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 Venture - IFRS 10 and IAS 28	Effective date 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 earnings	83,226,171	(5,209,080)
	========	=======
Number of shares
Weighted-average number of ordinary shares for basic/diluted earnings per share	360,667,049	2,239,510,913
	=========	==========

 

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  31, 2023	December 31, 2022	December  31, 2023	December 31, 2022
				(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		Total		Less than 1 year		1-2 years		2-5 years		More than 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 (refer to note 8)	102,250,823	21,780,570
	=========	=========

 

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%)