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Makkah & Madinah Holdings (MAMP)

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Wednesday 29 May, 2013

Makkah & Madinah Holdings

Annual Financial Report


                                                          Wednesday 29 May 2013

                      MAKKAH & MADINAH HOLDINGS LIMITED;                       

AUDITED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2012

CHAIRMAN'S STATEMENT

I am very pleased to be presenting our Annual Report for 2012 and I would like
to take this opportunity to highlight a number of important items that are
covered in more detail elsewhere in this document. Overall, I am pleased to
report a marked improvement in the business performance of Makkah & Madinah
Holdings Limited (the "Company" or "Group" or "MMH") during the financial year
ended 31 December 2012.

The year 2012 marked a significant change for the Company. Important steps were
taken to refocus the Company's investment strategy away from the non income
producing Eye of Ajman land plots in Ajman, to a significant minority
investment in Makkah Madinah Commercial Investment Company JSC ("MMCI"). MMCI
operates in the Kingdom of Saudi Arabia (KSA) with investments in the higher
growth KSA real estate market, particularly Makkah and Madinah. The investment
has been undertaken with the aim of creating a more robust future for the
Company.

MMCI is a Shari'ah-compliant company with a profitable trading history. MMCI
and its subsidiaries have investments in real estate property assets in the
provinces of Makkah, Madinah, Al Ahsa and Jeddah in the KSA. The holy city of
Makkah, where MMCI owns investments, is the location of some of the highest,
current property prices in the world. MMCI and the Company have been working
together since 2011 to evaluate, and develop plans for, a number of projects
within KSA.

Aside from the above, the Company continued to develop its profitable income
stream through its advisory and consultancy services to MMCI. Al Salam
Commercial Investments Limited has taken on all payment obligations on behalf
of MMCI.

Change of name

In the general meeting of shareholders held on 8 May 2012, the shareholders
resolved and approved the change of the name of the Company from Prime
Investments International Group Limited to Makkah & Madinah Holdings Limited.

Appointment of Mr Ahmed Iqbal Bangee as Executive Director and Chief Financial
Officer

I am pleased to report that on 2 April 2013 Ahmed Iqbal Bangee was formally
appointed as Executive Director and Chief Financial Officer.

Financial results

The Group has posted net profits of $39.96 million for the first time since the
commencement of the Company's operations, mainly derived from the share of
profit from MMCI. In addition, the Company derived revenues of $1.95 million
from its advisory and consultancy services.

The significant positive result in the Statement of Comprehensive Income has
resulted in an increase in earnings per share to $0.031 (31 December 2011: Loss
per share $0.004) per share.

At 31 December 2012, net assets were $440.41 million (31 December 2011: $397.89
million) or $0.35 (31 December 2011: $0.31) per share.

Business overview

A number of potential investment opportunities were identified throughout 2012,
primarily in the region of the KSA. The favourable macro-economic conditions
and expected growth trends for the KSA real estate market, supported the
Company's strategy to develop a diverse portfolio of assets that has the
potential to deliver value to the Company and its shareholders. These factors
resulted in a decision by the Board of Directors to enter this robust real
estate market through an investment in MMCI.

MMH's experience and expertise complements MMCI's business activities and on
this basis in May 2012 the Company acquired an indirect equity interest of
34.12% in MMCI. Representatives from MMH's Board were then invited onto the
Board of MMCI. This acquisition enabled the Company to dispose of its
non-income generating asset in return for an indirect interest in MMCI, a
company whose historical financial performance has shown profits year on year.
The acquisition and our new relations with MMCI gives the Company exposure to
development opportunities on projects located in one of the world's most
exciting real estate markets.

The Company continues to explore further acquisition opportunities in Saudi
Arabia to further expand our portfolio and diversify our investments across the
real estate sector. Our Board of Directors will communicate details to the
Company's shareholders in due course on all acquisitions, disposals and
development opportunities in line with the regulatory disclosure obligations.

The Company's equity stake in MMCI will enable us to integrate project
development services to MMCI's existing core business activities allowing MMCI
and the Company to exploit the growing demand in the KSA real estate market.

In addition to the acquisition and disposal of assets in May 2012, the Company
also announced that it has been evaluating options for raising the profile of
the Company and improving liquidity in the shares, including seeking admission
of the shares to trading on another stock exchange in addition to, or other
than, PLUS. I can confirm that whilst this remains an ongoing challenge, this
is being monitored closely and work continues to be undertaken.

ISDXmarket

PLUS Stock Exchange was acquired by ICAP Securities & Derivatives Exchange
Limited in June 2012. The ISDX is a Recognised Investment Exchange under the
Financial Services and Markets Act 2000 and a member of the ICAP plc group. The
Company is currently listed on the ISDX Growth Market.

Recommendation

The Directors of the Company consider that all the proposals to be considered
at the AGM are in the best interests of the Company. The future areas of focus
for the Company are to address any significant risk factors that affect the
Company's performance and future operations, maintain strong corporate
governance and transparency across the board and create improved liquidity in
the Company's shares.

Outlook

During the year since the Group's acquisition of a 34.12% indirect interest in
MMCI in May 2012, the Company's management has been working extensively with
MMCI. We continue to advise them with the evaluation of certain projects in the
city of Makkah and elsewhere within KSA.

The financial year 2012 was challenging. However the exceptional commitment of
the Executive directors and their team to deliver positive results whilst
restructuring our asset portfolio, has allowed the Company to reposition its
investment into a robust market which is forecasted to maintain a positive
growth trend in the short to medium term.

I am very confident about the Group's future prospects. The Company's
management continues to implement the Group's new strategy and work with MMCI
to take advantage of opportunities and invest where there is growth and future
potential. I feel the Group is now well positioned to take advantage of
opportunities as they arise following the investment in MMCI.

I would like to sincerely convey my gratitude to all our shareholders for their
continued support and to our management and the Board, as we look towards a
future that holds much promise and potential.

Chairman

Dr. Noor Aldeen S. A. Atatreh

28 May 2013

MAKKAH & MADINAH HOLDINGS LIMITED

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

FOR THE YEAR ENDED 31 DECEMBER 2012

                                                   Year ended   For the period 
                                                   31 December        of       
                                                      2012      16 months from       
                                                                  1 September
                                                                   2010 to 31 
                                                                 December 2011 
                                                                               
                                                      USD             USD      
                                                                               
Revenue                                          1,948,229      1,594,005      
                                                                               
Employee costs                                   (1,365,812)    (156,824)      
                                                                               
Other operating expenses                         (853,868)      (572,467)      
                                                                               
PLUS Listing expenses                            -              (6,850,843)    
                                                                               
Legal and professional fees                      (2,102,388)    -              
                                                                               
Change in fair value of investment               1,994,942      -              
property                                                                       
                                                                               
Impairment of available-for-sale                 (123,257)      -              
financial assets                                                               
                                                                               
Depreciation                                     (1,951)        -              
                                                                               
Operating loss                                   (504,105)      (5,986,129)    
                                                                               
Share of profit from associate                   40,355,469     -              
                                                                               
Finance income                                   -              9,126          
                                                                               
Finance expense                                  (18,044)       -              
                                                                               
Profit / (Loss) for the year                     39,833,320     (5,977,003)    
                                                                               
Other Comprehensive income                                                     
                                                                               
Change in fair value of                          -              (123,257)      
available-for-sale financial assets                                            
                                                                               
Recycle of prior period                          123,257        -              
available-for-sale financial assets                                            
losses                                                                         
                                                                               
Total comprehensive income for the year          39,956,577     (6,100,260)    

Earnings/(loss) per share attributable                                         
to the equity holders of the parent                                            
during the year                                                                
                                                                               
Basic earnings/(loss) per share for the                  0.0315         (0.004)
year                                                                           
                                                                               
Diluted earnings/(loss) per share for                    0.0312         (0.004)
the year                                                                       

MAKKAH & MADINAH HOLDINGS LIMITED

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

AS AT 31 DECEMBER 2012

                                                      2012           2011     
                                                                  (Restated)  
                                                                              
                                                      USD            USD      
                                                                              
ASSETS                                                                        
                                                                              
Non-current assets                                                            
                                                                              
Property, plant and equipment                    30,597         -             
                                                                              
Investment in associates                         440,355,469    -             
                                                                              
Investment property                              -              398,005,058   
                                                                              
                                                 440,386,066    398,005,058   
                                                                              
Current assets                                                                
                                                                              
Trade receivables                                631,471        990           
                                                                              
Prepayments, advances and other                  797,336        127,454       
receivables                                                                   
                                                                              
Cash and cash equivalents                        460,934        417,783       
                                                                              
                                                 1,889,741      546,227       
                                                                              
Total assets                                     442,275,807    398,551,285   
                                                                              
EQUITY                                                                        
                                                                              
Capital and reserves attributable to the                                      
equity holders of the company                                                 
                                                                              
Ordinary shares                                  10,220,614     10,210,843    
                                                                              
Share premium                                    395,001,706    394,835,588   
                                                                              
Available-for-sale financial assets              -              (123,257)     
reserve                                                                       
                                                                              
Reverse acquisition reserve                      1,636,894      2,591,217     
                                                                              
Retained earnings/(losses)                       33,545,786     (9,628,513)   
                                                                              
                                                 440,405,000    397,885,878   
                                                                              
LIABILITIES                                                                   
                                                                              
Current liabilities                                                           
                                                                              
Trade and other payables                         1,870,807      665, 407      
                                                                              
Total liabilities                                1,870,807      665,407       
                                                                              
Total equity and liabilities                     442,275,807    398,551,285   

MAKKAH & MADINAH HOLDINGS LIMITED

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

FOR THE YEAR ENDED 31 DECEMBER 2012

                                               Attributable to equity holders of the parent                          
                                                                                                                     
                                  Share        Share      Reverse   Shares to be  Available  Retained       Total    
                                              Premium   acquisition    issued     for sale                           
                                 capital                  reserve                 financial   losses                 
                                                                                   assets                            
                                                                                   reserve                           
                                                                                                                     
                                   USD          USD         USD          USD         USD        USD          USD     
                                                                                                                     
At 1 September 2010              32,262          -                -   503,900,076         - (2,697,187)   501,235,151
                                                                                                                     
Transaction with owners                                                                                              
                                                                                                                     
Prime Cayman                                                                                                         
                                                                                                                     
Ordinary shares issued         398,005,058       -                - (398,005,058)     -          -            -      
for investment property -                                                                                            
land                                                                                                                 
                                                                                                                     
Ordinary shares issued         105,895,018       -                - (105,895,018)     -          -            -      
for investment property -                                                                                            
tower                                                                                                                
                                                                                                                     
Ordinary shares issued           581,468         -                -       -           -          -         581,468   
related to investment                                                                                                
property                                                                                                             
                                                                                                                     
Ordinary shares issued          1,177,548        -           -            -           -          -        1,177,548  
for loan repayment                                                                                                   
                                                                                                                     
Ordinary shares cancelled     (105,895,018)      -           -            -           -          -      (105,895,018)
against investment                                                                                                   
property                                                                                                             
                                                                                                                     
Elimination of existing       (399,796,336)      -           -            -           -          -      (399,796,336)
shares                                                                                                               
                                                                                                                     
MMH                                                                                                                  
                                                                                                                     
Existing ordinary shares         108,325      837,409        -      -                 -          -         945,734   
before reverse                                                                                                       
acquisition                                                                                                          
                                                                                                                     
Ordinary shares issued on       9,994,909   389,801,427           -       -           -                  399,796,336 
reverse acquisition to                                                                                               
owners                                                                                                               
                                                                                                                     
Reverse acquisition                 -            -        2,591,217       -           -          -        2,591,217  
reserve                                                                                                              
                                                                                                                     
Ordinary shares issued to        107,609     4,196,752       -      -                 -          -        4,304,361  
professional advisors                                                                                                
                                                                                                                     
Opening retained losses             -            -           -            -       -          (954,323)    (954,323)  
                                                                                                                     
                               10,178,581   394,835,588   2,591,217 (503,900,076)     -      (954,323)  (97,249,013) 
                                                                                                                     
Comprehensive income for            -            -           -      -             (123,257) (5,977,003)  (6,100,260) 
the period                                                                                                           
                                                                                                                     
At 31 December 2011            10,210,843   394,835,588  2,591,217        -       (123,257) (9,628,513)  397,885,878 
                                                                                                                     
As at 1 January 2012           10,210,843   394,835,588   2,591,217       -       (123,257) (9,628,513)  397,885,878 
                                                                                                                     
Exercise of warrants              9,771       166,118             -       -           -          -         175,889   
                                                                                                                     
Capital contribution                -            -                -       -           -      1,702,981    1,702,981  
                                                                                                                     
Transfer of reserves                -            -        (954,323)       -           -       954,323         -      
                                                                                                                     
Share based payment                 -            -                -       -           -       683,675      683,675   
                                                                                                                     
Profit for the year                 -            -                -       -           -     39,833,320   39,833,320  
                                                                                                                     
Other comprehensive                 -            -                -       -        123,257       -         123,257   
income - recycle of                                                                                                  
available-for-sale                                                                                                   
financial assets losses                                                                                              
                                                                                                                     
At 31 December 2012            10,220,614   395,001,706   1,636,894       -           -     33,545,786   440,405,000 

MAKKAH & MADINAH HOLDINGS LIMITED

CONSOLIDATED STATEMENT OF CASH FLOWS

FOR THE YEAR ENDED 31 DECEMBER 2012

                                                   Year ended   For the period 
                                                   31 December        of       
                                                      2012      16 months from   
                                                                  1 September          
                                                                  2010 to 31   
                                                                 December 2011 
                                                                  (Restated)   
                                                                               
                                                      USD             USD      
                                                                               
Profit / (Loss) for the year                         39,833,320     (5,977,003)
                                                                               
Adjustments for non-cash items:                                                
                                                                               
Settlement of loan and other liabilities                      -       1,759,016
by issue of ordinary shares                                                    
                                                                               
Reverse acquisition IFRS 2 charge                             -       2,459,371
                                                                               
Professional fees settled by issue of                   175,889       4,304,361
ordinary shares by MMH                                                         
                                                                               
Share based payment expense                             683,675               -
                                                                               
Share of profit from associate                     (40,355,469)               -
                                                                               
Change in fair value of investment                  (1,994,942)               -
property                                                                       
                                                                               
Impairment of available-for-sale                        123,257               -
financial assets                                                               
                                                                               
-Depreciation                                             1,951               -
                                                                               
Working capital changes:                                                       
                                                                               
Trade and other receivables                         (1,300,363)       (128,444)
                                                                               
Trade and other payables                              1,205,400    (2,007,866 )
                                                                               
Cash (used in) / generated from                     (1,627,282)         409,435
operations                                                                     
                                                                               
Cash flows from Investing activities                                           
                                                                               
Purchase of property, plant and                        (32,548)               -
equipment                                                                      
                                                                               
Net cash used in investing activities                  (32,548)               -
                                                                               
Cash flows from Financing activities                                           
                                                                               
Capital contribution                                  1,702,981               -
                                                                               
Net cash generated from financing                     1,702,981               -
activities                                                                     
                                                                               
Net increase in cash and cash                            43,151         409,435
equivalents                                                                    
                                                                               
Cash and cash equivalents at beginning                  417,783           8,348
of the year                                                                    
                                                                               
Cash and cash equivalents at end of the                 460,934         417,783
year                                                                           

MAKKAH & MADINAH HOLDINGS LIMITED

1. Basis of preparation

The financial information does not constitute the Group's financial statements
for either the year ended 31 December 2012 or the period ended 31 December
2011, but is derived from those accounts. The Group's financial statements for
2012 will be available from the Company's website from 29 May 2013. The
auditor's reports on both the 2011 and 2012 accounts were unqualified; did not
draw attention to any matters by way of an emphasis; and did not contain any
statement in regard to matters reported on by exception.

The financial statements have been prepared in accordance with International
Financial Reporting Standards (IFRS), as adopted by the European Union and
IFRIC interpretations. The financial statements have been prepared under the
historical cost convention, except for those financial assets and financial
liabilities (includes derivative instruments) and investment properties that
are measured at fair value as stated in the accounting policies. The accounting
policies used are consistent with those applied in the 2011 annual financial
statements except the change in accounting policy on investment properties (see
note 2) and those that were applied in the 2012 financial statements.

2. Accounting policies

 a. Investment property
   
The Group has changed the accounting policy in respect to investment properties
from the cost model to fair value model. The change in accounting policy is
applied retrospectively. The carrying value of the investment properties in the
comparatives has not changed as in the opinion of the Directors, the fair value
of the investment properties at the comparative period end approximates to cost
as previously stated.

The Group's investment properties are revalued annually to open market value,
with changes in the carrying value recognised in the consolidated statement of
comprehensive income. On acquisition of companies owning investment properties,
or acquisition of investment property assets, such investment properties are
revalued and the gain on disposal of related investment properties adjusted
accordingly.

Land is not depreciated. An asset's carrying amount is written down immediately
to its recoverable amount if the asset's carrying amount is greater than its
estimated recoverable amount.

Gains and losses on disposals are determined by comparing the proceeds with the
carrying amount and are

recognised within `Other (losses)/gains - net' in the profit or loss.

 b. Associates
   
Associates are all entities over which the Group has significant influence but
not control, generally accompanying a shareholding of between 20% and 50% of
the voting rights. Investments in associates are accounted for using the equity
method of accounting. Under the equity method, the investment is initially
recognized at cost, and the carrying amount is increased or decreased to
recognize the investor's share of the profit or loss of the investee after the
date of acquisition. The Group's investment in associates includes goodwill
identified on acquisition.

The Group's share of post-acquisition profit or loss is recognized in the
profit or loss, and its share of post-acquisition movements in other
comprehensive income is recognized in other comprehensive income with a
corresponding adjustment to the carrying amount of the investment. When the
Group's share of losses in an

associate equals or exceeds its interest in the associate, including any other
unsecured receivables, the group does not recognize further losses, unless it
has incurred legal or constructive obligations or made payments on behalf of
the associate.

3. Earnings per share

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

                                                           2012            2011
                                                                               
Profit/(loss) attributable to equity holders of      39,956,577     (6,100,260)
the parent (USD)                                                               
                                                                               
Weighted average number of ordinary shares in     1,266,541,010   1,393,646,757
issue                                                                          
                                                                               

 b. Diluted
   
Diluted earnings per share is calculated by adjusting the weighted average
number of ordinary shares outstanding to assume conversion of all dilutive
ordinary shares. The company has two categories of dilutive potential ordinary
shares: share warrants and share options. For the share warrants and share
options, a calculation is performed to determine the number of shares that
could have been acquired at fair value (determined as the average annual market
share price of the company's shares) based on the monetary value of the
subscription rights attached to outstanding share warrants and share options.
The number of shares calculated as above is compared with the number of share
that would have been issued assuming the exercise of the share warrants and
share options.

                                                           2012            2011
                                                                               
Profit/(loss) attributable to equity holders of      39,956,577     (6,100,260)
the parent (USD)                                                               
                                                                               
Weighted average number of ordinary shares in     1,266,541,010   1,393,646,757
issue                                                                          
                                                                               
Adjustments for:                                                               
                                                                               
Assumed conversion of share warrants                  1,390,618               -
                                                                               
Assumed conversion of share options                  14,022,527               -
                                                                               
Weighted average number of ordinary shares for    1,281,954,155               -
diluted earnings per share                                                     

As a result of the loss incurred in the prior period, there is no dilution
arising from the share options and warrants in issue.

Enquiries:

Makkah & Madinah Holdings Limited:

Victoria Arscott, Investor Relations Manager; +9714 4239033;

[email protected]

Daniel Stewart and Company Plc:

Paul Shackleton; +44 20 7776 6550;

[email protected]

Panmure Gordon & Co.

Richard Gray; +44 207 886 2500;

[email protected]

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