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Makkah & Madinah Holdings (MAMP)

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Friday 28 September, 2012

Makkah & Madinah Holdings

Half-yearly Report


28 September 2012

                       MAKKAH & MADINAH HOLDINGS LIMITED                       

                           ("MMH" or the "Company")                            

 Interim Financial Results for the period from 1 January 2012 to 30 June 2012  

                         CHAIRMAN'S INTERIM STATEMENT                          

I am pleased to announce the financial results of the Company for the first
half-year ended on 30 June 2012. The unaudited consolidated financial
statements have been subject to an independent review by the Company's
auditors, BDO LLP.

Accounting Reference Dates

The Company's last interim results were announced on 30 November 2011 and
covered an extended period from 1 September 2010 to 31 August 2011; at the same
time, the Company announced that it had resolved to change its financial year
end from 31 August to 31 December. The figures for the previous interim period,
which appear in the following pages, are those from 1 September 2010 to 30 June
2011. The audited financial results for the entire period from 1 September 2010
to 31 December 2011 which were announced on 31 May 2012 also appear in the
consolidated interim statement.

Financial Results

Revenue from ongoing consultancy activities during the first half-year was
$919,619 (30 June 2011: nil). This revenue was in relation to a contract for
advisory and consulting services provided in relation to real estate
developments for a private real estate developer in the Kingdom of Saudi Arabia
("KSA"). The Consolidated Statement of Financial Position (Balance Sheet) shows
net assets of $401,396,967 (30 June 2011: $397,157,815).

Shareholders will know from earlier announcements that the management team had
been working a significant business opportunity in the KSA. This crystallised
with the announcement of an indirect investment in Makkah Madinah Commercial
Investment Company JSC ("MMCI").

Since 26 May 2012, when the Company's indirect investment in MMCI was completed
and became unconditional, and the end of the six months under review, the value
of the investment in MMCI has increased by $453,465. This increase represents
the Company's share in the operating profit of MMCI over this brief period.

Review of the Period

The Company's consultancy contract, described in my Chairman's Statement for
the 16 months ended on 31 December 2011, resulted in revenues of just under
$920,000 for the first half of 2012.

The principal milestones during the period, however, were the approval by
shareholders and the completion of the disposal of MMH's undeveloped Eye of
Ajman land bank for $400,000,000, the consideration for which was a 34.12%
minority interest in MMCI. I have described below a selection of the assets
owned/current projects being undertaken by MMCI in order to give shareholders
an indication of the scope of its activities.

MMCI

MMCI is a property company with interests in assets widely-spread through the
KSA. These assets are situated mainly in the Holy Cities of Makkah and Madinah,
the oil-rich Eastern Province and along the Red Sea coast.

Among MMCI's interests are investments in:

  * commercial, leisure and retail development projects in the Holy Cities of
    Makkah and Madinah
   
  * development land of 309,000 sq. m. located in close proximity to the Grand
    Mosque at Makkah
   
  * a cultural and tourism-related development project in Madinah
   
  * a retail mall development in Al Ihsa'a (Eastern Province)
   
  * development land in Jeddah
   
The property market in the KSA is active; demand for property for a variety of
uses including commercial, residential, hospitality and tourism, is high and
remains buoyant. The non-oil sector of the Saudi Arabian economy is strong and
National Commercial Bank estimates it will grow by 3.9% during 2012. This is
thanks in part to significant, recent government-led infrastructure investment
programmes; and in part to other initiatives announced, designed to expand the
KSA's non-oil economy.

The Company considers that MMCI is exceptionally well-placed to take advantage
of the opportunities which are available in the real estate arena generally.
Its knowledge of the property markets in particular in the Holy Cities of
Makkah (districts of which are hosts to some of the most expensive property
prices in the world) and Madinah should contribute to future successes.
Pilgrimages to the Holy Cities occur throughout the year and are not confined
to the period of the Hajj. The projected expansion of the world's Muslim
population over the years between now and 2030 implies rapid growth in numbers
visiting Makkah and Madinah, in the face of currently constrained capacity.

Appointment of Adviser

MMH announced on 17 May 2012 that it had for some time 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 am able to inform shareholders that,
during the period under review, the London investment bank, Panmure Gordon &
Co., was appointed as a financial adviser to the Company.

Current Trading

The Company's trading during the second half of the financial year continues in
line with the Directors' expectations.

Conclusion

MMH continues to develop a close and cooperative relationship with the senior
management of MMCI and I look forward to reporting further on the future
successes of MMCI in the context of MMH's substantial holding in that company.
I would like to thank the Company's shareholders, my Board colleagues and all
involved in the Company for their continuing support and efforts.

Dr. Noor Aldeen Subhi Ahmed Atatreh,

Chairman

Dubai.27 September 2012



                CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME                 

                       FOR THE PERIOD ENDED 30 JUNE 2012                       

                                          Six months   10 months    16 months  
                                           ended 30     ended 30     ended 31  
                                          June 2012    June 2011     December  
                                         (unaudited)  (unaudited)      2011    
                                                                    (audited)  
                                                                               
                                             USD          USD          USD     
                                                                               
Revenue                                       919,619            -    1,594,005
                                                                               
Gain on exchange of assets                  1,994,942            -            -
                                                                               
Employee costs                              (252,164)            -    (156,824)
                                                                               
Other operating expenses                    (307,544)     (44,974)    (572,467)
                                                                               
PLUS Listing expenses                               -  (6,771,953)  (6,850,843)
                                                                               
Legal and professional fees                 (562,828)            -            -
                                                                               
Impairment of available for sale            (123,257)            -            -
assets                                                                         
                                                                               
Operating income/(loss)                     1,668,768  (6,816,927)  (5,986,129)
                                                                               
Share of profit from associate                453,465            -            -
                                                                               
Net finance (expense) /income                 (1,430)     (11,396)        9,126
                                                                               
Income / (loss) for the period             2,120, 803  (6,828,323)  (5,977,003)
                                                                               
Other Comprehensive income                                                     
                                                                               
Change in fair value of available                   -            -    (123,357)
for sale financial assets                                                      
                                                                               
Recycle of prior period available             123,257            -            -
for sale assets losses                                                         
                                                                               
Total comprehensive income for the         2,244, 060  (6,828,323)  (6,100,260)
period                                                                         

Loss per share attributable to the                                             
equity holders of the parent during                                            
the period                                                                     
                                                                               
Basic earnings / (loss) per share               0.002      (0.005)      (0.004)
for the period                                                                 
                                                                               
Diluted earnings / (loss) per share             0.002      (0.005)      (0.004)
for the period                                                                 



                 CONSOLIDATED STATEMENT OF FINANCIAL POSITION                  

                              AS AT 30 JUNE 2012                               

                                       Six months     10 months     16 months  
                                      ended 30 June     ended         ended    
                                          2012      30 June 2011   31 December 
                                       (unaudited)   (unaudited)      2011     
                                                                    (audited)  
                                                                               
                                           USD           USD           USD     
                                                                               
ASSETS                                                                         
                                                                               
Non-current assets                                                             
                                                                               
Investment in associates                400,453,465             -             -
                                                                               
Investment property                               -   398,005,058   398,005,058
                                                                               
Property, plant and equipment                 1,306             -             -
                                                                               
                                       400,454 ,771   398,005,058   398,005,058
                                                                               
Current assets                                                                 
                                                                               
Trade receivables                           475,837             -           990
                                                                               
Available for sale financial                      -       123,257             -
assets                                                                         
                                                                               
Cash and cash equivalents                 1,047,980        22,092       417,783
                                                                               
Prepayments, advances and other              17,447             -             -
receivables                                                                    
                                                                               
                                          1,541,264       145,349       418,773
                                                                               
Total assets                            401,996,035   398,150,407   398,423,831
                                                                               
EQUITY                                                                         
                                                                               
Capital and reserves attributable                                              
to the                                                                         
                                                                               
equity holders of the company                                                  
                                                                               
Share capital                            10,210,843    10,210,843    10,210,843
                                                                               
Share premium                           394,835,588   394,835,588   394,835,588
                                                                               
Available for sale financial                      -             -     (123,257)
assets reserve                                                                 
                                                                               
Reverse acquisition reserve               1,636,894     2,591,217     2,591,217
                                                                               
Retained earnings / (losses)            (5,286,358)  (10,479,833)   (9,628,513)
                                                                               
                                       401,396 ,967   397,157,815   397,885,878
                                                                               
LIABILITIES                                                                    
                                                                               
Non-Current Liabilities                                                        
                                                                               
Current liabilities                                                            
                                                                               
Trade and other payables                    599,068       992,592       537,953
                                                                               
Total liabilities                           599,068       992,592       537,953
                                                                               
Total equity and liabilities           401,996 ,035   398,150,407   398,423,831



                  CONSOLIDATED STATEMENT OF CHANGES IN EQUITY                  

                       FOR THE PERIOD ENDED 30 JUNE 2012                       

                                           Attributable to equity holders of the parent                             
                                                                                                                    
                                Share        Share      Reverse   Shares to be  Available   Retained                
                               Capital      Premium   acquisition    issued     for sale     losses        Total    
                                                        reserve                 financial                           
                                                                                 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 for    398,005,058           -           - (398,005,058)         -            -             -
investment property - land                                                                                          
                                                                                                                    
Ordinary shares issued for    105,895,018           -           - (105,895,018)         -            -             -
investment property - tower                                                                                         
                                                                                                                    
Ordinary shares issued            581,468           -           -             -         -            -       581,468
related to investment                                                                                               
property                                                                                                            
                                                                                                                    
Ordinary shares issued for      1,177,548           -           -             -         -            -     1,177,548
loan repayment                                                                                                      
                                                                                                                    
Ordinary shares cancelled   (105,895,018)           -           -             -         -            - (105,895,018)
against investment property                                                                                         
                                                                                                                    
Elimination of existing     (399,796,336)           -           -             -         -            - (399,796,336)
shares                                                                                                              
                                                                                                                    
Prime Bahamas                                                                                                       
                                                                                                                    
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                                                                                                              
                                                                                                                    
Reserve movements on                    -           -   2,591,217             -         -    (954,323)     1,636,894
reverse acquisition                                                                                                 
                                                                                                                    
Ordinary shares issued to         107,609   4,196,752           -             -         -            -     4,304,361
professional advisors                                                                                               
                                                                                                                    
                               10,178,581 394,835,588   2,591,217 (503,900,076)         -    (954,323)  (97,249,013)
                                                                                                                    
Comprehensive income for                -           -           -             -         - (6,828,323 )   (6,828,323)
the period                                                                                                          
                                                                                                                    
At 30 June 2011                10,210,843 394,835,588   2,591,217             -         - (10,479,833)   397,157,815
                                                                                                                    
At 1 July 2011                 10,210,843 394,835,588   2,591,217             -         - (10,479,833)   397,157,815
                                                                                                                    
Comprehensive income for                -           -           -             - (123,257)      851,320       728,063
the period                                                                                                          
                                                                                                                    
At 31 December 2011            10,210,843 394,835,588   2,591,217             - (123,257)  (9,628,513)   397,885,878
                                                                                                                    
At 1 January 2012              10,210,843 394,835,588   2,591,217             - (123,257)  (9,628,513)   397,885,878
                                                                                                                    
Transactions with owners                                                                                            
                                                                                                                    
Capital contribution                    -           -           -             -         -    1,267,029     1,267,029
                                                                                                                    
Transfer of reserves                    -           -   (954,323)             -         -      954,323             -
                                                                                                                    
                                        -           -   (954,323)             -         -    2,221,352     1,267,029
                                                                                                                    
Impairment of available for             -           -           -             -   123,257    (123,257)             -
sale assets                                                                                                         
                                                                                                                    
Comprehensive income for                -           -           -             -         -    2,244,060     2,244,060
the period                                                                                                          
                                                                                                                    
At 30 June 2012                10,210,843 394,835,588  1,636, 894             -         -  (5,286,358)   401,396,967



                     CONSOLIDATED STATEMENT OF CASH FLOWS                      

                       FOR THE PERIOD ENDED 30 JUNE 2012                       

                                              Six months   10 months   16 months 
                                               ended 30    ended 30    ended 31  
                                               June 2012   June 2011   December  
                                              (unaudited) (unaudited)    2011    
                                                                       (audited) 
                                                                                 
                                                  USD         USD         USD    
                                                                                 
Profit / (loss) for the period                  2,120,803 (6,828,323) (6,100,260)
                                                                                 
Adjustments for non-cash items:                                                  
                                                                                 
Fair value changes to available for sale                -           -     123,257
financial assets                                                                 
                                                                                 
Settlement of loan and other liabilities                -   1,759,016   1,759,016
by issue of ordinary shares                                                      
                                                                                 
Reverse acquisition IFRS 2 charge                       -   2,459,371   2,459,371
                                                                                 
Professional fees settled by issue of                   -   4,304,361   4,304,361
ordinary shares by parent company                                                
                                                                                 
Share of profit from associate                  (453,465)           -           -
                                                                                 
Gain on exchange of assets                    (1,994,942)           -           -
                                                                                 
Impairment of available for sale assets           123,257           -           -
                                                                                 
Working capital changes:                                                         
                                                                                 
Trade receivables                               (474,846)           -       (990)
                                                                                 
Trade and other payables                           61,114 (1,680,681) (2,135,320)
                                                                                 
Prepayments                                      (17,447)           -           -
                                                                                 
Cash (used in) / generated from                 (635,526)      13,744     409,435
operations                                                                       
                                                                                 
Cash flows from Investing activities                                             
                                                                                 
Purchase of property, plant and equipment         (1,306)           -           -
                                                                                 
Net cash used in investing activities             (1,306)           -           -
                                                                                 
Cash flows from financing activities                                             
                                                                                 
Capital contribution                            1,267,029           -           -
                                                                                 
Cash generated from financing activities        1,267,029           -           -
                                                                                 
Net decrease in cash and cash equivalents         630,197      13,744     409,435
                                                                                 
Cash and cash equivalents at beginning of         417,783       8,348       8,348
the period                                                                       
                                                                                 
Cash and cash equivalents at end of the         1,047,980      22,092     417,783
period                                                                           



Basis of preparation

The consolidated interim financial statements of the Company for the period
ended 30 June 2012 comprise the results of the Company and its subsidiaries
(together, the "Group") and have been prepared in accordance with the rules of
the PLUS market.

The consolidated interim statements do not include all of the information and
disclosures required for full annual financial statements.

They should be read in conjunction with the Annual Report and Audited
Consolidated Financial Statements for the period ended 31 December 2011, which
were prepared in accordance with International Financial Reporting Standards
(IFRS) adopted for use in the European Union issued by the International
Accounting Standards Board (IASB) and interpretations issued by the
International Financial Reporting Committee of the IASB (IFRIC). The annual
financial statements are available to download from www.prime-holdings.com.

The accounting policies applied by the Group in preparing the period
consolidated interim financial statements for the period ended 30 June 2012 are
consistent with those applied by the Group in its audited consolidated
financial statements for the period ended 31 December 2011 and is consistent
with those that will be applied by the Group in its consolidated financial
statements for the year ended 31 December 2012.

The consolidated interim financial statements for the current and comparative
period 30 June 2011 are unaudited. The comparatives for 31 December 2011 are
audited and received an unqualified opinion.

The preparation of financial statements in conformity with IFRS as adopted by
the European Union requires the use of certain critical accounting estimates.
It also requires management to exercise its judgment in the process of applying
the group's accounting policies.

In preparing these interim financial statements the key judgment and estimates
made by the Board are the same as those applied in the financial statements as
of, and for the period ended 31 December 2011.

There have been no material changes to reportable contingent liabilities since
31 December 2011.

Significant accounting policies

Except as described below, the accounting policies applied by the Group in this
condensed consolidated interim financial report are the same as those applied
by the Group in its consolidated financial statements as at and for the period
ended 31 December 2011. The following additional accounting policy is also
expected to be reflected in the Group's consolidated financial statements as at
and for the period ended 31 December 2012.

Consolidation

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
recognised at cost, and the carrying amount is increased or decreased to
recognise 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 recognised in the
profit or loss, and its share of post-acquisition movements in other
comprehensive income is recognised 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
recognise further losses, unless it has incurred legal or constructive
obligations or made payments on behalf of the associate.

For the purpose of the interim financial period, the investment land and
properties held in the associate group have been fair valued at the interim
reporting date by the directors.

The Directors of Makkah & Madinah Holdings Limited have issued this
announcement after due and careful enquiry; and accept responsibility for its
content.

ENDS.

Enquiries:

Makkah & Madinah Holdings Limited:
Victoria Arscott, Investor Relations Manager; +971 4 350 3596;
[email protected]

Daniel Stewart and Company Plc:
Graham Atthill-Beck; +44 20 7776 6550/+44 7779 059 879; [email protected]
Jamie Barklem; +44 20 7776 6550; [email protected];
Paul Shackleton; +44 20 7776 6550; [email protected]

Panmure Gordon & Co.
Richard Gray; +44 207 886 2500; [email protected]

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