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DJ DagangHalal PLC Final Results

TIDMDGHL

RNS Number : 6352Z

DagangHalal PLC

31 May 2016

DagangHalal plc

("DagangHalal" or the "Group")

Final Results

for the year ended 31 December 2015

 
                  DagangHalal PLC**     DagangHalal Sdn Bhd* 
--------------  --------------------  ----------------------- 
                        2015    2014         2015        2014 
--------------  ------------  ------  -----------  ---------- 
 Revenue 
  (MYR)                    -       -    5,568,503   3,405,076 
--------------  ------------  ------  -----------  ---------- 
 Gross Profit 
  (MYR)                    -       -    4,795,972   3,215,357 
--------------  ------------  ------  -----------  ---------- 
 Profit / 
  Loss Before 
  Tax (MYR)        (852,738)       -      745,701     891,322 
--------------  ------------  ------  -----------  ---------- 
 Profit / 
  Loss After 
  Tax (MYR)        (852,738)       -      905,701     731,322 
--------------  ------------  ------  -----------  ---------- 
 Gross Margin              -       -          86%         94% 
--------------  ------------  ------  -----------  ---------- 
 Net debt 
  (MYR)                                   672,027       3,007 
--------------  ------------  ------  -----------  ---------- 
 

*Figures shown for DagangHalal Sdn Bhd are consolidated figures with its subsidiaries namely DagangAsia Net Sdn. Bhd, DH Events Sdn. Bhd and HVE Innovations Sdn. Bhd.

**As stated in the Admission Document, DagangHalal Sdn Bhd was incorporated on 22 September 2011 in Malaysia. On 31 March 2016, DagangHalal Plc (incorporated on 10(th) April 2015 in Jersey) (the "Company") acquired 100% of the issued share capital of DagangHalal Sdn Bhd, resulting in the Company becoming a wholly-owned subsidiary of DagangHalal plc.

The principal activity of DagangHalal plc is to act as the holding company of DagangHalal Sdn Bhd. The principal activity of DagangHalal Sdn Bhd is providing a business-to-business marketplace internet platform and portal as well as other online services.

Due to this corporate restructure and in the interests of clarity, the financial statements of both DagangHalal plc and DagangHalal Sdn Bhd are presented below

Chairman's Statement

I am pleased to report DagangHalal PLC's final results and provide the annual report and financial statements for the year ended 31 December 2015.

The Group has continued to deliver on its growth strategy. Revenue for the year ended 31 December 2015 increased by 64% year-on-year.

We have made solid progress in each of our divisions:

E-marketplace, e-commerce and web solutions

The Group's e-marketplace, DagangHalal.com, enables both B2B halal product and service listings as well as B2C sales for independent merchants looking to sell verified Halal products. The Group monetises this e-marketplace by selling year-long merchant packages which enable merchants to list their Halal products and services on the e-marketplace website.

Revenue from active merchants using DagangHalal.com to sell veri ed Halal products both in its core Malaysian marketplace and also in other geographies grew by 50% to c. MYR 307k in the year ended 31 December 2015 from c. MYR 204k in the previous year. The Group has continued to grow its active merchant numbers and as at 31 December 2014, the Group had 3,098 active merchants, 52.74% of which were based in Malaysia. The Group remains focussed on increasing the number of active merchants using DagangHalal.com, to grow subscription revenues and to drive further expansion of DagangHalal's ecosystem of Halal buyers.

Halal Certificate Repository

The HVE (halalverified.com) is the world's first Halal repository designed to ensure accurate Halal verification and expedite the Halal-certification process for Halal Applicants. HVE revenue for the year ended 31 December 2015 was c. MYR 348k, representing a year-on-year increase of 54%. As at February 2016, 38 out of over 120 Certification Bodies (CBs) were signed up to the HVE database. While still early in its adoption, the Group has successfully increased revenue derived through the HVE, and is seeking to expand the number of CBs signed up to and using the HVE database.

Halal events, training, education and consultancy business

The Group has in the past organised and attended local and international trade fairs, however the Group did not host any carnivals in 2013, 2014 or 2015 due to a switch of focus towards the development of the HVE and HCMS. It is the Group's intention to resume hosting its own carnivals in 2016.

The Group's consultancy business is focused on providing Halal Applicants with consultancy services to assist them with the Halal certificate application. The Group's Halal consultancy offering has continued to achieve good traction with Halal applicants, with revenue increasing by 48% to c. MYR 895k in the year ended 31 December 2015 (FY 2014: c. MYR 604k)

Strategy and outlook

The Group's core objective is to promote Halal trade business transactions anywhere and anytime. DagangHalal's strategy is fourfold:

   --      to grow the Group's ecosystem in existing core markets; 
   --      to expand the Group's activities into new geographies; 
   --      to increase the number of Halal Certification Body partners; and 
   --      to further develop the Group's platform, products and proprietary strategy. 

Post period end, in April 2016, the Group was successfully admitted on the Growth Market of the ISDX Stock Exchange in London. The Placing raised net proceeds of approximately GBP3.6 million from both Malaysian and UK investors which will be used to accelerate the Group's growth strategy, in particular through expanding its sales and marketing department, and by entering into new territories.

Our platform is unique and the only one of its kind in the world. We are confident of continued growth in the year ahead.

CHONG KHEK AH (FRANCIS)

Chairman

For further information, please contact:

 
 DagangHalal                       via FTI Consulting 
 Mohamed Hazli Mohamed Hussain, 
  Chief Executive Officer 
 Ali Sabri Sani Abdullah , 
  Chief Financial Officer 
 
                                   +44 (0) 20 7614 
 Arden Partners                     5900 
 James Felix / Patrick Caufield 
  (Corporate Finance) 
                                   +44 (0)20 3137 
 Optiva Securities                  1902 
 Vishal Balasingham 
 
                                   +44 (0) 20 3727 
 FTI Consulting                     1000 
 Chris Lane / Rob Mindell 
  / Elena Kalinskaya 
 

DagangHalal plc

For the Period Ended 31 December 2015

Statement of Comprehensive Income

for the period ended 31 December 2015

 
                                               Period ended 
                                                31 December 
                                                       2015 
                                        Note            MYR 
 Continuing operations 
 
 
 Administrative expenses                          (852,738) 
 
 Operating loss                                   (852,738) 
 
   Loss before taxation                   3       (852,738) 
 
 Taxation                                                 - 
 
   Loss for the period                            (852,738) 
 
 Other comprehensive loss for                             - 
  the period 
 
   Total comprehensive loss for 
   the period attributable to the 
   equity owners                                  (852,738) 
 
 Loss per share                                   (426,369) 
 
   Basic and diluted (MYR per share)              (426,369) 
 

The notes to the financial statements form an integral part of these financial statements

Statement of Financial Position

as at 31 December 2015

 
                                                2015 
                    Note                        MYR 
 
 CURRENT ASSET 
  Other debtors                                  1 
 
 Less: 
 CURRENT LIABILITY 
  Amount Owing To Related 
   Party                                     (852,738) 
                                    ------  ---------- 
 NET CURRENT LIABILITY                       (852,737) 
                                    ------  ---------- 
 
 NET LIABILITY                               (852,737) 
                                    ------  ---------- 
 
 SHARE CAPITAL                                   1 
 ACCUMULATED LOSS                            (852,738) 
                                    ------  ---------- 
                                             (852,737) 
  ----------------------------------------  ---------- 
 

Statement of Changes In Equity

for the period end 31 December 2015

 
                                                                       Retained earnings 
                                                      Stated capital                           Total 
 CURRENT PERIOD                                                  MYR                 MYR         MYR 
 
 Registered capital as at 10 April 2015                            1                   -           1 
 Loss for the period                                               -           (852,738)   (852,738) 
 
 Total comprehensive income for the period 
                                                                                       -           - 
 Issue of share capital net of share issue costs 
                                                                   -                   -           - 
 
 As at 31 December 2015                                            1           (852,738)   (852,737) 
                                                   =================  ==================  ========== 
 

Stated capital comprises the ordinary share capital of the Company.

Retained earnings represent the aggregate retained earnings of the Company.

Statement of Cash Flows

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DJ DagangHalal PLC Final Results -2-

for the year period 31 December 2015

 
                                                   Y/E 
                                                  31 Dec 
                                                   2015 
                                        Note       MYR 
 Cash flow from operating activities 
 Operating loss                                 (852,738) 
 
 Changes in working capital 
 Decrease in trade and other                            - 
  receivables 
 Increase in trade and other 
  payables                                        852,738 
 
 Net cash used in operating                             - 
  activities 
                                               ---------- 
 
 Cash flows from financing 
  activities 
 
 Proceeds from issuance of                              - 
  shares net of issue costs 
 Net cash generated from financing                      - 
  activities 
                                               ---------- 
 
 Cash flows from investing 
  activities 
 Purchase of property plant                             - 
  and equipment 
 Interest paid                                          - 
                                               ---------- 
 Net cash used in investing 
  activities 
                                               ---------- 
 
 
 Movement in cash and cash                              - 
  equivalents 
 
 Cash and cash equivalents                              - 
  at beginning of period 
 
 Cash and cash equivalents                6             - 
  at end of period 
                                               ---------- 
 

Notes to the Financial information

   1.      General Information 

The Company was incorporated in Jersey on 10(th) April 2015 as a public limited company. The Company did not trade during the financial period ended 31 December 2015, however consultancy and legal fees as well as general administrative expenses were incurred. The Company financial statements are presented in Malaysian Ringgit (MYR) which is also the Company's functional currency.

The Company is domiciled at, and is registered at 43-45 La Motte Street, St Helier, Jersey JE4 8SD.

   2.      Summary of Significant Accounting Policies 

The Board has reviewed the accounting policies set out below and considers them to be the most appropriate to the Company's business activities.

   a)      Basis of Preparation 

The financial statements have been prepared in accordance with International Financial Reporting Standards ("IFRS") as adopted for use by the European Union, and effective, or issued and early adopted, as at the date of these statements. The financial statements have been prepared under the historical cost convention as modified for financial assets carried at fair value.

At the date of authorisation of these financial statements, certain new standards, amendments and interpretations to existing standards have been published but are not yet effective, and have not been adopted early by the Company. The Directors anticipate that all of the pronouncements will be adopted in the Company's accounting policies for the first period beginning on or after the effective date of the pronouncement.

The Company has not early adopted amended standards and interpretations which are currently in issue but not effective for accounting periods commencing on 1 January 2015 as adopted by the EU. The Directors do not anticipate that the adoption of standards and interpretations will have a material impact on the Company's financial statements in the periods of initial application.

   b)      Significant accounting judgements, estimates and assumptions 

The preparation of financial statements in conformity with IFRS requires management to make estimates and assumptions that affect the reported amounts of income, expenditure, assets and liabilities. Estimates and judgements are continually evaluated, including expectations of future events to ensure these estimates to be reasonable.

The going concern basis of accounting have as been applied as Management are aware of activities since the year end which support the future of the Company (disclosed in events after the period).

Management do not consider there to be any other significant judgements and assumptions which would materially affect the financial statements.

   c)      Financial Instruments 

Financial assets and liabilities are recognised in the Company's statement of financial position when the Company becomes a party to the contractual provisions of the instrument. The Company currently does not use derivative financial instruments to manage or hedge financial exposures or liabilities.

   d)      Trade and Other Receivables and Payables 

Trade and other receivables and trade and other payables are initially recognised at fair value. Fair value is considered to be the original invoice amount, discounted where material, for short-term receivables and payables. Long term receivables and payables are measured at amortised cost using the effective interest rate method.

   e)      De-recognition and Impairment of Financial Assets and Liabilities 
   i.    Financial Assets 

A financial asset is derecognised where:

   --      the right to receive cash flows from the asset has expired; 

-- the Company retains the right to receive cash flows from the asset, but has assumed an obligation to pay them in full without material delay to a third party under a pass-through arrangement; or

-- the Company has transferred the rights to receive cash flows from the asset, and either has transferred substantially all the risks and rewards of the asset or has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset.

   ii.   Financial Liabilities 

A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expires. Where 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 a derecognition of the original liability and the recognition of a new liability, and the difference in the respective carrying amounts is recognised in the statement of comprehensive income.

   f)       Reserves 

Retained earnings represent the cumulative retained losses of the Company at the reporting date.

   g)      Taxation 

Current Tax

Current tax assets and liabilities for the current and prior periods are measured at the amount expected to be recovered from or paid to the tax authorities. The tax rates and the tax laws used to compute the amount are those that are enacted or substantively enacted by the statement of financial position date.

Deferred Tax

Deferred income tax is recognised on all temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements, with the following exceptions:

-- where the temporary difference arises from the initial recognition of goodwill or of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither accounting nor taxable profit or loss;

-- in respect of taxable temporary differences associated with investment in subsidiaries, associates and joint ventures, where the timing of the reversal of the temporary differences can be controlled and it is probable that the temporary differences will not reverse in the foreseeable future and

-- deferred income tax assets are recognised only to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, carried forward tax credits or tax losses can be utilised.

Deferred income tax assets and liabilities are measured on an undiscounted basis at the tax rates that are expected to apply when the related asset is realised or liability is settled, based on tax rates and laws enacted or substantively enacted at the statement of financial position date.

The carrying amount of deferred income tax assets is reviewed at each statement of financial position date. Deferred income tax assets and liabilities are offset, only if a legally enforcement right exists to set off current tax assets against current tax liabilities, the deferred income taxes related to the same taxation authority and that authority permits the Company to make a single net payment.

Income tax is charged or credited directly to equity if it relates to items that are credited or charged to equity. Otherwise income tax is recognised in the statement of comprehensive income.

   h)      Financial Risk Management Objectives and Policies 

The Company does not enter into any forward exchange rate contracts.

The main financial risks arising from the Company's activities are cash flow interest rate risk, liquidity risk, price risk (fair value) and credit risk. The Board reviews and agrees policies for managing each of these risks and they are summarised as:

Liquidity Risk - the Company raises funds as required on the basis of budgeted expenditure and inflows. When funds are sought, the Company balances the costs and benefits of equity and debt financing. When funds are received they are deposited with banks of high standing in order to obtain market interest rates.

Price Risk - the carrying amount of the following financial assets and liabilities approximate to their fair value due to their short term nature: cash accounts, accounts receivable and accounts payable.

Credit Risk - with respect to credit risk arising from other financial assets of the Company, the Company's exposure to credit risk arises from default of the counterparty, with a minimum exposure equal to the carrying amount of these instruments. The credit risk on cash is limited as cash is placed with substantial financial institutions.

   i)       Equity 

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Equity instruments issued by the Company are recorded net at proceeds after direct issue costs.

   j)       Foreign currency translation 

Monetary assets and liabilities denominated in foreign currencies are translated into Malaysian Ringgit (MYR) at the rates of exchange ruling at the balance sheet date. Transaction in foreign currencies are recorded at the rate ruling at the date of transaction. All differences are taken to the profit and loss account

   k)      Going Concern 

The Company's business activities and financial position, together with the factors likely to affect its future development, performance and position are set out in the front end of the financial statements.

The Directors have carried out a detailed assessment of going concern as part of the financial reporting process, taking into consideration a number of matters including forecast cash flows, medium and long term business plans and expectations. As described in note 12 to the financial statements, subsequent to the period end, the Company undertook a group reconstruction to become part of the DagangHalal group.

The continuity of the business will be funded with the public listing exercise that was undertaken in April 2016, following the group reconstruction. The directors have also obtained an undertaking from its principal creditors, being DagangHalal Sdn Bhd and DagangAsia Net Sdn Bhd, that they will not seek repayment of the current liabilities due to them to the extent that it will prejudice the ability of the company to meet its liabilities as they fall due.

   3.      Loss before income tax 

The loss before income tax is stated after charging:

 
               Period ended 
                31 Dec 2015 
                        MYR 
 
Listing Cost      (852,738) 
 
 

Audit fees of MYR 42,000 have been borne by DagangHalal Sdn Bhd.

   4.      Income tax 

The Company is not a "Financial Services Company" registered under the relevant Jersey laws; or a specified utility company and therefore it is subject to Jersey income tax at the general rate of 0 per cent. If the Company derives any income from Jersey property, including development of land or quarrying, such income will be subject to tax at the rate of 20 per cent. It is not expected that the Company will derive any such income.

   5.      Loss per share 

The calculation of loss per share is based on the following loss and number of shares:

 
                                           Period 
                                            ended 
                                           31 Dec 
                                             2015 
                                              MYR 
 Loss for the period from continuing 
  operations                            (852,738) 
                                       ---------- 
 
 Weighted average shares in issue: 
 Basic                                          2 
 Diluted                                        - 
 
 Loss per share                         (426,369) 
 Basic & Diluted                        (426,369) 
                                       ---------- 
 

Basic loss per share is calculated by dividing the loss for the period from continuing operations of the company by the weighted average number of ordinary shares in issue during the period.

There are no potential dilutive shares in issue.

On 31 March 2016, the company increased its authorized share capital to 200,000,000 Ordinary Shares of GBP0.01 each. The number of share capital which was issued and fully paid is 58,488,442.

   6.      Cash and cash equivalents 
 
                  As at 
                 31 Dec 
                   2015 
                    MYR 
 Cash Balance         - 
                      - 
               -------- 
 
   7.      Stated capital 

The shareholders incorporated the business on 10 April 2015 by allotment of share as follow:

Share Allotments:

   1.   Francis Chong Khek Ah hold 1 Ordinary Share @ GBP0.01 
   2.   Mohamed Hazli Bin Mohamed Hussain hold 1 Ordinary Share @ GBP0.01 

The issued capital is converted into the nearest MYR amounting to MYR1. The issued share capital at the period end is not fully paid.

On 31 March 2016, the company increased its authorized share capital from 100,000 to 200,000,000 Ordinary Shares of GBP0.01 each.

   8.      Amount Owing To Related Parties 

During the current period, the company owed the listing cost to foreign companies. The summary of the owing amount is follows:

 
 Company               Country Incorporation    Amount Owing 
                                                     MYR 
 DagangHalal Sdn 
  Bhd                  Malaysia                    94,000 
 DagangAsia Net Sdn 
  Bhd                  Malaysia                   758,738 
 
 Total                                            852,738 
 

DagangHalal Sdn Bhd and DagangAsia Net Sdn Bhd have common directors and subsequent to the period end, following a group reconstruction, became part of the DagangHalal plc group.

Key management personnel, which for DagangHalal plc is the company's directors, received no remuneration in the period.

   9.      Financial instruments 
   a)      Liquidity risk 

The Company regularly reviews its major funding positions to ensure that it has adequate financial resources in meeting its financial obligations. The Company takes liquidity risk into consideration when deciding its sources of funds.

   b)      Credit risk 

As at the period-end 31 December 2015, the Directors consider there to be no credit risk arising from any receivables.

   c)      Capital risk management 

The Company defines capital as the total equity of the Company. The Company's objectives when managing capital are to safeguard the Company's ability to continue as a going concern in order to provide returns for shareholders and benefits for other stakeholders and to maintain an optimal capital structure to reduce the cost of capital.

In order to maintain or adjust the capital structure, the Company may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt.

   d)      Fair value of financial assets and liabilities 

There are no material differences between the fair value of the Company's financial assets and liabilities and their carrying values in the financial information.

   10.     Borrowings Facilities 

There are no borrowing facilities currently available.

   11.     Ultimate Controlling Party 

The Directors have determined that there is no controlling party as no individual shareholder holds a controlling interest in the Company.

   12.     Subsequent events 

In order to prepare the DagangHalal group for listing on ISDX, the following steps were taken:

On 3 December 2015, Malaysian Technology Development Corporation "MTDC" entered into the following agreement with DagangAsia Net Sdn Bhd and DagangHalal Sdn Bhd:

-- Investment agreement, pursuant to which MTDC subscribed for 5,400,000 redeemable convertible preference shares of MYR1.00 each (RCPS-A shares) in the capital of DagangAsia Net Sdn Bhd for a subscription price of MYR5,400,000;

-- Corporate guarantee and indemnity pursuant to which DagangHalal Sdn Bhd agreed to guarantee and indemnify MTDC in respect of DagangAsia Net Sdn Bhd's obligations under its various agreements with MTDC;

-- Personal guarantee and indemnity pursuant to which Chong Khek Ah, Muhadzir Mohd Isa, Hwang Seak Wai and Mohamed Hazli Mohamed Hussain agreed to guarantee and indemnify MTDC in respect of DagangAsia Net Sdn Bhd's obligations under its various agreements with MTDC;

-- Put option agreement pursuant to which DagangHalal Sdn Bhd granted a put option to MTDC in respect of the redeemable convertible preference shares which may be exercised if DagangAsia Net Sdn Bhd becomes insolvent or fails to comply with its obligations under the MTDC agreements; and

   --      Shareholders agreement in respect of DagangAsia Net Sdn Bhd. 

On 22 January 2016 5,400,000 RCPA-A shares in the capital of DagangAsia Net Sdn Bhd were issued to MTDC.

In or around January 2016, the New Investors entered into subscription agreements for redeemable convertible preference shares in the capital of DagangHalal Sdn Bhd. These agreements were terminated by deeds of termination entered into by each of the subscribers in or around February 2016. The subscribers then entered into a Subscription Agreement dated 26 February 2016.

On 31 March 2016 MTDC, DagangAsia Net Sdn Bhd and Daganghalal Sdn Bhd entered into the MTDC Share Exchange Agreement, pursuant to which MTDC agreed to transfer its 5,400,000 RCPS-A shares in DagangAsia Net Sdn Bhd to Daganghalal Sdn Bhd in consideration for the allotment and issuance of Ordinary Shares in the capital of the Company.

On 31 March 2016, the shareholders of DagangHalal Sdn Bhd entered into a share exchange agreement with the company, pursuant to which each shareholder of Daganghalal Sdn Bhd transfer all of his ordinary shares in DagangHalal Sdn Bhd to the Company in consideration for the allotment and issuance of Ordinary Shares in the capital of the Company. The number of share capital which was issued and fully paid is 58,488,442. The Directors consider this to be a group reconstruction and as such the Directors have concluded that the transactions comprising the formation of the Group fall outside of the scope of IFRS 3 "Business Combinations" (Revised 2008) as a combination of entities under common control. The forthcoming financial statements will include the ongoing trade and results of the underlying group as though the enlarged group had been in existence for the entire period.

The Company listed on the ISDX Growth Market in April 2016.

DagangHalal SDN. BHD

For the Year Ended 31 December 2015

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STATEMENTS OF FINANCIAL POSITION AT 31 DECEMBER 2015

 
                                    The Group 
                                2015            2014 
                       Note         MYR          MYR 
 
 ASSETS 
 NON-CURRENT 
  ASSETS 
 Equipment              6        81,102       91,006 
 Intangible assets      7     2,720,488    2,473,903 
 
 
                              2,801,590    2,564,909 
 
 
 
 
 CURRENT ASSETS 
 Trade receivables      8     1,988,563      738,192 
 Other receivables, 
  deposits 
  and prepayments                78,305      123,255 
        Amount owing 
          by holding 
             company     9      852,738            - 
        Amount owing    10            -            - 
     by a subsidiary 
        Amount owing 
                by a 
       related party     11     110,133      871,877 
       Cash and bank 
            balances             28,616       81,986 
 
 
                              3,058,355    1,815,310 
 
 
 TOTAL ASSETS                 5,859,945    4,380,219 
 
 
 
 
 EQUITY AND LIABILITIY 
 EQUITY 
 Share capital            12     8,000,003     8,000,003 
 Merger deficit           13   (3,900,000)   (3,900,000) 
            Accumulated 
                 losses          (626,386)   (1,532,087) 
 
 
 TOTAL EQUITY                    3,473,617     2,567,916 
 
 
 
 
 
 CURRENT LIABILITIES 
 Trade payables          14          6,584        18,475 
 Other payables 
  and accruals           15      2,358,557       971,897 
 Amount owing 
  to a 
  related party           11        15,000             - 
 Amount owing 
  to a director          16          6,000       661,744 
          Current tax 
            liability                  187       160,187 
 
 
 TOTAL LIABILITY                 2,386,328     1,812,303 
 
 
 TOTAL EQUITY 
  AND 
  LIABILITY                      5,859,945     4,380,219 
 
 

STATEMENTS OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME

FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2015

 
                                           The Group 
                                      2015          2014* 
                            Note       MYR           MYR 
 
 REVENUE                     17      5,568,503     3,405,076 
 
 COST OF SALES                       (772,531)     (189,719) 
 
 
 GROSS PROFIT                        4,795,972     3,215,357 
 
 OTHER INCOME                          147,249        96,902 
 
 
                                     4,943,221     3,312,259 
 
 ADMINISTRATIVE 
  EXPENSES                         (2,492,077)   (2,170,938) 
 
 DISTRIBUTION COSTS                  (189,009)     (167,229) 
 
 OTHER EXPENSES                    (1,516,434)      (82,770) 
 
 
 PROFIT/(LOSS) BEFORE 
  TAXATION                    18       745,701       891,322 
 
 INCOME TAX EXPENSE          19        160,000     (160,000) 
 
 
 PROFIT/(LOSS) AFTER 
  TAXATION, REPRESENTING 
  TOTAL COMPREHENSIVE 
  INCOME/(EXPENSES) 
  FOR THE FINANCIAL 
  YEAR                                 905,701       731,322 
 
 
 
 PROFIT/(LOSS) AFTER 
  TAXATION/TOTAL 
  COMPREHENSIVE INCOME/ 
  (EXPENSES) FOR 
  THE FINANCIAL YEAR 
   ATTRIBUTABLE TO:- 
 Owners of DagangHalal 
  Sdn. Bhd.                            905,701       731,322 
 
 

Note:-

* - The financial statements of the subsidiary, namely DagangAsia Net Sdn. Bhd. ("DagangAsia Net") has been consolidated using the merger method of accounting. Accordingly, the results of the Group incorporated the results of DagangAsia Net for the financial period from 1 January 2014 to 31 December 2014. The 2014 comparative information has been extracted from the admission document published in April 2016.

STATEMENTS OF CHANGES IN EQUITY

FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2015

 
                                     Share       Merger      Accumulated 
                                     Capital     Deficit       Losses          Total 
                                        ^ 
 The Group                              MYR        MYR           MYR            MYR 
 
 Balance at 1.1.2014               6,000,003   (3,900,000)   (2,263,409)   (163,406) 
 
 Profit after taxation/Total 
  comprehensive 
  income for the financial 
  year                                     -             -       731,322     731,322 
 
 Contributions by 
  and distributions 
  to owners 
  of DagangHalal Sdn. 
  Bhd.: 
 Issuance of shares                2,000,000             -             -   2,000,000 
 
 
 Balance at 31.12.2014/1.1.2015    8,000,003   (3,900,000)   (1,532,087)   2,567,916 
 
 Profit after taxation/Total 
  comprehensive 
  income for the financial 
  year                                     -             -       905,701     905,701 
 
 
 Balance at 31.12.2015             8,000,003   (3,900,000)     (626,386)   3,473,617 
 
 
 

Note:-

^ - The share capital of RM6,000,000 were presented based on the share capital in issue pursuant to the acquisition of DagangAsia Net Sdn. Bhd., which were consolidated using merger method of accounting as disclosed in Note 4.2 and Note 21 to the financial statements.

STATEMENTS OF CASH FLOWS

FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2015

 
                                              The Group 
                                          2015          2014* 
                             Note           RM           MYR 
 
 CASH FLOWS FROM/(FOR) 
  OPERATING ACTIVITIES 
 Profit/(Loss) before 
  taxation                                 745,701       891,322 
 
 Adjustments for:- 
 Amortisation of 
  intangible assets                        622,828       116,981 
 Depreciation of 
  equipment                                 24,082        23,160 
 Impairment losses 
  on 
  trade receivables                      1,492,352        59,610 
 Writeback of impairment 
  losses on                               (64,500)             - 
  trade receivables 
 
 
 Operating profit/(loss) 
  before 
  working capital 
  changes                                2,820,463     1,091,073 
 Increase in trade 
  and other 
  receivables                          (2,633,273)     (490,342) 
 Increase in trade 
  and other 
  payables                               1,374,769       192,708 
 
 
 NET CASH FROM/(FOR) 
  OPERATING ACTIVITIES                   1,561,959       793,439 
 
 
 CASH FLOWS (FOR)/FROM 
  INVESTING ACTIVITIES 
 Net cash outflow 
  for acquisition              20                -             - 
  of subsidiaries 
 Purchase of equipment                    (14,178)      (32,519) 
 Development costs 
  paid                                   (869,413)     (271,316) 
 Advances to holding                     (852,738)             - 
  company 
 Repayment from a                                -             - 
  subsidiary 
 Repayment from/(Advances 
  to) 
  a related party                          761,744     (626,393) 
 
 
 NET CASH (FOR)/FROM 
  INVESTING ACTIVITIES                   (974,585)     (930,228) 
 
 
 
 

STATEMENTS OF CASH FLOWS

FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2015 (CONT'D)

 
                                       The Group 
                                  2015            2014* 
                                   MYR             MYR 
 
 CASH FLOWS (FOR)/FROM 
  FINANCING ACTIVITIES 
 Advances from a                   15,000               - 
  related party 
 (Repayment to)/Advances 
 from a 
 director                       (655,744)         167,674 
 
 
 NET CASH (FOR)/FROM 
  FINANCING ACTIVITIES          (640,744)         167,674 
 
 
 NET (DECREASE)/INCREASE 
 IN 
 CASH AND BANK BALANCES          (53,370)          30,885 
 
 CASH AND BANK BALANCES 
  AT 
  BEGINNING OF THE 
  FINANCIAL 
  YEAR                             81,986          51,101 
 
 
 CASH AND BANK BALANCES 
  AT 
  END OF THE FINANCIAL 
   YEAR                            28,616          81,986 
 
 
 

Note:-

* - The financial statements of the subsidiary, namely DagangAsia Net has been consolidated using the merger method of accounting. Accordingly, the results of the Group incorporated the results of DagangAsia Net for the financial period from 1 January 2014 to 31 December 2014.

NOTES TO THE FINANCIAL STATEMENTS

FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2015

   1.      GENERAL INFORMATION 

DagangHalal Sdn. Bhd. is a private company limited by shares and is incorporated under the Companies Act, 1965 in Malaysia. The domicile of the DagangHalal Sdn. Bhd. is Malaysia. The registered office and principal place of business are as follows:-

   Registered office                           :           802, 8(th) Floor, Block C, 

Kelana Square, 17 Jalan SS 7/26,

47301 Petaling Jaya, Selangor Darul Ehsan.

   Principal place of business            :           Suite 10-10, Wisma UOA II, 

No. 21, Jalan Pinang,

50450 Kuala Lumpur.

The financial statements were authorised for issue by the Board of Directors in accordance with a resolution of the directors dated 27 May 2016.

   2.      PRINCIPAL ACTIVITIES 

DagangHalal Sdn. Bhd. is principally engaged in the business of investment holding whilst the principal activities of the subsidiaries are set out in Note 6 to the financial statements. There have been no significant changes in the nature of these activities during the financial year.

   3.      HOLDING COMPANY 

On 31 March 2016, DagangHalal Plc acquired 100% of the issued share capital of DagangHalal Sdn. Bhd. resulting in DagangHalal Sdn. Bhd. becoming a wholly-owned subsidiary of DagangHalal Plc, a company incorporated in Jersey.

   4.      BASIS OF PREPARATION 

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The financial statements of the subsidiary, DagangAsia Net has been consolidated using the merger method of accounting as disclosed in Note 5.2 of the financial statements. Accordingly, the results of the Group incorporated the results of DagangAsia Net for the financial year from 1 January 2014 to 31 December 2014.

The financial statements of the Group are prepared under the historical cost convention and modified to include other bases of valuation as disclosed in other sections under significant accounting policies, and in compliance with Malaysian Financial Reporting Standards ("MFRSs"), International Financial Reporting Standards and the requirements of the Companies Act 1965, in Malaysia.

The financial statements have been prepared using accounting policies which are consistent with those adopted in the Company's ISDX admission document. The comparative information presented for the year ended 31 December 2014 has been extracted from the Company's ISDX admission document.

4.1 The Group has not applied in advance the following accounting standards and interpretations (including the consequential amendments, if any) that have been issued by the Malaysian Accounting Standards Board (MASB) but are not yet effective for the current financial year:- (cont'd)

 
 MFRSs and/or IC Interpretations (Including   Effective 
  The Consequential Amendments)                Date 
 Annual Improvements to MFRSs 2012            1 January 
  - 2014 Cycle                                 2016 
 

The adoption of the above accounting standards and interpretations (including the consequential amendments) is expected to have no material impact on the financial statements of the Group upon their initial application.

   5.      INVESTMENTS IN SUBSIDIARIES 
 
                                     DagangHalal Sdn. 
                                            Bhd. 
                                      2015       2014 
                                      MYR         MYR 
 Unquoted shares, at cost:- 
 At 1 January                      6,000,004           - 
 Addition during the financial 
  year                                     -   6,000,004 
 
 
 At 31 December                    6,000,004   6,000,004 
 
 

The details of the subsidiaries, are as follows:-

 
                          Principal 
                             Place          Effective 
 Name of Subsidiaries    of Business     Equity Interest    Principal Activities 
                                         2015      2014 
 
                                                            Providing business-to-business 
                                                             marketplace internet 
                                                             platform and 
                                                             portal as well 
 DagangAsia Net                                              as other online 
  Sdn. Bhd.                Malaysia      100%      100%      services. 
  ("DagangAsia 
   Net") 
 
 DH Events Sdn. 
  Bhd.                     Malaysia      100%      100%     Dormant. 
  ("DH Events") 
 
 HVE Innovations           Malaysia      100%      100%     Dormant. 
   Sdn. Bhd. 
  ("HVE Innovations") 
 

In the previous financial year, DagangHalal Sdn. Bhd. had acquired DagangAsia Net, DH Events and HVE Innovations. The details are disclosed in Note 20 to the financial statements.

   6.      EQUIPMENT 
 
                          At                     Depreciation       At 
                        1.1.2015     Additions      Charge       31.12.2015 
                          MYR          MYR           MYR            MYR 
 
 The Group 
 
 Net Book Value 
 
 Computer software         2,350         1,300        (2,407)         1,243 
 Computer equipment       17,267        12,878        (6,482)        23,663 
 Furniture and 
  fittings                24,507             -        (5,486)        19,021 
 Office equipment         22,800             -        (3,900)        18,900 
 Renovation               24,082             -        (5,807)        18,275 
 
 
                          91,006        14,178       (24,082)        81,102 
 
 
 
                          At                     Depreciation       At 
                        1.1.2014     Additions      Charge       31.12.2014 
                          MYR          MYR           MYR            MYR 
 
 Net Book Value 
 
 Computer software         3,972         4,700        (6,322)         2,350 
 Computer equipment        3,375        15,646        (1,754)        17,267 
 Furniture and 
  fittings                26,477         3,470        (5,440)        24,507 
 Office equipment         19,644         6,993        (3,837)        22,800 
 Renovation               28,179         1,710        (5,807)        24,082 
 
 
                          81,647        32,519       (23,160)        91,006 
 
 
 
                                      Accumulated    Net Book 
                            Cost      Depreciation     Value 
 The Group                   MYR          MYR          MYR 
 
 2015 
 
 Computer software          16,634        (15,391)      1,243 
 Computer equipment         64,328        (40,665)     23,663 
 Furniture and fittings     54,864        (35,843)     19,021 
 Office equipment           39,003        (20,103)     18,900 
 Renovation                 58,068        (39,793)     18,275 
 
 
                           232,897       (151,795)     81,102 
 
 
 
 2014 
 
 Computer software          15,334    (12,984)    2,350 
 Computer equipment         51,450    (34,183)   17,267 
 Furniture and fittings     54,864    (30,357)   24,507 
 Office equipment           39,003    (16,203)   22,800 
 Renovation                 58,068    (33,986)   24,082 
 
 
                           218,719   (127,713)   91,006 
 
 
   7.      INTANGIBLE ASSETS 
 
                                The Group 
                  Note      2015        2014 
                             MYR         MYR 
 
 Development 
  costs             a       487,385     473,903 
 Intellectual 
  property          b     2,233,103   2,000,000 
 
 
                          2,720,488   2,473,903 
 
 
   (a)    Development costs 
 
                                          The Group 
                                        2015      2014 
                                        MYR        MYR 
 
 Development costs, at cost 
 At 1 January                         668,086     396,770 
 Addition during the year             163,857     271,316 
 
 
 At 31 December                       831,943     668,086 
 
 
 Less: Accumulated amortisation 
 At 1 January                       (194,183)    (77,202) 
 Amortisation for the financial 
  year                              (150,375)   (116,981) 
 
 
 At 31 December                     (344,558)   (194,183) 
 
 
                                      487,385     473,903 
 
 

The development costs mainly consist of staff costs. Development costs principally comprise internally generated expenditure on development costs on major portal development project, namely "DagangHalal.com" where it is reasonably anticipated that the costs will be recovered through future commercial activity.

   (b)    Intellectual property 
 
                              The Group 
                            2015      2014 
                            MYR        MYR 
 
 Cost 
 At 1 January           2,000,000           - 
 Addition during 
  the year                705,556   2,000,000 
 Disposal during                -           - 
  the year 
 
 
 At 31 December         2,705,556   2,000,000 
 
 
 Less: Accumulated 
  amortisation 
 At 1 January                   -           - 
 Amortisation 
  for the financial 
  year                  (472,453)           - 
 
 
 At 31 December         (472,453)           - 
 
 
                        2,233,103   2,000,000 
 
 

The intellectual property of the Group and DagangHalal Sdn. Bhd. at the end of the reporting period relates to a software, namely "Halal Verified Engine".

   8.      TRADE RECEIVABLES 
 
                                           The Group 
                                         2015       2014 
                                          MYR        MYR 
 
 
 
 Trade receivables                    3,634,448     956,225 
 Less: Allowance for impairment 
  losses                            (1,645,885)   (218,033) 
 
 
                                      1,988,563     738,192 
 
 Allowance for impairment 
  losses:- 
 At 1 January                         (218,033)   (158,423) 
 Addition during the financial 
  year                              (1,492,352)    (59,610) 
 Reversal during the financial           64,500          - 
  year 
 
 
 At 31 December                     (1,645,885)   (218,033) 
 
 

The Group's normal trade credit term is 30 days (2014 - 30) days. Other credit terms are assessed and approved on a case-by-case basis.

   9.      AMOUNT OWING BY HOLDING COMPANY 

The amount owing is non-trade in nature, unsecured, interest-free and repayable on demand. The amount owing is to be settled in cash.

   10.    AMOUNT OWING BY A SUBSIDIARY 

The amount owing is non-trade in nature, unsecured, interest-free and repayable on demand. The amount owing is to be settled in cash.

   11.    AMOUNTS OWING BY/(TO) A RELATED PARTY 

The amounts owing are non-trade in nature, unsecured, interest-free and repayable on demand. The amounts owing are to be settled in cash.

   12.    SHARE CAPITAL 

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The Group's exposure to credit risk, or the risk of counterparties defaulting, arises mainly from trade and other receivables. The Group manages its exposure to credit risk by the application of credit approvals, credit limits and monitoring procedures on an ongoing basis. For other financial assets, the Group minimises credit risk by dealing exclusively with high credit rating counterparties.

The Group establishes an allowance for impairment that represents its estimate of incurred losses in respect of the trade and other receivables as appropriate. The main components of this allowance are a specific loss component that relates to individually significant exposures, and a collective loss component established for groups of similar assets in respect of losses that have been incurred but not yet identified (where applicable). Impairment is estimated by management based on prior experience and the current economic environment.

   (i)     Credit Risk Concentration Profile 

The Group's major concentration of credit risk relates to the amounts owing by three (3) (2014 - five (5)) customers, which constituted approximately 80% (2014 - 61%) of its total trade receivables as at the end of the reporting period.

In addition, the Group also determines concentration of credit risk by monitoring the geographical region of its trade receivables on an ongoing basis. The credit risk concentration profile of trade receivables at the end of the reporting period is as follows:-

 
                   The Group 
                2015       2014 
                 MYR        MYR 
 
 Malaysia       327,146   716,442 
 Thailand     1,069,917    12,000 
 China          375,000         - 
 Japan          216,500         - 
 Others               -     9,750 
 
 
              1,988,563   738,192 
 
 
 
   (ii)    Exposure to Credit Risk 

At the end of the reporting period, the maximum exposure to credit risk is represented by the carrying amount of each class of financial assets recognised in the statement of financial position of the Group after deducting any allowance for impairment losses.

   (iii)   Ageing analysis 

The ageing analysis of the Group's trade receivables at the end of the reporting period is as follows:-

 
                                 Gross        Individual     Carrying 
 The Group                         Amount     Impairment       Value 
                                     MYR          MYR           MYR 
 2015 
 
 Not past due                     118,000                -     118,000 
 
 Past due: 
 
   *    less than 3 months         24,575                -      24,575 
 
   *    over 3 months           3,491,873      (1,645,885)   1,845,988 
 
 
                                3,634,448      (1,645,885)   1,988,563 
 
 
 
                                 Gross        Individual     Carrying 
 The Group                         Amount     Impairment      Value 
                                     MYR          MYR          MYR 
 2014 
 
 Not past due                     562,702                -    562,702 
 
 Past due: 
 
   *    less than 3 months        169,290                -    169,290 
 
   *    over 3 months             224,233        (218,033)      6,200 
 
 
                                  956,225        (218,033)    738,192 
 
 

At the end of the reporting period, trade receivables that are individually impaired were those in significant financial difficulties and have defaulted on payments. These receivables are not secured by any collateral or credit enhancement.

The Group believes that no additional impairment allowance is necessary in respect of trade receivables that are past due but not impaired because they are companies with good collection track record and no recent history of default.

   (c)      Liquidity Risk 

Liquidity risk arises mainly from general funding and business activities. The Group practises prudent risk management by maintaining sufficient cash balances.

Maturity Analysis

The following table sets out the maturity profile of the financial liabilities at the end of the reporting period based on contractual undiscounted cash flows (including interest payments computed using contractual rates or, if floating, based on the rates at the end of the reporting period):-

 
 
                    Weighted 
                    Average                 Contractual 
                   Effective    Carrying    Undiscounted    Within 
 The Group            Rate       Amount      Cash Flows     1 Year 
                       %           MYR          MYR           MYR 
 
 2015 
 
 Non-derivative 
  Financial 
  Liabilities 
 Trade payables        -            6,584          6,584       6,584 
 Other payables 
  and accruals         -        2,358,557      2,358,557   2,358,557 
 Amount owing 
  to a related 
  party                 -          15,000         15,000      15,000 
 Amount owing 
  to a director        -            6,000          6,000       6,000 
 
 
                                2,386,141      2,386,141   2,386,141 
 
 
 2014 
 
 Non-derivative 
  Financial 
  Liabilities 
 Trade payables        -           18,475         18,475      18,475 
 Other payables 
  and accruals         -          971,897        971,897     971,897 
 Amount owing 
  to a director        -          661,744        661,744     661,744 
 
 
                                1,652,116      1,652,116   1,652,116 
 
 
 

22.2 CAPITAL RISK MANAGEMENT

The Group manages its capital by maintaining an optimal capital structure so as to support its businesses and maximise shareholders' value. To achieve this objective, the Group may make adjustments to the capital structure in view of changes in economic conditions, such as adjust the amount of dividend payment, return of capital to shareholders or issuing new shares.

The Group manages its capital based on debt-to-equity ratio. The debt-to-equity ratio is calculated as net debt divided by total equity. The Group includes within net debt, loans and borrowings from financial institutions less cash and cash equivalents. The Group has no external borrowings. The debt-to-equity ratio is not presented as it does not provide a meaningful indicator of the risk of borrowings.

There was no change in the Group's approach to capital management during the financial year.

22.3 CLASSIFICATION OF FINANCIAL INSTRUMENTS

 
                                The Group 
                            2015        2014 
                             MYR         MYR 
 Financial asset 
 
 Loans and Receivables 
  Financial Assets 
 Trade receivables        1,988,563     738,192 
 Other receivables 
  and 
  deposits                   61,235     123,255 
 Amount owing by 
  holding                   852,738           - 
  company 
 Amount owing by                  -           - 
  a subsidiary 
 Amount owing by 
  a related 
  party                     110,133     871,877 
 Cash and bank 
  balances                   28,616      81,986 
 
 
                          3,041,285   1,815,310 
 
 
 Financial liability 
 
 Other Financial 
  Liabilities 
 Trade payables               6,584      18,475 
 Other payables 
  and accruals            2,358,557     971,897 
 Amount owing to             15,000           - 
  a related party 
 Amount owing to 
  a director                  6,000     661,744 
 
 
                          2,386,141   1,652,116 
 
 

22.4 FAIR VALUE INFORMATION

The carrying amount of the financial assets and financial liabilities reported in the financial statements approximated their fair value.

The fair values of the financial assets and financial liabilities maturing within the next 12 months approximated their carrying amounts due to the relatively short-term maturity of the financial instruments. These fair values are included in level 2 of the fair value hierarchy.

   23.       SIGNIFICANT EVENTS DURING/OCCURRING AFTER THE REPORTING PERIOD 

(a) On 3 December 2015, DagangHalal Sdn. Bhd. and its subsidiary, DagangAsia Net entered into an investment agreement ("IA") with Malaysian Technology Development Corporation Sdn. Bhd. ("MTDC") which allow MTDC to subscribe for 5,400,000 Series A redeemable convertible preference shares ("RCPS") of DagangAsia Net in accordance with the terms and conditions of the IA.

On 22 January 2016, DagangAsia Net issued 5,400,000 RCPS to MTDC with a total consideration of RM5,400,000.

(b) On 26 February 2016, DagangHalal Sdn. Bhd. increased its issued and paid-up share capital from RM8,000,003 to RM11,767,619 by way of an issuance of 3,767,616 new ordinary shares of RM1 each for cash at par for the purpose of working capital.

The new ordinary shares issued rank pari passu in all respects with the existing ordinary shares of DagangHalal Sdn. Bhd.

(c) On 31 March 2016, MTDC, DagangAsia Net and DagangHalal Sdn. Bhd. entered into a share exchange agreement ("SEA") pursuant to which MTDC agreed to transfer its 5,400,000 RCPS in DagangAsia Net to DagangHalal Sdn. Bhd. in consideration for the allotment and issuance of 5,339,829 ordinary shares in the capital of DagangHalal Plc ("DHPLC") to MTDC.

DagangHalal Sdn. Bhd. issued 1,209,600 new ordinary shares of RM1 each at par to DHPLC in consideration for the transfer of 5,400,000 RCPS from MTDC to DagangHalal Sdn. Bhd. and the issuance of 5,339,829 ordinary shares in DHPLC to MTDC.

The new ordinary shares issued rank pari passu in all respects with the existing ordinary shares of DagangHalal Sdn. Bhd.

This information is provided by RNS

The company news service from the London Stock Exchange

END

FR WGUMCAUPQGCU

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