investor (https://darglobal.co.uk/investor) ) during
the course of today.
For further information, please contact:
Dar Global
Abhilash Paul, Head of Investor Relations +44 (0) 20 8156 5573
ir@darglobal.co.uk (mailto:ir@darglobal.co.uk)
Liberum (Corporate Broker) +44 (0) 20 3100 2000
Dru Danford
Jamie Richards
Powerscourt +44 (0) 20 7250 1446
Justin Griffiths darglobal@powerscourt-group.com (mailto:darglobal@powerscourt-group.com)
Nick Dibden
Louisa Henry
About Dar Global
Dar Global PLC is a highly differentiated international real estate business.
It focuses predominantly on developing real estate projects comprising second
homes for internationally mobile customers, in some of the most desirable
locations across the Middle East and Europe, including downtown Dubai, Muscat
in Oman, London and the Costa del Sol region in the South of Spain.
Dar Global was originally established to house and develop the international
assets of Dar Al Arkan Real Estate Development PJSC ("DAARE"), a leading real
estate developer in the Kingdom of Saudi Arabia. Listed on the Saudi Stock
Exchange since 2007, Dar Al Arkan has delivered over 15,000 residential units
with total assets of c. USD 9 billion.
The Company intends to expand its focus to hospitality assets. The aim is to
acquire or build hotels and sell them after a period of three to five years of
operation once the hotels or resorts' revenue streams stabilise. Target
markets include Spain, Dubai, Maldives, Athens, Saudi Arabia and London.
Dar Global was admitted to the Main Market of the London Stock Exchange on 28
February 2023. Please visit www.DarGlobal.co.uk (http://www.DarGlobal.co.uk)
Chairman's Statement
In February 2023 we completed an important milestone in the evolution of Dar
Global: a successful listing on the Main Market of the London Stock Exchange.
In my maiden Chairman's statement, I am pleased to report that the Group has
made significant progress against the strategic objectives we outlined in the
listing Prospectus. We are on track to complete our first project in Dubai in
Q1 2024, launched six exciting new projects, including three in partnership
with leading global luxury brands, signed our first partnership in the
hospitality sector and added four new sales offices to our international
distribution network.
We are already seeing the benefits we anticipated from choosing to list in
London. As well as access to one of the world's leading capital markets, our
enhanced visibility has allowed us to continue to build our global reputation
with potential partners and landowners, whilst creating a presence with
international investors and broadening our shareholder base.
Despite the ongoing challenging headwinds and current inflationary
environment, Dar Global is a trusted high-end luxury property developer, with
a focus on High Net Worth Individuals (HNWIs) and Ultra High Net Worth
Individuals (UHNWIs) who are less exposed to economic cycles and challenges,
resulting in sustainable demand for properties throughout the economic cycle.
As set out in the Prospectus, the Company is focused on investing to deliver
future growth. As such, the Company's current dividend policy is not to
declare any dividends in the near future. The Company will continue to review
its dividend policy as the Board believes dividends to be an important
component of long-term total shareholder return.
An ambitious strategy for growth
We have a clear strategy focused exclusively on developing real estate
projects for internationally mobile customers looking to diversify their
wealth across asset classes and geographies. Our co-branding approach with
world-leading luxury brands provides a significant sales boost and enables us
to deliver increased volumes at a premium over non-branded properties. We have
a unique capital light business model with some of our projects based on joint
venture agreements with landowners enabling the Group to focus its resources
on development while deferring purchase of the land, allowing us to develop a
larger number of projects simultaneously.
Whilst we are well-funded with a strong balance sheet, in May 2023 the Group
secured a c. USD 204 million term loan over four years to allow us to take
advantage of further significant opportunities as they arise.
Building strong governance
Our new status as a listed company has commenced with a well-constructed board
combining a good balance of executive and non-executive experience. My
previous experience in both corporate governance and real estate, alongside
the international banking and real estate development backgrounds of my two
independent non-executive board colleagues has proved enormously beneficial.
Whilst Dar Global currently has a Standard Listing, we are working hard to
ensure the Group progresses towards the highest level of corporate governance
standards. Our intention would be to appoint a fourth independent
Non-Executive Director in due course.
Our listing has also created an entity which is independent from our major
shareholder, leading Saudi real estate developer Dar Al Arkan, whilst
retaining the significant benefits that come from our continued relationship.
We have made rapid progress in a short space of time to set up all the
necessary Board Committees, with Audit, Remuneration and Nomination Committees
in place and functioning well. Important policies including whistleblowing and
ethics have been developed and communicated to all employees throughout the
Group. I am grateful for the flexibility and commitment of my Board colleagues
who have ensured these committees were up and running from a standing start.
During the year the management team also strengthened its governance with
important appointments made in compliance and internal audit.
The Board is very cognisant of its responsibility to ensure the Group's
property sales are fully compliant with international money laundering
regulations, with an internal 'Know Your Customer' process supported by the
introduction of an internationally recognised screening service that the Group
uses to review each purchaser, in addition to only accepting payments through
recognised financial institutions.
Our stakeholders
Whilst we have a close relationship with our major shareholder, the Board is
mindful of its obligations to minority shareholders and ensures our
communications are regular and transparent. Our customers expect the highest
level of service from us and we strive to deliver a product we can be proud
of. This includes building to the latest standards to conserve energy and
water, reducing the environmental impact of our properties.
Other stakeholders include development partners, brand partners, contractors
and of course our people; all of whom are important to the delivery of our
strategic objectives and we ensure mutual understanding and respect are key
characteristics of these relationships.
Outlook
Whilst the global uncertainties ahead are likely to impact inflation and
capital movement in certain jurisdictions, we have a geographically diverse
project portfolio and a capital light business model which will help us
navigate these challenges and continue to deliver the targeted returns,
creating value for all our stakeholders.
David Hunter
Chairman
CEO's Statement
Overview
It's been an outstanding year for Dar Global with our successful listing on
the Main Market of the London Stock Exchange in February 2023, exceptional
revenue growth, a significant increase in profits and strong progress in
delivering our ambitious strategy.
We have created a unique offering focused on the development of luxury second
homes for internationally mobile, affluent global citizens. Our clientele are
taking advantage of developments in technology that enable them to run their
businesses from anywhere, while also diversifying their property portfolio to
hedge against inflation or currency movements.
Our project pipeline will provide exceptional properties in some of the most
desirable locations in the GCC countries and Europe, with most of our projects
developed and marketed exclusively in partnership with luxury brands such as
Automobili Lamborghini, W Residences, Missoni and Pagani.
Key achievements
During the year we launched six new projects across several jurisdictions,
these included:
- Our largest active project, the AIDA masterplan in Oman.
- Our stunning DG1 project in downtown Dubai.
- Tierra Viva, our first European project in the ultra-luxury market of
Marbella in Spain.
We now have 12 active projects with a Gross Development Value (GDV) of USD 5.9
billion (31 December 2023 compared with 10 projects with GDV of USD 4.7
billion in 2022). Customer demand has remained strong with contracted sales as
at year-end rising to c. 1,498 units, representing 46% of the total launched
GDV of USD 2.2 billion.
Financial highlights
Our rapid progress since listing delivered growth in revenues to USD 360.6
million (2022: USD 80.0 million) driven by robust sales for newly launched and
existing projects, generating a significant increase in gross profit to USD
146.4 million (2022: USD 28.7 million) and a healthy gross profit margin of
41%. Profit before tax also rose substantially to USD 81.2 million, as we get
closer to the imminent completion of our first project - Urban Oasis Tower. We
have made good progress in customer collections and construction, particularly
in the United Arab Emirates.
We ended the year with a strong balance sheet including cash of USD 238.5
million comprising of free cash of c. USD 80.2 million, and restricted cash
balances (escrow and escrow retention) of USD 158.3 million. With total
liquidity of USD 216.3 million (including undrawn debt facilities), we are
well-positioned to take advantage of growth opportunities and expand our
portfolio in the year ahead.
Business performance and project update
Our commitment to excellence has yielded positive results in a challenging
economic landscape. Despite prevailing macroeconomic headwinds, we have
continued our growth trajectory and sales momentum across all active projects,
while maintaining a prudent and discerning approach to ongoing investment
decisions.
We are pleased to provide an update on our project portfolio and contracted
sales for FY 2023 (see table).
Project portfolio update
UAE ROW*
No. of Projects 4 8
Total GDV (USD mn) 1,033 4,877
Months since launch (avg.) 17 7
Launched GDV (USD mn) 1,033 1,181
Launched GDV sold (%) 73% 23%
Number of units launched 1,158 920
Number of units sold 1,019 479
* Rest of the world
Progress in delivering our strategy
Since our inception two and half years ago, our strategy has focused
exclusively on developing real estate projects for affluent global citizens,
launching developments in six countries. The launch of the Tierra Viva project
in Spain takes us another step forward in our strategic objective to build a
geographically diversified portfolio with close to 50% of our projects in the
GCC and the remaining in the rest of the world.
Key to delivery of this strategy is the development and marketing of some our
projects in partnership with luxury brands, underpinning our product
differentiation. We added two new brands to this stable - Automobili
Lamborghini and Dolce & Gabbana (D&G) - bringing our total luxury
brand partnerships to eight. Our partnership with D&G marks our debut into
the hospitality market, specifically the luxury hotel sector. This will
enhance our premium offer for our target customers and contribute to building
a pipeline of future potential clients.
To support our strategy, we have built a highly effective distribution system
which includes both our own sales force and access to a global broker network.
We opened four new sales offices during the year and now have over 80 sales
professionals across eight locations, complemented by a network of brokers in
over 60 cities globally.
Our capital light business model is a critical component in de-risking our
business and accelerating growth. It gives us the ability to scale rapidly by
selling units off plan, creating joint development agreements with landowners
which allows lower initial costs and outsourcing construction under fixed
price contracts.
Our people
Our team has grown to match our expansion, and we have a fully-fledged
organisation with all key disciplines in place from front to back office,
staffed by talented, committed professionals. I would like to thank them all
for their drive and enthusiasm during this eventful year and recognise their
contribution to our success to date.
Whilst we are a young, dynamic company, our entrepreneurial spirit is
underpinned by a strong, experienced executive team with over 65 years of
experience between us.
Our environment
We take our responsibility to minimise our environmental impact seriously and
build water and energy conservation best practices into the designs of our
buildings. Plans to develop our environmental strategy are well underway and
set to develop further in 2024.
Looking forward
Following our successful listing on the London Stock Exchange in February
2023, this past year has been marked by significant progress for Dar Global.
We are poised to leverage the opportunities that have arisen from this
milestone, aiming to expand our reach through new joint venture and joint
development agreements. Additionally, we are exploring growth avenues in
markets such as Saudi Arabia, Greece, and Morocco as well as key international
cities in the United States of America like New York and Miami.
Our robust foundation, meticulously crafted over the past two and a half
years, positions us strongly to navigate the potential economic challenges and
sentiment around global security concerns in the current environment. With a
well-diversified portfolio, a capital light business model, steady demand for
upcoming projects and ample financial resources, we are confident in our
ability to seize future opportunities.
The year 2023 stands out as a pivotal period for Dar Global, characterised by
strong business performance, consistent sales, and steady construction
progress. This momentum will culminate in the successful completion and
delivery of our inaugural project, the Urban Oasis Tower in Dubai, in Q1 this
year.
Looking ahead to the remainder of 2024, we are committed to consolidating our
presence in the GCC region while actively pursuing expansion opportunities
beyond. Across all areas of our business, we are making notable strides. Based
on anticipated progress across our existing portfolio of projects and current
market conditions, we are targeting to deliver at least USD 700 million of
revenue in aggregate across the next two financial years (FY24 and FY25). In
addition, we would target a similar sales rate and EBITDA margin to what we
delivered in FY23.
Ziad El Chaar
Chief Executive Officer
Dar Global's Portfolio
Dubai, United Arab Emirates (UAE)
The Dubai residential market saw robust activity in 2022 and 2023, coming back
from a dip during the COVID-19 pandemic. According to CBRE, by September 2023,
total transactions for the year reached 87,163 (Full year 2022: 90,881),
reflecting very strong demand for property in the city. This is the highest
total on record over this period and the 2023 total is expected to have
exceeded 2022 transactions. This growth has been underpinned by a 55% growth
in off-plan transactions and 19% growth in secondary market transactions.
Knight Frank's Dubai residential market review points to the strength of this
market being particularly evident in the high-end segment of the market when
inventory is limited, resulting in the number of transactions over USD 10
million reaching 188 in H1 2023, and the full year figure is likely to have
substantially exceeded the 2022 total of 224. Cash purchasers continue to
dominate, accounting for c. 80% of the total value of all transactions in Q2
2023. The relatively high and persistent level of cash purchases is indicative
of the depth of demand for homes in Dubai, a strong reflection of the HNWI
buyers.
Our projects in Dubai
1. Urban Oasis Tower
The Urban Oasis Tower is a 34-storey residential development located on the
Dubai Canal and will contain bespoke apartments with interiors designed in
collaboration with Missoni, the Italian luxury fashion designer.
a. Status: pre-completion
b. Launched: Q4 2021
c. Scheduled completion: March 2024
d. Number of units: 467
2. Da Vinci Tower by Pagani
Da Vinci Tower is a residential building in Downtown Dubai featuring interiors
designed by Pagani, the Italian luxury car manufacturer. The original asset
was acquired in Q4 2021 and a full interior refurbishment to a luxury standard
is underway.
a. Status: Undergoing interior refurbishment
b. Launched: Q4 2022
c. Scheduled completion: December 2024
d. Number of units: 85
3. W Residences
Situated in Downtown Dubai with views of the iconic Burj Khalifa, W Residences
is a 49-floor high residential building close to many of Dubai's major
landmarks.
a. Status: under construction
b. Launched: Q4 2022
c. Scheduled completion: June 2026
d. Number of units: 383
4. DG1
Located directly by the canal in Downtown Dubai, DG1 is a 20 storey tower set
to create a new benchmark in Dubai's luxury living space, with its distinctive
architecture.
a. Status: pre-sales
b. Launched: Q1 2023
c. Scheduled completion: December 2026
d. Number of units: 223
Muscat, Oman
The residential real estate market in Muscat, Oman ( 'Sultanate') has seen
steady growth over recent years, with a focus on developing new residential
projects. More recently, according to Hamptons International, land prices in
the Sultanate rose by an average of c. 15% in Q2 2023 compared with Q2 2022,
driven by a 6% rise in the price of residential units. The expatriate
population, one of the major drivers of residential demand witnessed an
increase of 5.6% from the start of the year until August 2023. The number of
expatriates within the Muscat governorate meanwhile is reported to be at
890,368. This increase of expats has led to a positive impact on the demand
for residential buildings. Further demand is supported by Omanis who are
predominantly located outside of Muscat, travelling to the capital for work
and higher education purposes.
Our project in Muscat
1. AIDA
The AIDA project in Oman is a 3.5 million sqm mixed-use development on the
clifftops in Muscat. It represents c.50% of Dar Global's total GDV and is
expected to be developed over the next 8-10 years, with one phase launching
each year. The master plan includes a Trump International golf course and club
house and 450 luxury hotel rooms. Phase 1 saw the launch of 616 residential
units.
a. Status: pre-sales
b. Launched: Q1 2023
c. Scheduled completion for Phase 1: March 2027
d. Number of units in Phase 1: 616
Costa del Sol, Spain
Spain has seen strong demand for property, with the number of transactions in
2022 hitting a record high for residential units. Although transactions are
expected to have decreased by 10-15% in 2023 due to higher interest rates and
their impact on mortgage costs, in our target region - Andalucia - 45% of
purchasers are cash-buyers according to the Malaga Property Observatory, OMAU,
and is hence less influenced by changes in interest rates.
Despite the higher interest rate environment, prices have continued to rise,
albeit at a slower rate than in the past. According to the Knight Frank Global
Branded Residence Report 2023, the new build market in the region remains
robust with average new build prices increasing to €2,110/sqm (up 6.6%) with
Andalucia experiencing one of the highest average growth rates at 4.8%. This
region includes the Costa del Sol where three of Dar Global's projects are
situated. We continue to see a healthy underlying demand from our target
market, with 15% UHNWIs considering a property purchase in key hubs with Spain
amongst the favoured destinations.
Our projects in Costa del Sol
1. Tierra Viva
Tierra Viva is our first project in continental Europe. Launched in June 2023,
in conjunction with the legendary Automobili Lamborghini, it includes 53 grand
villas overlooking the Mediterranean sea, close to Marbella, an up-market
resort on the Costa del Sol.
a. Status: pre-sales
b. Launched: Q2 2023
c. Scheduled completion: December 2026
d. Number of villas: 53
2. Marea, interiors by Missoni
Marea, our second project in Spain was unveiled in August 2023, with interiors
designed by Missoni. This project is located in one of the most sought-after
enclaves of the Andalusian coast, not far from the Finca Cortesin resort which
has an 18-hole championship golf course rated among Spain's best golf courses.
a. Status: pre-sales
b. Launched: Q3 2023
c. Scheduled completion: June 2027
d. Number of units: 64
3. Manilva (Tabano)
In September 2022, Dar Global acquired six plots of land in the municipality
of Manilva in the province of Malaga on the border with the province of Cadiz
in southern Spain. The plots are located approximately 45 minutes from
Marbella by car and are close to one of the top polo destinations in the
country and one of the best beach areas of Costa del Sol.
The Tabano project is currently in the early permitting stage and is expected
to be completed in December 2029. Consultants have been appointed for the
development of the concept master plan and associated infrastructure plan.
The total land area of the Tabano project is 4,650,092 m(2).
Doha, Qatar
The housing market in Qatar currently faces some headwinds as demand moderates
against a limited oversupply in the market post the construction boom in the
run up to the 2022 FIFA World Cup. This supply-demand imbalance, coupled with
rising interest rates, have contributed to a shrinking mortgage market and
declining number of home sales. The total number of residential sales
transactions fell by 36% over the 12-months to Q2 2023, while the value of
residential transactions declined by 24% over the same period. After adjusting
for the one-off effect of the FIFA World Cup, housing transactions were stable
and the Doha and Al Rayyan municipalities recorded the highest volume of
residential transactions during the second quarter of 2023. Findings from the
Knight Frank 2023 Destination Qatar report, which analyses results of a survey
of Qatari HNWIs shows that Lusail, where Dar Global's Les Vagues project is
located, is the most preferred residential investment target, with an average
budget of USD 1.8 million .
Our project in Doha
1. Les Vagues
Les Vagues is the first ever residential project in Qatar with interiors
designed by world renowned fashion icon, Elie Saab. The project is located on
the Qetaifan island within Lusail and features 303 opulent sea-front
residences of one, two and three-bedroom apartments.
a. Status: under construction
b. Launched: Q4 2022
c. Scheduled completion: Q1 2027
d. Number of units launched: 160
e. Total Number of units: 303
London, United Kingdom
As well as being less reliant on debt to fund purchases, the prime central
London market benefits from its appeal to both a domestic and international
audience. Data from Heathrow Airport indicates that the number of people
arriving at the airport increased in Q2 2023 when compared with the same
period the previous year. Specifically, the number of travellers from the GCC
and from North America have risen in double digit percentage terms. The
sterling continues to strengthen and recover from the lows of 2022, but it
still offers good value for overseas buyers using non-sterling currencies for
their purchases. Dollar-based investors are now paying 35% less than they were
in 2014, due largely to favourable exchange rates, while Chinese investors are
paying 24% less. The UK housing market more broadly has experienced
macro-economic headwinds throughout 2022 and 2023 stemming from uncertainty
surrounding the short-term economic outlook and recent tightening in monetary
policy. These headwinds have had a limited impact on London's house prices,
which have witnessed a 2.4% annual decline in 2023 (as per Nationwide's House
Price Index). Despite this, the fundamentals of prime central London real
estate continues to look favourable over the coming years.
Our projects in London
1. Old Park Lane
Situated on the corner of Old Park Lane and Piccadilly and overlooking Green
Park, 149 Old Park Lane is a sophisticated landmark building with an important
role in London's architectural heritage.
a. Status: pre-completion
b. Launched: Q4 2022
c. Scheduled completion: Q1 2024
d. Number of units: 1
2. 8mins-to-Central
Situated only minutes from central London on the new Elizabeth underground
line, this is a low-rise building housing meticulously designed apartments.
a. Status: under construction
b. Launched: Q2 2023
c. Scheduled completion: June 2024
d. Number of units: 9
3. Oh So Close
Located within the leafy community of West Ealing, this project comprises of
two 3-storey houses divided into luxury flats.
a. Status: under construction
b. Launched: Q2 2023
c. Scheduled completion: June 2024
d. Number of units: 17
Financial Review
Dar Global is pleased to present its first Annual Report since listing on the
London Stock Exchange in February 2023. The Group is happy to share the
positive developments and achievements over the past year, as it continues to
build on the momentum gained.
It has been a year of remarkable growth, challenges, and invaluable learning
experiences. Despite a challenging year marked by global economic uncertainty
and macroeconomic headwinds, the Group achieved robust operational and
financial performance driven by revenue recognition attributed to the progress
of Urban Oasis Tower, Da Vinci Tower by Pagani and W Residences, as well as
strong sales and customer collections across projects.
FY 2023 financial performance
Dar Global delivered strong growth, Dar Global delivered strong growth in
2023. Revenue for the period was USD 360.6 million (FY 2022: USD 80.0
million), a growth of c. 351% over the previous year. Gross Profit for the
period was USD 146.4 million, representing a margin of 41% compared with USD
28.7 million and 36% for 2022.
EBITDA for the period was USD 83.0 million (FY 2022: USD 6.3 million), Net
Profit USD 83.2 million (2022: loss USD 5.2 million) and total comprehensive
income for the period was USD 84.7 million (2022: loss USD 5.5 million), a
significant improvement from the previous year.
The 23% Return on Equity (ROE) demonstrates our successful implementation of a
capital light model. This approach has enabled the Group to deliver robust
financial performance and sustainable value for our shareholders.
Throughout the year, the Group took initiatives to expand its presence across
different regions and strengthen its brand. Dar Global launched six new
projects in four countries with a GDV of over USD 1.1 billion in 2023.
The Group continues to utilise its balance sheet strength and its debt
facilities in a prudent and effective manner. Dar Global further strengthened
its balance sheet and demonstrated robust access to various pools of capital
across banks and the capital markets by signing a c. USD 204 million secured
term loan facility with Emirates NBD in May 2023. The Facility has a tenure of
four years and is priced at a competitive fixed margin over the Emirates
Interbank Offered Rate ("EIBOR"). The Group envisages using the proceeds of
the facility for future asset acquisitions and general corporate purposes
(including working capital requirements), as the Group continues to build its
international portfolio of luxury second home and leisure developments across
Europe and the GCC.
The Group's balance sheet reflects this strength with cash and cash
equivalents of USD 238.5 million, comprising free cash of USD 80.2 million and
restricted cash balances (escrow and escrow retention) of USD 158.3 million.
The net asset value surged to USD 465.4 million, marking a growth of c. 65%
compared to the previous year at USD 281.4 million.
As of 31 December 2023, the total liquidity pool stands at USD 216.3 million,
including undrawn debt facilities of USD 136.1 million. This provides the
Company flexibility to capitalise on project opportunities, ensuring a strong
asset portfolio that fuels our future expansion.
Summarised consolidated statement of profit or loss and other comprehensive
income
Amounts in USD million 2023 2022
Revenue 360.6 80.0
Cost of revenue (214.1) (51.4)
Gross profit 146.4 28.7
Gross profit % 40.6% 35.8%
Other income 3.1 1.9
SG&A expenses (68.0) (38.3)
Finance income (cost) (0.2) 2.9
Share of loss from joint venture (0.1) (0.3)
Profit before tax 81.2 (5.2)
Income tax credit 2.0 -
Profit for the period 83.2 (5.2)
Increase in foreign currency translation reserve 1.4 (0.3)
Total comprehensive income/(loss) for the year 84.7 (5.5)
Summarised consolidated statement of financial position
Amounts in USD million As of FY 2023 As of FY 2022 Change
Cash and cash equivalents 228.5 112.6 +115.9
Escrow retentions 10.0 5.9 +4.1
Trade and unbilled receivables 221.9 40.6 +181.3
Advances, deposits and other receivables 60.9 81.1 (20.3)
Development properties 216.9 302.3 (85.3)
Other assets 29.2 15.5 +13.7
Total assets 767.3 557.9 +209.5
Trade and other payables 25.7 30.7 (5.0)
Advance from customers 57.5 94.5 (36.9)
Loans and borrowings 125.4 69.7 +55.7
Development property liability 78.6 72.5 +6.2
Other liabilities 14.7 9.2 +5.4
Total liabilities 301.9 276.5 +25.4
Net asset value / Total equity 465.4 281.4 +184.0
- Trade and unbilled receivables - increase in receivables primarily due to
revenue recognition from Urban Oasis Tower, Da Vinci Tower and W Residences.
- Development properties - there was a gross addition of USD 130.0 million,
reclassification of USD 1.2 million to property, plant and equipment and USD
214.1 million transferred to cost of goods sold.
- Net assets - Net assets increased over the period to USD 465.4 million,
primarily due to profit of USD 83.2 million, shareholder funding of USD 20.5
million (pre-listing) and fresh issue of equity shares of USD 72.0 million.
Reflecting on what has been a landmark year for Dar Global, the Group is
pleased to end 2023 with exceptional financial performance evidenced by USD
83.2 million of profit after tax, USD 80.2 million of free cash balance and
USD 216.3 million of total liquidity. This collective financial strength has
solidified the Group's position within the industry. By streamlining the land
holdings, relationships with the Joint Development Agreement partners, and
maintaining a healthy balance sheet, the Group is building a foundation for
sustained growth and agility in the real estate market.
Outlook for 2024
Out of the launched portfolio GDV of USD 2.2 billion, the Group has over 50%
of unsold inventory and expects sales to pick up in 2024, supported by
increased liquidity in the residential real estate market. The Group
anticipates 2024 to be a pivotal year for Dar Global as it aims to complete
and deliver five projects while simultaneously advancing construction across
all other projects. Along with the construction progress, the Group is
dedicated to enhance the sales, CRM, and marketing teams in order to provide
exceptional customer experiences. The Group's upgraded ERP systems have
significantly boosted its digital capabilities, empowering it with enhanced
analytics for informed decision-making.
Given the current strength in the Group's balance sheet and the flexible
funding options available, Dar Global stands well-positioned to further expand
its portfolio of assets globally.
Principal risks and uncertainties
Strategic and financial risk
Risk description Remediation / Mitigation
1. Property market cycles and interest rates
Changes in macroeconomic environment or tightening of financial conditions may - Critical assessment of target location and underlying demand.
lead to falling demand through a reduction in the wealth of our target
affluent customer demographic. This could result in reduced sales volumes and - Conservative deployment of capital.
affect our ability to provide profitable growth.
- Joint venture agreements for suitable land and partners.
- Frequent review of pricing.
Availability of suitable land at appropriate cost is also strongly impacted by
property market conditions, and the incorrect timing of purchases could impact - Strong relationships with key brokers.
future profitability.
- Geographical diversification.
2. Capital availability and solvency
Lack of sufficient financing may restrict our ability to respond to changes in - Disciplined capital management.
the economic environment, and take advantage of appropriate land buying and
operational opportunities to deliver strategic priorities. - Secured funding lines for future opportunities.
- Strong and supportive majority shareholder.
3. Political risk
Significant political events locally and globally may impact Dar Global's - Diversification across several jurisdictions, with the majority considered
business as customers may be reluctant to make purchases due to uncertainty, safe havens by wealthy investors.
sanctions may cause supply chain disruption, and changes in local laws may
increase costs or cause delays to projects. - Conservative capital policy enables management to tolerate lower sales
volumes and avoid steep price cuts.
Operational risk
Risk description Remediation / Mitigation
4. Contractor ability to deliver on time with high quality/low defect
Failure to achieve excellence in construction, such as late completion of - Rigorous contractor due diligence.
works, design and construction defects and deviation from environmental
standards, could expose the Company to future remediation liabilities, and - Legally binding contractual terms.
impact future sales through reputational damage.
- Stringent quality assurance through build programme oversight by both Dar
Global engineers and independent consultants.
5. Legal risks: joint venture and branding
Differences in interpretation of goals, roles, and responsibilities of each - Extensive due diligence on all partners.
partner. Underperformance by one or more parties, or a change in
control/financial stability of one of our partners may lead to protracted - Contractual agreements detailing roles, responsibilities and performance
delays in executing and legal recourse, which could result in large losses and requirements, defined through pre-agreement discussions to effectively address
reputational damage to Dar Global. and allocate ownership of risks and potential liabilities between parties.
- Effective, frequent communication and updates to all relevant parties
throughout the life of each project.
6. Labour standards and health & safety
Health and safety, or environmental breaches can impact Dar Global's - Robust health and safety procedures for all construction sites.
employees, subcontractors and site visitors, and result in reputational
damage, criminal prosecution, civil litigation, increased cost and delays in - Regular health and safety monitoring, external audits of all sites, and
construction. regular management reviews.
- Contractual requirements for all subcontractors to abide by high standards
of safety.
7. Cyber and data risk
The Group places significant reliance upon the availability, accuracy, and To address the residual risk, the Group:
confidentiality of all of its information systems and data. It could suffer
significant financial and reputational damage from corruption, loss or theft - Initiated a comprehensive Information Security Programme to complement
of data. existing controls, addressing any vulnerabilities and implementing best
practices with the support of specialist external third parties.
- Deployed multi-factor authentication on key platforms.
- Uses cloud-based services reducing centralised risk exposure.
8. Employee relations
Increasing competition for skills may mean we are unable to recruit and/or An initiative is underway to enhance:
retain the best people. Together with a failure to consider the retention and
succession of key management could result in a failure to deliver our - Succession and leadership training.
strategic objectives, a loss of corporate knowledge and competitive advantage.
- Personal development plans.
- Monitoring attrition rates, attendance and feedback from exit interviews.
Statement of Directors' responsibilities in respect of the annual report and
the financial statements
The directors are responsible for preparing the Annual Report and the
consolidated financial statements and company financial statements of Dar
Global PLC ("the Group and parent Company financial statements") in accordance
with applicable law and regulations.
Company law requires the directors to prepare Group and parent Company
financial statements for each financial year. Under that law they are required
to prepare the Group financial statements in accordance with UK-adopted
international accounting standards and applicable law and have elected to
prepare the parent Company financial statements in accordance with UK
accounting standards and applicable law (UK Generally Accepted Accounting
Practice), including FRS 101 Reduced Disclosure Framework.
Under company law the directors must not approve the financial statements
unless they are satisfied that they give a true and fair view of the state of
affairs of the Group and parent Company and of the Group's profit or loss for
that period. In preparing each of the Group and parent Company financial
statements, the directors are required to:
- select suitable accounting policies and then apply them consistently;
- make judgements and estimates that are reasonable, relevant, and reliable;
- state whether they have been prepared in accordance with UK-adopted
international accounting standards;
- assess the Group and parent Company's ability to continue as a going
concern, disclosing, as applicable, matters related to going concern; and
- use the going concern basis of accounting unless they intend either to
liquidate the Group or the parent Company or to cease operations or have no
realistic alternative but to do so.
The directors are responsible for ensuring that the Group and parent Company
maintain adequate accounting records that are sufficient to show and explain
the parent Company's transactions and disclose with reasonable accuracy at any
time the financial position of the parent Company and to enable them to ensure
that its financial statements comply with the Companies Acts 2006. They are
responsible for such internal control as they determine is necessary to enable
the preparation of financial statements that are free from material
misstatement, whether due to fraud or error, and have general responsibility
for taking such steps as are reasonably open to them to safeguard the assets
of the Group and to prevent and detect fraud and other irregularities.
Under applicable law and regulations, the directors are also responsible for
preparing a Strategic Report, Directors' Report, Directors' Remuneration
Report and Corporate Governance Statement that complies with that law and
those regulations.
The directors are responsible for the maintenance and integrity of the
corporate and financial information included on the Company's website.
Legislation in the UK governing the preparation and dissemination of financial
statements may differ from legislation in other jurisdictions.
In accordance with Disclosure Guidance and Transparency Rule ("DTR") 4.1.16R,
the financial statements will form part of the annual financial report
prepared under DTR 4.1.17R and 4.1.18R. The auditor's report on these
financial statements provides no assurance over whether the annual financial
report has been prepared in accordance with those requirements.
Responsibility statement of the directors in respect of the annual financial
report
We confirm that to the best of our knowledge:
- the financial statements, prepared in accordance with the applicable set of
accounting standards, give a true and fair view of the assets, liabilities,
financial position and profit or loss of the Company and the undertakings
included in the consolidation taken as a whole; and
- the strategic report/directors' report includes a fair review of the
development and performance of the business and the position of the issuer,
and the undertakings included in the consolidation taken as a whole, together
with a description of the principal risks and uncertainties that they face.
David Hunter
Chairman
29 February 2024
Dar Global PLC and its subsidiaries
London - United Kingdom
Consolidated statement of financial position
As at 31 December 2023 (in United States dollar)
December 31, December 31,
2023 2022
Note (Unaudited)
Assets
Cash and cash equivalents 5 228,492,034 112,612,385
Trade and unbilled receivables 6 221,867,464 40,552,740
Advances, deposits and other receivables 7 60,870,788 81,131,849
Development properties 8 216,931,211 302,274,899
Escrow retentions 9 9,987,477 5,853,253
Investment in joint venture 10 5,370,876 4,681,667
Loan to joint venture 11 2,150,987 1,991,953
Due from related parties 19 8,619,797 5,310,572
Property and equipment 12 5,536,049 842,131
Right-of-use assets 13 5,538,638 2,643,470
Deferred tax assets 20 1,980,741 -
--------------- ---------------
Total assets 767,346,062 557,894,919
========= =========
Liabilities and equity
Liabilities
Trade and other payables 14 25,713,890 30,691,284
Advances from customers 15 57,523,290 94,456,096
Retention payable 16 6,849,069 4,038,203
Development property liability 17 78,631,324 72,467,693
Loans and borrowings 18 125,363,803 69,668,662
Due to related party 19 1,248,415 2,101,668
Employees' end of service benefits 660,158 325,910
Lease liabilities 13 5,944,562 2,743,815
---------------- ---------------
Total liabilities 301,934,511 276,493,331
---------------- ---------------
Equity
Share capital 21 1,800,216 22,395,109
Share premium 22 88,781,078 -
Capital contribution - 259,006,479
Retained earnings 372,985,572 -
Foreign currency translation reserve 1,436,244 -
Statutory reserve 2.22 408,441 -
--------------- ---------------
Total equity 465,411,551 281,401,588
--------------- ---------------
Total liabilities and equity 767,346,062 557,894,919
========= =========
The accompanying notes from 1 to 37 form an integral part of these
consolidated financial statements.
These consolidated financial statements were approved by the Board of
Directors on xx February 2024 and signed on its behalf by:
David Hunter Ziad El Chaar
Director
Director
Dar Global PLC and its subsidiaries
London - United Kingdom
Consolidated statement of profit or loss and other comprehensive income
For the year ended 31 December 2023 (in United States dollar)
December 31, December 31,
2023 2022
Note (Unaudited)
Revenue 23 360,575,755 80,001,625
Cost of revenue 23 (214,131,383) (51,351,257)
--------------- ---------------
Gross profit 146,444,372 28,650,368
Other income 24 3,147,006 1,865,649
Selling and marketing expenses 25 (38,764,532 (9,699,201)
General and administrative expenses 26 (29,256,276 ) (28,560,995)
Finance costs 27 (5,020,798) (554,795)
Finance income 27 4,788,820 3,420,628
Share of loss from joint venture 10 (93,162) (330,734)
--------------- ----------
Profit/ (loss) before tax 81,245,430 (5,209,080)
Income tax credit 20 1,980,741 -
--------------- -------------
Profit/(loss) for the year 83,226,171 (5,209,080)
========= ========
Other comprehensive income/(loss)
Items that are or may be classified subsequently to profit or loss
Increase/(decrease) in foreign currency translation reserve 1,434,037 (256,700)
--------------- -------------
Total comprehensive income/(loss) for the year 84,660,208 (5,465,780)
======== =========
Profits attributable to:
Owners of the Company 83,226,171 (5,209,080)
Non-controlling Interests - -
--------------- -------------
83,226,171 (5,209,080)
Total comprehensive income/(loss) attributable to: ========= ========
Owners of the Company 84,660,208 (5,465,780)
Non-controlling Interests - -
---------------- -------------
84,660,208 (5,465,780)
========= ========
Earnings per share attributable to owners of the Company:
- basic and diluted earnings per share (USD) 28 0.231 (0.002)
---------------- --------------
Adjusted earnings before interest, tax, depreciation and amortisation
(adjusted EBITDA)
Net finance costs/(income) 231,978 (2,865,833)
Depreciation on property and equipment and right-of-use assets 3,184,400 886,824
Listing related (reversals)/ expenses (1,680,520) 13,465,003
Tax (expenses)/ credit (1,937,734) 71,378
------------- --------------
Adjusted earnings before interest, tax, depreciation and amortisation 83,024,295
(adjusted EBITDA) 6,348,292
======== ========
The accompanying notes from 1 to 37 form an integral part of these
consolidated financial statements.
Dar Global PLC and its subsidiaries
London - United Kingdom
Consolidated statement of changes in equity
For the year ended 31 December 2023 (in United States dollar)
Share capital Statutory reserve Foreign currency translation reserve Retained earnings Share premium Capital Contribution Total equity
Balance as at January 1, 2022 (Unaudited) - - - - - - -
Profit for the year - - - (5,209,080) - - (5,209,080)
Other comprehensive income - - (256,700) - - - (256,700)
Total comprehensive income for the year - - (256,700) (5,209,080) - - (5,465,780)
Transactions with owners of the Company
Capital contribution for the year* - - - - - 266,717,137 266,717,137
Issue of ordinary shares 22,395,109 - - - - (2,244,878) 20,150,231
Transferred from capital contribution - - 256,700 5,209,080 - (5,465,780) -
Total transactions with owners of the Company 22,395,109 - 256,700 5,209,080 - 259,006,479 286,867,368
-------------- ---------- -------------- ------------ --------------- -------------- ---------------
Balance as at December 31, 2022 (Unaudited) 22,395,109 - - - - 259,006,479 281,401,588
======== ====== ======== ======= ========= ======== =========
Balance as at January 1, 2023 22,395,109 - - - - 259,006,479 281,401,588
Profit for the year - - - 83,226,171 - - 83,226,171
Other comprehensive income - - 1,436,244 - - - 1,436,244
Total comprehensive income for the year - - 1,436,244 83,226,171 - - 84,662,415
Transaction with owners of the Company
Issue of shares related to acquisition of subsidiary (notes 21 & 22) 3,666,666 - - - 279,662,114 (259,006,479) 24,322,301
Issue of ordinary shares (notes 21 & 22) 216,216 - - - 71,783,588 - 71,999,804
Reduction of share capital (notes 21 & 22) (24,477,775) - - 287,142,399 (262,664,624) - -
Other reserves - - - 3,025,443 - - 3,025,443
Statutory reserve - 408,441 - (408,441) - - -
Total transactions with owners of the Company (20,594,893) 408,441 - 289,759,401 88,781,078 (259,006,479) 99,347,548
------------ ------------ ------------ ---------------- -------------- ----------- ---------------
Balance as at December 31, 2023 1,800,216 408,441 1,436,244 372,985,572 88,781,078 - 465,411,551
======= ======= ======= ========= ======== ====== =========
* This represents the difference between the carrying value of the "Due to
related Parties" i.e., the amount of cash received net of losses absorbed, and
their fair value on the initial recognition.
The accompanying notes from 1 to 37 form an integral part of these
consolidated financial statements.
Dar Global PLC and its subsidiaries
London - United Kingdom
Consolidated statement of cash flows
For the year ended 31 December 2023 (in United States dollar)
December 31, December 31,
2023 2022
Note (Unaudited)
Cash flows from operating activities
Profit/(loss) for the year 83,226,171 (5,209,080)
Adjustments for:
Depreciation on property and equipment 26 984,458 19,867
Depreciation on right-of-use assets 26 2,200,115 866,957
Provision for employees' end of service benefits 334,248 219,100
Impairment on investments - 36,320
Loss on early termination of lease 26 - 196,076
(Reversals)/accruals for listing related expenses 26 (1,680,520) 13,465,003
Finance costs 27 5,020,798 554,795
Finance income 27 (4,788,820) (3,420,628)
Share of loss from joint venture 93,162 330,734
Income tax expenses/(credit) (1,980,741) -
-------------- --------------
Operating profit before working capital changes 83,408,871 7,059,144
Working capital changes:
Trade and unbilled receivables (181,314,724) (40,552,740)
Advances, deposits and other receivables 20,261,061 (51,820,672)
Development properties 89,177,623 (53,010,782)
Trade and other payables (271,431) 13,202,882
Advances from customers (36,932,806) 60,456,918
Retention payable 2,810,866 2,322,549
Due to related parties (853,253) (4,150,487)
--------------- --------------
Net cash used in operating activities (23,713,793) (66,493,188)
--------------- --------------
Cash flows from investing activities
Acquisition of property and equipment 12 (4,397,667) (653,311)
Escrow retentions (4,134,224) (4,149,781)
Funds transferred to related party 19 (2,796,105) (5,310,572)
Proceeds from disposal of property and equipment 12 10,223 -
Investment in joint venture - (4,969,246)
Interest income 27 3,754,858 -
Loan to joint venture (48,742) (1,991,953)
-------------- --------------
Net cash used in investing activities (7,611,657) (17,074,863)
Cash flows from financing activities -------------- --------------
Proceeds from bank borrowings 18 77,234,071 69,668,662
Repayment of bank borrowings 18 (18,882,948) (72,157,931)
Interest expense on borrowings 27 (3,579,519) -
Payment of structuring fees for loans and borrowings 18 (2,655,982) -
Proceeds from initial public offerings 71,999,804 -
Funds received from Major shareholder 24,322,301 -
Funds received from Ultimate parent company of Major shareholder 19 - 181,297,703
Payment of lease liabilities (1,898,214) (766,612)
Interest expense on lease liabilities (376,587) (161,790)
--------------- --------------
Net cash generated from financing activities 146,162,926 177,880,032
--------------- --------------
Net increase in cash and cash equivalents 114,837,476 94,311,981
Effect of translation of foreign currency 1,042,173 (280,750)
Cash and cash equivalents, beginning of the year 112,612,385 18,581,154
--------------- --------------
Cash and cash equivalents at the end of the year 228,492,034 112,612,385
Cash and cash equivalents: --------------- --------------
Cash in hand 24,785 14,709
Cash at banks 228,467,249 112,597,676
--------------- --------------
228,492,034 112,612,385
========= ========
The accompanying notes from 1 to 37 form an integral part of these
consolidated financial statements.
Dar Global PLC and its subsidiaries
London - United Kingdom
Notes to the consolidated financial statements
(in United States dollar)
1. Legal status and business activities
1.1 Dar Global PLC (the "Company") is public limited company, limited
by shares, incorporated, domiciled, and registered in England and Wales. The
Company operates under a Company Number 14388348 issued by the registrar of
the companies for England and Wales. The majority of shares of the Company are
held by Dar Al Arkan Global Investment LLC (formerly known as Dar Al Arkan
Global Real Estate Development LLC) ("Major shareholder") in United Arab
Emirates ("UAE") and the Ultimate parent company of Major shareholder is Dar
Al Arkan Real Estate Development Company, Kingdom of Saudi Arabia.
1.2 The registered address of the Company is located at Link Company
Matters Limited, 6(th) Floor, 65 Gresham Street, London, EC2V 7NQ, United
Kingdom.
1.3 These consolidated financial statements ("financial statements")
represent the results of Dar Global PLC and its subsidiaries (the "Group"),
set out in note 1.4.
1.4 The Company has the following subsidiaries over which it has
direct or indirect control:
Name of subsidiary and domicile Percentage of effective holding Percentage of voting rights License / Registration No. Principal activities
Dar Al Arkan Properties L.L.C - UAE * 100% 100% Commercial license no. 791860 Development and sale of real estate.
Dar Al Arkan Global UK Holdings LTD - United Kingdom 100% 100% Company registration no. 13881707 Development and sale of real estate.
Dar Al Arkan Holding UK LTD - United Kingdom 100% 100% Company registration no. 14385758 General business activities
Dar Global UK No. 1 LTD - United Kingdom ** 100% 100% Company registration no. 14751868 Development and sale of real estate.
Dar Global UK No. 2 LTD - United Kingdom ** 100% 100% Company registration no. 14751750 Development and sale of real estate.
Dar Global UK No. 3 LTD - United Kingdom ** 100% 100% Company registration no. 14751915 Development and sale of real estate.
Dar Al Arkan Spain S.L. - Spain 100% 100% Company registration no. B09896390 Development and sale of real estate.
Dar Benahavis I, S.L. - Spain 100% 100% Company registration no. B72530843 Development and sale of real estate.
Daranavis S.L. - Spain 100% 100% Company registration no. B72530850 Development and sale of real estate.
Dar Tabano, S.L. - Spain 100% 100% Company registration no. B72530835 Development and sale of real estate.
Name of subsidiary and domicile Percentage of effective holding Percentage of voting rights License / Registration No. Principal activities
M/s. Prime Real Estate D.o.o Sarajevo - Bosnia * 100% 100% Company registration no. 65-01-0672-17 Development and sale of real estate.
M/s. Luxury Real Estate D.o.o. Sarajevo - Bosnia * 100% 100% Company registration no. 65-01-0698-17 Development and sale of real estate.
M/s. Dar Al Arkan Property Development D.o.o Sarajevo - Bosnia * 100% 100% Company registration no. 65-01-0676-17 Development and sale of real estate.
M/s. Beijing Dar Al Arkan Consulting Co. Ltd. * 100% 100% Company registration no. 91110105MA7 EQ79Y9Q Economic and trade consulting, Engineering consulting, business management
consulting, corporate planning, real estate information consulting,
undertaking exhibition activities, advertising design, production, agency and
release, development of real estate, technical consulting and technical
services, computer and graphic design.
Aqtab Properties L.L.C -UAE (Formerly Dar Al Arkan Global Property Development 100% 100% Commercial license no. 997901 Purchase and sale of real estate
L.L.C) *
Dar Al Arkan International Properties L.L.C - UAE * 100% 100% Commercial license no. 997919 Purchase and sale of real estate
Name of subsidiary and domicile Percentage of effective holding Percentage of voting rights License / Registration No. Principal activities
Dar Al Arkan International Property Development L.L.C - UAE * 100% 100% Commercial license no. 997915 Purchase and sale of real estate
Dar Al Arkan Property Development SPC - Oman 100% 100% Commercial license no. 1402786 Real estate development, Construction of buildings (general constructions of
residential and non-residential buildings)
Dar Al Arkan Holdings Limited (ADGM) - UAE * 100% 100% Commercial license no. 000008662 Holding ownership of equity and non-equity assets, real property, intellectual
property and other tangible and intangible assets.
Dar Al Arkan Properties L.L.C - Branch Of Abu Dhabi 1 - UAE ** 100% 100% Commercial license no. CN-4765091 - Self-Owned property management services
- Real estate development construction
- Real estate purchase and sale brokerage.
Darglobal Maldives Private Limited - Maldives ** 100% 100% Commercial license no. C09392023 Owning, operating and managing tourist hotels and resorts.
Dar DG Global Investment L.L.C - UAE ** 100% 100% Commercial license no. 1215259 Investment in Commercial Enterprises & Management.
Dar Global Services Limited - UK ** 100% 100% Commercial license no. 15273295 Business support including marketing activities.
DG Luxury Property Management L.L.C - UAE ** 100% 100% Commercial license no. 1274015 Property management services.
1.4
Name of subsidiary and domicile Percentage of effective holding Percentage of voting rights License / Registration No. Principal activities
Dar Al Arkan Global Holdings Real Estate - KSA ** 100% 100% Commercial license no. 1010924907 Development of projects and buying and selling of real estate.
Dar Global USA LLC - USA ** 100% 100% Commercial license no. M23000008667 Investment in Commercial Enterprises & Management.
Dar Al Arkan Property Development LLC - Real Estate Rep. Office - UAE ** 100% 100% Commercial license no. 1143279 Real estate Representative Office.
Dar Global Centralized Services DMCC - UAE** 100% 100% Commercial license no. DMCC198720 Project management services.
* These entities have become part of the group as on 25 January 2023 pursuant
to the acquisition of Dar Al Arkan Holdings Limited (ADGM) by the Company
through issuance of shares to the Major shareholder (notes 21 and 30).
** These entities have been formed by the Group during the year 2023.
2 Material accounting policies
2.1 Statement of compliance
The financial statements have been prepared in accordance with UK adopted
International Accounting Standards and in conformity with the requirements of
the Companies Act 2006.
All values are rounded to the nearest unit in USD except where otherwise
indicated. Each entity determines its own functional currency and items
included in the financial statements of each entity are measured using that
functional currency.
This is the first annual financial statements of the Group, as the Company was
incorporated on 30 September 2022. The Material accounting policies are set
out below. These accounting policies elected by the group is on the
presumption that the group existed in the comparatives for the year in which
it was under common control. The comparatives represent the results of Dar Al
Arkan Global Investment LLC and those legal entities that Dar Al Arkan Global
Investment LLC has transferred to Dar Global PLC. Forming part of the same
group, the entities included in the comparatives are considered to be under
common management. Management considers the combination is appropriate in view
of the intention to show the comparatives. Refer note 2.2.
The financial statements have been prepared on a historical cost basis except
financial assets and financial liabilities that have been measured at fair
value (note 2.11 and 29). Historical cost is generally based on the fair value
of the consideration given in exchange for assets.
2.2 Basis of preparation
Basis of consolidation
The financial statements comprise the financial statements of the Company and
the subsidiaries ('the Group'), plus the Group's share of the results and net
assets of its joint ventures and associates.
Subsidiaries
Subsidiaries are entities controlled by the Group. The Group controls an
entity when it is exposed to, or has rights to, variable returns from its
involvement with the entity and has the ability to affect those returns
through its power over the entity. In assessing control, the Group takes into
consideration potential voting rights. The acquisition date is the date on
which control is transferred to the acquirer. The financial statements of
subsidiaries are included in the consolidated financial statements from the
date that control commences until the date that control ceases.
Joint ventures
A joint venture is a contract under which the Group and other parties
undertake an activity or invest in an entity, under joint control. The Group
uses equity accounting for such entities, carrying its investment at cost plus
the movement in the Group's share of net assets after acquisition, less
impairment.
Group restructure
A group restructuring exercise was carried out during the year as follows:
On 24 January 2023, the Major shareholder assigned the benefit of certain
shareholder loans to Dar Al Arkan Holdings Limited (ADGM) - UAE in exchange
for an issuance of new ordinary shares by Dar Al Arkan Holdings Limited (ADGM)
- UAE on a dollar for dollar basis.
On 25 January 2023, the entire issued share capital of Dar Al Arkan Holdings
Limited (ADGM) and its subsidiaries ("Trading Group") was transferred to the
Company by the Major shareholder in consideration for the issuance of new
ordinary shares by the Company.
The Trading Group and the Company were under common control by the Major
shareholder at the time of the transaction.
The acquisition by the Company of the Trading Group is a common control
transaction under IFRS 3. The consolidation of this Group has been prepared
using the book value accounting. In the statement of financial position, the
acquiree's identifiable assets, liabilities are recognised at their book
values at the acquisition date. The results of merged operations following the
Group's restructure in the year are included in the consolidated statement of
comprehensive income as if the Group has always existed. Comparative figures
are provided on the basis that the merged group always existed.
Group restructure
On 28 January 2023, the Company undertook a reduction of capital by cancelling
certain ordinary shares, in order to create distributable reserves and reduce
the number of ordinary shares in issue to 158,400,000 in aggregate.
Going concern
On 28 February 2023, the Company raised USD 72 million of new equity by way of
a private placing before expenses in order to invest in new projects, fund
working capital and to support continuing development work. On 28 February
2023 Dar Global was admitted to the standard listing segment of the Official
List of the FCA and to trading on the London Stock Exchange's Main Market for
listed securities.
The Board, having regard to the Group's forecasts and projections which are
based on the current trends in sales and development, and after taking account
of the funds currently held, the available facility including the undrawn
portion of USD 136 million at year end (refer to note 18) have concluded that
the Company and the Group will be able to operate within the level of
available resources. The directors have, at the time of approving the
consolidated financial statements, a reasonable expectation that the Group has
adequate resources to continue to be in operational existence for the
foreseeable future. Thus, they continue to adopt the going concern basis of
accounting in preparing the consolidated financial statements.
Adoption of new and revised standards
The Group has adopted all relevant amendments to existing standards and
interpretations issued by the International Accounting Standard Board (IASB)
that are effective for the respective financial year ends presented, with no
material impact on its consolidated results or financial position.
The Group did not implement the requirements of any other standards or
interpretations that were in issue but were not required to be adopted. No
other standards or interpretations have been issued that are expected to have
a material impact on the financial statements.
The preparation of the financial statements requires estimates and assumptions
to be made that may affect the amounts reported in the financial statements
and accompanying notes. Actual amounts could differ from the estimates
included in the financial statements herein. The preparation of the financial
statements on the basis set out, requires the use of certain critical
accounting estimates. It also requires judgement to be exercised in the
process of applying the accounting policies. The areas involving a higher
degree of judgement or complexity, or areas where assumptions and estimates
are Material to the financial statements, are disclosed in note 2.23.
2.3 Fair value measurement
Fair value is the price that would be received to sell an asset or paid to
transfer a liability in an orderly transaction between market participants at
the measurement date. The fair value measurement is based on the presumption
that the transaction to sell the asset or transfer the liability takes place
either:
- In the principal market for the asset or liability, or
- In the absence of a principal market, in the most advantageous market
for the asset or liability.
The principal or the most advantageous market must be accessible to by the
Group.
The fair value of an asset or a liability is measured using the assumptions
that market participants would use when pricing the asset or liability,
assuming that market participants act in their best economic interest.
A fair value measurement of a non-financial asset takes into account a market
participant's ability to generate economic benefits by using the asset in its
highest and best use or by selling it to another market participant that would
use the asset in its highest and best use.
2.4 Foreign currency
The transactions in currencies other than the Group's presentation currency
are recognized at the rates of exchange prevailing at the dates of the
transactions. At the end of each reporting period, monetary items denominated
in foreign currencies are retranslated at the rates prevailing at that date.
Non-monetary items carried at fair value that are denominated in foreign
currencies are retranslated at the rates prevailing at the date when the fair
value was determined. Non-monetary items that are measured in terms of
historical cost in a foreign currency are not retranslated.
Exchange differences on monetary items are recognized in the consolidated
statement of profit or loss in the period in which they arise.
In preparing the separate financial information of the individual
subsidiaries, the transactions in currencies other than the subsidiaries
functional currency are recognized at the rates of exchange prevailing at the
dates of the transactions. At the end of each reporting period, monetary items
denominated in foreign currencies are retranslated at the rates prevailing at
that date. Non-monetary items carried at fair value that are denominated in
foreign currencies are retranslated at the rates prevailing at the date when
the fair value was determined. Non-monetary items that are measured in terms
of historical cost in a foreign currency are not retranslated. Any gain or
loss on translation from functional currency of subsidiaries to presentation
currency of the Group is taken to statement of other comprehensive income.
Foreign exchange differences
Exchange differences on monetary items are recognized in consolidated
statement of profit or loss in the period in which they arise except for
exchange differences that relate to assets under construction for future
productive use. These are included in the cost of those assets when they are
regarded as an adjustment to interest costs on foreign currency borrowings.
Foreign exchange gains and losses
The carrying amount of financial assets that are denominated in a foreign
currency is determined in that foreign currency and translated at the spot
rate at the end of each reporting period. Financial assets measured at
amortized cost, exchange differences are recognized in the consolidated
statement of profit or loss.
2.5 Property and equipment
Property and equipment is stated at cost less accumulated depreciation and
identified impairment loss, if any. The cost comprise of purchase price,
together with any incidental expense of acquisition.
Subsequent costs are included in the asset's carrying amount or recognized as
a separate asset, as appropriate, only when it is probable that future
economic benefits associated with the item will flow to the Group and the cost
of the item can be measured reliably. All other repairs and maintenance
expenses are charged to the statement of profit or loss during the financial
period in which they are incurred.
Depreciation is spread over its useful lives so as to write off the cost of
property and equipment, using the straight-line method over its useful lives
as follows:
Assets Life years
Leasehold improvements 3
Furniture and fixtures 3-5
Computers and office equipment 3-5
When part of an item of property and equipment have different useful lives,
they are accounted for as separate items (major components) of property and
equipment.
The leasehold improvements are being depreciated over the period from when it
became available for use up to the end of the lease term.
The estimated useful lives, residual values and depreciation method are
reviewed at the end of each reporting period, with the effect of any changes
in estimate accounted for on a prospective basis.
The gain or loss arising on the disposal or retirement of an item of property
and equipment is determined as the difference between the sales proceeds and
the carrying amount of the asset and is recognized in the consolidated
statement of profit or loss.
2.6 Leases
Leases are accounted for by recognising a right-of-use asset and a lease
liability except for:
- Leases of low value assets; and
- Leases with a duration of 12 months or less.
Lease liabilities are measured at the present value of the contractual
payments due to the lessor over the lease term, with the discount rate
determined by reference to the rate inherent in the lease unless (as is
typically the case) this is not readily determinable, in which case the
group's incremental borrowing rate on commencement of the lease is used.
Variable lease payments are only included in the measurement of the lease
liability if they depend on an index or rate. In such cases, the initial
measurement of the lease liability assumes the variable element will remain
unchanged throughout the lease term. Other variable lease payments are
expensed in the period to which they relate.
On initial recognition, the carrying value of the lease liability also
includes:
· amounts expected to be payable under any residual value guarantee;
· the exercise price of any purchase option granted in favor of the group
if it is reasonably certain to assess that option;
· any penalties payable for terminating the lease, if the term of the
lease has been estimated based on termination option being exercised.
Right of use assets are initially measured at the amount of the lease
liability, reduced for any lease incentives received, and increased for:
· lease payments made at or before commencement of the lease;
· initial direct costs incurred; and
· the amount of any provision recognized where the group is contractually
required to dismantle, remove or restore the leased asset.
Subsequent to initial measurement lease liabilities increase as a result of
interest charged at a constant rate on the balance outstanding and are reduced
for lease payments made. Right-of-use assets are amortised on a straight-line
basis over the remaining term of the lease or over the remaining economic life
of the asset if, rarely, this is judged to be shorter than the lease term.
2.7 Joint operations
A significant portion of land plots, on which the Group's projects are
located, is sourced through the contribution of land by the Group's joint
development partners, which allows the Group to secure land for its projects
with minimal upfront cash contributions. The Group adopts a capital light
model of Joint Development Agreement where the land is contributed by the
joint development partners and also a certain percentage of profits are
shared. All projects are controlled and managed by the Group which includes
funding, sales, development, marketing, collections, loss absorption if any
etc.
These arrangements under IFRS11 "Joint arrangements" have been classified as
joint operations where each party to the joint operation (or each "Joint
operator") recognised its share of the assets, liabilities, revenue, and
expenses of the joint arrangement. The share is determined based on the rights
and obligations of each party as set out in the contractual terms.
2.8 Development properties
Properties constructed or in the course of construction for
sale in the ordinary course of business are classified as development
properties and are stated at the lower of cost or net realizable value. Cost
includes cost of acquisition of land, cost of construction including planning
and design cost, commission, borrowing costs, employee costs, cost of
acquiring development rights and other direct costs attributable to the
development.
Net realizable value is the estimated selling price in the
ordinary course of business, based on market prices at the reporting date and
discounted for the time value of money, if material, less costs to completion
and the estimated costs of sale.
The management reviews the carrying values of the
development properties on each reporting date.
2.9 Advances from customers
Advances received from customers include instalments received from customers
for properties sold either before the revenue recognition criteria have been
met or in excess of the project's stage of completion. These funds are later
recognized in the profit or loss statement once the revenue recognition
criteria are satisfied. Additionally, advances from customers may be
derecognized from the books when either the customer or the Group terminates
the contract.
2.10 Impairment of non-financial assets
Non-financial assets of the Group mainly include development properties,
advances to suppliers and contractors, right-of-use assets and property and
equipment. At the end of each reporting period, the Group reviews the
carrying amounts of its non-financial assets to determine whether there is any
indication that those assets have suffered an impairment loss. If any such
indication exists, the recoverable amount of the asset is estimated in order
to determine the extent of the impairment loss (if any).
Where it is not possible to estimate the recoverable amount of an individual
asset, the Group estimates the recoverable amount of the cash-generating unit
to which the asset belongs. Where a reasonable and consistent basis of
allocation can be identified, corporate assets are also allocated to
individual cash-generating units, or otherwise they are allocated to the
smallest group of cash-generating units for which a reasonable and consistent
allocation basis can be identified.
Recoverable amount is the higher of fair value less costs to sell and value in
use. In assessing value in use, the estimated future cash flows are discounted
to their present value using a pre-tax discount rate that reflects current
market assessments of the time value of money and the risks specific to the
asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated
to be less than its carrying amount, the carrying amount of the asset (or
cash-generating unit) is reduced to its recoverable amount. An impairment loss
is recognized immediately in the consolidated statement of profit or loss.
Where an impairment loss subsequently reverses, the carrying amount of the
asset (or cash-generating unit) is increased to the revised estimate of its
recoverable amount, but so that the increased carrying amount does not exceed
the carrying amount that would have been determined had no impairment loss
been recognized for the asset (or cash-generating unit) in prior years. A
reversal of an impairment loss is recognized immediately in the consolidated
statement of profit or loss.
2.11 Financial instruments
Financial assets and financial liabilities are recognized when the Group
becomes a party to the contractual provisions of the instrument.
2.12 Financial assets
Classification
The Group classifies its financial assets at amortized cost.
Classification
The Group classifies its financial assets at amortized cost.
Measurement
At initial recognition, the Group measures a financial asset at its fair value
plus transaction costs that are directly attributable to the acquisition of
the financial asset.
Financial assets comprise of cash and cash equivalents, trade receivables,
advances deposits and other receivables, due from related parties and other
escrow retentions.
Cash and cash equivalents
Cash and cash equivalents comprise cash on hand and demand deposits and other
short-term highly liquid investments that are readily convertible to a known
amount of cash and are subject to an insignificant risk of changes in value.
Trade and other receivables (including due from related parties)
Receivable balances that are held to collect are subsequently measured at the
lower of amortized cost or the present value of estimated future cash flows.
The present value of estimated future cash flows is determined through the use
of value adjustments for uncollectible amounts. The Group assesses on a
forward-looking basis the expected credit losses associated with its
receivables and adjusts the value to the expected collectible amounts.
Receivables are written off when they are deemed uncollectible because of
bankruptcy or other forms of receivership of the debtors. The assessment of
expected credit losses on receivables takes into account credit-risk
concentration, collective debt risk based on average historical losses,
specific circumstances such as serious adverse economic conditions in a
specific country or region and other forward-looking information.
For accounts receivable, the Group applies the simplified approach permitted
by IFRS 9, which requires expected lifetime losses to be recognized from
initial recognition of the receivables.
Derecognition of financial assets
The Group derecognizes a financial asset only when the contractual rights to
the cash flows from the asset expire; or it transfers the financial asset and
substantially all the risks and rewards of ownership of the asset to another
Group. If the Group neither transfers nor retains substantially all the risks
and rewards of ownership and continues to control the transferred asset, the
Group recognizes its retained interest in the asset and an associated
liability for the amounts, it may have to pay. If the Group retains
substantially all the risks and rewards of ownership of a transferred
financial asset, the Group continues to recognize the financial asset.
2.13 Financial liabilities
Financial liabilities are classified according to the substance of the
contractual arrangements entered into and the definitions of a financial
liability. All financial liabilities are recognized initially at fair value
and, in the case of loans, borrowings and payables, net of directly
attributable transaction costs.
The Group's financial liabilities include accounts payables and provisions,
other payables, development property liabilities, advance from customers and
due to related parties.
Accounts and other payables
Accounts payable are obligations to pay for goods or services that have been
acquired in the ordinary course of business from suppliers. Accounts payable
are classified as current liabilities if payment is due within one year or
less (or in the normal operating cycle of the business if longer). If not,
they are presented as non-current liabilities. Accounts and other payables are
recognized initially at fair value and subsequently are measured at amortized
cost using effective interest method.
Loans and borrowings
Term loans are initially recognised at the fair value of the consideration
received less directly attributable transaction costs. After initial
recognition, interest-bearing loans and borrowings are subsequently measured
at amortised cost using the effective interest rate method. Gains and losses
are recognised in the consolidated income statement when the liabilities are
derecognised as well as through the amortisation process.
Development property liabilities
Development property liabilities represents the amount payable for the
acquisition of development properties on a deferred payment plan basis
including variable consideration. Initially, these amounts are stated at the
fair value of the consideration payable. Subsequently, at each reporting date
the development property liabilities are measured at amortised cost.
Derecognition of financial liabilities
The Group derecognizes financial liabilities when, and only when, the Group's
obligations are discharged, cancelled or they expire. When an existing
financial liability is replaced by another, from the same lender on
substantially different terms, or the terms of an existing liability are
substantially modified, such an exchange or modification is treated as the
derecognition of the original liability and the recognition of a new
liability. The difference in the respective carrying amounts is recognized in
the consolidated statement of profit or loss.
Where the loan payable (or part thereof) is forgiven by a shareholder, the
loan is derecognised at its carrying value, and an equity contribution is
reflected at that same carrying value, this contribution is reflected as a
loss absorbed by a shareholder. No gain or loss is recognised in profit or
loss.
2.14 Offsetting financial instruments
Financial assets and liabilities are offset and the net amount reported in the
consolidated statement of financial position, when there is a legally
enforceable right to offset the recognized amounts and there is an intention
to settle on a net basis or realize the asset and settle the liability
simultaneously.
2.15 Provisions
Provisions are recognized when the Group has a present obligation (legal or
constructive) as a result of a past event, it is probable that the Group will
be required to settle the obligation, and a reliable estimate can be made of
the amount of the obligation.
The amount recognized as a provision is the best estimate of the consideration
required to settle the present obligation at the end of the reporting period,
taking into account the risks and uncertainties surrounding the obligation.
When a provision is measured using the cash flows estimated to settle the
present obligation, its carrying amount is the present value of those cash
flows.
When some or all of the economic benefits required to settle a provision are
expected to be recovered from a third party, a receivable is recognized as an
asset, if it is virtually certain that reimbursement will be received and the
amount of the receivable can be measured reliably.
2.16 Revenue recognition
Revenue from contracts with customers
The Group recognizes revenue from contracts with customers based on a five
step model as set out in IFRS 15 Revenue from contracts with customers.
Step 1. Identify the contract(s) with a customer: A contract is defined as
an agreement between two or more parties that creates enforceable rights and
obligations and sets out the criteria for every contract that must be met.
This is evidenced by issuance of signed Sale and Purchase Agreement ("SPA") to
the customer and meeting specified threshold of project completion and
collection from the customers.
Step 2. Identify the performance obligations in the contract: A performance
obligation is a promise in a contract with a customer to transfer a good or
service to the customer. The performance obligation for the Group is to
deliver the constructed property to the customers along with the ancillary
rights such as the right to use amenities and other related infrastructure
facilities available. Accordingly, one performance obligation has been
identified for each unit to be sold. The group assesses its revenue
arrangements against specific criteria to determine if it is acting as
principal or agent. The Group has concluded that it is acting as a principal
in all of its revenue arrangements.
Step 3. Determine the transaction price: The transaction price is the
amount of consideration to which the Group expects to be entitled in exchange
for delivering the property to its customers. The agreed transaction price is
a part of signed SPA issued to each customer. Revenue excludes taxes and duty,
and includes an adjustment for a significant financing component ("SFC") as
the payment plan for the projects extends beyond twelve months from the
reporting period. No adjustment has been made for variable consideration as
the group does not have any contracts with variable consideration.
Step 4. Allocate the transaction price to the performance obligations in
the contract: The Group allocates the transaction price to each unit sold,
consistent with the performance obligation identified in Step 2.
Step 5. Recognize revenue when (or as) the entity satisfies a performance
obligation.
The Group satisfies a performance obligation and recognizes revenue over time,
if one of the following criteria is met:
1. The customer simultaneously receives and consumes the benefits
provided by the Group's performance as the Group performs; or
2. The Group's performance creates or enhances an asset that
the customer controls as the asset is created or enhanced; or
3. The Group's performance does not create an asset with an
alternative use to the Group and the entity has an enforceable right to
payment for performance completed to date.
The Group determines the satisfaction of performance obligation separately for
each of its contracts and recognize revenue accordingly.
For performance obligations where one of the above conditions are not met,
revenue is recognised at the point in time at which the performance obligation
is satisfied.
When the Group satisfies a performance obligation by delivering the promised
goods or services it creates a contract asset based on the amount of
consideration earned by the performance. Where the amount of consideration
received from a customer exceeds the amount of revenue recognized this gives
rise to a contract liability.
2.16 Cost of revenue
Cost of revenue represent cost for purchase of land, construction costs,
consultant costs, utilities cost, and other related direct costs recognized to
consolidated statement of profit or loss on percentage of completion or point
in time as applicable.
2.17 Borrowing costs
Borrowing costs directly attributable to the acquisition, construction or
production of qualifying assets, which are assets that necessarily take a
substantial period of time to get ready for their intended use or sale, are
added to the cost of those assets, until such time as the assets are
substantially ready for their intended use or sale. Borrowing costs consist of
interest and other costs that the Group incurs in connection with the
borrowing of funds. All other borrowing costs are recognised in the
consolidated statement of profit or loss in the year in which they are
incurred.
2.18 Escrow Accounts
Escrow accounts represent bank accounts where money is held in with the bank,
acting as an escrow agent, and available for use only if all the
pre-determined conditions are fulfilled. The funds paid by customers for their
apartments in off-plan sales are required to be deposited into escrow accounts
held by banks accredited by the local governing bodies.
For Escrow retention, in line with UAE laws an escrow agent must retain
five percent. Of the total value of each escrow account once the developer
obtains the building completion certificate to ensure coverage of defects in
the property post-handover. The retained amount will be released to the
developer one year from the registration of the residential units in the name
of purchasers of such units.
2.19 Equity and reserves
Share capital represents the nominal value of shares that have been issued.
Share premium represents the excess consideration received over the nominal
value of share capital upon the sale of shares, less any incidental costs of
issue.
The retained earnings represent distributable reserves.
The foreign currency translation reserve is used to record exchange difference
arising from translation of the financial statements of foreign subsidiaries,
associates and joint ventures.
2.20 Taxation
The tax charge represents the sum of the tax currently payable and deferred
tax.
Current tax
Current tax comprises the expected tax payable or receivable on the taxable
income or loss for the year and any adjustment to the tax payable or
receivable in respect of previous years. The amount of current tax payable or
receivable is the best estimate of the tax amount expected to be paid or
received that reflects uncertainty related to income taxes, if any. It is
measured using tax rates enacted or substantively enacted at the reporting
date. Current tax also includes any tax arising from dividends.
Deferred tax
Deferred tax is recognised in respect of temporary differences between the
carrying amounts of assets and liabilities for financial reporting purposes
and the amounts used for taxation purposes.
Deferred tax is recognised in respect of temporary differences between the
carrying amounts of assets and liabilities for financial reporting purposes
and the amounts used for taxation purposes. Deferred tax is not recognised
for:
- temporary differences on the initial recognition of assets or liabilities
in a transaction that:
a) is not a business combination; and
b) at the time of the transaction (i) affects neither accounting nor taxable
profit or loss and (ii) does not give rise to equal taxable and deductible
temporary differences;
- temporary differences related to investments in subsidiaries, associates
and joint arrangements to the extent that the Group is able to control the
timing of the reversal of the temporary differences and it is probable that
they will not reverse in the foreseeable future; and
- taxable temporary differences arising on the initial recognition of
goodwill.
Deferred tax assets are recognised for unused tax losses, unused tax credits
and deductible temporary differences to the extent that it is probable that
future taxable profits will be available against which they can be used.
Future taxable profits are determined based on the reversal of relevant
taxable temporary differences. If the amount of taxable temporary differences
is insufficient to recognise a deferred tax asset in full, then future taxable
profits, adjusted for reversals of existing temporary differences, are
considered, based on the business plans for individual subsidiaries in the
Group. Deferred tax assets are reviewed at each reporting date and are reduced
to the extent that it is no longer probable that the related tax benefit will
be realised; such reductions are reversed when the probability of future
taxable profits improves.
The measurement of deferred tax reflects the tax consequences that would
follow from the manner in which the Group expects, at the reporting date, to
recover or settle the carrying amount of its assets and liabilities.
Deferred tax assets and liabilities are offset only if certain criteria are
met.
2.21 Statutory Reserve
According to Article 103 of the UAE Federal Law No. (32) of 2021, 5% of annual
net profits after NCI are allocated to the statutory reserve for the entities
registered in UAE. The transfers to the statutory reserve may be suspended
when the reserve reaches 50% of the paid-up capital.
2.22 Significant accounting judgements, estimates and assumptions
In the application of the Group's accounting policies, which are described in
policy notes, the management are required to make judgements, estimates and
assumptions about the carrying amounts of assets and liabilities that are not
readily apparent from other sources. The estimates and associated assumptions
are based on historical experience and other factors that are considered to be
relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis.
Revisions to accounting estimates are recognized in the period in which the
estimate is revised if the revision affects only that period, or in the period
of the revision and future periods if the revision affects both current and
future periods.
The significant judgments and estimates made by management, that have a
significant risk of causing a material adjustment to the carrying amounts of
assets and liabilities within the next financial year are described below:
Critical judgements in applying accounting policies
In the process of applying the Group's accounting policies, which are
described above, and due to the nature of operations, management makes the
following judgment that has the most significant effect on the amounts
recognized in the consolidated financial statements.
Identifying a contract
The group assesses for each development and for each customer the point in
time at which a contract exists. This requires assessing the point in each
development where there is certainty that it will continue to completion, as
well as assessing the point in time at which consideration from the customer
is probable - this assessment takes into account the legal requirements and
history of collections.
Timing of satisfaction of performance obligations
The Group is required to assess each of its contracts with customers to
determine whether performance obligations are satisfied over time in order to
determine the appropriate method of recognizing revenue. The Group has
assessed that based on the sale and purchase agreements entered into with
customers and the provisions of relevant laws and regulations, where contracts
are entered into to provide real estate assets to customer, the Group does not
create an asset with an alternative use to the Group and usually has an
enforceable right to payment for performance completed to date. In these
circumstances the Group recognizes revenue over time.
Measurement of progress when revenue is recognized over time
The Group has elected to apply the input method to measure the progress of
performance obligations where revenue is recognized over time. The Group
considers that the use of the input method which requires revenue recognition
on the basis of the Group's efforts to the satisfaction of the performance
obligation provides the best reference of revenue actually earned. In applying
the input method, the Group estimates the cost to complete the projects in
order to determine the amount of revenue to be recognized.
Key sources of estimation uncertainty
The key assumptions concerning the future, and other key sources of estimation
uncertainty at the reporting date, that have a significant risk of causing a
material adjustment to the carrying amounts of assets and liabilities within
the next financial year, are discussed below:
Impairment of financial assets
The loss allowances for financial assets are based on assumptions about risk
of default and expected loss rates. The Group uses judgement in making these
assumptions and selecting the inputs to the impairment calculation, based on
the Group's past history, existing market conditions as well as forward
looking estimates at the end of each reporting period. Details of the key
assumptions and inputs used are disclosed in the relevant notes to the
consolidated financial statements.
Determination of transaction prices
The Group is required to determine the transaction price in respect of each of
its contracts with customers. In making such judgment the Group assess the
impact of any variable consideration in the contract, due to discounts or
penalties, the existence of any significant financing component in the
contract and any non-cash consideration in the contract.
The Group estimates the cost to complete the projects in order to determine
the cost attributable to revenue being recognized. These estimates include the
cost of providing infrastructure, potential claims by contractors as evaluated
by the project consultant and the cost of meeting other contractual
obligations to the customers.
Net realisable value of development properties
Development properties are stated at the lower of cost and estimated net
realisable value. The cost of work-in-progress comprises construction costs
and other related direct costs. Net realisable value is the estimated selling
price in the ordinary course of business, less cost of completion and selling
expenses.
Contingent consideration payable for development property liabilities
For each joint development agreement, the Group estimates the contingent
consideration payable to the joint developer. In order to determine the
contingent consideration, the Group estimates the total sales price, the total
cost of development properties including potential claims by contractors and
the estimated cost of meeting other contractual obligations.
2 New standards and amendments
3.1 New standards and amendments applicable for 2023
The following standards and amendments apply for the first time to the
financial reporting periods commencing on or after January 01, 2023.
- IFRS 17 Insurance Contracts
- Disclosure of Accounting Policies - Amendments to IAS 1 and IFRS
Practice Statement 2
- Definition of Accounting Estimate - Amendments to IAS 8
- Deferred Tax related to Assets and Liabilities arising from a
Single Transaction - Amendments to IAS 12
- International Tax Reform - Pillar Two Model Rules - Amendments to
IAS 12
The management believes that the adoption of the above amendments effective
for the current accounting period has not had any material impact on the
recognition, measurement, presentation, and disclosure of items in the
consolidated financial statements.
3.2 New standards and amendments issued but not effective for the
current year
The following standards and interpretations had been issued but not yet
mandatory for annual periods beginning after 1 January 2023.
Description Effective for annual periods beginning on or after
Non-current liabilities with Covenants - Amendments to IAS 1 January 1, 2024
Classification of Liabilities as Current or Noncurrent - Amendments to IAS 1
January 1, 2024
Lease liability in a Sale and Leaseback - Amendments to IFRS 16 January 1, 2024
Supplier Finance Arrangements - Amendments to IAS 7 and IFRS 7 January 1, 2024
Lack of Exchangeability - Amendments to IAS 21 January 1, 2025
Sale or Contribution of Assets between an investor and its Associate or Joint Effective date
Venture - IFRS 10 and IAS 28
deferred indefinitely
Management anticipates that these new standards, interpretations and
amendments will be adopted in the financial statements as and when they are
applicable and adoption of these new standards, interpretations and
amendments, may have no material impact on the consolidated financial
statements in the period of initial application.
3 Segment Information
Management monitors the operating results of its business segments separately
for the purpose of making decisions about resource allocation and performance
assessment. Segment performance is evaluated based on operating profit or loss
and is measured consistently with operating profit or loss in the consolidated
financial statements. The only segment is real estate development,
accordingly, the component parts of the revenue, profits or assets as
disclosed in the notes to the consolidated financial statement pertain to this
segment.
Business segment
The only business segment is Real estate development which represents 100% of
the revenue and total assets.
Geographic segments
The following tables include revenue and other segment information for the
years ended 31 December 2023 and 31 December 2022. Certain assets information
for geographic segments is presented as at 31 December 2023 and 31 December
2022.
The Group has divided its operations into two categories i.e. Domestic (UK)
and International (all other countries where Group has its operations)
Domestic International
USD USD
For the year ended 31 December 2023:
Revenue - 360,575,755
Profit for the year 1,587,396 81,638,775
For the year ended 31 December 2022 (unaudited):
Revenue - 80,001,625
Profit/(loss) for the year (14,813,354) 9,604,274
As at 31 December 2023
Total assets 35,170,037 732,176,025
Total liabilities 2,386,588 299,547,923
As at 31 December 2022 (unaudited)
Total assets 9,637,947 548,256,972
Total liabilities 14,838,569 261,654,762
The Group has generated 100% of its revenue from its operations in United Arab
Emirates. The details of the Group's non-current assets categorized by the
subsidiary's country of domicile is as follows:
As at December As at December
31, 2023 31, 2022
---------------- ----------------
(Unaudited)
Non-current assets
United Arab Emirates 105,659,116 30,209,519
Other countries 6,626,542 45,819,709
---------------- ---------------
112,285,658 76,029,228
========= =========
5 Cash and cash equivalents
As at December As at December
31, 2023 31, 2022
---------------- ----------------
(Unaudited)
Cash in hand 24,785 14,709
Cash at bank
- Current accounts 12,815,812 40,936,094
- Escrow retention accounts (refer to (a) below) 9,987,477 5,853,253
- Escrow accounts (refer to (b) below) 148,308,559 71,661,582
- Demand deposit (refer to (c) below) 67,342,878 -
---------------- ----------------
238,479,511 118,465,638
Less: Escrow retention accounts (note 9) (9,987,477) (5,853,253)
---------------- ---------------
228,492,034 112,612,385
========= =========
a) The above represents Escrow retention accounts maintained with a
commercial bank in accordance with Law No. 8 of 2007 relating to Trust
Accounts Regulation and Real Estate Regulatory Authority (RERA) requirements
in Dubai - United Arab Emirates. The retention balance shall be released after
one year from the completion of the project. These balances carry interest at
the rate of 40 percent of 3 months EIBOR.
b) The above represents Escrow accounts maintained with a commercial bank
in accordance with the local laws issued by the governing body of the
respective countries. This escrow account can be used for making payments
directly related to the projects subject to the regulations. The significant
increase in the balances during the period is mainly due to collections from
customers as per the payment plan.
c) The above represents deposit held with a bank in Kingdom of Saudi Arabia
rated at investment grade through one of its related parties (refer to note
19) for the period of three years at an interest rate of 7.80% per annum. This
deposit is repayable on demand without any penalty on early maturity.
Management has concluded that the Expected Credit Loss (ECL) for all bank
balances is immaterial as these balances are held with banks/financial
institutions whose credit risk rating by international rating agencies has
been assessed as low.
6 Trade and unbilled receivables
As At December As At December
31, 2023 31, 2022
---------------- ----------------
(Unaudited)
Unbilled receivables (refer to (a) below) 207,553,472 39,152,132
Trade receivables (refer to (b) below) 14,313,992 1,400,608
---------------- ----------------
221,867,464 40,552,740
Less: Provision for impairment on trade receivables - -
---------------- ----------------
Net receivables 221,867,464 40,552,740
========= =========
Not more than 12 months 139,199,058 21,760,799
More than 12 months 82,668,406 18,791,941
---------------- --------------
221,867,464 40,552,740
========= ========
a) Unbilled receivables are contract assets which relate to the Group's
right to receive considerationfor work completed but not billed as at the
reporting date. These are transferred to trade receivables when invoiced as
per milestones agreed in contracts with the customers.
b) At reporting date, the ageing analysis of net trade and
unbilled receivables is as follows:
As At December As At December
31, 2023 31, 2022
---------------- ---------------
(Unaudited)
Current (Not past due) 207,553,472 39,164,419
Not more than 90 days 7,749,411 625,417
Between 91 to 180 days 907,483 538,546
Between 181 to 360 days 4,229,881 201,341
More than 360 days 1,427,217 23,017
---------------- --------------
Total 221,867,464 40,552,740
========= ========
Refer note 31(d) on credit risks of trade and unbilled receivables, which
explains how the Group manages and measures credit quality of trade and
unbilled receivables.
7 Advances, deposits and other receivables
As at December As at December
31,2023 31,2022
---------------- ----------------
(Unaudited)
Prepayments (refer to (a) and (c) below) 33,100,762 44,540,626
Advances to suppliers and contractors 23,324,510 3,640,981
Margin deposit (refer to (b) below) 1,353,302 21,592,920
Other deposits 1,007,198 824,130
Other receivables 687,037 486,009
VAT refundable 1,397,979 10,047,183
-------------- ---------------
60,870,788 81,131,849
======== =========
Not more than 12 months 59,517,486 38,543,988
More than 12 months 1,353,302 42,587,861
-------------- ----------------
60,870,788 81,131,849
======== =========
a) The above mainly includes incremental cost of obtaining a
contract such as sales commission paid to brokers and employees for the sale
of properties, amounting to USD 27,685,694 (2022: USD 36,413,568) and will be
amortized consistent with the pattern of revenue in the future.
b) The above represents margin deposits held with a bank against
project guarantee (note 33).
c) Prepayments includes USD 73,997 (2022: Nil) for commission paid
to a related party (note 19)
8 Development properties
As at December As at December
31, 2023 31,2022
--------------- ---------------
(Unaudited)
Balance at the beginning of the year 302,274,899 176,796,423
Additions during the year 130,052,699 176,829,733
Reclass to property and equipment (refer to note 12) (1,265,004) -
Cost of revenue (214,131,383) (51,351,257)
--------------- ---------------
Balance at the end of the year 216,931,211 302,274,899
========= =========
Properties acquired, constructed or in the course of construction for sale in
the ordinary course of business are classified as development properties and
include the costs of:
· Freehold and leasehold rights for land;
· Amounts paid to contractors for construction including the cost of
construction of infrastructure; and
· Planning and design costs, costs of site preparation, professional fees
for legal services, property transfer taxes, borrowing costs, employee costs,
cost of acquiring development rights, construction overheads and other related
costs.
Common overhead cost (directly attributable to the projects) is allocated to
various projects and forms part of the estimated cost to complete a project in
order to determine the cost attributable to revenue being recognised.
The Group assesses the net realizable value of development properties for
impairment on each reporting date and the management believes that the net
realizable value of above development properties is higher than its carrying
value as on the reporting date.
Development properties in the UAE include land provided by Joint Development
Agreement (JDA) partner on December 9, 2021, under a JDA. On initial
recognition the property has been recognized at fair value of the
consideration payable i.e., at USD 67,599,386 which is computed based on a
deferred payment plan as defined in the Sale and Purchase agreement ("SPA")
(note 17). Under this arrangement, profits will be shared equally between the
parties.
Development properties include an amount of USD 95,302,927 (December 2022 :
USD 95,302,927) which is registered as primary mortgage in the favour of
commercial bank in Dubai against the borrowings (note 18).
The development properties are located in United Arab Emirates, United
Kingdom, Bosnia, Spain and Oman.
9 Escrow retentions
As at December As at December
31, 2023 31,2022
--------------- ---------------
(Unaudited)
Escrow retention accounts - more than 12 months (note 5)
9,987,477 5,853,253
======== ========
10 Investment in joint venture
As at December As at December
31, 2023 31,2022
--------------- ---------------
(Unaudited)
Percentage of ownership interest 75.30% 75.30%
149 OPL Ltd 5,370,876 4,681,667
======== ========
On 3 November 2022, the Group entered into joint venture for the purpose of
acquiring, developing and selling the property under the name of 149 OPL Ltd
("joint venture") domiciled in the United Kingdom.
In accordance with the joint venture agreement, the Group and the other
investor have subscribed to deep discount bonds issued by 149 OPL Ltd in the
proportion of their respective ownership interest. On 3 November 2022, the
Group has subscribed for bonds with nominal value of USD 5,919,512 at a
discounted price of USD 4,932,926. Further, the discount rate is 10% per annum
and maturity period for the bond is two years.
December December
31, 2023 31,2022
---------------- ----------------
(Unaudited)
Revenue - -
Net loss (123,740) (439,221)
Other comprehensive income - -
-------------- --------------
Total comprehensive loss (123,740) (439,221)
Group's share of loss (93,162) (330,734)
======== ========
The following table summarises the financial position of Group's joint venture
for the year ended:
As at December As at December
31, 2023 31,2022
---------------- ----------------
(Unaudited)
Total assets 25,077,273 18,837,517
Total liabilities (17,942,847) (12,620,164)
-------------- --------------
Net assets 7,134,426 6,217,353
Group's share of net asset 5,370,876 4,681,667
======== ========
11 Loan to joint venture
As at December As at December
31, 2023 31,2022
---------------- ----------------
(Unaudited)
149 OPL Ltd 2,150,987 1,991,953
======== ========
Loan to joint venture is unsecured, repayable on demand and does not carry any
interest.
12 Property and equipment
Leasehold improvements Furniture and fixtures Computers and office equipment Capital work-in-progress Total
Cost
As at January 1, 2022 (unaudited) - - - - -
Additions - 3,164 73,831 576,016 653,011
Transfer from related party 201,073 39,989 164,004 - 405,066
Disposals (201,073) - - - (201,073)
------------ ------------ ------------- ------------ -------------
As at December 31, 2022 (unaudited) - 43,153 237,835 576,016 857,004
Additions 227,250 941,356 1,729,079 1,499,982 4,397,667
Transfer from Capital work-in-progress 1,412,172 429,343 - (1,841,515) -
Reclass from development properties - - 590,872 674,132 1,265,004
Disposal - - (10,223) - (10,223)
Translation adjustments 6,524 19,068 300 - 25,892
---------- ------------ ------------ ------------ ------------
As at December 31, 2023 1,645,946 1,432,920 2,547,863 908,615 6,535,344
---------- ------------ ------------ ----------- ------------
Accumulated depreciation
As at January 1, 2022 (unaudited) - - - - -
Charge for the year 4,994 5,425 9,448 - 19,867
Disposals (4,994) - - - (4,994)
---------- ---------- ------------ ------------ ------------
As at December 31, 2022 (unaudited) - 5,425 9,448 - 14,873
Charge for the year 192,693 268,456 523,309 984,458
Disposal - - (173) - (173)
Translation adjustments - - 137 - 137
---------- ---------- ---------- ------------ ------------
As at December 31, 2023 192,693 273,881 532,721 - 999,295
---------- ---------- ---------- ------------ ------------
Carrying value
As at December 31, 2023 1,453,253 1,159,039 2,015,142 908,615 5,536,049
====== ====== ====== ======= =======
As at December 31, 2022 (unaudited) - 37,728 228,387 576,016 842,131
====== ====== ====== ======= =======
13 Right-of-use assets and lease liabilities
The carrying amounts of the Group's right-of-use assets and lease liabilities and the movements during the year:
Right-of-use assets As at December As at December
31, 2023 31,2022
---------------- ----------------
(Unaudited)
Balance at the beginning of the year 2,643,470 -
Additions during the year 5,095,167 3,510,427
Depreciation charge for the year (2,200,115) (866,957)
Foreign exchange gain 116 -
-------------- --------------
Balance at the end of the year 5,538,638 2,643,470
======== ========
Lease liabilities As at December As at December
31, 2023 31,2022
---------------- ----------------
(Unaudited)
Balance at the beginning of the year 2,743,815 -
Additions during the year 5,095,167 3,510,427
Interest expense for the year 376,587 161,790
Payments for the year (2,274,801) (928,402)
Foreign exchange loss 3,794 -
------------ ------------
Balance at the end of the year 5,944,562 2,743,815
======= =======
Not more than 12 months 2,597,561 1,054,322
More than 12 months 3,347,001 1,689,493
------------ ------------
5,944,562 2,743,815
======= =======
14 Trade and other payables
As at December As at December
31, 2023 31,2022
---------------- ----------------
(Unaudited)
Trade payables 3,050,477 1,823,906
Accruals 22,533,630 28,601,037
Other payables 129,783 266,341
-------------- --------------
25,713,890 30,691,284
======== ========
As at December As at December
31, 2023 31,2022
---------------- ----------------
(Unaudited)
Not more than 12 months 25,713,890 30,691,284
More than 12 months - -
------------- -------------
25,713,890 30,691,284
======== ========
15 Advances from customers
As at December As at December
31, 2023 31,2022
---------------- ----------------
(Unaudited)
Balance at the beginning of the year 94,456,096 33,999,178
Revenue recognized during the year (137,692,637) (41,269,364)
Advances received from the customers during the year - Net
100,759,831 101,726,282
--------------- --------------
Balance at the end of the year 57,523,290 94,456,096
========= ========
The above represent contractual liabilities arising from the
property sales agreement with the customers including advance consideration
received from them.
The aggregate amount of the sale price allocated to the performance
obligations of the Group that are fully or partially unsatisfied as at 31
December 2023 is USD 165,477,358 (31 December 2022: USD 125,492,668). The
Group expects to recognise these unsatisfied performance obligations as
revenue over a period of 1 to 5 years.
16 Retention payable
As at December As at December
31,2023 31,2022
---------------- ----------------
(Unaudited)
Retention payable for construction works - not more than 12 months 2,956,238 -
Retention payable for construction works - more than 12 months
3,892,831 4,038,203
------------ ------------
6,849,069 4,038,203
======= =======
17 Development property liability
As at December As at December
31,2023 31,2022
---------------- ----------------
(Unaudited)
Long term liability - Land 78,631,324 72,467,693
-------------- --------------
78,631,324 72,467,693
======== ========
The above represents amount payable for the land contributed by joint
development partner under the JDA. This liability is secured against
development property (note 8). The property has been purchased on a deferred
payment plan with the final instalment due on the completion of the project
i.e. on or before December 31, 2025. The above liability is discounted at
the rate of 8.5%.
18 Loans and borrowings
As at December As at December
31,2023 31,2022
---------------- ----------------
(Unaudited)
Balance at the beginning of the year 69,668,662 -
Add: Drawdown during the year 77,234,071 69,668,662
Less: Repayments during the year (18,882,948) -
-------------- --------------
Total Borrowings 128,019,785 69,668,662
Less:- Unamortised cost (2,655,982) -
-------------- --------------
125,363,803 69,668,662
======== ========
Loans and borrowings maturity profile: As at December As at December
31, 2023 31,2022
---------------- ----------------
(Unaudited)
Not more than 12 months 17,699,115 4,482,821
More than 12 months 107,664,688 65,185,841
-------------- --------------
125,363,803 69,668,662
======== ========
The Group has following secured interest-bearing borrowings:
- On 26 May 2023, the Group has obtained financing facility of USD
204,220,558 (AED 750,000,000) from a commercial bank in UAE which is
guaranteed by majority shareholder and Ultimate parent company of majority
shareholder with a contractual maturity by July 2027 repayable in half yearly
instalments.
Further, during the year, the Group has drawn USD 68,073,520 (AED 250,000,000)
at an interest rate of 3 months EIBOR plus 2.30% per annum. The amount of
undrawn facility as at 31 December 2023 is USD 136,147,038 (AED 500,000,000).
- Additionally, during the current year, the Group entered into a USD
2,224,557 financing facility with a commercial bank in Spain which has been
fully drawn. This facility carried interest at 3 months EURIBOR plus 2.50% per
annum. This loan has been repaid in current year.
- During the year 2022, the Group entered into a financing facility with
a commercial bank for an amount of USD 87,134,105 (AED 320,000,000) of which
the Group had drawn down USD 72,121,834 (AED 264,867,435). This facility is
secured against development property (note 8) in United Arab Emirates, carries
interest at 3 months EIBOR plus 2.55% per annum and is repayable by November
2027. The facility is presented in the consolidated financial statements at
USD 59,946,264.
- During the year 2022, the Group entered into a USD 4,482,821 financing
facility with a commercial bank in Spain which has been fully drawn. This
facility carried interest at 3 months EURIBOR plus 2.449% per annum. This loan
has been repaid in current year.
19 Related party transactions
The Group enters into transactions with other entities that fall within the
definition of a related party as contained in IAS 24, Related party
disclosures. Related parties comprise entities under common ownership and/or
common management and control; their partners and key management personnel.
The management decides on the terms and conditions of the transactions and
services received/rendered from/to related parties as well as other charges,
if applicable.
a) Due from related parties
As at December As at December
31,2023 31,2022
---------------- ----------------
(Unaudited)
Entity under common control
Dar Al Arkan For Real Estate Development W.L.L, Qatar (refer to (i) below) 7,201,786 5,310,572
Quara Holding, Dubai 1,392,125 -
Dar (Beijing) International Holdings Co. Ltd. 25,886 -
------------- --------------
8,619,797 5,310,572
======== ========
(i) These above balances are interest bearing at the rate of 6%
per annum and shall be repayable by 21 November 2026.
b) Due to related party
As at December As at December
31,2023 31,2022
---------------- ----------------
Major shareholder (Unaudited)
Dar Al Arkan Global Investment LLC, UAE 1,248,415 2,101,668
======== ========
These balances are unsecured, interest free and are repayable on demand.
c) Transactions with key management personnel
As at December As at December 31
31,2023 31,2022
---------------- ----------------
(Unaudited)
Short term benefits 2,052,682 1,198,592
Employees' end-of-service benefits 180,014 118,142
Board of directors' fees 637,865 -
------------ -------------
2,870,561 1,316,734
======= =======
d) Other related party transactions
As at December As at December
31,2023 31,2022
---------------- ----------------
Issuance of shares for acquisition of subsidiary
Major shareholder 283,328,780 -
Issuance and redemption of preference shares
Major shareholder 61,900 -
Loan (granted)/received
Entity under common control of Ultimate parent company of Major shareholder (2,796,105) (5,310,572)
Ultimate parent company of Major shareholder - 181,297,703
Joint venture (48,742) -
Deposits *
Entity under common control 67,342,878 -
Share of loss
Joint venture 93,162 330,734
As at December As at December
31,2023 31,2022
---------------- ----------------
Interest income
Entity under common control of Ultimate parent company of Major shareholder 513,120 -
Joint venture 520,843 -
Other income
Entity under common control of Ultimate parent company of Major shareholder 1,392,125 -
Professional fees
Ultimate parent company of Major shareholder (470,959) -
Prepayments
Entity under common control of Ultimate parent company of Major shareholder 73,997 -
During the year 2023, the Group entered into revolving credit agreement of USD
200 million with the Ultimate parent company of the Major shareholder to
finance the general corporate purposes of the Group. The amount is fully
undrawn as at 31 December 2023 and the terms and conditions of any drawdown
will be agreed when they occur.
* During the year 2023, the Group held deposits with a bank in the Kingdom of
Saudi Arabia rated at investment grade through one of its related parties
amounting to USD 67,342,878 (refer to note 5).
20 Income taxes
Income tax expense represents the sum of current income tax and deferred tax.
Current income tax assets and liabilities for the current and prior periods
are measured at the amount expected to be recovered from or paid to the
taxation authorities.
The Group recognizes deferred tax assets only to the extent that it is
probable that future taxable profit will be available against which the
deductible temporary differences and carried forward tax losses can be
utilised.
Deferred tax assets and liabilities are measured on an undiscounted basis at
the tax rates that are expected to apply when the asset is realised or the
liability is settled, based on tax rates and tax laws enacted or substantively
enacted at the balance sheet date.
As a result, deferred tax assets with a carrying value of USD 1,980,741 (2022:
Nil) were recognised during the year. The deferred tax assets relate to unused
accumulated losses that the Group believes are recoverable due to the
availability of future tax profit against which the tax losses carried forward
can be utilised.
21 Share capital
As at December 31, 2023 As at December 31, 2022
(Unaudited)
Ordinary shares Number Amount Number Amount
Called up and fully paid-up share capital
Opening 2,239,510,913 22,395,109 - -
Issuance of shares for acquisition of subsidiary* 366,666,594 3,666,666 2,239,510,913 22,395,109
Issuance of ordinary shares* 21,621,612 216,216 - -
Capital reduction** (2,447,777,507) (24,477,775) - -
--------------- -------------- ----------------- --------------
180,021,612 1,800,216 2,239,510,913 22,395,109
========= ======== ========== ========
* On 25(th) January 2023, the Company issued 366,666,594 ordinary shares to
Major shareholder for acquisition of Dar Al Arkan Holdings Limited (ADGM) -
UAE.
Additionally, on 28(th) February 2023, the Company issued 21,621,612 ordinary
shares at a price of USD 3.33 by way of a private placement on the London
Stock Exchange to qualified investors.
**On 30(th) January 2023, the Company completed a capital reduction, reducing
the issued share capital by USD 24,477,775 through the cancellation of
2,447,777,507 shares, this amount and its related share premium has been
transferred to retained earnings as it is distributable.
22 Share premium
As at December As at December
31,2023 31,2022
---------------- ----------------
(Unaudited)
Share premium 88,781,078 -
-------------- --
88,781,078 -
======== ==
Additional net assets of USD 279,004,068 received on 25(th) January 2023 for
the issuance of 366,666,594 shares of USD 0.01 each to the Major shareholder
in exchange of acquisition of shares in Dar Al Arkan Holdings Limited (ADGM) -
UAE amounting to USD 282,670,732 (Note 21).
On 30th January 2023, the Company completed a capital reduction, reducing the
issued share capital by USD 24,477,775 through the cancellation of
2,447,777,507 shares, the share premium relating to this reduction amounting
to USD 262,664,624 has been transferred to retained earnings as it is
distributable.
Additionally, share premium includes an amount of USD 71,783,588 premium
received on 28th February 2023, on issuance of 21,621,612 ordinary shares of
USD 0.01 each at a price of USD 3.33 (Note 21).
23 Revenue
December 31, December 31,
2023 2022
---------------- ----------------
(Unaudited)
Revenue is recognised over time as provided below:
Sale of residential units 360,575,755 80,001,625
========= ========
Cost of revenue
Cost of residential units (214,131,383) (51,351,257)
========= ========
Revenue from sale of residential units is net of discount against transaction
prices for certain units sold with a significant financing component amounting
to USD 19,367,185 (2022: USD 10,563,687).
Change in estimates:
During 2023, the Group reviewed its revenue recognition criteria for one of
its projects due to improved contractor construction performance and buyer
behaviour, bringing it in line with the criteria applied to all other projects
in the relevant jurisdiction.
The effect of the above changes on actual and expected revenue, cost of sales
and selling and marketing expenses was as follows.
2023 2024
---------------- ----------------
Increase / (Decrease) in revenue 15,801,721 (15,801,721)
(Increase)/ Decrease in cost of sales (8,109,996) 8,109,996
--------------- --------------
Increase/ (Decrease) in gross profit 7,691,725 (7,691,725)
(Increase) / Decrease in selling and marketing expenses (1,517,226) 1,517,226
--------------- --------------
Increase / (Decrease) in net profit 6,174,499 (6,174,499)
========= ========
24 Other income
December 31, December 31,
2023 2022
---------------- ----------------
(Unaudited)
Income from termination of units (note (a) below) 2,649,498 1,131,537
Foreign exchange gain 497,508 675,231
Others - 58,881
--------------- --------------
3,147,006 1,865,649
========= ========
(a) This represents instalments collected from customers that have been
forfeited due to termination of contracts on account of cancellation of units
booked.
25 Selling and marketing expenses
December 31, December 31,
2023 2022
---------------- ----------------
(Unaudited)
Sales commission 33,009,570 6,544,327
Marketing expenses 5,754,962 3,154,874
-------------- --------------
38,764,532 9,699,201
======== ========
26 General and administrative expenses
December 31, December 31,
2023 2022
---------------- ----------------
(Unaudited)
Salaries and related benefits 19,040,312 9,290,554
Legal and professional expenses 3,166,009 1,542,253
Depreciation on right-of-use assets (refer to note 13) 2,200,115 866,957
IT related expenses 1,058,667 145,596
Bank charges 722,808 1,125,496
Utilities 476,155 294,607
Depreciation on property and equipment (refer to note 12) 984,458 19,867
Rent 352,252 297,205
Board of Directors Fees (refer to note 19) 637,865 -
Travelling expenses 705,319 235,369
Listing related (reversal)/ expenses (refer to (a) below) (1,680,520) 13,465,003
Value added tax expense 43,007 71,378
Service charge - 226,930
Loss on early termination of lease - 196,076
Other expenses 1,549,829 783,704
-------------- --------------
29,256,276 28,560,995
======== ========
(a) The current year amount represents reversal of excess provisions made
with respect to listing related expenses in the year 2022.
27 Net finance costs/(income)
December 31, December 31,
2023 2022
---------------- ----------------
(Unaudited)
Finance costs
Interest expense on bank borrowings 3,579,519 393,005
Interest expense on unwinding of discount on long term liability 1,064,692 -
Interest on lease liability (refer to note 13) 376,587 161,790
------------ ----------
5,020,798 554,795
======= ======
Finance income
Interest income (3,754,858) -
Income from investment in bonds of joint venture (520,842) (79,475)
Income on early settlement of long-term Liability - (3,341,153)
Interest income from loan to related party (refer to note 19) (513,120) --
-------------- --------------
(4,788,820) (3,420,628)
======== ========
Net finance cost/ (income) 231,978 (2,865,833)
======== ========
28 Earning Per Share
Basic earnings per share amounts are calculated by dividing net profit or loss
for the year attributable to the owners of the Company by the weighted average
number of ordinary shares outstanding during the year.
Diluted earnings per share amounts are calculated by dividing the net profit
or loss attributable to the owners of the Company by the weighted average
number of ordinary shares outstanding during the year plus the weighted
average number of ordinary shares that would be issued on conversion of all
the dilutive potential ordinary shares into ordinary shares. The Company has
no dilutive instruments in issue.
The information necessary to calculate basic and diluted earnings per share is
as follows:
December 31, December 31,
2023 2022
---------------- ----------------
(Unaudited)
Earnings:
Profit/(loss) attributable to the owners of the Company for basic/ diluted 83,226,171 (5,209,080)
earnings
======== =======
Number of shares
Weighted-average number of ordinary shares for basic/diluted earnings per 360,667,049 2,239,510,913
share
========= ==========
Earnings per share:
- basic and diluted earnings per share (USD) 0.231 (0.002)
======== ========
29 Financial instruments
a) Material accounting policies
Details of the material accounting policies and methods adopted, including the
criteria for recognition, the basis of measurement and the basis on which
income and expenses are recognized, in respect of each class of financial
asset and financial liability are disclosed in note 2 to the consolidated
financial statements.
b) The Group considers that the carrying amount of financial assets and
liabilities are reasonable approximation of fair values.
As at As at
December December 31, 2022 December December 31, 2022
31, 2023 31, 2023
(Unaudited) (Unaudited)
Financial assets Carrying amount Fair Value
Cash and cash equivalents 228,492,034 112,612,385 228,492,034 112,612,385
Trade and unbilled receivables 221,867,464 40,552,740 221,867,464 40,552,740
Advances, deposits and other receivables 3,047,537 22,903,059 3,047,537 22,903,059
Escrow retentions 9,987,477 5,853,253 9,987,477 5,853,253
Due from related parties 8,619,797 5,310,572 8,619,797 5,310,572
Loan to joint venture 2,150,987 1,991,953 2,150,987 1,991,953
--------------- --------------- --------------- ---------------
474,165,296 189,223,962 474,165,296 189,223,962
========= ========= ========= =========
Financial liabilities
Trade and other payables 25,713,890 30,691,284 25,713,890 30,691,284
Retention payable 6,849,069 4,038,203 6,849,069 4,038,203
Loans and borrowings 125,363,803 69,668,662 125,363,803 69,668,662
Development property liability 78,631,324 72,467,693 78,631,324 72,467,693
Due to related party 1,248,415 2,101,668 1,248,415 2,101,668
Lease liabilities 5,944,562 2,743,815 5,944,562 2,743,815
--------------- --------------- --------------- ---------------
243,751,063 181,711,325 243,751,063 181,711,325
========= ========= ========= =========
Financial instruments comprise of financial assets and financial liabilities.
Financial assets consist of accounts receivable, cash and cash equivalents,
due from related parties, loan to joint venture and other receivables
excluding prepayments, advances to suppliers and contractors and VAT
refundable. Financial liabilities consist of other payables, interest bearing
loans and borrowings, development property liabilities, lease liabilities and
accounts payables and provisions.
30 Acquisition of subsidiaries
On 25 January 2023, the Company acquired Dar Al Arkan Holdings Limited (ADGM)
from the Major shareholder, at a book value as at 31 December 2022, in
exchange for issuing 366,666,594 new ordinary shares by the Company amounting
to USD 3,666,666 (refer to notes 21 and 22).
The acquisition by the Company is a common control transaction under IFRS 3
and has been accounted as continuing group using the book value accounting. In
the statement of financial position, the acquiree's identifiable assets,
liabilities are recognised at their book values at legal acquisition date.
For the year ended 31 December 2023, ADGM accounted for entire revenue and
profit of the Group. Management estimates that if the acquisition had occurred
on 1 January 2023, there would be no change in consolidated revenue or profit.
The following table summarises the recognised amounts of assets acquired, and
liabilities assumed at legal acquisition date:
Assets USD
Cash and cash equivalents 140,377,085
Trade and unbilled receivables 40,552,740
Advances, deposits and other receivables 72,656,769
Development properties 245,914,632
Due from related party 50,976,545
Property and equipment 260,474
Right-of-use assets 1,174,895
Other assets 872,431
Trade and other payables (16,485,879)
Advances from customers (94,456,096)
Retention payable (4,036,399)
Due to related party (2,101,668)
Development property liability (72,467,693)
Loans and borrowings (65,185,841)
Lease liabilities (1,258,212)
---------------
Total identifiable net assets acquired 296,783,783
=========
31 Financial risk management objectives
The Group management set out the Group's overall business strategies and its
risk management philosophy. The Group's overall financial risk management
program seeks to minimize potential adverse effects on the financial
performance of the Group. The Group policies include financial risk management
policies covering specific areas, such as market risk (including foreign
exchange risk, interest rate risk), liquidity risk and credit risk. Periodic
reviews are undertaken to ensure that the Group's policy guidelines are
complied with.
There has been no change to the Group's exposure to these financial risks or
the manner in which it manages and measures the risk.
The Group is exposed to the following risks related to financial instruments.
The Group has not framed formal risk management policies, however, the risks
are monitored by management on a continuous basis. The Group does not enter
into or trade in financial instruments, investment in securities, including
derivative financial instruments, for speculative or risk management purposes.
a) Foreign currency risk management
The Group undertakes certain transactions denominated in foreign currencies.
Hence, exposures to exchange rate fluctuations arise. The summarized
quantitative data about the Group's exposure to currency risk as reported to
the management of the Group is as follow:
EUR GBP BAM CNY
December 31, 2023
Cash and cash equivalents 5,910,324 1,885,534 30,734 -
Other financial assets 892,563 3,991,989 - -
Financial liabilities (359,745) (1,337,715) (82,953) -
------------ ------------ ---------- ---------
6,443,142 4,539,808 (52,219) -
======= ======= ====== =====
( )
December 31, 2022
Cash and cash equivalents 2,634,646 1,039,054 49,206 -
Other financial assets 2,318,083 7,001,000 1,068,891 -
Financial liabilities (17,349,296) (41,934,259) (2,236,142) (11,446,683)
( ) --------------- --------------- -------------- ---------------
(12,396,567) (33,894,205) (1,118,045) (11,446,683)
========= ========= ======== =========
The following table details the Group's sensitivity to a 1000 basis points
increase or decrease in USD against the relevant foreign currencies.
December 31, December 31,
2023 2022
---------------- ---------------
(Unaudited)
EUR 644,314 (1,239,656)
GBP 453,980 (3,389,420)
BAM (5,221) (111,804)
CNY - (1,144,668)
------------ -------------
1,093,073 (5,885,548)
======= ========
The Group's significant monetary assets and liabilities denominated in foreign
currencies are in AED which is pegged to USD. As the AED is currently pegged
to the USD, balances are not considered to represent significant currency
risk.
b) Interest rate sensitivity analysis
The sensitivity analysis below has been determined based on the exposure to
interest rates for non-derivative financial instruments as at 31 December
2023. The analysis is prepared assuming the amount of liabilities outstanding
at the reporting date was outstanding for the whole year.
The interest rate profile of the Group's interest-bearing financial
instruments as reported to the management of the Group is as follows:
December 31, December 31,
2023 2022
---------------- ---------------
(Unaudited)
Fixed rate instruments
Financial assets 74,544,664 -
Financial liabilities - -
( ) -------------- ---------
( ) 74,544,664 (-)
( ) ======== =====
Variable rate instruments ( ) ( )
Financial assets 172,465,150 21,592,920
Financial liabilities (125,363,803) (69,668,662)
--------------- --------------
47,101,347 (48,075,742)
========= ========
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.
If interest rates had been 50 basis points higher/lower and all other
variables were held constant, the change in Group's profit for the year ended
31 December 2023 would be USD 235,507 (2022: USD 240,397). This is mainly
attributable to the Group's exposure to variable rate financial instruments.
c) Liquidity risk management
Ultimate responsibility for liquidity risk management rests with the
management which has built an appropriate liquidity risk management framework
for the management of the Group's short, medium and long-term funding and
liquidity management requirements. The Group manages liquidity risk by
maintaining adequate reserves, continuously monitoring forecast and actual
cash flows and matching the maturity profiles of financial assets and
liabilities.
The Group's objective is to maintain a balance between continuity of funding
and flexibility through the use of bank overdrafts, bank loans and equity from
shareholders.
The table below summarizes the maturity profile of the Group's financial
liabilities. The contractual maturities of the financial liabilities have been
determined on the basis of the remaining period at reporting date to the
contractual maturity date. The maturity profile of these liabilities at the
reporting date based on contractual repayment arrangements are shown in the
table below:
Contractual Cashflows
Carrying amount Less than More than 5 years
Total 1 year 1-2 years 2-5 years
31 December 2023
Financial liabilities
Payables 25,713,890 (25,713,890) (25,713,890) - - -
Retention payable 6,849,069 (6,849,069) (2,956,238) (3,184,957) (707,874) -
Loans and borrowings 125,363,803 (154,130,558) (28,517,099) (41,101,308) (84,512,151) -
Development property liability 78,631,324 (92,579,986) - - (92,579,986) -
Lease liabilities 5,944,562 (6,390,540) (2,792,437) (2,280,731) (1,317,372) -
Due to related party 1,248,415
(1,248,415) (1,248,415) - - -
--------------- ---------------- ------------- ------------- ---------------- ----------
243,751,063 (286,912,458) (61,228,079) (46,566,996) (179,117,383) -
======== ========= ======= ======= ========= =====
31 December 2022 (Unaudited)
Financial liabilities
Payables 30,691,284 (30,691,284) (30,691,284) - - -
Retention payable 4,038,203 (4,038,203) - - (4,038,203) -
Loans and borrowings 69,668,662 (86,742,249) (10,499,907) (9,530,293) (66,712,049) -
Development property liability 72,467,693 (92,579,986) - - (92,579,986) -
Lease liabilities 2,743,815 (3,000,489) (1,054,322) (932,719) (780,380) (233,068)
Due to related party 2,101,668 (2,101,668) (2,101,668) - - -
--------------- --------------- ------------- --------------- --------------- ----------
181,711,325 (219,153,879) (44,347,181) (10,463,012) (164,110,618) (233,068)
========= ========= ======== ========= ========= ======
d) Credit risk management
Credit risk refers to the risk that the counterparty will
default on its contractual obligations resulting in financial loss to the
Group. The Group has adopted a policy of only dealing with creditworthy
counterparties. The Group's exposures are continuously monitored and their
credit exposure is reviewed by the management regularly.
The credit risk on liquid funds is limited because the
counterparties are banks with high credit-ratings assigned by international
credit-rating agencies.
The carrying amounts of the financial assets recorded in the
consolidated financial statements, which is net of impairment losses,
represents the Group's maximum exposure to credit risks. The Group considers
that the risk of loss related to unbilled receivables and trade receivables is
remote due to collateral held against such amounts due, being residential
property developed by the Group.
32 Capital risk management
The capital structure of the Group consists of cash and cash equivalents,
debt, which includes interest-bearing loans and borrowings as disclosed in
note 18 and equity as disclosed in the consolidated financial statements.
The Group manages its capital to ensure that it will be able to continue as a
going concern while maximizing the return to stakeholders through the
optimization of the equity balance. The Group's overall strategy remains
unchanged from prior year. The Group is not subject to any externally imposed
capital requirements.
The Group monitors capital using 'net debt' to 'equity'. Net debt is
calculated as total liabilities (as shown in the consolidated statement of
financial position) less cash and cash equivalents. Equity comprises all
components of equity as disclosed in note 21.
The Group's policy is to keep the ration below 1. The Group's net debt to
equity ratio at 31 December was as follows.
December 31, December 31,
2023 2022
---------------- ---------------
(Unaudited)
Total liabilities 301,934,511 276,493,331
Less: Cash and cash equivalents (228,492,034) (112,612,385)
-------------- --------------
Net debt 73,442,477 163,880,946
-------------- --------------
Total equity 465,411,551 281,401,588
-------------- --------------
Net debt to equity ratio 0.16 0.58
33 Contingent liabilities
As at December As at December
31, 2023 31, 2022
---------------- ----------------
(Unaudited)
Letters of guarantee (refer to note (a) below) 3,866,575 21,592,920
Others (refer to note (b) below) 339,547 -
-------------- --------------
4,206,122 21,592,920
======== ========
(a) Under the Real Estate Regulatory Agency (RERA) regulations, the Group is
required to provide letters of guarantees to the Dubai Land Department for all
of its projects located in Dubai in the amount of 20 percent. of the
construction costs for such projects. The Group holds margin deposits against
the letters of guarantee at the bank providing such letters of guarantee. The
guarantee margin deposit is refundable on completion of the project.
(b) During the year 2023, Ashbilia Contracting L.L.C ("contractor") filed a
case before the Court of First Instance against Dar Al Arkan Properties L.L.C
("subsidiary"), demanding an amount of USD 339,547 (AED 1,246,986), as
specified in the ruling of The Centre for Amicable Resolution of Disputes in
Dubai. In response, the subsidiary has filed a counterclaim, requesting a
reassessment of the award and seeking compensation totalling USD 1,037,723
(AED 3,811,036) due to the contractor's failure to deliver the agreed-upon
works.
Except for the above and ongoing business obligations which are under normal
course of business, there has been no other known contingent liability on
Group's consolidated financial statements as of reporting date.
34 Commitments
As at December As at December
31, 2023 31, 2022
---------------- ----------------
(Unaudited)
Contracted commitments for development properties 102,250,823 21,780,570
(refer to note 8)
========= =========
Except for the above commitments which are for construction works on ongoing
projects and ongoing business obligations which are under normal course of
business, there has been no other known commitment on Group's consolidated
financial statements as of reporting date. These commitments will be funded
from Group's existing funds or undrawn loan and borrowing facilities.
35 Staff number and costs
December 31, December 31,
2023 2022
---------------- ----------------
(Unaudited)
The average number of employees employed by the Group 207 92
========= =========
The payroll cost for these employees is as follows:
- Wages and salaries 19,040,312 9,290,554
========= =========
36 Auditors Remuneration
December 31, December 31,
2023 2022
---------------- ----------------
(Unaudited)
Audit of these consolidated financial statements 394,630 81,688
Audit of condensed consolidated interim financial statements 133,665 -
Audit of financial statements of subsidiaries of the Company 153,142 67,301
Filing - Section 92 25,140 -
---------- --------------
706,577 148,989
====== =========
37 Events after the reporting date
Subsequent to 31 December 2023, there have been no events that require
disclosure or adjustment to these consolidated financial statements.
Alternative performance measures
The Group uses a number of alternative performance measures (APM) which are
not defined within IFRS. The Directors use the APMs, along with IFRS measures
to assess the operational performance of the Group. Definitions and
reconciliations of the financial APMs used compared to IFRS measures, are
included below:
Adjusted performance metrics
Adjusted performance metrics reconciled to statutory reported measures are
shown below. The Directors consider these performance metrics provide
additional information regarding the Group's core operations and business
performance.
(In USD)
Particulars 1 January 2023 to 31 December 2023 1 January 2022 to 31 December 2022
Revenue 360,575,755 80,001,625
Gross Profit 146,444,372 28,650,368
Gross Profit % 41% 36%
Profit / (Loss) for the year before tax 81,245,430 (5,209,080)
Profit / (Loss) for the year % of revenue 23% (7%)
Dar Global PLC and its subsidiaries
London - United Kingdom
Cautionary statement regarding forward-looking statements
This release may include statements that are, or may be deemed to be,
'forward-looking statements'. These forward-looking statements can be
identified by the use of forward-looking terminology, including the terms
'targets', 'believes', 'estimates', 'plans', 'projects', 'anticipates',
'expects', 'intends', 'may', 'will' or 'should' or, in each case, their
negative or other variations or comparable terminology, or by discussions of
strategy, plans, objectives, goals, future events or intentions. These
forward-looking statements include all matters that are not historical facts.
They appear in a number of places throughout this release and include, but are
not limited to, statements regarding the Group's intentions, beliefs or
current expectations concerning, among other things, the Group's results of
operations, financial position, liquidity, prospects, growth, strategies and
expectations of the industry.
By their nature, forward-looking statements involve risk and uncertainty
because they relate to future events and circumstances. Forward-looking
statements are not guarantees of future performance and the development of the
markets and the industry in which the Group operates may differ materially
from those described in, or suggested by, any forward-looking statements
contained in this release. In addition, even if the development of the markets
and the industry in which the Group operates are consistent with the
forward-looking statements contained in this release, those developments may
not be indicative of developments in subsequent periods. A number of factors
could cause developments to differ materially from those expressed or implied
by the forward-looking statements including, without limitation, general
economic and business conditions, industry trends, competition, commodity
prices, changes in law or regulation, changes in its business strategy,
political and economic uncertainty. Save as required by the Listing and
Disclosure Guidance and Transparency Rules, the Company is under no obligation
to update the information contained in this release. Past performance cannot
be relied on as a guide to future performance.
Market abuse regulation information
The information contained in this announcement is deemed by the Company to
constitute inside information as stipulated under the UK version of the Market
Abuse Regulation (EU) No. 596/2014 as it forms part of UK law by virtue of the
European Union (Withdrawal) Act 2018. Upon the publication of this
announcement, this inside information is now considered to be in the public
domain. Powerscourt, the Company's communication consultant, is responsible
for the release of this announcement for the purposes of such regulation.
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