FY 2012 Annual Report - Orascom Development

2012 Annual Report 2
Annual Report
2012 Company Developments

2012 Annual Report 1
Contents
1. Orascom Development in 2012
1.1
1.2
1.3
Key Events
About Orascom Development
Destinations’ Map
2
4
6
2. Board and Management Statements
2.1
2.2
2.3
Letter to Shareholders
CEO’s Statement
CFO’s Comment
8
10
12
3. Business Segments
3.1
3.2
3.3
3.4
Hotels
Real Estate and Construction
Destination Management
Other Segments
14
16
18
20
4. Countries
4.1
4.2
4.3
4.4
4.5
4.6
4.7
4.8
4.9
Egypt
UAE
Jordan
Oman
Switzerland
Morocco
Montenegro
United Kingdom
Romania
24
34
36
38
44
46
48
50
51
5. Corporate Governance
5.1
5.2
5.3
5.4
5.5
5.6
5.7
5.8
5.9
Group Structure and Significant Shareholders
Capital Structure
Board of Directors
Executive Management
Compensation, shareholdings and loans
Shareholders’ participation
Changes of control and defense measures
External Auditors
Information Policy
52
54
56
62
64
65
65
66
67
6. Investor Information
68
7. Consolidated Financial Statements 2012
Orascom Development Holding AG
7.1
7.2
7.3
7.4
7.5
Consolidated statement of comprehensive income
Consolidated statement of financial position
Consolidated statement of changes in equity
Consolidated statement of cash flows
Notes to the consolidated financial statements
F-3
F-5
F-7
F-8
F-10
8. Financial Statements 2012
Orascom Development Holding AG
8.1
8.2
8.3
8.4
8.5
Income statement
Statutory balance sheet
Statement of changes in equity
Cash flow statement
Notes to the financial statements
F-85
F-86
F-87
F-88
F-89
9. Glossary of Terms 168

2 Orascom Development 2012 Annual Report 3
1. Orascom Development in 2012
1.1 Key Events
January
April
July
October
El Gouna hosted five soccer camps, promoting the destination as a
professional training location for European and local soccer clubs.
From 8-13 April El Gouna hosted the international squash open, one of the
most important PSA World Tour Events.
Salalah Beach becomes an operating destination with the opening of the Juweira
Hotel. Ahmed El Shamy appointed new CFO of Orascom Development.
Inauguration of the satellite campus of Technische Universität Berlin marks
educational milestone for El Gouna.
February
May
August
November
Several hotels in El Gouna and Taba Heights named in TripAdvisor
Travellers` Choice Awards.
Signed management agreements with Club Med and Melia to develop a
hotel in our destination Chbika, Morocco.
Signed management agreement with Swedish company SkiStar to operate
the ski arena Andermatt-Sedrun.
Completion of core and shell of the first villa in Andermatt, construction
work of the first two apartment houses on the Podium is well under way.
March
June
September
December
Orascom Development celebrated the soft opening of the marina
in Jebel Sifah.
Opening of the golf driving range in Luštica, Montenegro, with Gary Player
being awarded to design the future golf course.
Successful sale of 73 apartments ensures completion of The Chedi
Andermatt on time.
Stuart N. Siegel appointed new Chief Real Estate Officer with more than
25 years of experience in the real estate industry.

4 Orascom Development 2012 Annual Report 5
1.2 About Orascom Development
Orascom Development is a leading developer of fully integrated destinations that include hotels, private villas and apartments, leisure
facilities such as golf courses, marinas and supporting infrastructure. Orascom Development’s diversified portfolio of destinations
is spread over multiple jurisdictions such as Egypt, UAE, Jordan, Oman, Switzerland, Morocco, Montenegro, United Kingdom and
Romania. Orascom Development has a dual listing, with a primary listing on the SIX Swiss Exchange and a secondary listing on the
EGX Egyptian Exchange
Sold Real Estate Units ca. 14,000
during the last 15 years
Number of Tourists 496,240
in our Destinations in 2012
Five years key financial information Orascom Development Holding AG (numbers in CHF million):
Income Statement 2008 2009 2010 2011 2012
Revenue 568.2 586.1 516.1 253.8 271.9
Gross Profit 162.5 196.3 175.4 19.7 21.3
% revenue 29% 33% 34% 8% 8%
EBITDA (Reported) 175.0 214.6 178.1 -40.0 -52.1
% revenue 31% 37% 35% -16% -19%
Net Profit 1 96.3 106.5 94.9 -69.7 -97.2
Jobs created 346
in El Gouna in 2012
Of our hotels are
62%
certified with Green Stars
Balance Sheet 2008 2009 2010 2011 2012
Total Assets 1,659.7 1,885.6 2,093.4 2,083.2 2,082.6
PP&E 2 856.5 957.5 926.1 969.4 1,003.0
Number of Permanent
Residents
22,000
in El Gouna
Present in
9
Countries
Equity 3 947.0 1,065.4 1,193.1 1,095.2 977.9
% of total assets 57% 57% 57% 53% 47%
Interest-bearing debt 375.1 388.2 511.8 536.2 603.9
% of total assets 23% 21% 24% 26% 29%
Net debt 197.9 310.3 235.3 456.8 502.2
76.4
16.5
31.4 Egypt
29.5
Hotels
Oman
Real Estate and Construction
17.6
United Arab Emirates
Revenue Split by
Destination Management
Revenue Split
Business Segment
by Country
Jordan
147.6
(CHFm)
Other Operations
(CHFm)
Switzerland
Others
4.1
0.2
9.8
210.7
Cash Flow Statement 2008 2009 2010 2011 2012
Operating cash flow⁴ 50.4 82.8 126.1 -181.3 -14.5
Payments for PP&E 208.6 187.7 273.1 92.2 104.1
Per Share Data (CHF) 2008 2009 2010 2011 2012
Earnings per share (EPS) 5 4.33 4.59 3.88 -2.46 -3.41
Net asset value per share (NAV) 34.57 37.40 35.29 29.93 25.99
Dividend per share (DPS) 6 0.50 0.65 0.65 - - 7
Operating Destinations 6
as per end 2012
Number of employees 14,750
as per end 2012
Owner of 29
Hotels
Number of Hotel Rooms
6,654
Share Data 2008 2009 2010 2011 2012
Nominal value of shares (CHF) 25.00 24.50 23.85 23.20 23.20
Weighted average number of shares outstanding 22,219,128 23,219,317 24,478,213 28,328,422 28,516,898
Number of shares issued 23,219,658 23,219,658 28,213,118 28,543,147 28,543,147
1- After non controlling interest
2- Property, Plant & Equipment
3- Shareholder`s Equity before non-controlling interests
4- After interest and taxes
5- Basic and diluted
6- Par value reduction
7- Subject to the decision of the Annual General Meeting on 13 May 2013
Revenues 272
CHF million
More than
20 years
development experience

6 Orascom Development
2012 Annual Report 7
1.3 Destinations’ Map
49.7
million m 2
0.3
million m 2
22.8
million m 2
1.5
million m 2
Egypt
U.A.E.
Oman
Switzerland
Operating Destination
The Cove
Operating destination
El Gouna
Taba Heights
Haram City
Developing destination
Amoun Island
Fayoum
Makadi
Qena Gardens
Operating Destination
Jebel Sifah
Salalah Beach 1
Developing destination
As Sodah Island
Destination in the pipeline
City Walk, Muscat 2
Developing destination
Andermatt Swiss Alps
15.0
million m 2
6.9
million m 2
6.6
million m 2
3.1
million m 2
Morocco
Montenegro
United Kingdom
Romania
105.8
million m 2
total area
15.5
million m 2
completed
15%
completed
Developing destination
Chbika
Developing destination
Luštica Development
Destination in the pipeline
Eco-Bos
Destination in the pipeline
Constanta
Any plot of land, developed or undeveloped, which is under the direct or indirect possession of Orascom Development by virtue of lease, usufruct and/or ownership rights and over which Orascom
Development may have further rights to develop, fully own, lease to third parties, sell to third parties, grant sub-usufruct rights to third parties, or otherwise dispose to third parties. Each plot of land is governed
by the respective agreement between Orascom Development (directly or indirectly) and the respective governmental entity, shareholders, and/or investors.
1 The discrepancy between the land size of the Salalah Beach project reflected in this year’s Annual Report as compared to previous years is due to our earlier reliance on the initial agreement (reflected in
the initial master plan) between Orascom Development and the Ministry of Tourism. It was initially agreed that Orascom Development would be granted 25.1 million square meters of land. However, the final
arrangement was to grant us the 15.6 million square meters as reflected in the Development Agreement and the final master plan. Orascom Development and the Government of the Sultanate of Oman
agreed to later discuss the possibility of acquiring the remaining land to develop a housing project.
2 An understanding has been reached between Orascom Development and the government of Oman in 2007, however no official land has been allocated to Orascom Development yet.

8 Orascom Development 2012 Annual Report 9
2. Board and Management Statements
2.1 Letter to Shareholders
Dear Shareholders,
Samih O. Sawiris
Chairman of the Board of Directors
Despite the challenging market environment,
Orascom Development offers an attractive
real estate and hotels mix in unique locations
and customers will ultimately reward our
offering over time.
As I wrote to you last year, Orascom Development started to adapt
its business model to counteract the adverse effects of the fragile
macroeconomic environment and unstable political situation in
the MENA region. During the period under review, we analyzed
several options for each of our destinations to embark on a more
capital-light growth path. We established encouraging partnerships
to expand projects as planned but with less financial commitments
from our side and at the same time succeeded to turn some of
these partnerships into first visible results. During September, we
achieved to sell 73 apartments in The Chedi Andermatt to Acuro
Immobilien AG, which secured the completion and opening of the
hotel for December this year.
In order to further streamline our business and to focus on our core
competencies, we decided to divest the tour operations business and
signed a sale and purchase agreement in November to sell further
stakes in companies operating in this segment.
We continuously reviewed our capital expenditures and recurring
costs based on achievable cash flows and have identified a portfolio
of non-strategic assets which we are going to divest over the next 24
months.
Board of Directors
At the previous and fourth Annual General Meeting in Altdorf,
Switzerland, on May 7, 2012 all members of the Board of Directors,
with the exception of Amr Sheta who left Orascom Development to
pursue business opportunities outside of the company, stood for reelection
and were confirmed in their office for a further year.
In light of the results 2012, the Board of Directors will propose to the
fifth Annual General Meeting on March 13, 2013 to pay no dividend.
Executive Management
In order to respond to the changed market environment we
strengthened the Executive Management team. Effective July 2012,
Ahmed El Shamy who has a track record in private equity in
the MENA region was appointed Chief Financial Officer. His
predecessor Mahmoud Zuaiter, whose career spans 14 years in the
hotel industry, became Chief Hotel Officer. In addition, Stuart Siegel
was appointed Chief Real Estate Officer. He has vast experience
in the real estate business and served for more than 15 years as
President and CEO of Sotheby’s International Realty. Furthermore,
the Board of Directors appointed Aly Elhitamy as new member of
the Executive Management responsible for Egypt. Aly Elhitamy is
Orascom Development’s Managing Director of Egypt and Chief
Construction Officer. The assignment of responsibility to the new
members underscores the relevance that they have for our company.
The new Executive Management now contains seven members. We
believe that the appointments enable us to improve the performance
of Orascom Development in the coming years.
Significant events after the balance sheet date
On March 26, 2013, the Board of Directors decided to improve
the capitalization of Orascom Development’s Swiss subsidiary
Andermatt Swiss Alps (ASA). As a result of the transaction, I will
become majority shareholder with a 51% share by converting my
loans to Orascom Development into ASA equity, and will act as
new Executive Chairman of ASA. Orascom Development remains
shareholder with a 49% share. Furthermore, I will invest at least
CHF 150 million of new equity or subordinated loans into ASA in
order to secure funding of the critical size of the resort in Andermatt
until 2017.
The transaction will release Orascom Development from further
capex spending in Andermatt and significantly reduce debt levels.
Furthermore I remain firmly committed to fully finance the expected
operating cash deficit of Orascom Development of up to CHF 60
million in 2013.
Outlook for 2013
For 2013, we expect that the political environment will remain unstable
in many regions in the Middle East. However, our destinations
especially on the Red Sea and in the United Arab Emirates are
affected only to a limited extent because of their safety and security.
Therefore, tourists from the MENA region and Europe continue
to visit our towns in good numbers which enables us to generate
free cash flows from these operations. Sales of secondary homes
depend on the general economic environment, the location and
the funding schemes available. In this regard, the conditions have
not changed materially in the last months, but we remain cautiously
optimistic regarding real estate sales for 2013. In addition, the Board
has mandated the management of Orascom Development to put
a stronger focus on cost reduction across our destinations and
business segments to prepare the company for the future. We believe
that Orascom Development offers an attractive mix of real estate in
unique locations, and customers will ultimately reward our offering
over time. More than once, Orascom Development has proved to be
able to adapt to difficult market conditions and to initiate change to
undermine its position as a leading town developer. Personally, I am
convinced that we can transform the Group to a position of former
strength, thereby creating long-term value for both our stakeholders
and you, our shareholders. The Board of Directors likes to thank all
employees for their contribution and efforts to advance our company
in 2012. We also like to express a special thanks to our shareholders
for their continued support of Orascom Development, as well as to
our clients, suppliers and business partners for the trust and confidence
they have placed in our company.
Samih O. Sawiris
Chairman of the Board of Directors

10 Orascom Development 2012 Annual Report 11
2.2 CEO’s Statement
Dear Shareholders,
Gerhard Niesslein
Chief Executive Officer
In the year 2012 we advanced the development
and funding of our destinations, adopted our
business model to focus on capital-light growth
and continued to optimize internal structures
and processes.
The year 2012 was another challenging year for Orascom
Development, but we managed to make important steps forward in
many business areas. We were able to increase tourist inflows into
our destinations by about 10% to almost half a million, managed to
raise hotel room rates, continued construction works as planned,
and our combined real estate efforts resulted in significantly higher
sales than in the year before. Still, we operated another year under
adverse market conditions with a restrained European economy and
an unstable situation in the MENA region. Against this backdrop we
advanced the development and funding of our destinations, adopted
our business model to focus on capital-light growth and continued to
optimize internal structures and processes.
Steady development progress in several destinations
Our destinations made significant progress during the last year.
A milestone was reached in October 2012 when the Technische
Universität Berlin opened its satellite campus in El Gouna. The first
branch outside of Germany offers three master studies for sustainable
town development and marks an essential milestone of education
as well as of sustainable development in Egypt and will support the
promotion of El Gouna as a self-sufficient town.
In Taba Heights the marina was successfully reopened in September
2012 which allows guests to visit Jordan and the ancient city of
Petra, one of the most popular tourist attractions in the region. The
reopening is a good example of effective collaboration between
Orascom Development and various ministries to support tourism in
Egypt and was a turning point in terms of tourist inflows into Taba.
After several years of development and construction in Oman,
we finally celebrated the opening of the marina in Jebel Sifah.
Furthermore the Juweira hotel in Salalah Beach opened its doors
during summer 2012.
In our Swiss destination Andermatt we successfully sold 73
apartments to Acuro, a real estate investment vehicle, while we
retained ownership of the Chedi Hotel which will open in December
2013. During November 2012, we finished the core and shell of
the first villa while construction of the first two apartment houses is
well underway. Additionally, we completed the friendly tender offer
to the shareholders of the two local ski operators and reached an
agreement with the environmental associations to further expand
and upgrade the ski arena Andermatt-Sedrun. We expect to start
construction for the ski arena already by the end of this year.
Increased focus on capital-light growth
While our business performance was not satisfactory, we improved
the operating cash flow during the period under review, which remains
one of the key priorities for 2013. At the same time, we plan to further
invest into our core destinations in Egypt and Oman. While we remain
committed to the Andermatt destination as an important minority
shareholder, the Andermatt Swiss Alps transaction releases Orascom
Development from further investment obligations. This significant
step improves the strategic flexibility of the Group and enables us to
focus our resources on our other destinations under development. By
engaging in additional relationships with strategic partners, we can
access a new range of funding options which we are confident to put
in place in the coming years.
Strengthened organization
Operationally, we became more efficient and effective in the last
twelve months as we launched a company-wide re-engineering
program named “Synchro“ to adapt our company’s structures and
processes to the challenging market environment and to increase
our overall performance in the mid-term. Part of this exercise
was to streamline our business and organization and to make use
of synergies and best practices across the group. Based on the
outcome of this project, several other initiatives have been launched
such as the planned set-up of shared service centers and the
alignment of cross functional workflows in project management,
planning and design, as well as construction and procurement.
The implementation of the established processes will continue this
year with company-wide training sessions and other measures to
continuously improve our performance.
Outlook for 2013
In 2013 we will continue to focus on the advancement and funding
of our destinations and further optimization of our internal structures
and processes. In this respect, we have no plans to add additional
development projects to our portfolio in the near future as our
existing land bank offers enough potential for organic growth for
the next decade.
At the end of 2012, the Group operated 6,654 hotel rooms. This
number will increase within the next 12 months through the upcoming
hotel openings in Switzerland (The Chedi Andermatt), Oman
(Rotana) and Egypt (Makadi near Hurghada on the Red Sea).
On behalf of the Executive Management, I like to take the opportunity
to thank all our employees for their commitment put forward during
the last year. I also like to thank our clients and business partners for
their confidence in Orascom Development. Last but not least, let
me thank you, our dear shareholders, for the trust you have placed
in the Group.
Gerhard Niesslein
Chief Executive Officer

12 Orascom Development 2012 Annual Report 13
2.3 CFO’s Comment
Dear Shareholders,
Ahmed El Shamy
Chief Financial Officer
Operating cash flow improved in 2012, but
results were impacted by extraordinary items.
In 2013 we will continue to focus on cost
savings and monetization efforts.
Despite the on-going challenging market environment in the
MENA region and the subdued economic situation in Europe,
Orascom Development achieved to increase revenues by 7.1% to
CHF 271.9 million, up from CHF 253.8 million a year ago. The
growth in revenues was mainly a result of higher income from the
hotel and real estate segment. Gross profit for the period under
review improved from CHF 19.7 million (7.7% margin) to CHF 21.3
million (7.8% margin).
Extraordinary non cash items such as impairments or transaction
losses of CHF 45.1 million and provisions for cancelled real estate
sales and doubtful collections of CHF 27.3 million negatively impacted
the income statement. Accordingly, the operating result (EBITDA)
in 2012 was a negative CHF 52.1 million (2011: CHF 40.0 million
loss). When adjusting for the above mentioned extraordinary items
EBITDA in 2012 was CHF 20.3 million (7.5% margin) compared to
CHF 42.6 million in 2011 (16.8% margin).
While group taxes were virtually zero last year, in 2012 some CHF
10.1 million of taxes were charged against the income statement.
Combined with higher finance costs this resulted in a net loss after
minorities for the period of CHF 97.2 million versus a loss of CHF
69.7 million in 2011.
Reported versus adjusted EBITDA 2012 (in CHF million)
40
20
0
-20
-40
-60
-52.1
EBITDA
reported
+45.1
Extraordinary
items
+27.3
Real Estate
provisions
20.3
EBITDA
Adjusted
Balance sheet
Total assets on the balance sheet at the end of 2012 were largely
unchanged at CHF 2,082.6 million compared to one year ago. The
increase in property, plant and equipment (infrastructure, hotels and
land belonging to the Group) is mainly due to our development in
Switzerland (The Chedi) and Oman (Rotana). The decline in the
accounts receivables balance is due to an improved real estate
collection process in Egypt and the provision for doubtful debts.
Despite ongoing construction works, the inventory increased only
slightly. Cash and cash equivalents at the end of the reporting period
reached more than CHF 100 million.
Borrowings increased by CHF 67.7 million to CHF 603.9
million due to the use of credit facilities from the group’s majority
shareholder to finance our construction and development activities.
Net debt accordingly was CHF 502.2 million, compared to CHF
456.8 million a year ago. After having successfully rescheduled the
2013 and 2014 loan maturities, the group is in discussions with its
major creditors to further optimize the funding structure.
As a consequence of the reported net loss shareholders’ equity
including non-controlling interests decreased from CHF 1,095.2
million to CHF 977.9 million. The equity ratio declined from 52.6%
to 47.0%, respectively. The ratio of net debt to equity increased from
41.7% a year ago to 51.4%.
Operating cash flow improving
In 2012 Orascom Development generated an operating cash
flow (after interest and taxes) of negative CHF 14.5 million,
which was an improvement versus the same period last year.
During 2012 we invested CHF 104.1 million as we continued
to develop our destinations in Switzerland and Oman and as we
maintained the standard in our Egyptian destinations. For 2013,
we expect a capex of around CHF 60-70 million, excluding
discretionary capex, to finish the completion of the Rotana
hotel in Oman and for several other smaller projects in Egypt.
Further focus on cost savings and monetization programs
An important element for 2013 is the implementation of a more
capital-light strategy. This is a combination of divestments of nonstrategic
assets to strengthen the balance sheet or cooperation
with external partners in order to complete and finance entire
development phases or certain project elements.
Besides working on those monetization efforts, the Group has
developed several other strategies to ensure that appropriate and
immediate actions are taken during those unstable times and to
ensure sufficient funding for our 2013 plans, one of which is the
postponement of certain planned capital expenditure investments.
On an operational level, we are now focusing on liquidating our
inventory of finished or close to be finished real estate units as well
as initiating several efficiency and cost saving initiatives that should
generate savings in overhead expenses, direct expenses and
interest expenses.
We expect 2013 to be a tough year , yet we are firm believers that all
our efforts in monetization and efficiencies will pay out . We will keep
monitoring the events as they unfold at the present and will continue
revamping our operations to be more efficient so that they are in the
right structure once this cycle reverses.
Ahmed El Shamy
Chief Financial Officer

14 Orascom Development 2012 Annual Report 15
3. Business Segments
3.1 Hotels
Hotel revenues increased by 8.2% due to higher room rates and slightly improved occupancy rates. Accordingly, the operating
result (EBITDA) increased to CHF 36.9 million.
Hotel revenues
CHF 147.6m
(2011: CHF 136.3m)
Share of Group revenue
54.3%
(2011: 53.7%)
2012
2011
2012
2011
Hotel market in 2012
The main factors opposing a stronger revival of the hotel market in Northern
Africa and in a number of countries in the Middle East were the continued political
volatility and a subdued economic situation in key European source markets.
In addition tour operators reduced flight capacities impacting occupancy
rates. Nevertheless, revenues per available room grew in the North African
market by 10% in 2012 and 6% in the Middle East.
Financial review 2012
Orascom Development’s hotel revenues grew by 8.2% from CHF 136.3
million a year ago to CHF 147.6 million in 2012 driven by three main factors:
First, our hotel room capacity increased by 1.0% from 6,589 rooms to 6,654
rooms due to the opening of the Juweira Hotel in Salalah Beach (64 rooms)
in Oman during 2012. Second, occupancy rates in our hotels increased
by one percentage point from 56% to 57%. And third we were able to
increase our average room rates by 5.3% compared to the prior year. In this
context it is worth mentioning that the share of hotels managed by Orascom
Development, in contrast to the share of international hotel chains, grew from
7.4% a year ago to 9.1% in 2012. While our key source markets remained to be
Western Europe (mainly Germany, France, Great Britain and BeNeLux), for
the first time business from Egypt became the number one in terms of number
of hotel guests and number two in terms of room nights because of shorter
stays. As a consequence of the revenue growth, the segment`s operating
result (EBITDA) increased from CHF 31.3 million in the prior year (23.0%
margin) to CHF 36.9 million (25.0% margin).
Country and destination performance varies
In our flagship destination El Gouna near Hurghada and in our other hotels
on the Red Sea client demand increased as customers started to significantly
differentiate between safe tourism areas and larger urban cities.
Taba Heights, Egypt, was negatively affected by reduced flight capacities which
led to a lower occupancy rate of 47%.
In our destination the Cove in UAE, 100 km away from of Dubai, the number of
hotel guests increased for the fourth consecutive year and a stellar occupancy
rate of 81% was reached despite a 16.0% increase in average room rates.
In Jordan occupancy rates reached 44%, slightly below the previous year. At the
same time, we managed to stabilize average room rates at the 2011 level.
In Oman we celebrated the opening of our second hotel, the Juweira Boutique
Hotel in Salalah Beach. As a consequence, the number of hosted tourists in
Oman increased compared to last year.
Reorganization of Management Team
Our hotel management team has been reorganized in the course of 2012 in
order to align our businesses closer to customer needs. Mahmoud Zuaiter,
former CFO of Orascom Development, was appointed Chief Hotel Officer.
In addition, three internationally recognized hospitality experts for the areas
Sales & Marketing, Development & Technical Services and Operations were
hired. We opened representative offices in Cairo, Muscat, Amman, London,
Cologne, Stockholm and Budapest to increase customer relationships. To
further increase our public and product awareness, Orascom Development
intends to intensify its social media efforts and customer events in the future.
Outlook for 2013
The first two months of the current business year registered a slight decrease
in revenues compared to the same period of last year. During the next 12
months our hotel portfolio will be expanded with the openings of The Chedi
Andermatt in Switzerland (December 2013: 89 rooms), our first hotel in
Makadi on the Rea Sea (December 2013: 288 rooms) and the Rotana Hotel
in Salalah Beach (expected December 2013: 399 rooms) which should
additionally increase revenues.
EBITDA
CHF 36.9m
(2011: CHF 31.3m)
2.8
18.5
1.8
Revenues by
Countries
(% total)
76.9
Egypt
UAE
Jordan
Oman
The Hotels segment KPIs, as of 31 December 2012
2012
2011
2
3
3
6
Number of Hotel Rooms
23
Occupancy rate
Egypt
Russia
Germany
France
Great Britain
Belgium
ARR
(CHF) 1
UAE
Netherlands
Jordan
Israel
Others
TRevPAR
(CHF) 2
Country Destination FY 2011 FY 2012 FY 2011 FY 2012 FY 2011 FY 2012 FY 2011 FY 2012
Egypt El Gouna 2,706 2,707 57% 63% 53 54 51 59
Taba Heights 2,365 2,365 54% 47% 50 53 52 48
Others Red Sea 830 830 55% 63% 34 30 36 40
Floating Hotels 27 27 25% 15% 595 625 226 132
UAE The Cove 346 346 77% 81% 139 161 182 215
Jordan Tala Bay 260 260 47% 44% 65 64 47 44
Oman Jebel Sifah 55 55 25% 33% 103 111 52 76
Salalah - 64 - 38% - 128 - 74
ODH Group 6,589 6,654 56% 57% 57 60 57 61
7
7
8
15
Nationality of
hotel guests
(% total)
1 ARR: Average Room Rate
2 TRevPAR: Total Revenue Per Available Room is similar to RevPAR but also takes into account other room revenues e.g. food and beverage, entertainment, laundry and other services.
11
14

16 Orascom Development 2012 Annual Report 17
3.2 Real Estate and Construction
The segment Real Estate and Construction achieved a high level of contracted sales in 2012, while the segment result was
affected by several extraordinary items.
Real Estate and Construction revenues
CHF 76.4m
(2011: CHF 67.0m)
2012
2011
Real Estate and Construction market in 2012
After several years of high inquiries for second homes in Egypt we witnessed
a lower demand from European buyers in 2012. In El Gouna for example
the share of local buyers accounted for about 80% in 2012 which is about
twice as high when compared to last years. We also saw an amount of real
estate owners returning their units, however we could retain customers by
shifting them towards lower priced units. In construction we completed the first
satellite campus of the Technische Universität Berlin in El Gouna and made
progress in our Makadi project on the Red Sea. Due to the subdued demand
for real estate in Egypt, the construction segment had to further reduce its
manpower capacities. In Oman we achieved the same level of real estate sales
as last year with two-thirds of our buyers being Omani citizens. Delectably
high was the demand in our European destinations such as Switzerland and
Montenegro with a regionally diversified buyer`s mix.
Financial review 2012
During 2012 Orascom Development sold 791 real estate units for the amount
of CHF 225.9 million compared to 898 units for the amount of CHF 131.5
million a year ago. The increase of 71.8% in terms of value was also a result
of our efforts to strengthen the on-site sales teams to create a more effective
international sales partner network. In terms of regional exposure the increase
mainly results from higher sales in Switzerland where we successfully sold 73
apartments in The Chedi Andermatt to Acuro and the fact that we started
sales in Montenegro.
For 2012 the segment Real Estate and Construction increased revenues
by 14.1% from CHF 67.0 million to CHF 76.4 million due to higher sales,
our efforts to accelerate construction works and deliveries and due to
the enhanced collection process. We as well increased the sale of extraworks
and upgrades for our sold units which positively affected revenues.
Throughout the year however, several extraordinary items impacted our
operating results. First, the increase in cost of goods sold particularly in
Oman affected segment results. Second, we built provisions in the amount
of CHF 27.3 million for cancelled real estate units and doubtful collections in
Oman and Egypt. Third, we had to reverse profits from the Iskan transaction
in Oman with an amount of CHF 7.4 million. The segment’s EBITDA of
negative CHF -11.1 million was a result of the aforementioned extraordinary
items. Adjusted for these extraordinary items, EBITDA in 2012 was CHF
23.6 million compared to CHF 27.6 million in 2011.
Outlook for 2013
During 2012, Stuart Siegel was appointed Chief Real Estate Officer. The main
focus for 2013 is to further develop a more flexible local sales strategy that
accommodates dynamic market cycles. In addition the real estate segment
focuses on expanding its sales distribution channels to reach new markets such
as Asia or the Gulf States. At the same time plans are set in place to ensure that
our products reflect current market needs by continuing to refine our pricing
and offering. Also, there will be more focus on offloading our existing inventory.
In Egypt, we will continue to develop programs that focus on incentives for
early settlement and will also provide financing programs as well as pay more
attention to the secondary resale and rental market. In terms of construction, we
will complete the hotel and residential units in Makadi including infrastructure
works as well as the Ancient Sands golf course including club house in El Gouna.
For Switzerland, we expect a positive impact from the development of the
destination’s infrastructure, the launch of the Chedi Hotel as well as from the
expansion and upgrade of the ski arena.
In Montenegro, construction for Luštica Bay will start with ten residential
buildings and we will develop an enhanced marketing strategy to raise the
value of Luštica Bay as a destination.
Real Estate prospects in Oman remain stable in 2013 while markets appear
to be slowly recovering. The finishing of sold properties continues and by the
middle of the year we expect to complete deliveries. Thereafter the focus will
be on selling inventory. No off-plan sales or new construction are planned
for this year, while we focus on further developing the Rotana hotel in Salalah
Beach for its completion in December.
Share of Group revenue
28.1%
(2011: 26.4%)
Adjusted EBITDA 1
CHF 23.6m
(2011: CHF 27.6m)
15.4
Value of
contracted
sales (CHFm) 2
163.9
19.4
14.2
1 Excluding provisions and Iskan profit elimination
2 Numbers excluding Haram City and Makadi
Egypt
Oman
Switzerland
Montenegro
2012
2011
2012
2011
The Real Estate Segment’s KPIs, as of 31 December 2012
3 3
Value of contracted units
(CHFm)
9
11
15
16
5 4
7
Contracted
89
Sales by Buyer
Nationality
(units) 2
Number of contracted
units
Value of reserved units
(CHFm)
Dutch
American
Belgian
French
Others
Number of reserved units
Country Destination FY 2011 FY 2012 FY 2011 FY 2012 2011 2012 2011 2012
Egypt El Gouna 24.8 19.4 47 61 10.2 9.3 18 24
Fayoum 1.5 - 12 - 0.1 - 1 -
Haram City 12.5 10.2 649 520 4.2 6.7 222 367
Makadi 3.9 2.3 96 54 0.4 0.1 9 5
UAE The Cove - 0.2 - 1 - - - -
Oman Jebel Sifah 7.4 10.5 15 15 0.4 - 1 -
Salalah Beach 5.9 3.7 20 8 0.2 - 1 -
Switzerland Andermatt 70.9 163.9 28 87 2.9 14.8 1 10
Montenegro Luštica Bay - 15.4 - 43 - 5.7 - 15
Morocco Chbika 4.5 0.2 31 2 1.6 1.7 15 11
Group Total 131.5 225.9 898 791 19.9 38.4 268 432
Group (excl. Budget Housing) 115.1 213.4 152 217 15.7 31.7 46 65
55
Swiss
Egyptian
Omani
British
Russian
Serbian

18 Orascom Development 2012 Annual Report 19
3.3 Destination Management
For 2012 revenues and operating result in Destination Management were slightly below last year.
Destination Management revenues
CHF 16.5m
(2011: CHF 17.7m)
2012
2011
Destination Management environment in 2012
The segment Destination Management felt the aftermath of the European debt
crisis and political events in the MENA region during 2012. In addition, real
estate owners spent less and used their properties less frequently than usual.
The rising awareness that our destinations have a high level of security
standards, however, stimulated demand.
Financial review 2012
Revenues in Orascom Development’s segment Destination Management
slightly decreased to CHF 16.5 million in 2012 (2011: CHF 17.7 million).
Around 60% of revenues were generated from utility functions such as
water or electricity generation, while the remaining 40% were derived from
commercial, urban and community services as well as infrastructure and
maintenance activities. The segment reported an operating loss (EBITDA) of
CHF 1.7 million in 2012.
Outlook for 2013
We will continue to strengthen our brand awareness and ensure that guests/
residents experience our “life as it should be” vision in our destinations. For
El Gouna and Taba Heights, it is vital to increase their brand awareness not
only in European key markets, but to further address secondary markets such
as Turkey, the Ukraine and other CIS countries. Additionally, we will continue
to further develop world class services and facilities. For Oman, we will work
to enforce Jebel Sifah’s positioning as a natural picturesque getaway offering
an adventurous experience including hiking, diving, water sports, whale and
dolphin watching which is unique in the Middle Eastern region. Similarly,
Salalah Beach will be branded as the only exclusive tropical destination in
the region.
Share of Group revenue
6.1%
(2011: 7.0%)
EBITDA
CHF -1.7m
(2011: CHF 0.1m)
6.6 4.3
2012
2011
2012
2011
2.5
2.0
7.0
As Destination Management encompasses every component of the
destination’s operation such as facility management, security, landscaping,
transportation, telecommunications and environmental services, the segment
name was changed from Town Management to Destination Management. The
segment’s composition itself has not been changed.
Key events
In April the El Gouna International Squash Open, one of the most important
tournaments on the PSA World Tour, took place in El Gouna. In October we
celebrated the opening of the Technische Universität Berlin satellite campus
in El Gouna. The satellite campus offers three master studies for sustainable
town development and marks a milestone of education as well as of sustainable
development in Egypt and will support the promotion of El Gouna as a selfsufficient
town.
24.9
Destination
Management
Revenues by
Destination
(% total)
64.2
Haram City
El Gouna
Taba
The Cove
12.0
16.6
Destination
Management
Revenues by
Service Type
(% total) 59.9
Utilities
Commercial Services
Infrastructure & Maintenance
Urban Services
Community Services
Others
Egypt`s Prime Minister Dr. Hisham Qandil and Orascom Development’s
chairman Samih O. Sawiris successfully reopened the marina of our destination
Taba Heights. The marina as a revitalising element for our destination allows
guests to visit Jordan and the ancient city of Petra, one of the most popular
tourist attractions in the region.
For Oman the year 2012 was characterized by the opening of the marina in
Jebel Sifah and the soft opening of the Juweira Hotel in Salalah Beach.

20 Orascom Development 2012 Annual Report 21
3.4 Other Segments
Land Sales
Occasionally, the Group sells land where there are no development obligations or where the Group has developed infrastructure in order to sell the land to
third-party developers. This establishes a reference point for the market price of our land bank. Revenues from such sales are included in our Land Sales segment.
Revenues from the sale of land, sale of land rights and the associated costs are recognized when land is delivered and the risk of ownership and control has been
transferred to the buyer.
Other operations
The segment Other operations combines those businesses of Orascom Development that are not classified in any of the other business segments. The segment
includes activities such as mortgage financing, rental of villas and apartments, hospital and educational services, marina, limousine rentals, laundry and other services.
During 2012, revenues of the segment Other operations increased by 2.9% from CHF 30.5 million to CHF 31.4 million, in particular due to our mortgage
business (Tamweel) which increased revenues above expectations.
Land Sales revenues
CHF 0.0m
(2011: CHF 2.3m)
2012
2011
Other operations revenues
CHF 31.4m
(2011: CHF 30.5m)
2012
2011
Share of Group revenue
0.0%
(2011: 0.9%)
2012
2011
Share of Group revenue
11.6%
(2011: 12.0%)
2012
2011
EBITDA
CHF -2.4m
(2011: CHF -0.9m)
2012
2011
EBITDA
CHF 15.7m
(2011: CHF 5.7m)
2012
2011
Note regarding the segment Tour Operations
During 2012 Orascom Hotels & Development S.A.E, a subsidiary of the Group entered into shares sale and purchase agreements with Garranah family. Besides reducing the ownership in several
investments in associates, the Group sold their remaining subsidiary operating in the tour operations business. Therefore the segment “Tour Operations” is considered a discontinued operation and is
presented accordingly. For further information also see the financial report, footnote 14, 20 and 36.

22 Orascom Development 2012 Annual Report 23
4. Countries
Orascom Development
Story
Over 20 years ago, Orascom Development’s founder Samih O.
Sawiris had a simple idea – to create a little piece of paradise on
the exquisitely desolate Red Sea coast. This initial thought evolved
over the years and became our principle. Today, Orascom
Development develops sustainable holiday destinations and
integrated towns offering hotels, residential units, and luxury
leisure facilities. We really created and continue to create new
communities.
Supported by our know-how and market expertise, we are able
to spot ideal land plots that can be successfully developed. We
assess and evaluate a variety of influencing factors from the ease
of accessibility, climate attractiveness, and surrounding cultural
attractions to support from the public and the authorities. This
procedure is sustainable and allows us to bring value to our land
bank step by step.
So far, we have successfully implemented this concept in Egypt,
Jordan, UAE, and Oman and are further expanding into the
Middle East and Europe. With many similarities across our towns,
each and every destination has its own identity, comparative edges
and as such offers a unique experience.
Key Facts
105.8
million m 2
29
6,654
9
Total Land bank
Operating Hotels
1 Nile Cruise Ship and 16 hotels are
managed by international or local
hotel management companies
Hotel Rooms
currently operating
Countries of Presence
Egypt, United Arab Emirates, Jordan,
Oman, Switzerland, Morocco,
Montenegro, United Kingdom, Romania
Orascom Development’s Land Bank
Destination Name Total land bank Completed
Under
construction
Under
development
Undeveloped
EGYPT 49.7 14.3 0.4 3.8 31.2
El Gouna 36.9 9.4 - 3.4 24.1
Taba Heights 4.3 2.5 - - 1.8
Haram City 2.6 1.9 0.2 - 0.5
Amoun Island 0.02 - - - 0.02
Fayoum 1.2 0.2 0.1 0.3 0.7
Qena Gardens 0.8 - - - 0.8
Makadi 3.8 0.3 0.1 0.1 3.2
UNITED ARAB EMIRATES 0.3 0.3 - - -
The Cove 0.3 0.3 - - -
JORDAN - - - - -
Tala Bay - - - - -
OMAN 22.8 0.9 0.2 4.8 16.9
Jebel Sifah 6.2 0.2 - 1.5 4.5
Salalah Beach 1 15.6 0.7 0.2 2.5 12.2
As Sodah Island 1.0 - - 0.8 0.2
City Walk 2 0.01 - - - 0.01
SWITZERLAND 1.5 - 1.3 0.1 0.1
Andermatt 1.5 - 1.3 0.1 0.1
MOROCCO 15.0 - - 3.0 12.0
Chbika 15.0 - - 3.0 12.0
MONTENEGRO 6.9 - - 0.2 6.7
Luštica 6.9 - - 0.2 6.7
UNITED KINGDOM 6.6 - - - 6.6
Eco-Bos 6.6 - - - 6.6
ROMANIA 3.1 - - - 3.1
Constanta 3.1 - - - 3.1
Total 105.8 15.5 1.9 11.9 76.5
Percentage of Total Land bank Size 15% 2% 11% 72%
1 The discrepancy between the land size of the Salalah Beach project reflected in this year’s Annual Report as compared to previous years is due to our earlier reliance on the initial agreement (reflected
in the initial master plan) between Orascom Development and the Ministry of Tourism. It was initially agreed that Orascom Development would be granted 25.1 million square meters of land. However,
the final arrangement was to grant us the 15.6 million square meters as reflected in the Development Agreement and the final master plan. Orascom Development and the Government of the Sultanate
of Oman agreed to later discuss the possibility of acquiring the remaining land to develop a housing project.
2 An understanding has been reached between Orascom Development and the government of Oman in 2007, however no official land has been allocated to Orascom Development yet.
Land categories
Definition
6
Operating Towns
El Gouna, Taba Heights, and Haram
City in Egypt, Jebel Sifah and Salalah
Beach in Oman and The Cove in U.A.E.
Total Land Bank
Completed
Under construction
Under development
Undeveloped
Any plot of land, developed or undeveloped, which is under the direct or indirect possession of Orascom Development by virtue of lease,
usufruct and/or ownership rights and over which Orascom Development may have further rights to develop, fully own, lease to third parties, sell
to third parties, grant sub-usufruct rights to third parties, or otherwise dispose to third parties. Each plot of land is governed by the respective
agreement between Orascom Development (directly or indirectly) and the respective governmental entity, shareholders, and/or investors
Any plot of land where infrastructure is completed and individual elements of the projects are completed
Any plot of land where infrastructure is completed and individual elements of the projects are under construction
Any plot of land where infrastructure is under construction but not yet completed
Any plot of land with zero infrastructure (raw land)

24 Orascom Development 2012 Annual Report 25
EL GOUNA, EGYPT
Operating Destination
Increased client demand for
El Gouna Hotels
Spotlight on kite surfing
Repeated visits of kite surfing world champions
such as Kristin Boese, raised public awareness for
El Gouna as a prime location for kite surfing events.
The hotel sector improved customer relationships
and strengthened its sales approach, driving more
business to the town. Occupancy rates increased to
63% in 2012 from 57% in 2011, making El Gouna
hotels among the best performing in the Orascom
Development portfolio.
Opening of satellite campus of
Technische Universität Berlin
In September, El Gouna achieved a new educational
milestone with the inauguration of the Technische
Universität Berlin El Gouna Campus. 30 students
were enrolled in the first semester.
El Gouna International Squash
Open Success
For the 2nd time El Gouna hosted the International
Squash Open. With the world’s top 16 players, live
international broadcasts, and remarkable audience
and viewership, El Gouna made itself a name in
hosting international events.
New attraction: El Gouna Water
Sports Complex covering 90,000 m 2
Opening in summer 2013, El Gouna is preparing
to welcome its latest attraction - El Gouna Water
Sports Complex, offering water ski and wake board
cableways facilities.

Key Facts
Story
36.9
million m 2
16
Total land
stretching along 10 km of beach and
spreading across 36 islands and
lagoons
Hotels
2,707 guest rooms
The catalyst and powerhouse behind the growth of Orascom
Development’s activities - El Gouna - started with a man’s search
for a perfect spot on the seaside. Over the course of 20 years,
the barren spot nourished, demand increased, and the community
grew into a fully fledged town.
With jobs on offer in the areas of construction, hospitality, service
and infrastructure management, El Gouna turned into a microeconomy.
Growing the critical mass to over 22,000 permanent
residents, El Gouna became an internationally well-known
destination.
Now El Gouna is a model of a self-sufficient and fully-integrated
resort town, illustrating the destination’s vision of “Life as it
should be”.
463 Commercial outlets
22,000 Permanent residents
Home to some of the world’s most reputable brands, El Gouna’s
facilities include a landing strip, three yacht marinas, an 18-hole
championship golf course - and another one under construction,
16 hotels, two spa outlets, a state-of-the-art gym, an international
standard hospital, a satellite campus of the Technische Universität
Berlin, a field study center of the American University in Cairo,
a German-Egyptian hotel school, a nursing institute, and an
international K12 School.
www.elgouna.com
2,790
Residential Units
sold since 1997 till 31 st of
December 2012

26 Orascom Development 2012 Annual Report 27
TABA HEIGHts, EGYPT
Operating Destination
Re-opening of Taba Heights marina
TripAdvisor Travellers’
Choice Awards 2012
In the TripAdvisor Travellers`Choice Awards 2012
several hotels in Taba Heights were awarded.
The marina in Taba Heights re-opened in September
which increased the attractiveness of the destination
among both Jordanian and European tourists.
The marina connects Tala Bay in Jordan with Taba
Heights in Egypt. Around 30,000 travelers used
the marina since it was re-inaugurated.
Marketing efforts bear fruit
Thanks to new partnerships with German Tour
Operators starting in fall 2012, Taba Heights could
increase the share of German guests in
the destination.
Ideal starting point for excursions
Taba Heights is the ideal starting point for cultural
excursions to the ancient city of Petra in Jordan or
St. Catherine’s Monastery on the Sinai Peninsula.
Jordanian travelers appreciate the ease of accessibility
and luxury offered by the Taba Heights hotels.
Taba Heights Golf course topranked
in the region
For another consecutive year in a row Taba Heights
Golf course was ranked among the top 5 golf
courses in the region by an independent website
dedicated to the best golf courses in the world
(top100golfcourses).

Key Facts
Story
4.3
million m 2
6
Total Land
private resort built along 5 kilometers
of natural beaches
Hotels
internationally branded with 2,365
guest rooms
Taba Heights emerges as a precious jewel in the stunning Sinai
Peninsula. Sprawling down a gentle slope framed by mountain
ranges and turquoise waters, the integrated upscale resort town
boasts breathtaking scenery and a supreme location with a view
of four countries: Egypt, Israel, Jordan, and Saudi Arabia.
It is an ideal tourist destination featuring six hotels, an uptown
village that is home to arts and crafts boutiques, a central square
where folklore shows and live music are staged, an 18-hole
championship golf course regarded as one of Egypt’s most
beautiful, the region’s first man-made salt cave and a five-star
water sports center.
107 Commercial outlets
With a fully functioning harbor operating as official port of entry to
Egypt, Taba Heights is a popular starting point for excursions to
UNESCO World Heritage sites such as the monastery of Saint
Catherine, the rose-red city of Petra, the desert of Wadi Rum, the
holy city of Jerusalem, and the Dead Sea.
www.tabaheights.com
4,000 Permanent residents

28 Orascom Development 2012 Annual Report 29
HARAM CITY, EGYPT
Operating Destination
Another year with more than 500
residential units sold
For the 5th consecutive year, Orascom Housing
Communities (OHC) sold more than 500 residential
units in the low income housing sector.
Social Mobility Initiative with
World Bank
During 2012 OHC worked with the World Bank
and the GSF to promote a social mobility concept,
focusing on modular expansion of smaller units into
larger ones.
Guarantee and Subsidy Fund activated
Activation of the Guarantee and Subsidy Fund (GSF),
a governmental low income housing program providing
mortgage subsidies, supported inventory sales.
OHC wins Cityscape Egypt award
In February OHC was awarded the Residential
Project Award for its flagship project Haram City by
Cityscape Egypt. This award is the fourth and most
recent acknowledgement for OHC’s efforts
in developing fully integrated cities.

Key Facts
Story
2.6
million m 2
Total land
Launched in 2007 as the first of its kind in Egypt, Haram City’s
award-winning model of affordable housing within a sustainable
and fully integrated township encourages social responsibility and
civil engagement.
10,000
Built Residential
units
89 Commercial outlets
Spanning over approximately 2.6 million square meters of land,
the project is now home to more than 30,000 residents. As a truly
integrated development, Haram City offers comprehensive
community facilities including schools, clinics, worship houses,
sporting amenities, a cinema, and 89 commercial outlets.
Beyond ensuring the town’s self-sustainability through employment
opportunities in commercial and industrial sectors, the city hosts
various projects designed to stimulate job creation and benefits
the overall community as well as underprivileged segments. In
order to improve the quality of education of the town students,
the Group subsidizes four public schools such as Haram City
Language School, making it more affordable for the enrolled
students to learn English, German, and Arabic.
www.orascomhc.com
30,000
Permanent residents
in our community

30 Orascom Development 2012 Annual Report 31
AMOUN ISLAND, EGYPT
FAYOUM, EGYPT
QENA GARDENS, EGYPT
Developing Destination
Developing Destination
Developing Destination
Story
Orascom Development entered a lease agreement with the Egyptian
Government in 2005 to develop the area into an exclusive luxury
boutique-style hotel. The project spans over 20,000 m 2 and is located
on a spectacular Nile river bank.
With 38 luxurious suites featuring private lounges and pools, an
exquisite restaurant, lounge bar, wine cellar, and a private library, plans
are set to have hotel management agreements with world-renowned
Cheval Blanc (Group LVMH).
Key Facts
Story
Story
20,000
m 2
Total Land
38
Planned Luxurious
suites
In appreciation of its proven development record in 1998 the
Egyptian Government awarded Orascom Development a total
land area of 1.2 million square meters.
Fayoum is located 100 km southwest of Cairo in an ideal location
overlooking the spiritual lake of Qarun. Plans are set to develop
Fayoum comprising the projects Byoum and Al Roboua in a luxury
residential community.
Following the success of Haram City, Orascom Housing Communities
was allocated 0.8 million m 2 of land in the Qena Governorate, Upper
Egypt, in 2010.
Committed to providing high-quality affordable housing units within
sustainable and fully-integrated townships in Egypt, Qena Gardens was
master planned to incorporate 8,000 residential units, school, clinics,
shopping areas, and an entertainment venue.
The master plan for Byoum includes a marina, a 4-star hotel, and 265
residential units, whereas its neighboring sister project, Al Roboua is set
to feature 36 stand-alone villas with supporting infrastructure.
Key Facts
Key Facts
1.2
million m 2
Total Land
0.2
million m 2
Completed Land
1
Planned Hotel
A 4-star hotel featuring
62 guestrooms
0.8
million m 2
Total Land
0.07
million m 2
Completed Land
8,000
Planned Units

32 Orascom Development 2012 Annual Report 33
MAKADI, EGYPT
ROYAL AZUR
& CLUB AZUR , EGYPT
ZAHRA OBEROI,
EGYPT
Developing Destination
Other Hotel
Other Hotel
High local market visibility
Hosting a mega event in cooperation with Vodafone
Egypt; Makadi is currently enjoying a PR boost on a local
level. The event was attended by around 80% of the
home owners and generated huge media coverage.
Story
Having paved the way with two decades of experience and
sound reputation, the Orascom Development business model has
evolved with Orascom Development and Management lending its
expertise to land owners in return for a stake in the proceeds of real
estate sales or a share of the operational revenue.
Story
Story
Makadi, Orascom Development and Management’s flagship
project, is settled in the heart of the Red Sea tourism hub located
only 30 kilometers away from Hurghada International Airport and
just a short drive from the bustling shopping and dining venues of
Hurghada and Sahl Hasheesh.
With a mission to provide upper middle class families the opportunity
to own a home at affordable prices, the town resort will feature, once
fully developed, a variety of residential units, a hotel, commercial and
entertainment areas, as well as all the supporting infrastructure and
services such as a school, a medical center, supermarket, laundries,
banks, worship areas, and transportation facilities. Makadi is also
home to the first sports club in the Hurghada area, allowing individuals
and families to benefit from a more active lifestyle.
Key Facts
The two hotels are located only a short drive away from Hurghada,
offering 830 guest rooms collectively and provide easy access to
most of the Red Sea’s world-class waterfront destinations.
Key Facts
Offering the highest standards of hospitality and service, the Zahra
Oberoi is described as one of Egypt’s most spacious cruise ships
with 27 cabins.
Recognized by the Egyptian Ministry of Tourism as the “Best Cruiser
on the River Nile,” the Oberoi Zahra is the only Nile Cruiser with a
full-service spa.
Makadi presents a secure and promising opportunity for both
homeowners and investors.
www.makadi-redsea.com
3.8
million m 2
Total Land
1,902
Sold Residential
units
Since 2010
1
3-star hotel
with 288 rooms
due to open in
December 2013
5
star hotel
Royal Azur
offering 491
guestrooms
4
star hotel
Club Azur
offering 339
guestrooms

34 Orascom Development 2012 Annual Report 35
THE COVE, U.A.E
Operating Destination
Story
Key Facts
A rising star in the region’s tourism industry, the northernmost emirate
of Ras Al Khaimah has a lot to offer to both tourists and investors.
Similarly, The Cove with its ideal location at the entrance of the
emirate, close proximity to both the international airport and Dubai,
made the development a regional investment and leisure attraction.
0.3
million m 2
Total Land
with 600 meters of private beach
Extending over about 300,000 square meters, The Cove overlooks
600 meters of private beach and comprises an internationally
renowned 5-star hotel operated by Rotana, exclusive real estate,
and a range of upscale services and amenities. State-of-the-art
leisure and urban facilities are within easy reach as the development
is in close proximity to two golf courses, several shopping malls and
supermarkets, international schools, and hospitals of international
standard.
1
A 5-star hotel
with 346 guestrooms
www.thecove-uae.com

36 Orascom Development 2012 Annual Report 37
TALA BAY, JORDAN
Other Hotels
Story
Key Facts
Tala Bay is one of the Group’s regional roll-outs of its business model
outside of Egypt. Situated on the Gulf of Aqaba making it an exquisite
getaway to the Northern Red Sea, the destination is built on a manmade
lagoon and is one of the largest tourism destinations in the
country.
1
Operating hotel
with 260 guestrooms
In Tala Bay, only 10 km away from the Aqaba International Airport,
Orascom Development owns and manages the Marina Town Plaza
Hotel which started operations in April 2008 encompassing 260
rooms.
Connected to Sinai in Egypt via the Taba Heights Marina, Tala Bay is
a tourist attraction for its proximity to Sinai’s cultural attractions and
the ancient town of Petra in Jordan.
www.talabay.jo

38 Orascom Development 2012 Annual Report 39
JEBEL SIFAH, OMAN
Operating Destination
Improved hotel performance
The 2011 opened Sifawy Boutique hotel (55 rooms)
witnessed in 2012, during its first full year of operations,
increased hotel occupancy rates and revenues.
Discussions about destination
upgrade
We expect that the start of the construction works of
the new road to Jebel Sifah, making it only 45 minutes
away from Muscat city center, as well as the ongoing
discussions around a regular fast ferry service tying
Seeb to Jebel Sifah will further increase demand for
our destination in Jebel Sifah.
Destination’s life more accentuated New real estate owners
The destination’s life became more accentuated
with the opening of the Jebel Sifah marina and the
fact that we increased occupancy levels within our
commercial shops.
During 2012 we continued to deliver further units
(3 villas and 34 apartments) to their respective owners.

Key Facts
Story
6.2
million m 2
6
1
Total Land
along 5 kilometers of beach front
Hotels
One existing 4-star and five
planned 5-star international
branded hotels
Planned golf course
an 18-hole golf course
Located on land that combines a modern spirit with traditional
hospitality, Jebel Sifah, Orascom Development’s third biggest
town offers 100% freehold property and the possibility for
expatriates to obtain official residency permits. This is making
Jebel Sifah a great opportunity for foreign and local investors alike.
Only an hour away from the Muscat city center, and stretching
across 5 km of beachfront, Jebel Sifah boasts a planned 950
residential units, an 18-hole PGA golf course, and a 84-berth
inland marina surrounded by a picturesque marina town. Orascom
Development currently operates the Sifawy Boutique Hotel, and
further plans to develop five 5-star hotels including some of
the world’s most prestigious brands, namely Four Seasons and
Rezidor Missoni. Restaurants, cafés, luxuriously-appointed spas,
and boutiques featuring the latest fashion complete the town’s
offerings.
www.jebelsifah.com
1
World Class Marina
opened March 2012

40 Orascom Development 2012 Annual Report 41
SALALAH BEACH, OMAN
Operating Destination
Soft opening of first hotel
The soft opening of our first hotel in Salalah Beach,
the Juweira Hotel with 64 rooms, took place in 2012;
and marked an important milestone for the project.
Delivery of further real estate units
During 2012 we delivered 7 villas and 39 apartments
to their respective owners. In addition we opened the
first fish restaurant in our destination.
Rotana Hotel
Construction works for our second hotel in Salalah
Beach, the Rotana Hotel are underway and we are
expecting the soft opening of the 399 rooms in
December 2013.
Salalah International Airport
Over the next decade tourism in Southern Oman
is forecasted to increase. To support this trend the
government of the Sultanate of Oman decided to
upgrade the airport in Salalah to have international
status. The foreseen opening is in 2014.

Key Facts
Story
15.6
million m 2
7
1
Total Land
boasting 8.2 kilometers of beach
located only 20 kilometers from Salalah
Airport and approximately 90 minutes
flight from most GCC countries
Planned hotels
one existing and 6 planned with
1,800 planned guestrooms
Marina
A 200-berth world-class marina
Offering a spectacular landscape of fertile plains, fresh water
springs, and lush coconut trees enhanced by the monsoon during
the summer, Salalah Beach is the Group’s first and the region’s
only tropical destination.
Located on the southern part of Oman in the Dhofar region,
Salalah Beach is a large family-oriented integrated tourism
complex boasting over 8 kilometers of beachfront on the Arabian
Sea as well as a man-made lagoon system extending the sea inland.
Once fully developed, it comprises high-end luxury apartments
and villas, restaurants and cafés, shopping and retail outlets, hotels
- ranging from boutique to five-star beach resorts, a 200-berth
inland marina, as well as two 18-hole PGA golf courses.
The various real estate options are all subject to a low-density
building policy that limits built-up areas to 25% while the remaining
75% are left to nature, properties are 100% freehold and come
with access to all the amenities of the destination including the
opportunity for expatriates to obtain official residency permits in
a tax-free country.
www.salalahbeach.com
Planned golf courses
2 18-hole golf courses

42 Orascom Development 2012 Annual Report 43
AS soDAH ISLAND, OMAN
CITY WALK, OMAN
Developing Destination
Destination in the Pipeline
Story
Located off the southern coast of Oman opposite Salalah Beach,
As Sodah is a secluded island covering a surface area of 11 million
square meters.
Set to be the region’s niche destination, As Sodah Island’s highlight
is planned to be a Cheval Blanc (Group LVMH) managed luxury
boutique hotel. A corresponding management agreement was
signed in 2009. The hotel spans an area of 1 million square meters
and features 32 exclusive pavilions, each having its own private
swimming pool and private access beach. The hotel’s master plan
also includes a main lodge and a spa.
Story
City Walk Muscat is the awaited vibrant Downtown City Complex
serving the cosmopolitan capital city of Oman, Muscat. The master
plan encompasses a modern administrative tower and a luxury
shopping mall. Furthermore, the project plan includes a five star hotel
with a capacity of 270 rooms.
An understanding has been reached between Orascom
Development and the government of Oman in 2007, however no
official land has been allocated to Orascom Development.

44 Orascom Development 2012 Annual Report 45
ANDERMATT, SWITZERLAND
Developing Destination
Development of ski arena Andermatt-
Sedrun progressed significantly
Throughout the year we acquired the local ski lift
operators Andermatt Gotthard Sportbahnen AG
and Sedrun Bergbahnen AG to develop the ski arena
Andermatt-Sedrun.
Hotel The Chedi Andermatt to open
in December 2013
At the same time, we finished large parts of the
façade works of The Chedi Andermatt and retained
ownership of the hotel which will open as planned in
December 2013.
We further signed in August a partnership and
management agreement with the Swedish company
SkiStar to operate the ski arena Andermatt-Sedrun.
Successful sale of The Chedi
Andermatt apartments (Real Estate)
In September we successfully sold 73 apartments
in The Chedi Andermatt complex to the real estate
investment vehicle Acuro Immobilien AG for a base
purchase price of CHF 122.7 million plus a variable
pricing component from sales proceeds.
Steady construction progress
achieved
Construction in Andermatt progressed swiftly. During
this past year we have almost completed the shell
and core of “Steinadler“ and “Hirsch” – our first two
apartment buildings and celebrated the topping-out
ceremony of the first villa.

Key Facts
Story
1.5
million m 2
6
490
Total Land
Planned Hotels
4- and 5-star hotels with a total of 844
guestrooms, with The Chedi Andermatt
expected to open in December 2013
Planned apartments
in 42 buildings
Strategically located halfway between Zurich and Milan, the village
of Andermatt nestles amid snowy mountaintops at an altitude
of 1,444 meters at the foot of the Gotthard Massif. Through the
current resort expansion, the winter sports location of Andermatt
is set to become an exclusive year-round holiday destination
whilst maintaining its original character.
Andermatt Swiss Alps will sustainably enhance the traditional
mountain village with numerous attractions. Tailor-made real
estate, hotel and leisure facilities will support the existing village.
In addition to new infrastructure, public facilities will be expanded
and modernized.
Andermatt offers many options for both the physically active and
those seeking pure relaxation, from an ecologically designed 18-
hole golf course meeting international tournament standards ideal
for outdoor summer activities, to modernized ski facilities linking
up with the neighboring ski area of Sedrun to form a 120-kilometer
ski domain. In December 2013, Andermatt is due to celebrate the
opening of its first hotel – The Chedi Andermatt.
www.andermatt-swissalps.ch
25
Planned
exclusive villas
1
Planned ski arena
Andermatt-Sedrun
Largest ski arena in Central Switzerland
once fully developed

46 Orascom Development 2012 Annual Report 47
CHBIKA, MOROCCO
Developing Destination
Marina
Nearly 75% of the marina basin works have been
finished as of end 2012.
Construction
Two on-site riads were intensively renovated and are
currently operating as the administration offices.
Club Med and Melia
During 2012 we signed management agreements
with Club Med and Melia regarding the management
of one of Chbika’s first-phase hotels.
Mansions
At the end of 2012 two mansions were fully
developed in our destination in Morocco.

Key Facts
Story
15.0
million m 2
8
1
Total Land
Planned Hotels
with 2,500 planned guestrooms
Planned
world-class marina
with a capacity of 100 berths and a
medina-style city center
Orascom Development is planning to turn 15 million square
meters of the land set amidst the sparkling shores of the Atlantic
Ocean and the smooth golden dunes of the Sahara Desert into
the country`s first self-sufficient and fully integrated town.
Struck by its ideal location directly in front of the Canary Island of
Fuerteventura, topographical splendor and ease of accessibility,
the Group master planned the area to become a modern oasis
of harmony characterized by a western, Moroccan cultural blend.
Home to eight planned hotels, 1,166 apartments and 685 villas,
atmospheric riads, and even customizable mansions in the Kosour
neighborhood, Chbika like all other Orascom Development signature
towns will feature state-of-art facilities including an 18-hole
championship golf course, a marina, shops, dining outlets, as well
as a medina-style handcraft center and a medical facility.
www.chbika.ma
1
Planned 18-hole
golf course

48 Orascom Development 2012 Annual Report 49
LUŠTICA BAY, MONTENEGRO
Developing Destination
Golf Course Driving Range opened
The opening of Luštica Bay’s golf course driving
range took place on July 10, 2012 in the attendance
of the course’s designer Gary Player.
Real Estate Off Market sales
Luštica Bay’s fully finished model apartment
appealed to potential clients boosting sales
and creating a diversified buyer’s nationality mix.
Almara Beach Club
The Golf Course is complemented by the Luštica
Bay Almara Beach Club attracting an exclusive highend
clientele.
Summer activities
The summer activities, Almara Beach Club, Golf
Driving Range, Bistro 19 as well as the site access
roads with the viewing platforms helped to give the
project a face and supported sales activities.

Key Facts
Story
6.9
million m 2
1
2
Total Land
Planned 18-hole
championship golf
course
designed by Gary Player
Planned world-class
marinas
on the Adriatic Sea with a total of
170 berths
Its unspoiled natural beauty and rich culture deeply rooted in
history made Montenegro one of the fastest growing tourism
destinations in Europe. With its picturesque location, inviting land
bank complemented by the Orascom Development expertise,
Luštica Bay is set to become a premium luxury holiday resort and
a fully-integrated, self-sufficient town offering guests and residents
a taste of lavishness and refinement unsurpassed in the region.
The planned 2,080 residential units and hotels will be
complemented by high-end leisure amenities including two
world-class marinas on the Adriatic Sea, an 18-hole championship
golf course designed by Gary Player, along with a downtown area
featuring year-round living facilities including shops, restaurants,
schools, medical services, and a conference center.
A philosophy honoring both the natural beauty and the cultural
heritage of the land is carried throughout the project’s planning,
execution, and long-term operation starting from the project’s
emblem to the eco-friendly designs and building methods
which allow the town to blend in smoothly with the backdrop of
the peninsula. The project will be the first certified eco-labeled
development in Montenegro.
www.lusticabay.com

50 Orascom Development 2012 Annual Report 51
ECO-Bos, UK
CONSTANTA, ROMANIA
Destination in the Pipeline
Destination in the Pipeline
Story
Selected for its track record in areas of community creation, real
estate and marina development, Orascom Development is the lead
partner in an ambitious scheme to turn six old, disused china clay
sites and the harbor into the region’s first purpose-built, sustainable
community in the heart of Cornwall.
Set to cover 6.6 million square meters, Eco-Bos will offer a mixed
portfolio of 5,000 real estate dwellings including affordable housing
and upscale residential units. These will be complemented by a
5-star hotel and a marina with a berth capacity of 125 vessels and a
variety of commercial operations. The Eco-Bos proposals are seen
as a rare opportunity to provide significant economic, social, and
environmental benefits by creating employment and helping to reenergize
the local community.
Story
In 2009, Orascom Development acquired land in Constanta
Romania covering an area of 2.5 million square meters with plans
to develop the first international budget housing town outside Egypt.
In 2010 and 2011, more plots of land were acquired increasing the
land bank size to 3.1 million square meters.
With environmental preservation and conservation as core values,
Orascom Development joined forces with Imerys, a global player
in producing and transforming industrial minerals, in planning these
fully-integrated communities promoting sustainable living across the
region. The British government’s official recognition of the Eco-Bos
plans as one of the country’s first large scale “green” developments is
seen as a significant accolade for the scheme.
www.eco-bos.com
Key Facts
6.6
million m 2
Total Land
5,000
Planned ecohomes
1
Planned Worldclass
marina

52 Orascom Development 2012 Annual Report 53
5. Corporate Governance
5.1. Group Structure and Significant Shareholders
Group Structure (Reporting Structure)
Significant shareholders
Orascom
Development
Holding AG
Since the initial public offering of the Company’s shares in May 2008 through the end of the 2012 financial year, the following shareholders have
disclosed participation in the Company of 3 percent or more in voting rights (in accordance with Art. 20 SESTA 2 ): 3
Name of Shareholder Date of latest disclosure 4 Number of shares
Percentage of ownership of the total
equity capital and voting rights 5
Corporate
Functions
Samih O. Sawiris 6 May 13, 2008 13,534,714 60.82%
Janus Capital Management LLC 7 Aug. 25, 2008 1,156,323 5.08%
Orascom Development 8 Dec. 15, 2010 1,286,353 4.56%
Hotels
Real Estate
and Construction
Destination
Management
Land Sales
Other
Segments
On September 21, 2011, Blue Ridge Capital Holdings LLC and Blue Ridge Capital Offshore Holdings LLC 9 disclosed that their participation in
the company had fallen below 3 percent in voting rights.
Aside from the above, the Company is not aware of a shareholder holding a participation of 3 percent or more of voting rights.
The operating business of Orascom Development Holding AG (“Orascom Development” or the “Company”) is organized into the following segments: Hotels,
Real Estate and Construction, Destination Management, Land Sales and Other Segments.
As of the end of the 2012 financial year, the following listed companies were part of the Orascom Development scope of consolidation:
Cross-Shareholdings
There are no cross-shareholdings between the Company and any other entity that would exceed 5 percent of capital or voting rights on both sides.
Company
Orascom Development Holding AG
(Altdorf, Switzerland)
(Cairo, Egypt)
Orascom Hotels & Development S.A.E.
(Cairo, Egypt)
The market capitalization of Orascom Development as per December 31, 2012 is CHF 361’070’810. Orascom
Development has a dual listing with its primary listing on the main board of the SIX Swiss Exchange. The secondary
listing is in the form of EDRs (Egyptian Depositary Receipts) on the EGX Egyptian Exchange (20 EDRs = 1 equity
share).
SIX Registration
Exchange
SIX Swiss Exchange
Symbol
ODHN
Security number 003828567
ISIN
CH0038285679
EGX Registration
Exchange
Symbol
ISIN
EGX Egyptian Exchange
ODHN
EGG676K1D011
EGX Registration
Exchange
EGX Egyptian Exchange
Market capitalization EGP 4,312,727,955 1
Symbol
ORHD
ISIN
EGS70321C012
Orascom Hotels & Development S.A.E. is 99.68% owned by Orascom Development
1 The last trading day of Orascom Hotels & Development S.A.E. on EGX was on December 31, 2009.
2 Swiss Federal Act on Stock Exchanges and Securities Trading.
3 The table, in accordance with the SIX Swiss Exchange’s guidelines, shows significant
shareholders’ participations as last disclosed pursuant to Art. 20 SESTA. The numbers of shares
and percentages shown conform to the situation at the time of the respective last disclosure. They
do not necessarily conform to the situation as per December 31, 2012, given that a shareholder
may have purchased or sold shares subsequent to the last disclosure but not thereby crossed a
disclosure threshold. See also fn. 5 in respect of the percentages shown. For information on the
participations of shareholders exceeding 3 percent of voting rights as reflected in the Company’s
share register as of December 31, 2012, refer to Note 27.5 to the Company’s consolidated
financial statements.
4 The date indicated is (a) as from 2010, the date of publication on the SIX Swiss Exchange’s
online database; (b) prior to 2010, the date of the issue of the Swiss Commercial Gazette in which
the disclosure was published or, in those cases where the latest disclosure was made in or in
conjunction with the Offering Circular published by the Company in the course of the initial public
offering of its shares, the date of the Offering Circular (May 13, 2008).
5 The percentages shown relate to the Company’s registered share capital as of the date of the
respective disclosure. For information on changes in capital since the founding of the Company,
refer to Section 5.2 below. In those cases where the latest disclosure was made in or in conjunction
with the Offering Circular published by the Company in the course of the initial public offering of
its shares, the percentages shown are those disclosed as “Expected holding upon completion of
the Offering (assuming full exercise of Over-Allotment Option)”.
6 The shares of Samih O. Sawiris are held directly and through his entities Thursday Holding
Ltd.(former-TNT Holding Ltd.) and SO.S Holding Ltd.
7 Janus Capital Management LLC, with its principal office at 151 Detroit Street, Denver, CO,
80206, is the investment adviser of (a) Janus Overseas Fund, with its principal office at 151 Detroit
Street, Denver, CO. 80206, (b) Janus Adviser International Growth Fund, with its principal office
at 151 Detroit Street, Denver, CO, 80206, and (c) Janus Aspen Series International Growth
Portfolio, with its principal office at 151 Detroit Street, Denver, CO 80206.
8 Orascom Development and Samih O. Sawiris entered into a Securities Lending Agreement
under which the Company is entitled to borrow from Samih O. Sawiris up to the indicated number
of shares. On 2 December 2010 the indicated number of shares was transferred to the Company.
9 Blue Ridge Capital Holdings LLC, with its principal office at 660 Madison Avenue, New
York, New York 10065, is the general partner of Blue Ridge Limited Partnership, with its principal
office at 660 Madison Avenue, New York, New York 10065. Blue Ridge Capital Offshore
Holdings LLC, with its principal office at 660 Madison Avenue, New York, New Yord 10065, is
the general partner of Blue Ridge Offshore Master Limited Partnership, with its principal office at
P.O. Box 309, Grand Cayman KY1-1104, Cayman Islands.
Pursuant to a tender offer completed in January 2011, Orascom Development increased its holding in the Egyptian subsidiary Orascom Hotels
& Development S.A.E. to 99.68%.
For information on the non-listed companies comprised by the Orascom Development’s scope of consolidation, please refer to Note 19
(Subsidiaries) of the consolidated financial statements.

54 Orascom Development 2012 Annual Report 55
5.2. Capital Structure
Capital
As of December 31, 2012, the Company’s issued share capital amounted to
CHF 662,201,010.40 and was divided into 28,543,147 registered shares
with a nominal value of CHF 23.20 each, fully paid in. The authorized capital
amounted to CHF 108,343,327.20 while the conditional capital amounted
to CHF 130,489,699.20.
Authorized and conditional capital
Authorized capital
Art. 4a of the Company’s articles of incorporation (“Articles of Incorporation”),
relating to its authorized capital, reads as follows:
“The board of directors is authorized to increase the share capital of the
Company by a maximum of CHF 108,343,327.20 by issuing of up to
4,669,971 fully paid-up registered shares with a par value of CHF 23.20
each until May 23, 2013. A partial increase is permitted. The board
of directors determines the date of issue, the issue price, the type of
contribution, the date of dividend entitlement as well as the allocation of non
exercised pre-emptive rights.
The board of directors can withdraw or limit the pre-emptive rights of the
shareholders in case of (i) the use of shares in connection with mergers,
acquisitions, financing and/or refinancing of mergers, acquisitions and
other investment projects, (ii) national and international offerings of shares
for the purpose of increasing the free float or to meet applicable listing
requirements, (iii) an over-allotment option (greenshoe) being granted to
one or more financial institutions in connection with an offering of shares
and (iv) conversion of loans, securities or equity securities (including shares
of subsidiaries) into shares.”
Conditional capital
Art. 4b of the Articles of Incorporation, relating to the Company’s conditional
capital, reads as follows:
“The share capital may be increased by a maximum amount of CHF
130,489,699.20 through the issuance of up to 5,624,556 fully paid
registered shares with a nominal value of CHF 23.20 each, (a) up to the
amount of CHF 14,489,699.20 corresponding to 624,556 fully paid
registered shares through the exercise of option rights granted to the
members of the board and the management, further employees and/
or advisors of the company or its subsidiaries, (b) up to the amount of
CHF 116,000,000 corresponding to 5,000,000 fully paid registered
shares through the exercise of conversion rights and/or warrants granted
in connection with the issuance of newly or already issued bonds or other
financial instruments by the Company or one of its group companies. The
subscription rights of the shareholders shall be excluded.
The board of directors may restrict or withdraw the right for advance
subscription (Vorwegzeichnungsrecht) of the shareholders in connection
with (i) the financing (refinancing inclusively) of acquisitions of enterprises
or parts thereof, participations or other investment projects of the company
and/or its subsidiaries or (ii) the placement of convertible bonds or
financial instruments with conversion or option rights on the national or
international capital market. In case the right of advance subscription
(Vorwegzeichnungsrecht) will be withdrawn, (x) the bonds or financial
instruments have to be placed at market conditions, (y) the period of time
for exercising the conversion rights or the option rights may not exceed 10
years and (z) the exercise or conversion price of the new registered shares
has to be fixed at the conditions of the market. The terms and conditions
of the convertible bonds or financial instruments with option or conversion
rights, the issue price of the new shares, the dividend entitlement as well as
the type of contribution shall be determined by the board of directors.”
As of December 31, 2012, no option rights, conversion rights, or warrants had
been granted on the basis of Art. 4b.
Changes in capital in the past three years
2010
At the ordinary general meeting of shareholders on May 11, 2010, it was
resolved to reduce the share capital by CHF 15,092,777.70 from CHF
568,881,621 to 553,788,843.30 by reducing the nominal value of each
of the 23,219,658 registered shares from CHF 24.50 to CHF 23.85. The
amount of the reduction of CHF 0.65 per registered share was remitted to
shareholders.
On September 29, 2010, the Board of Directors resolved, based on the
authorization included in Art. 4a of the Articles of Incorporation to increase
the share capital by CHF 119,094,021 through the issuance of 4,993,460
new registered shares to CHF 672,882,864.30 divided into 28,213,118
registered shares with a nominal value of CHF 23.85 each.
2011
At the ordinary general meeting of shareholders on May 23, 2011, it was
resolved to reduce the share capital by CHF 18,338,526.70 from CHF
672,882,864.30 to CHF 654,544,337.60 by reducing the nominal value
of each of the 28,213,118 registered shares from CHF 23.85 to CHF 23.20
and to remit the amount of reduction of CHF 0.65 per registered share to
the shareholders. At the same meeting it was resolved that the nominal value
of any shares created from authorized or conditional capital in accordance
with Art. 4a and Art. 4b of the Articles of Incorporation (cf. next paragraph)
until completion of the capital reduction be equally reduced by CHF 0.65
and the amount of the reduction remitted to the respective shareholders.
At its meetings of July 14, 2011 and July 28, 2011 (i.e. before the share capital
reduction described in the preceding paragraph had become effective), the
Board of Directors resolved, based on the authorization included in Art.
4a of the Articles of Incorporation, to increase the share capital by CHF
7,871,191.65 through the issuance of 330’029 new registered shares, from
CHF 672,882,864.30 to CHF 680,754,055.95, divided into 28,543,147
registered shares with a nominal value of CHF 23.85 each.
The share capital reduction resolved by the shareholders on May 23, 2011
(see above) became effective on August 8, 2011. The payment for the
reduction of CH 0.65 per registered share amounted to a total of CHF
18,553,045.55. The registered share capital after the reduction amounts to
CHF 662,201,010.40 and is divided into 28,543,147 registered shares with
a par value of CHF 23.20 each.
2012
The share capital was not changed during the year under review and no
decisions have been made on changes in share capital. The registered share
capital as of December 31, 2012 amounts to CHF 662,201,010.40 and is
divided into 28’543’147 registered shares with a par value of CHF 23.20.
Shares and participation certificates
The 28,543,147 registered shares with a par value of CHF 23.20 are fully
paid in. They are in the form of dematerialized securities (Wertrechte, within
the meaning of the Swiss Code of Obligations) and intermediated securities
(Bucheffekten, within the meaning of the Swiss Federal Intermediated Securities
Act). Each registered share carries an equal right to dividend payments. Voting
rights are described in Section 5.6. The voting rights of registered shares held
by the Company or any of its subsidiaries are suspended. No preferential or
similar rights have been granted. As of December 31, 2012, no participation
certificates (Partizipationsscheine) have been issued.
Profit sharing certificates
The Company has not issued any profit sharing certificates (Genussscheine).
Limitation on transferability and nominee registrations
Limitations on transferability for each share category; indication
of statutory group clauses and rules for granting exceptions
Pursuant to Art. 5 of the Articles of Incorporation, the Company maintains
a share register in which the full name, address, and nationality (in case of
legal entities, the company name and registered office) of the holders and
usufructuaries of registered shares are recorded. Upon application to the
Company, acquirers of registered shares will be recorded in the share register
as shareholders with the right to vote, provided that they explicitly declare
to have acquired the shares in their own name and for their own account.
Acquirers who do not make this declaration will be recorded in the share
register as shareholders without the right to vote (for an exception to permit
nominee registrations, see below).
Exemptions in the year under review
No exemptions from the limitations on transferability of shares have been
granted in the year under review.
Permissibility of nominee registrations; indication of any percent
clauses and registration conditions
Pursuant to the Company’s Regulations on the Registration of Nominees,
the Company may register a nominee in its share register as a shareholder
with the right to vote if either such nominee’s shareholdings do not exceed 5
percent of the issued share capital as set forth in the Commercial Register, or, if
such nominee’s shareholdings exceed that threshold, the respective nominee
discloses to the Company the names, addresses, locations or registered
offices, nationalities and the number of shares held on behalf of all beneficial
owners whose beneficial shareholdings exceed 0.5 percent of the issued
share capital
Procedure and conditions for cancelling statutory privileges and
limitations on transferability
The Articles of Incorporation do not provide for any privileges. The limitations on
transferability of the Company’s shares, as described above, may be cancelled
by a resolution (amending the Articles of Incorporation) of an ordinary general
meeting of shareholders reuniting the absolute majority of votes represented
at the meeting, or by a resolution of an extraordinary general meeting of
shareholders reuniting a majority of two thirds of votes represented (ref. to
Section 5.6 below).
Convertible bonds and warrants/options
The Company has not issued any convertible bonds, warrants or options.

56 Orascom Development 2012 Annual Report 57
5.3. Board of Directors
Samih O. sAWIRIs
Luciano Gabriel
Nicholas N. Cournoyer
Adil Douiri
Carolina Müller-Möhl
Jean-Gabriel Pérès
Franz Egle
Chairman
Non-Executive Member, Lead Director
Non Executive Member
Non Executive Member
Non Executive Member
Non Executive Member
Non Executive Member
After receiving his Diploma in economic
engineering from the Technical University of
Berlin in 1980, Mr. Sawiris founded his first
company, National Marine Boat Factory. In
1996 he established Orascom Projects for
Touristic Development and in 1997 Orascom
Hotel Holdings, the two companies that
later merged to form Orascom Hotels &
Development S.A.E. (OHD). Furthermore,
Mr. Sawiris established El Gouna Beverages
Co. in 1997, which he sold in 2001 when it
was the largest beverage company in Egypt.
Formerly CEO of Orascom Development,
Mr. Sawiris now serves as chairman of the
Board of Directors.
Mr. Gabriel is delegate of the board of
directors and CEO of PSP Swiss Property
Group (PSP). Prior to joining PSP, Mr.
Gabriel worked for Union Bank of
Switzerland (1984-1998), where he held
management positions in corporate finance,
risk management, international corporate
account management and business
development. From 1998 to 2002 he
was responsible for corporate finance and
group treasury at Zurich Financial Services.
He serves as a member of the executive
board of the European Public Real Estate
Association (EPRA). Mr. Gabriel completed
his studies in economics at the Universities
of Bern and Rochester (NY, USA) and
his activity as assistant in economics at the
University of Bern in 1983 with the title of
Dr.rer.pol.
Nicholas N. Cournoyer is a finance
and capital markets specialist. He is the
Managing Director of Montpelier Investment
Management LLP, London, an investment
company focusing on Emerging Market
equities and distressed debt. Prior to
founding Montpelier in 1992, Mr. Cournoyer
worked for Chase Manhattan Bank from
1982 to 1991, first working in its sovereign
and corporate debt restructuring teams
in Central and South America (1982 –
1985), then establishing its New Yorkbased
Emerging Markets debt trading
group (1985) and finally heading a similar
operation in London (1986 – 1991). He is
also the Managing Director of Montpelier
Capital Advisors (Monaco) SAM and
resides in Monaco. He holds a Bachelor’s
degree in Arts from the Connecticut
College (New London, CT).
Mr. Douiri is the founding shareholder
and CEO of Mutandis, a Moroccan
investment company established
in 2008. Mr. Douiri served in
His Majesty King Mohamed VI’s
Government as Minister of Tourism
(2002-2004) and later as Minister
for Tourism, Crafts & Social Economy
(2004-2007). In 1992 Mr. Douiri
founded Casablanca Finance Group
(later renamed CFG Group), the
country’s first investment bank.
Until 2002 he acted as chairman
of its supervisory board and is still a
board member. He is also a board
member of BMCE Bank, the third
largest Moroccan commercial bank,
and MFEX, a Stockholm-based
technology company serving
the financial industry. Mr. Douiri
graduated as an engineer from
the Ecole Nationale des Ponts &
Chaussées (ENPC) in Paris.
Ms. Müller-Möhl has been
president of the Müller-Möhl
Group since 2000. From 1999
to 2000 she was vice chair of the
board of Müller-Möhl Holding AG,
after working as a journalist and
advertising and PR consultant. She
is currently the chairperson of Hyos
Invest Holding AG. After gaining
an International Baccalaureate at
Upper School Salem International
College (Germany), Ms. Müller-
Möhl studied politics, history and
law at the University of Heidelberg
and at the Otto-Suhr Institut at
the Freie Universität Berlin. She
graduated with a Master’s degree
in political science and completed
further studies at the London
School of Economics and at the
Europainstitut of the University
of Basel.
Mr. Pérès has more than 20 years of
experience in senior appointments
in the hospitality and luxury
consumer brands segments. Since
1999 he has served as President
and CEO of Mövenpick Hotels
& Resorts. From 1985 to 1996
he worked with the Le Méridien
Group, where he first had
responsibility for development in
Africa and the Middle East and as
of 1989 was a member of group
executive management and head
of the Asia Pacific region. Mr. Pérès
holds an MBA degree from the
Ecole Supérieure des Sciences
Economiques et Commerciales
(ESSEC). Mövenpick Hotels &
Resorts has been retained by the
Group to manage two of its hotels.
Mr. Egle’s background is in strategy
development, corporate
communications, media and PR.
After holding senior positions in
the private sector he was in charge
of communications at the Swiss
Federal Department of Foreign
Affairs and advisor to the Minister
of Foreign Affairs (1993-1998).
Before co-founding Dynamics
Group, a Swiss company providing
strategic consulting, communication
management and research
analysis, Mr. Egle was a partner of
Hirzel.Neef.Schmid.Konsulenten,
a communication and financial
consultancy firm (1999-2006).
Mr. Egle holds a Doctor’s degree
in sociology from the University of
Zurich. Dynamics Group, where Mr.
Egle is a Senior Partner, has been
retained by the Group to provide
services in the field of communications.

58 Orascom Development 2012 Annual Report 59
Members of the board
Name Function Nationality Birth Elected first
Elected
until
Audit
Committee
Nomination &
Comp. Committee
Samih O. Sawiris Chairman EGY 1957 2008 2013 - -
Adil Douiri Member MOR 1963 2008 2013 - -
Franz Egle Member CH 1957 2008 2013 - -
Luciano Gabriel Member, Lead Director CH 1953 2008 2013 Chair Chair
Carolina Müller-Möhl Member CH 1968 2008 2013 - Member
Jean-Gabriel Pérès Member F 1957 2008 2013 - Member
Nicholas Cournoyer Member UK / US 1958 2011 2013 Member -
The current members of the Board of Directors are all non-executive. With the exception of the Chairman, none of the members of the Board of Directors
held executive positions with Orascom Development during the three financial years preceding the year under review. Other than as individually mentioned
above, none of these members, and no enterprise or organization represented by them, maintains any substantial business relationship with an Orascom
Development subsidiary.
There are no news in respect of other activities and vested interests which fall within the scope of Subsection 3.2 of the SIX Directive on Information relating to
Corporate Governance.
Elections and terms of office
The Board of Directors is elected by the general meeting of shareholders. In
accordance with the Articles of Incorporation, the Board is composed of a
minimum of three and a maximum of fifteen members, whose term of office
shall not exceed three years (a year for that purpose meaning the period
between two ordinary general meetings of shareholders). Each member’s
term of office is determined upon his or her election, and there are no limits
on re-election.
At the Company’s fourth ordinary general meeting of shareholders held on
May 7, 2012, all present members of the Board were re-elected (each by
separate vote) for a term of one year. Mr. Sheta decided not to stand for reelection
at the ordinary general meeting of shareholders on May 7, 2012.
Internal organizational structure
Board
The Board of Directors governs the Company and is ultimately responsible
for the Company’s business strategy and management. It has the authority
to decide on all corporate matters not reserved by law or by the Articles of
Incorporation to the general meeting of shareholders or to another body.
Subject to its inalienable duties pursuant to the law and to a number of
additional matters, the Board has delegated the management of the
Company’s business to the CEO. The Board appoints the CEO and the other
members of Executive Management.
The Board of Directors constitutes itself autonomously and appoints its
Chairman and secretary, who does not have to be a member of the Board.
It may deliberate if a majority of members are present at a meeting. Decisions
are taken by the majority of votes cast. In case of a deadlock, the Chairman
has a casting vote. A Board member shall abstain from voting if he or she has
a personal interest in a matter other than an interest in his or her capacity as
shareholder of the Company.
In order to ensure good corporate governance and a balance of leadership
and control for the Company, a Lead Director has been appointed. The Lead
Director must be non-executive, and is elected by the Board of Directors
for a term of one year. He has the right to access any files or records of
the Company or to solicit information from any member of Executive
Management at any time.
Committees
Two permanent committees have been formed to support the Board
of Directors; these are the Audit Committee and the Nomination &
Compensation Committee. The Lead Director chairs both of the permanent
committees. The duties and competences of either committee are defined
as below.
Audit Committee
The Audit Committee consists of two non-executive members of the Board of
Directors as determined by the Board. The two Audit Committee members
currently appointed have broad experience in finance and accounting on the
basis of their professional backgrounds. The Lead Director is a member ex
officio of the Audit Committee.
The mission of the Audit Committee is to assist the Board of Directors in the
discharge of its responsibilities with respect to financial reporting and audit.
The committee reports and issues recommendations to the Board regarding
yearly and interim financial statements, the auditing process, the internal
control system, the integrity and effectiveness of the Company’s external and
internal auditors and other topics submitted to it by the Board from time to
time. The Audit Committee has no decision making power.
Nomination & Compensation Committee
The Nomination & Compensation Committee consists of three nonexecutive
members of the Board of Directors as determined by the Board.
The Lead Director is a member ex officio of the Nomination & Compensation
Committee. The mission of the Nomination & Compensation Committee is
to assist the Board of Directors in the discharge of its responsibilities and to
discharge certain responsibilities of the Board relating to compensation and
nomination of members of the Board and of Executive Management.
The Nomination & Compensation Committee has decision-making power
regarding matters of the compensation of executive members of the Board
of Directors and members of Executive Management. The Nomination &
Compensation Committee issues recommendations to the Board without
having decision-making power regarding other matters of compensation, the
nomination of Board members and members of Executive Management, and
other topics submitted to the Board for the committee’s consideration.

60 Orascom Development 2012 Annual Report 61
Work methods of the Board of Directors and its committees
Invitations to attend meetings of the Board of Directors are extended by the
Chairman or the Secretary of the Board. Any member of the Board may
request the Chairman to convene a meeting. The members of the Board and
the committees are provided with all necessary supporting material before
a meeting is held, enabling them to prepare for discussion of the relevant
agenda items.
Pursuant to their respective Charters, the committees of the Board of Directors
convene at least once (in the case of the Nomination & Compensation
Committee) or twice a year (in the case of the Audit Committee), but can
be summoned by their respective chairman as often as the business requires.
Meetings of the Audit Committee may, upon invitation by its chairman and
in an advisory function, be attended by members of Executive Management.
The Company’s auditors are in regular contact with the chairman of the Audit
Committee and have the right to have items added to its agenda.
In the 2012 financial year, the Board of Directors convened for 11 meetings, and
passed 1 circular resolution. Of the 11 meetings, seven were held as physical
meetings, and four were meetings held by telephone conference. The Audit
Committee convened for five meetings, four were physical meetings, and
one was held by telephone conference. The Nomination & Compensation
Committee convened for one physical meeting and one telephone conference.
Certain members of the Executive Management, in particular the CEO and
the CFO participated in several meetings of the Board and the committees.
Physical meetings of the Board as well as of the Audit Committee and the
Nomination & Compensation Committee typically lasted approximately from
three to eight hours, while telephone conferences typically lasted from thirty
minutes to two hours.
Definition of areas of responsibility
Based on the provision of Art. 15 of the Articles of Incorporation governing the
delegation of duties, the Board of Directors has entrusted the preparation and
the execution of certain of its decisions, the supervision of certain tasks, as well
as certain decision-making powers to the permanent committees . The Board
has delegated the management of the Company’s business to the CEO,
who may further delegate any of his duties and competencies to Executive
Management and other members of the Company’s management although
the CEO remains fully responsible for all duties and competencies delegated
to him by the Board.
Excluded from such delegation to the CEO are the inalienable duties of the
Board as defined by law (Art. 716a Para. 1 of the Swiss Code of Obligations),
the duties of the Board’s permanent committees (as described above), and
decisions on the following matters which remain reserved to the Board:
1. The approval of the issuance of securities or other capital market
transactions, and the entering into loan agreements in excess of CHF
80 million;
2. The approval of investments and acquisitions (including land acquisitions,
whether by way of contract or by rights in rem, or acquisitions of companies
and participations in companies) as well as divestments, dispositions and
asset disposals in excess of CHF 20 million;
3. The entering into agreements with a value in excess of CHF 20 million
(subject to 1. above);
4. The provision of guarantees, suretyships, liens and pledges and other
security in excess of CHF 20 million;
5. The approval of inter-company agreements of a value exceeding CHF
20 million.
Information and control instruments vis-a-vis senior management
To ensure comprehensive information is provided to the Board of Directors
on the performance of the functions delegated by it, members of Executive
Management and other senior managers are regularly invited by the Chairman
or the Lead Director to attend meetings of the Board, or to participate when
individual agenda items are discussed. For example, during the year under
review, the CEO and the CFO were present at all physical meetings of the
Board of Directors. Also during the year under review, individual Board
members supported Executive Management in various projects. Furthermore,
Board members cultivate a regular informal exchange of ideas with Company
management and regularly visit the Company’s locations.
The company’s management has been managing to enhance the internal
governance by increasing the capacity of the internal audit functions. During
the year under review, BDO Muscat has been appointed to provide the
services of internal audit in Oman. In General, the in-house internal audit
function has performed many ad-hoc assignments in addition to the preplanned
assignments. For each assignment, a report of major findings was
presented to and discussed with the management on the entity level, and
corrective actions were agreed.
Executive Management meetings, chaired by the CEO, are held on a (at
least) monthly basis in which performance of operating projects is reviewed
alongside the budget and previous financial year. Key performance
indicators are reviewed as described in the preceding paragraph. Updates
on new projects, whether off-plan or under construction, are shared and
future steps agreed.

62 Orascom Development 2012 Annual Report 63
5.4 Executive Management
Members of the Executive Management
Gerhard Niesslein, Chief Executive Officer
Austrian national, born 1954, Dr. Niesslein joined Orascom Development as CEO on November 1, 2011. He is an experienced
real estate expert who served in leading positions at various companies in Canada and Germany during the last 35 years. After
holding real estate-related positions at Deutsche Bank and Commerzbank, he became a member of the Board of Landesbank
Hessen-Thüringen (Helaba) responsible for real estate financings, investments and funds. In 1999, he became CEO of DeTe
Immobilien GmbH (the real estate business of Deutsche Telekom). Since 2008, he was CEO of IVG Immobilien AG, Bonn,
one of the big real estate companies in Europe.
Julien Renaud-Perret, Chief Development Officer
French national, born 1968, Mr. Renaud-Perret joined the Group in 2006 as a member of the Executive Management in
charge of worldwide development activities. Prior to that, he was a member of the executive committee of Club Méditerranée
responsible for group strategy and implementation with respect to resort development and asset management. Mr. Renaud-
Perret started his career with Euro Disney SCA, where he held positions in finance and strategic planning. He was educated in
France and holds an MBA degree from INSEAD.
Hamza Selim, Chief Destination Management Officer
Ahmed El Shamy, Chief Financial Officer (AS of JULY 2012)
Egyptian national, born 1971, Mr. El-Shamy joined Orascom Development as Chief Financial Officer on July 1, 2012. During
the last six years Mr. El-Shamy served as Managing Director and CFO of Citadel Capital, a leading private equity firm in Africa
and in the Middle East. Prior to that, he served as Founder and CFO of Fayrouz International, a company today fully owned by
the Dutch beverage company Heineken. Mr. El-Shamy started his career with Protector & Gamble where he scaled to the role
of Regional Finance Manager for their European Care Operations based in Brussels. Mr. El-Shamy holds a BA degree from
Helwan University.
Egyptian national, born 1961, Prior to joining the Group in 2005 Mr. Selim worked extensively with Hyatt Regency, serving
as general manager for its Taba Heights property as well as area general manager for Egypt. Other positions with Hyatt
included the position as regional director of marketing for the Middle East and general manager for hotels in Jeddah and
Dubai. Mr. Selim holds a Bachelor’s degree in business administration from Cairo University, Egypt.
Mahmoud M. Zuaiter, Chief Hotel Officer
Raymond Cron, Chief OPERATING Officer
Swiss national, born 1959, Since 1989 Mr. Cron held top management positions in major construction companies in Switzerland.
In 1996 he was appointed managing director and member of the executive board in a key Swiss construction enterprise. He was
also Director General of the Federal Office of Civil Aviation (FOCA) from 2004 to 2008. He joined the Group at the end of
2008. Until 2011 he was responsible for all European projects of Orascom Development. As of 2012, Mr. Cron was promoted
to Orascom Development’s Chief Operating Officer. Mr. Cron graduated from the Swiss Federal Institute of Technology (ETH)
in Zurich and completed his postgraduate studies in business management at BWI/ETH in Zurich.
Other members of senior management
German national, born 1967, Mr. Zuaiter’s career spans 14 years of experience with the InterContinental Hotels Group,
culminating in the position of Director of Finance for the Middle East & Africa region. Mr. Zuaiter joined the Group in 2004.
Formally CFO of Orascom Development for eight years, Mr. Zuaiter was promoted to Chief Hotel Officer as of July 1, 2012.
Educated in Germany, Mr. Zuaiter holds an MBA degree from Columbus University and is a qualified financial accountant.
The following member of the Company’s senior management, although not a member of the Executive
Management, is regularly invited to participate in Executive Management meetings as a guest:
Aly Elhitamy, Chief CONSTRUCTION Officer & MANAGING DIRECTOR EGYPT
Egyptian national, born 1941, Eng. Elhitamy joined Orascom Development four years ago being responsible for the
Construction Segment. In May 2012, he was promoted to Managing Director of Egypt, overseeing all activities of the
Group in Egypt. In October 2012, Eng. Elhitamy became member of the Executive Management. For the past three
decades, Eng. Elhitamy has been heading top managerial positions in major construction and real estate companies
dealing with local and international projects. In addition to his engineering degree from Cairo University, he is a licensed
consultant engineer from the Egyptian Syndicate of Engineers in Civil Project Management since 1986.
StUARt N. Siegel, Chief Real ESTATE Officer (AS of NOVEMBER 2012)
American national, born 1955, Mr. Siegel joined the Group in 2012 as Chief Real Estate Officer overseeing the Group`s
real estate projects from El Gouna on the Red Sea in Egypt to Andermatt in the Swiss Alps. Mr. Siegel’s primary career started
at Sotheby’s International Realty, a subsidiary of Sotheby’s Holdings. He was appointed President and CEO of the firm in
1999 and served on Sotheby’s Holding Worldwide Management Committee (1999-2004) and on the North American
Board of Directors (1994-2004). Mr. Siegel graduated from the University of Virginia Graduate School of Architecture in
Charlottesville, VA, USA.

64 Orascom Development 2012 Annual Report 65
5.5. Compensation, shareholdings and loans 5.6. Shareholders’ participation
For detailed information on compensation paid to members of the Board of
Directors and to members of Executive Management for the financial year
2012, and on shares and options held by and loans granted to these persons
as of December 31, 2012, please refer to Note 12.1 (Board and Executive
Compensation Disclosures as Required by Swiss Law) of the consolidated
financial statements.
The compensation of the members of the Board of Directors and of Executive
Management is determined as specified below. The Company does not have
any formal stock ownership or option plans for members of the Board of
Directors or Executive Management. It does not employ external advisors or
systematically use external benchmarks for fixing compensation.
Board of Directors
In respect of the compensation of members of the Board of Directors for their
service on the Board and on its committees, the Board decided in 2008, in
its discretion, on the amount of the annual remuneration per member (CHF
160’000 for all Board members, except for the Lead Director in whose case
the amount is set at CHF 185’000), and on the form in which that remuneration
is discharged. It was decided that half the remuneration shall be discharged in
cash and half in the form of shares of the Company. This decision of the Board,
in which all Board members participated at the time, remained in effect for the
2012 financial year. The shares of the Company allocated to the members of the
Board as compensation are, for that purpose, purchased by the Company in
the market, and their valuation (for purposes of the calculation of the number of
shares allocated to each member) is based on the average purchase price paid
by the Company for the shares.
For members of Executive Management, the Policy provides that their target
bonus lies in the range of 0-75% of their base salary, and that it may be paid
in cash or in the form of unrestricted shares of the Company (for 50% of the
bonus at most). Details in respect of compensation paid in the form of shares,
if any, remain to be defined upon individual agreement.
The amount of the bonus paid to members of Executive Management for a
particular year (percentage of the target bonus) is determined, pursuant to the
Policy, based on two categories of targets:
• Firstly, a target figure for the Company’s financial performance
(Net Profit) is annually defined, the achievement of which determines the
bonus entitlement of the members of Executive Management in respect
of three fourths of the target bonus. The entitlement for this part of the
bonus rises, in defined steps, from 0% (in case of achievement of less than
95% of the Net Profit target) to 100% (in case of achievement of
99-101% of the Net Profit) and further to a maximum of 150% (in case of
achievement of more than 110% of the Net Profit).
• Secondly, several individual bonus targets are set for members of Executive
Management at the beginning of each year, which in the aggregate
determine the member’s entitlement in respect of one fourth of the target
bonus (e.g. where five individual targets are set, each target will determine
the entitlement to 5% of the target bonus). Such individual targets comprise
both quantitative and qualitative targets.
As the Company didn’t achieve its financial performance target (Net profit) in
2012, this part of the bonus was zero.
Voting rights and representation restrictions
With the exception of restrictions on the transferability of shares (ref. to Section
5.2 above), there are no limitations on voting rights. At a general meeting of
shareholders, each share entitles its owner to one vote. By means of a written
proxy, each shareholder may be represented by a third person who does not
need to be a shareholder.
Statutory quora
According to Art. 10 of the Articles of Incorporation, the holders of at least
25 percent of issued shares must be present or represented at an ordinary
general meeting of shareholders for the meeting to be validly constituted.
Similarly, holders of at least 50 percent of issued shares must be present
or represented at an extraordinary general meeting of shareholders for the
meeting to be validly constituted.
Resolutions are generally passed, in the case of an ordinary general meeting
of shareholders (except for matters subject to a higher majority requirement
by law), with the absolute majority of the shares represented. In the case of
an extraordinary general meeting of shareholders, resolutions are generally
passed with a majority of two thirds of the shares represented.
Resolutions relating to the following matters, however, require a majority of 75
percent of shares represented at the meeting: (a) capital increases pursuant
to Art. 650 CO and reductions of the share capital pursuant to Art. 732
CO; (b) dissolving the Company before its termination date or changing its
duration (which pursuant to the Articles of Incorporation is 99 years from its
formation); (c) changing the Company’s purpose; and (d) any merger with
another company.
Agenda
Shareholders who represent shares with a par value of at least CHF
1,000,000 may request that an item be placed on the agenda. The request
must be communicated to the Board of Directors in writing, stating the item to
be placed on the agenda and the shareholder’s corresponding motion, at least
45 days prior to the general meeting of shareholders.
Record date for entry into the share register
In order to be entitled to participate at the 2012 ordinary general meeting
of shareholders, a holder of registered shares need be inscribed in the share
register as a shareholder with voting rights by May 2, 2013.
5.7 Changes of control and defense
measures
Duty to make an offer
The Articles of Incorporation do not provide for any “opting out” or “opting up”
arrangements within the meaning of Art. 22 and Art. 32 SESTA.
Clauses of change of control
No change of control clauses have been agreed upon.
Executive Management
Compensation of the members of Executive Management for their service in
Executive Management consists of a base salary which is annually reviewed,
and a bonus payment which is annually determined, as further described below.
The initial base salaries of the members of Executive Management were either
(in case of members who have served in that capacity since the Company was
formed in 2008) carried over from their previous employment with Orascom
Hotels & Development S.A.E., or (in case of members appointed at a later
time) they were determined in a discretionary decision of the CEO together
with the Nomination & Compensation Committee.
In respect of the annual salary review and bonus determination, the Nomination
& Compensation Committee discusses the proposals presented by the CEO,
approves them if deemed fit, and subsequently informs the Board on its
decisions. Members of Executive Management do not have a right to attend
meetings of the Nomination & Compensation Committee at which decisions
are taken in respect of their compensation, or otherwise to participate in the
decision process. In the year under review, there were no changes in the base
salaries of members of Executive Management.
Bonus
In late 2010, the Board of Directors approved a formal bonus policy (“Policy”) for the
Company. Since 2010, the Policy applies to the members of Executive Management.
The individual targets set for each member of Executive Management were
achieved at different levels in 2012. The members of Executive Management
agreed to defer the payment of this bonus part to January 2015.
Furthermore, all members of the Executive Management agreed that the
entitlement to this bonus part will be subject to a certain share price of the
Company at the end of 2014. If the share price at the end of 2014 is:
- below CHF 20.00 0% of the deferred bonus part is
to be paid
- between CHF 20.00 and CHF 24.99 50% of the deferred bonus part
is to be paid
- between CHF 25.00 and CHF 29.99 100% of the deferred bonus part
is to be paid
- above CHF 30.00 150% of the deferred bonus part is
to be paid
Convocation of the general meeting of shareholders
An ordinary general meeting of shareholders is to be held annually following
the close of the financial year. It is called by the Board of Directors or, if
necessary, by the auditors. Extraordinary general meetings may be called by
the Board of Directors, the auditors, the liquidators, or by the general meeting
of shareholders itself.
One or more shareholders representing at least 10 percent of the share capital
may request in writing that the Board of Directors call an extraordinary general
meeting of shareholders. The request must state the purpose of the meeting
and the agenda to be submitted. General meetings of shareholders are held
at the statutory seat of the Company or at such other place as determined by
the Board of Directors.
Notice of a general meeting of shareholders is given by means of a single
publication in the Swiss Commercial Gazette (Schweizerisches Handelsamtblatt)
or by registered letter to the shareholders of record. There must be a time period
of not less than 20 days between the day of the publication or the mailing of the
notice and the scheduled date of the meeting. The notice of the general meeting of
shareholders must indicate the agenda and the motions by the Board of Directors.

66 Orascom Development 2012 Annual Report 67
5.8 External Auditors
5.9 Information Policy
Duration of the mandate and term of office of the lead auditor
Since the foundation of the Company on January 17, 2008, Deloitte AG,
Zurich, have been the statutory auditors with responsibility for the audit of
the Company’s non-consolidated and consolidated financial statements. The
Company’s subsidiary OHD is audited by Deloitte Saleh, Barsoum & Abdel
Aziz, Cairo. The auditor in charge for the Company at Deloitte AG, Hans-
Peter Wyss, took up office as of the 2008 financial year. A rotation cycle of
7 years is foreseen for the position of the auditor in charge. The Board of
Directors will propose to the ordinary general meeting of shareholders on
May 13, 2013 to re-elect Deloitte AG, Zurich as the statutory auditors for the
2013 financial year.
Auditing fees
Deloitte received the following fees for their services as the statutory auditors
of the Company and the majority of Orascom Development companies on
the one hand, and for non-audit services on the other hand:
In CHF 2012 2011
Audit Services 2,202,814 2,401,507
Tax Services - -
IPO/Listing related services - -
Other services - 12,000
Total non-audit services - 12,000
Total fees 2,202,814 2,413,507
Informational instruments pertaining to the external audit
The Board of Directors’ Audit Committee has the task of ensuring the effective
and regular supervision of the statutory auditors’ reporting with the aim of
ensuring its integrity, transparency and quality.
In advance of each financial year, the proposed auditing schedule is
presented to and discussed with the Audit Committee. After each audit,
important observations by the statutory auditors, together with appropriate
recommendations, are presented to the Audit Committee (after discussions
with the CFO) during its relevant meeting. Subsequently, members of
the Audit Committee receive the statutory auditors’ management letter
in final form. During the year, the statutory auditors are in regular contact
with the chairman of the Audit Committee to discuss matters arising in the
performance of their task.
Based on these communications the Audit Committee discusses its impression
of the integrity and effectiveness of the statutory auditors’ work, and issues
a recommendation to the Board concerning the proposal to the general
meeting of shareholders whether to re-elect the statutory auditors for the
following year. In its assessment, the Audit Committee places particular value
on demonstrated independence and willingness to identify and challenge
assumptions underlying the financial reporting, and the timely completion of
audits permitting the Company to comply with its reporting obligations and its
corporate communications calendar.
In the year under review, representatives of the statutory auditors participated
in all five Audit Committee meetings.
The CEO, the CFO, and the Investor Relations Department took care of
the communication with investors during 2012. The company intends to
update the financial community through personal contacts, discussions, and
presentations held through various road shows and investor conferences.
Orascom Development is committed to an open information policy and
provides shareholders, the capital market, employees and all stakeholders
with open, transparent and timely information. The information policy
accords with the requirements of the Swiss stock exchange as well as the
relevant statutory requirements. As a company listed on SIX Swiss Exchange,
Orascom Development also publishes information relevant to its stock price in
accordance with Art. 53 of the Listing Rules (ad hoc publicity).
The financial reporting system is comprised of quarterly, interim (semiannual),
and annual reports. Consolidated financial statements are prepared
in accordance with International Financial Reporting Standards (IFRS) in
compliance with Swiss and Egyptian law and the rules of the SIX Swiss
Exchange and EGX Egyptian Exchange.
In addition, the Company utilizes electronic news releases to report the latest
changes and developments to ensure equal treatment for all capital market
participants.
Corporate Calendar
Annual general meeting of shareholders May 13, 2013
First quarter 2013 results May 28, 2013
Second quarter 2013 results August 27, 2013
Third quarter 2013 results November 26, 2013
Further information and contact
Investors and interested stakeholders can find further information about
Orascom Development on the company’s website at www.orascomdh.com.
Stakeholders may subscribe to the Company’s e-mail alert service to receive
news releases at www.orascomdh.com/en/media-center/news-alert.html.
Investors may also contact the Investor Relations department as follows:
Till Leisner
+41 41 874 88 07
Sara El Gawahergy
+20 22 461 89 61
ir@orascomdh.com.

68 Orascom Development 2012 Annual Report 69
6. Investor Information
Introduction
Orascom Development Holding AG has a dual listing with its primary listing on the main board of the SIX Swiss Exchange.
The secondary listing is in the form of Egyptian Depository Receipts (EDRs) on the EGX Egyptian Exchange.
Overview
Switzerland 31/12/2011 31/12/2012
Shares held with SIS and registered in the share register 10,742,864 12,860,045
Dispo shares 6,036,375 5,514,015
Egypt
Share equivalents in custody of MCDR’s depositary bank (EDRs) 10,633,698 9,048,227
Shares in custody of MCDR (Not Traded) 1,130,210 1,120,860
Total Shares 28,543,147 28,543,147
Market capitalization (in CHF billion) 0.41 0.36
Per share data 1 31/12/2011 31/12/2012
Share price at year-end (in CHF) 14.35 12.65
Highest share price during the year (in CHF) 58.70 21.10
Lowest share price during the year (in CHF) 12.90 11.50
Number of traded shares (in millions) 5.50 5.61
Value of traded shares (in CHF million) 172.25 89.89
Average number of traded shares per day 21,644 22,421
Average traded value per day (in CHF) 677,071 358,434
Share information 1
Shares listing
Zurich, Switzerland
EDRs information 1
EDRs listing
Cairo, Egypt
1 Source: Bloomberg
Number of shares 18,374,060
ISIN code
CH0038285679
Currency
Swiss Franc
Ticker code (Bloomberg)
ODHN:SW
Number of EDRs 2 180,964,540
ISIN code
EGG676K1D011
Currency
Egyptian Pound
Ticker code (Bloomberg)
ODHN:EY
Per EDR data 1 31/12/2011 31/12/2012
Market price at year-end (in EGP) 3.98 4.36
Highest market price during the year (in EGP) 17.25 7.08
Ticker code (Reuters)
ODHN.S
Ticker code (Reuters)
ODHN.CA
Lowest market price during the year (in EGP) 3.79 3.91
1 As at end of 2012.
2 Implying a conversion ratio of 20:1, where 20 EDRs are equivalent to 1 registered share.
Number of traded EDRs (in millions) 15.98 16.62
Value of traded EDRs (in EGP million) 159.07 85.76
Average number of traded EDRs per day 80,281 72,568
Average traded value per day (in EGP) 768,464 350,021
1- Source: Bloomberg

70 Orascom Development 2012 Annual Report 71
Shareholding structure
A- Shares
Shareholders by type
Categories
Number of
shareholders
Number of
shares
Legal persons 80 8,899,302
Banks 24 1,806,634
Natural persons 3,600 1,721,689
Investment trusts 22 358,816
Pension funds 14 61,741
Foundations 5 10,763
Public corporations 2 1,100
Total 3,747 12,860,045
B- EDRs
EDRs holders by type
Categories
Number of EDRs
Holders
Number of
EDRs
Individuals 1640 148,067,281
Legal entities 26 28,494,996
Funds 8 1,495,227
Other foundations 4 323,520
Banks 4 1,653,300
Pension funds 3 930,216
Public corporations - -
Total 1,685 180,964,540
Significant Shareholders
Name of major shareholders 1
Name of major shareholders 2011 2012
Number of
shares issued
Percentage of
ownership (%)
Number of
shares issued
Percentage of
ownership (%)
Samih O. Sawiris 2 17,634,321 61.78% 17,907,121 62.74%
Janus Capital Management LLC 1,533,538 5.37 1,542,643 5.40
Others 9,375,288 32.85 9,093,383 31.86
Total 28,543,147 100.00 28,543,147 100.00
Shareholders by country
Country
Distribution of shareholdings 1
Number of
shareholders
Number of
shareholders
Number of
shares
Egypt 6 7,116,591
Switzerland 3,694 2,733,730
United Kingdom 7 1,627,213
Greece 1 500,444
Cayman Islands 1 371,640
United States of America 3 270,083
Virgin Islands (British) 1 124,441
United Arab of Emirates 2 59,528
Germany 11 19,197
Netherlands 1 8,933
Ireland 3 8,667
Austria 3 7,300
Singapore 2 3,300
Malta 1 3,000
Liechtenstein 3 2,370
Belgium 1 1,163
Thailand 1 810
Brazil 2 800
Bahamas 1 500
Spain 1 200
France 2 135
Total 3,747 12,860,045
Number of
shares
1 10 360 2,494
11 100 1,303 72,758
101 1,000 1,750 659,850
1,001 10,000 287 782,361
10,001 100,000 36 1,009,164
100,001 1,000,000 9 3,741,821
1,000,001 999,999,999 2 6,591,597
Total 3,747 12,860,045
1- Distribution of registered shares/EDRs as at 31 December 2012.
EDRs holders by country
Country
Number of EDRs
Holders
Number of
EDRs
Egypt 1,625 146,712,882
United Kingdom 12 21,878,224
Saudi Arabia 13 11,086,100
United States of America 6 678,114
Germany 3 265,520
Singapore 1 149,439
Canada 2 62,400
Jordan 5 26,235
Bahrain 1 22,948
India 2 22,760
Syria 1 13,839
Lebanon 2 13,236
Malaysia 1 9,100
Oman 1 8,240
Italy 1 6,250
Palestine 5 5,970
Netherlands 1 2,200
Thailand 1 1,060
United Arab of Emirates 1 19
Switzerland 1 4
Total 1,685 180,964,540
Distribution of EDRs Holders 1
Number of EDRs
Holders
Number of
EDRs
1 10 57 249
11 100 86 4,793
101 1,000 602 312,094
1,001 10,000 698 2,683,548
10,001 100,000 205 6,450,670
100,001 1,000,000 29 6,550,632
1,000,001 999,999,999 8 164,962,554
Total 1,685 180,964,540
1 Overview of significant shareholders as at 31 December 2012.
2 The shares of Samih O. Sawiris are held directly and through his entities Thursday Holding (former TNT Holding) and SOS Holding.
Corporate Calendar 2013
Date
Events
13 May 2013 5th Annual General Meeting
28 May 2013 First quarter 2013 results
27 August 2013 Half-year 2013 results
26 November 2013 Nine-months 2013 results
Research coverage
Bank Sarasin & Co. Ltd
Patrick Hasenböhler
patrick.hasenboehler@sarasin.ch
T: +41 44 213 94 81
Goldman Sachs
Eyad R. Faraj
eyad.faraj@gs.com
T: +971 4 376 34 76
UBS
Andre Rudolf von Rohr
andre.rudolf-von-rohr@ubs.com
T: +41 44 239 16 57
Zürcher Kantonalbank
Marco Strittmatter
marco.strittmatter@zkb.ch
T: +41 44 292 35 64
Investor Contacts
Till Leisner
Head of Group Controlling & Investor Relations
T: +41 41 874 88 07
Sara El Gawahergy
Investor Relations Manager
T: +20 224 61 89 61
ir@orascomdh.com
For publications and further information visit
http://www.orascomdh.com/en/investor-relations

F-1 Orascom Development 2012 Annual Report F-2
Contents
Orascom Development
Orascom Development Holding AG (consolidated financial statements)
Consolidated statement of comprehensive income F-3
Consolidated statement of financial position F-5
Consolidated statement of changes in equity F-7
Consolidated statement of cash flows F-8
Notes to the consolidated financial statements F-10
Orascom Development Holding AG
Income statement F-85
Statutory balance sheet F-86
Statement of changes in equity F-87
Cash flow statement F-88
Notes to the financial statements F-89
Holding
Consolidated financial statements
together with auditor's report for the
year ended 31 December 2012
F-2

F-3 Orascom Development 2012 Annual Report F-4
Orascom Development Holding AG
Consolidated statement of comprehensive income for the year ended 31 December 2012
CHF Notes 2012 2011
CONTINUING OPERATIONS
Revenue ‎6/7 271,900,850 253,761,623
Cost of sales ‎7.2 (250,592,124) (234,103,253)
GROSS PROFIT 21,308,726 19,658,370
Investment income ‎9 5,638,592 11,844,621
Other gains and losses ‎10 (33,254,281) (13,224,071)
Administrative expenses 8 (76,221,769) (81,434,322)
Finance costs 11 (8,925,935) (8,122,655)
Share of losses of associates ‎20 (907,733) (4,980,563)
(LOSS)BEFORE TAX (92,362,400) (76,258,620)
Income tax expense ‎13 (10,073,093) (35,619)
LOSS FOR THE YEAR FROM CONTINUING
OPERATIONS
DISCONTINUED OPERATIONS
Gain/(loss) for the year from discontinued
operations
(102,435,493) (76,294,239)
14 1,080,814 (140,881)
LOSS FOR THE YEAR (101,354,679) (76,435,120)
Orascom Development Holding AG
Consolidated statement of comprehensive income for the year ended 31 December 2012
CHF Notes 2012 2011
Earnings per share from continuing and
discontinued operations
Basic 15 (3.41) (2.46)
Diluted 15 (3.41) (2.46)
Earnings per share from continuing operations
Basic 15 (3.45) (2.46)
Diluted 15 (3.45) (2.46)
Samih Sawiris Gerhard Niesslein Ahmed El Shamy
Chairman Group CEO Group CFO
Other comprehensive income, net of income tax
Exchange differences arising on translation of foreign
operations
Net gain on hedging instruments entered into for cash
flow hedges
Gain/(loss) on revaluation of financial assets at
FVTOCI
Total other comprehensive income for the year, net
of tax
(40,803,196) (21,212,198)
562,076 701,004
17,245,804 (34,749,698)
(22,995,316) (55,260,892)
Total comprehensive income for the year (124,349,995) (131,696,012)
(Loss) attributable to:
Owners of the Parent Company (97,207,864) (69,704,752)
Non-controlling interests (4,146,815) (6,730,368)
Total comprehensive income attributable to:
(101,354,679) (76,435,120)
Owners of the Parent Company (113,306,820) (121,370,862)
Non-controlling interests (11,043,175) (10,325,150)
(124,349,995) (131,696,012)
F-3
F-4

F-5 Orascom Development 2012 Annual Report F-6
Orascom Development Holding AG
Consolidated statement of financial position at 31 December 2012
CHF Notes 31 December 2012 31 December 2011
ASSETS
NON-CURRENT ASSETS
Property, plant and equipment ‎16 1,002,981,620 969,362,187
Investment property 17 78,903,321 76,366,131
Goodwill 18 7,331,756 7,951,210
Investments in associates ‎20 18,852,835 29,349,124
Non-current receivables 21 74,119,839 89,167,880
Non-current receivable due from related parties 42 2,140,680 137,143
Deferred tax assets 13.4 30,999,043 30,681,825
Finance lease receivables 26 17,742,084 12,760,423
Other financial assets ‎22 54,319,056 39,609,291
TOTAL NON-CURRENT ASSETS 1,287,390,234 1,255,385,214
CURRENT ASSETS
Inventories ‎24 499,127,430 478,154,600
Trade and other receivables ‎25 90,265,697 133,567,041
Finance lease receivables 26 4,376,243 3,214,009
Current receivables due from related parties 42 17,500,946 45,218,733
Other financial assets 22 8,249,157 14,557,520
Other current assets ‎23 74,015,193 73,719,589
Cash and bank balances 43 101,668,196 79,399,104
TOTAL CURRENT ASSETS 795,202,862 827,830,596
TOTAL ASSETS 2,082,593,096 2,083,215,810
CHF Notes 31 December 2012 31 December 2011
EQUITY AND LIABILITIES
CAPITAL AND RESERVES
Issued capital 27 662,201,010 662,201,010
Reserves 28 (149,503,893) (134,983,659)
Retained earnings 29 229,270,759 327,175,626
Equity attributable to owners of the Parent
Company
741,967,876 854,392,977
Non-controlling interests 30 235,883,784 240,823,907
Total equity 977,851,660 1,095,216,884
NON-CURRENT LIABILITIES
Borrowings 31 279,376,296 254,353,148
Trade and other payables 34 32,139,626 31,717,802
Retirement benefit obligation 38 871,355 416,295
Notes payable 3,688,597 5,797,662
Deferred tax liabilities ‎13.4 40,360,551 36,396,168
Other financial liabilities 35 13,121,891 14,018,690
Total non-current liabilities 369,558,316 342,699,765
CURRENT LIABILITIES
Trade and other payables 34 49,984,236 57,631,059
Borrowings 31 324,484,554 281,857,673
Due to related parties 42 17,081,959 5,760,784
Current tax liabilities 13.3 5,187,962 6,133,481
Provisions 32 79,106,988 90,144,020
Other current liabilities 33 259,337,421 203,772,144
Total current liabilities 735,183,120 645,299,161
Total liabilities 1,104,741,436 987,998,926
Total equity and liabilities 2,082,593,096 2,083,215,810
Samih Sawiris Gerhard Niesslein Ahmed El Shamy
Chairman CEO Group CFO
F-5
F-6

F-7 Orascom Development 2012 Annual Report F-8
Orascom Development Holding AG
Consolidated statement of changes in equity for the year ended 31 December 2012
Total
Noncontrolling
interests
Attributable
to owners of
the Parent
Company
Retained
earnings
Equity swap
settlement
Reserve from
common
control
transactions
Foreign
currency
translation
reserve
General
reserve
Investments
revaluation
reserve
Hedging
reserve
Treasury
shares
Share
premium
Issued
Capital
CHF
Balance at 1 January 2011 672,882,864 242,272,821 (1,464,267) (1,712,949) (1,025,518) - (195,803,181) (106,255,917) (10,220,295) 396,880,378 995,553,936 197,589,888 1,193,143,824
Loss for the year - - - - - - - - - (69,704,752) (69,704,752) (6,730,368) (76,435,120)
Other comprehensive income for the year, net of income tax - - - 701,004 (34,749,698) - (17,617,416) - - - (51,666,110) (3,594,782) (55,260,892)
Total comprehensive income for the year - - - 701,004 (34,749,698) - (17,617,416) - - (69,704,752) (121,370,862) (10,325,150) (131,696,012)
Reserve from common control transactions - - - - - - - (14,961,709) - - (14,961,709) - (14,961,709)
Share capital reduction (repayment of nominal value) (18,553,046) - - - - - - - - - (18,553,046) - (18,553,046)
Equity swap settlement (note 28.8) - - - - - - - - 14,487,709 - 14,487,709 - 14,487,709
Share capital increase (issuance of ordinary shares) 7,871,192 1,699,649 - - - 4,916,868 - - (14,487,709) - - - -
Share capital increase costs - (173,451) - - - - - - - - (173,451) - (173,451)
Purchase of treasury shares - - (589,600) - - - - - - - (589,600) - (589,600)
Non-controlling interests’ share in equity of consolidated subsidiaries - - - - - - - - - - - 53,559,169 53,559,169
Balance at 31 December 2011 662,201,010 243,799,019 (2,053,867) (1,011,945) (35,775,216) 4,916,868 (213,420,597) (121,217,626) (10,220,295) 327,175,626 854,392,977 240,823,907 1,095,216,884
Balance at 1 January 2012 (note 28) 662,201,010 243,799,019 (2,053,867) (1,011,945) (35,775,216) 4,916,868 (213,420,597) (121,217,626) (10,220,295) 327,175,626 854,392,977 240,823,907 1,095,216,884
Loss for the year - - - - - - - - - (97,207,864) (97,207,864) (4,146,815) (101,354,679)
Other comprehensive income for the year, net of income tax - - - 562,076 17,245,804 - (33,906,836) - - - (16,098,956) (6,896,360) (22,995,316)
Total comprehensive income for the year - - - 562,076 17,245,804 - (33,906,836) - - (97,207,864) (113,306,820) (11,043,175) (124,349,995)
Distribution of treasury shares - - 1,285,559 - - - - - - (697,003) 588,556 - 588,556
Non-controlling interests’ share in equity of consolidated subsidiaries - - - - - - - 293,163 - - 293,163 6,103,052 6,396,215
Balance at 31 December 201 2 (note 28) 662,201,010 243,799,019 (768,308) (449,869) (18,529,412) 4,916,868 (247,327,433) (120,924,463) (10,220,295) 229,270,759 741,967,876 235,883,784 977,851,660
F-7
Orascom Development Holding AG
Consolidated cash flow statement for the year ended 31 December 2012
CHF Notes 2012 2011
CASH FLOWS FROM OPERATING ACTIVITIES
(Loss) for the year (101,354,679) (76,435,120)
Adjustments for:
Income tax expense recognized in profit or loss ‎13.1 10,073,093 35,619
Share of losses of associates 20 907,733 4,980,563
Finance costs recognized in profit or loss 11 8,925,935 8,166,347
Investment income recognized in profit or loss 9 (5,638,592) (11,844,621)
Impairment loss on receivables and other current assets 40.11 20,739,967 29,843,491
Reversal of impairment loss on trade receivables 25 (2,059,010) (684,615)
Gain on sale or disposal of property, plant and equipment 10 (390,539) (413,555)
(Gain)/loss on revaluation of investment properties 17 (3,951,870) 4,745,050
Gain on disposal of subsidiaries 36 (4,356,370) -
Loss on deemed disposal of subsidiary 37 1,992,741 -
Gain arising on financial assets carried at FVTPL - (127,724)
Impairment losses in relation to investments in associates 10/20 18,582,682 -
Depreciation and amortization of non-current assets 16 34,492,359 33,499,525
Net foreign exchange losses 10 9,828,821 11,332,336
MOVEMENTS IN WORKING CAPITAL
Decrease/(increase) in trade and other receivables 10,609,005 (21,295,585)
(Increase) in finance lease receivables (7,388,416) (264,741)
(Increase) in inventories (24,442,248) (205,465,076)
Decrease in other assets 17,839,919 26,474,236
(Decrease) in trade and other payables (8,166,320) (5,859,094)
(Decrease)/increase in provision (6,919,075) 33,437,215
Increase in other liabilities 68,336,709 33,235,182
Cash generated from/(used in) operations 37,661,845 (136,640,567)
Interest paid (46,812,129) (30,550,953)
Income tax paid (5,381,121) (14,107,925)
Net cash (used in) operating activities (14,531,405) (181,299,445)
CASH FLOWS FROM INVESTING ACTIVITIES
Payments for property, plant and equipment 16 (104,131,640) (92,158,715)
Proceeds from disposal of property, plant and equipment 6,700,578 5,320,782
Proceeds on sale of financial assets 7,294,817 10,936,585
Payments to acquire financial assets (291,121) (15,653,211)
Payments to acquire investments in associates 37 (5,600,000) -
Dividends received 9 105,906 1,157,774
Interest received 5,532,686 10,686,847
Net cash outflow on deconsolidated subsidiaries 36/37 (676,852) -
Net cash (used in) investing activities (91,065,626) (79,709,938)
CASH FLOWS FROM FINANCING ACTIVITIES
Transaction costs resulted from capital increase - (173,451)
Issued capital reduction paid to shareholders (13,580,644)
Proceeds from distribution of shares 588,556 -
Payment for buy-back of shares - (589,600)
Non controlling interests shares in changes of equity for
consolidated subsidiaries
11,216,699 60,733,748
Repayment of borrowings (22,661,676) (9,259,658)
Proceeds from borrowings 142,239,779 42,786,749
Net cash generated by financing activities 131,383,358 79,917,144
Net increase/(decrease) in cash and cash equivalents 25,786,327 (181,092,239)
Cash and cash equivalents at the beginning of the year 79,399,104 276,452,970
Effects of exchange rate changes on the balance of cash
held in foreign currencies
(3,517,235) (15,961,627)
Cash and cash equivalents at the end of the year 43 101,668,196 79,399,104
F-8

F-9 Orascom Development 2012 Annual Report F-10
Index to the notes to the consolidated financial statements
Page
1 General information 10
2 Application of new and revised International Financial Reporting Standards 10
3 Significant accounting policies 15
4 Critical accounting judgments and key sources of estimation uncertainty 29
5 The group and major changes in group entities 32
6 Revenue 32
7 Segment information 33
8 Employee benefits expense 36
9 Investment income 37
10 Other gains and losses 37
11 Finance costs 38
12 Compensation of key management personnel 38
13 Income taxes relating to continuing operations 41
14 Discontinued operations 43
15 Earnings per share 44
16 Property, plant and equipment 45
17 Investment property 47
18 Goodwill 47
19 Subsidiaries 49
20 Investments in associates 51
21 Non-current receivables 52
22 Other financial assets 53
23 Other current assets 54
24 Inventories 55
25 Trade and other receivables 55
26 Finance lease receivables 56
27 Capital 57
28 Reserves (net of income tax) 58
29 Retained earnings and dividends on equity instruments 60
30 Non-controlling interests 60
31 Borrowings 61
32 Provisions 62
33 Other current liabilities 63
34 Trade and other payables 63
35 Other financial liabilities 63
36 Disposal of a subsidiary 64
37 Deemed loss of control of subsidiary 65
38 Retirement benefit plans 66
39 Risk assessment disclosure required by Swiss law 68
40 Financial instruments 68
41 Share-based payments 75
42 Related party transactions 76
43 Cash and cash equivalents 78
44 Non-cash transactions 79
45 Operating lease arrangements 79
46 Commitments for expenditure 80
47 Litigation 81
48 Other significant events that occurred during the reporting period 82
49 Subsequent events 82
50 Approval of financial statements 82
Notes to the consolidated financial
statements for the year ended 31 December
2012
1 GENERAL INFORMATION
Orascom Development Holding AG (“ODH” or “the Parent Company”), a limited company incorporated in Altdorf, Switzerland, is
a public company whose shares are traded on the SIX Swiss Exchange. In addition, Egyptian Depository Receipts (“EDRs”) of the
Parent Company are traded at the EGX Egyptian Exchange. One EDR represents 1/20 of an ODH share.
The Company and its subsidiaries (the “Group”) is a leading developer of fully integrated towns that include hotels, private villas
and apartments, leisure facilities such as golf courses, marinas and supporting infrastructure. The Group’s diversified portfolio of
projects is spread over nine jurisdictions, with primary focus on touristic towns and recently affordable housing. The Group
currently operates in Egypt, Jordan, UAE, Oman, Switzerland, Morocco, United Kingdom, Montenegro and Romania and is
continuously seeking development opportunities in untapped yet attractive locations all over the world. The Group has four
existing projects: El Gouna, the flagship project, a fully-fledged town on the Red Sea coast (Egypt); Taba Heights, on the Sinai
Peninsula (Egypt), the Group’s second tourism destination following El Gouna’s business model; the Cove (Ras Al Khaimah, UAE),
the Group’s first development experience outside Egypt; and Haram City, an integrated town dedicated to affordable housing in
Egypt, catering for the mass population.
The addresses of its registered office and principal place of business are disclosed in the introduction to the annual report.
2 Application of new and revised International Financial Reporting Standards
(“IFRSs”)
2.1 New and revised IFRSs affecting amounts reported in the current year and prior years
The following new and revised Standards and Interpretations have been applied in the current period and have affected these
financial statements. Details of other new and revised IFRSs applied in these financial statements that have had no material effect
on the financial statements are set out in note 2.2:
IFRS 9 Financial Instruments – Amendment of recognition and measurement requirements as the first part of the project to
replace IAS 39
In the current year, the Group has early applied IFRS 9 Financial Instruments (as issued in November 2009 and revised in October
2010) and the related consequential amendments. As the Standard is required to be applied retrospectively, the date of initial
application is 1 January 2011. Comparative amounts have been restated where appropriate. The main reason why the Group
decided to early apply IFRS 9 is the elimination of the available-for-sale (“AFS”) category of financial assets. AFS financial assets
needed to be assessed for impairment with any impairment losses recognised through profit or loss. Going forward any gains and
losses in financial assets previously classified as AFS will be shown either in profit or loss or, where the Group irrevocably
designates, other comprehensive income relating to equity instruments which are not held for trading and at initial recognition
have been classified as at fair value through other comprehensive income (FVTOCI) with no subsequent recycling to profit or loss
even in case of disposal or if they are impaired as indicated by significant or prolonged declines in fair values.
In its 2011 financial statements the group held equity instruments classified as AFS in the amount of CHF 56.4 million for which a
decline in fair value of CHF 35.8 million has been recognised in other comprehensive income. Although the decline in fair value was
significant and prolonged the group has assessed that the decline did not represent an impairment based on the reasons given in
Note 21.1 of the 2011 financial statements. During 2012 in the course of an investigation by SIX Exchange Regulation the company
agreed that the group should have deemed these investments impaired based on the requirements of IAS 39 and that this error
could be remediated through the early application of IFRS 9 in 2012. Had the requirements of IAS 39 been applied accordingly,
other gains and losses as well as loss for the period would have increased by the same amount and basic and diluted losses per
share would have been CHF 3.72. However, due to the early adoption of IFRS 9 the comparative period does not need to be
restated.
IFRS 9 introduces new classification and measurement requirements as set out below for financial assets and liabilities that before
were in the scope of IAS 39 Financial Instruments: Recognition and Measurement.
F-9
F-10

F-11 Orascom Development 2012 Annual Report F-12
Financial assets
IFRS 9 requires all financial assets to be classified and subsequently measured at either amortised cost or fair value on the basis of
the Group’s business model for managing the financial assets and the contractual cash flow characteristics of the financial assets.
As required by IFRS 9, debt instruments are measured at amortised cost only if
– The asset is held within a business model whose objective is to hold assets in order to collect contractual cash flows; and
– The contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and
interest on the principal amount outstanding. If either of the two criteria is not met, the debt instruments are classified as at
fair value through profit or loss (“FVTPL”).
However, the Group may choose at initial recognition to designate a debt instrument that meets the amortised cost criteria as at
FVTPL if doing so eliminates or significantly reduces an accounting mismatch. The Group has not elected to designate any such
debt instruments as at FVTPL.
Debt instruments that are subsequently measured at amortised cost are subject to impairment.
Investments in equity instruments are classified and measured as at FVTPL except when the equity investment is not held for
trading and is designated by the Group as at fair value through other comprehensive income “”FVTOCI”. If the equity investment is
designated at FVTOCI, all gains and losses, except for dividend income that is generally recognised in profit or loss in accordance
with IAS 18 Revenue, are recognised in other comprehensive income and are not subsequently reclassified to profit or loss.
Due to the initial application of IFRS 9, all equity investments which were previously classified as AFS financial assets under IAS 39
have been designated as at FVTOCI.
The impact of this change is the following:
– AFS equity instruments which previously were measured at fair value will continue to be measured at fair value with fair value
changes recognized through OCI. However, contrary to the requirements of IAS 39, there will be no recycling to profit or loss
in case of realisation or permanent and prolonged impairment. This change does not lead to a restatement of the Company’s
financial statements at 1 January 2011 and the comparative period based on the reasons above.
– AFS equity instruments which previously were measured at cost are now measured at fair value with all gains and losses
recognised in other comprehensive income. Management has reviewed the value of Falcon Company for Hotels (“Falcon”),
the only material investment measured at cost. As already noted in ODH’s consolidated financial statements at 31 December
2011, the financial statements of Falcon were incorporated into ODH’s consolidated financial statements at 31 December
2008 in accordance with the International Financial Reporting Standards, as a result of the business combination previously
effected through one of ODH’s subsidiaries whereby control had existed over Falcon at that time. Subsequent to the first
time consolidation, but prior to the completion of the transfer of the legal title on the Egyptian Stock Exchange (EGX), a
dispute over the Falcon securities purchase agreement had arisen. At the beginning of October 2009, the Group ceased
consolidating Falcon due to changes in Falcon’s management resulting in a loss of control for the Group which was one of the
reasons of the dispute. Hence cost value of Falcon represents the fair value on deconsolidation. Due to lack of any detailed
financial information of Falcon and the legal dispute over the Falcon securities purchase agreement, management believes
that the fair value on deconsolidation is still the best estimate of fair value as at 1 January 2011 and any period since then.
For all other immaterial investments held at cost under IAS 39 management believes that cost value represents the best
estimate of fair value due to lack of detailed financial information.
This change does not lead to a restatement of the Company’s financial statements at 1 January 2011 and the comparative
period based on the reasons above.
Financial liabilities
The Groups’ consolidated financial statements so far included hedging liabilities held at FVTPL as well as other financial liabilities
at amortized cost. The option agreements with CMAR and ADL, which are shown in ODH’s consolidated financial statements as at
31 December 2011 under “other financial liabilities” are in substance liabilities from the acquisition of additional interests in these
companies to be settled in the future. Therefore since the initial recognition they have been treated as financial liabilities at
amortized cost. There are no changes in relation to such financial liabilities under IFRS 9 hence the adoption of IFRS 9 did not have
any impacts on the financial liabilities.
Summary of impact on initial application of IFRS 9 as at 1 January 2011
FS Item Categories Carrying Amounts (in CHF)
IAS 39 IFRS 9 IAS 39 IFRS 9
Financial Assets
Cash and bank balances Cash and bank Cash and bank 276,452,970 276,452,970
Other current financial assets FVTPL FVTPL 1,380,948 1,380,948
Other current financial assets Held to maturity Amortized cost 9,427,913 9,427,913
Other non-current financial assets AFS at FV FVTOCI 51,723,128 51,723,128
Other non-current financial assets AFS at cost FVTOCI 18,874,019 18,874,019
Various receivables L & R Amortized cost 338,065,282 338,065,282
Financial Liabilities
Other non-current financial liabilities FVTPL FVTPL 2,141,187 2,141,187
Other non-current financial liabilities Amortized cost Amortized cost 13,307,420 13,307,420
Borrowings Amortized cost Amortized cost 511,768,954 511,768,954
Trade and other payables Amortized cost Amortized cost 93,042,714 93,042,714
Various other financial liabilities Amortized cost Amortized cost 116,974,844 116,974,844
2.2 New and revised IFRSs applied with no material effect on the consolidated financial
statements
Amendments to IFRS 7 Disclosures – Transfers of Financial Assets
The Group has applied the amendments to IFRS 7 Disclosures – Transfers of Financial Assets in the current year. The amendments
increase the disclosure requirements for transactions involving the transfer of financial assets in order to provide greater
transparency around risk exposures when financial assets are transferred.
So far this amendment has not had an impact on the consolidated financial statements of the Group as in the current year there
were no transfers of financial assets where some level of continuing exposure in the asset was retained.
Amendments to IAS 12 Deferred Tax: Recovery of Underlying Assets
The amendments to IAS 12 provide an exception to the general principles in IAS 12 that the measurement of deferred tax assets
and deferred tax liabilities should reflect the tax consequences that would follow from the manner in which the entity expects to
recover the carrying amount of an asset. Specifically, under the amendments, investment properties that are measured using the
fair value model in accordance with IAS 40 Investment Property are presumed to be recovered through sale for the purposes of
measuring deferred taxes, unless the presumption is rebutted in certain circumstances.
The Group measures its investment properties using the fair value model. Management has reviewed the Group’s investment
properties and concluded that the objective is to consume substantially all of the economic benefits embodied in the investment
properties over time, rather than through sale. Therefore, management has determined that the presumption set out in the
amendments to IAS 12 is rebutted and therefore this amendment has had no effect on the amounts reported in the current and
prior years.
One major change under IFRS 9 relates to the accounting for changes in the fair value of a financial liability (designated as at
FVTPL) attributable to changes in the credit risk of that liability. This accounting requirement is further explained in the
accounting policies and did not have any impact on the consolidated financial statements.
F-11
F-12

F-13 Orascom Development 2012 Annual Report F-14
2.3 Standards and Interpretations in issue but not yet effective
At the date of authorisation of these financial statements, the Group has not adopted the following Standards and Interpretations
that have been issued but are not yet effective. They will be effective on or after the dates described below.
New, amended and revised Standards and Interpretations
IFRS 7/
IAS 32
IFRS 10
IFRS 10
IFRS 11
IFRS 12
IFRS 13
The amendments to IAS 32 clarify existing application issues relating to the offset
of financial assets and financial liabilities requirements. Specifically, the
amendments clarify the meaning of ‘currently has a legally enforceable right of
set-off’ and ‘simultaneous realisation and settlement’.
The amendments to IFRS 7 require entities to disclose information about rights of
offset and related arrangements (such as collateral posting requirements) for
financial instruments under an enforceable master netting agreement or similar
arrangement.
IFRS 10 replaces the parts of IAS 27 Consolidated and Separate Financial
Statements that deal with consolidated financial statements. SIC-12
Consolidation – Special Purpose Entities has been withdrawn upon the issuance
of IFRS 10. Under IFRS 10, there is only one basis for consolidation; that is
control. In addition, IFRS 10 includes a new definition of control that contains
three elements which should all be possessed by an entity to conclude it controls
an investee, these are: (a) power over an investee, (b) exposure, or rights, to
variable returns from its involvement with the investee, and (c) the ability to use
its power over the investee to affect the amount of the investor's returns.
The amendments to IFRS 10 introduce an exception to consolidating subsidiaries
for an investment entity, except where the subsidiaries provide services that
relate to the investment entity’s investment activities. Under the amendments to
IFRS 10, an investment entity is required to measure its interests in subsidiaries at
fair value through profit or loss. To qualify as an investment entity, certain criteria
have to be met. Specifically, an entity is required to:
- obtain funds from one or more investors for the purpose of providing
them with professional investment management services;
- commit to its investor(s) that its business purpose is to invest funds
solely for returns from capital appreciation, investment income, or
both; and
- measure and evaluate performance of substantially all of its
investments on a fair value basis.
Consequential amendments to IFRS 12 and IAS 27 (as revised in 2011) have been
made to introduce new disclosure requirements for investment entities.
IFRS 11 replaces IAS 31 Interests in Joint Ventures. IFRS 11 deals with how a joint
arrangement of which two or more parties have joint control should be classified.
SIC-13 Jointly Controlled Entities – Non-monetary Contributions by Venturers has
been withdrawn upon the issuance of IFRS 11. Under IFRS 11, joint arrangements
are classified as joint operations or joint ventures, depending on the rights and
obligations of the parties to the arrangements. In contrast, under IAS 31, there
are three types of joint arrangements: jointly controlled entities, jointly
controlled assets and jointly controlled operations.
In addition, joint ventures under IFRS 11 are required to be accounted for using
the equity method of accounting, whereas jointly controlled entities under IAS 31
can be accounted for using the equity method of accounting or proportionate
consolidation accounting.
IFRS 12 is a disclosure standard and is applicable to entities that have interests in
subsidiaries, joint arrangements, associates and/or unconsolidated structured
entities. In general, the disclosure requirements in IFRS 12 are more extensive
than those in the current standards.
IFRS 13, which shall be applicable on a prospective basis, establishes a single
source of guidance for fair value measurements and disclosures about fair value
measurements. The Standard defines fair value, establishes a framework for
measuring fair value, and requires disclosures about fair value measurements.
The scope of IFRS 13 is broad; it applies to both financial instrument items and
non-financial instrument items for which other IFRSs require or permit fair value
effective from
Annual periods beginning on or
after 1 January 2013 (IFRS 7)
and 1 January 2014 (IAS 32)
Annual periods beginning on or
after 1 January 2013
Annual periods beginning on or
after 1 January 2014
Annual periods beginning on or
after 1 January 2013
Annual periods beginning on or
after 1 January 2013
Annual periods beginning on or
after 1 January 2013
F-13
IAS 1
IAS 19
IAS 27
IAS 28
measurements and disclosures about fair value measurements, except in
specified circumstances. In general, the disclosure requirements in IFRS 13 are
more extensive than those required in the current standards. For example,
quantitative and qualitative disclosures based on the three-level fair value
hierarchy currently required for financial instruments only under IFRS 7 Financial
Instruments: Disclosures will be extended by IFRS 13 to cover all assets and
liabilities within its scope.
The new amendments to IAS 1, that have to be adopted retrospectively, retain
the option to present profit or loss and other comprehensive income in either a
single statement or in two separate but consecutive statements. However, the
amendments to IAS 1 require additional disclosures to be made in the other
comprehensive income section such that items of other comprehensive income
are grouped into two categories: (a) items that will not be reclassified
subsequently to profit or loss; and (b) items that will be reclassified subsequently
to profit or loss when specific conditions are met. Income tax on items of other
comprehensive income is required to be allocated on the same basis.
The amendments to IAS 19 change the accounting for defined benefit plans and
termination benefits. The most significant change relates to the accounting for
changes in defined benefit obligations and plan assets. The amendments require
the recognition of changes in defined benefit obligations and in fair value of plan
assets when they occur, and hence eliminate the 'corridor approach' permitted
under the previous version of IAS 19 and accelerate the recognition of past
service costs. The amendments require all actuarial gains and losses to be
recognised immediately through other comprehensive income in order for the
net pension asset or liability recognised in the consolidated statement of
financial position to reflect the full value of the plan deficit or surplus.
Another significant change to IAS 19 relates to the presentation of changes in
defined benefits obligations and plan assets with changes being split into three
components:
Service cost – recognised in profit or loss and includes current and past service
cost as well as gains or losses on settlements.
Net interest – recognised in profit or loss and calculated by applying the
discount rate at the beginning of the reporting period to the net defined benefit
liability or asset at the beginning of each reporting period.
Remeasurement – recognized in other comprehensive income and comprises
actuarial gains and losses on the defined benefit obligation, the excess of the
actual return on plans assets over the change in plan assets due to the passage
of time and the changes, if any, due to the impact of the asset ceiling.
As a result, the profit or loss will no longer include an expected return on plan
assets, instead, imputed finance income is calculated on the plan assets and is
recognised as part of the net interest cost in profit or loss. Any actual return
above or below the imputed finance income on plan assets is recognised as part
of remeasurement in other comprehensive income.
Except for two exceptions this amendment needs to be applied retrospectively.
IAS 27 Separate Financial Statements (revised 2011), has been amended for the
issuance of IFRS 10 but retains the current guidance for separate financial
statements.
IAS 28 Investments in Associates and Joint Ventures (revised 2011), has been
amended for conforming changes based on the issuance of IFRS 10 and IFRS 11.
Annual periods beginning on or
after 1 July 2012
Annual periods beginning on or
after 1 January 2013
Annual periods beginning on or
after 1 January 2013
Annual periods beginning on or
after 1 January 2013
Various Amendments resulting from annual improvement project Annual periods beginning on or
after 1 January 2013
IFRIC 20
IFRIC 20 clarifies the requirements for accounting for stripping costs associated
with waste removal in surface mining, including when production stripping costs
should be recognised as an asset, how the asset is initially recognised, and
subsequent measurement. As the Group’s activities do not extend to that
industry this IFRIC will not be applicable.
Annual periods beginning on or
after 1 January 2013
Due to the changes to IAS 19 the Group will have to change its accounting policy for the recognition of actuarial gains/losses as
they are currently accounted for using the corridor approach. The Group estimates that the change in accounting policy will
increase the defined benefit obligation recognized for 31 December 2012 by CHF 1.7 million and will impact profit and loss for 2012
by CHF (0.4) million. For all other changes, the Group is assessing whether these changes will impact the consolidated financial
statements in the period of initial application.
F-14

F-15 Orascom Development 2012 Annual Report F-16
3 SIGNIFICANT ACCOUNTING POLICIES
3.1 Statement of compliance
The consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS)
issued by the International Accounting Standards Board (IASB).
3.2 Basis of preparation
The consolidated financial statements have been prepared on the historical cost basis except for financial instruments that are
measured at fair value or amortized cost, as appropriate and investment properties that are measured at fair value as explained in
the accounting policies below. Historical cost is generally based on the fair value of the consideration given in exchange for assets.
The principal accounting policies are set out below.
3.3 Basis of consolidation
The consolidated financial statements of the Group incorporate the financial statements of the Parent Company and entities
(including special purpose entities) controlled by the Parent Company (its subsidiaries). Control is achieved where the Parent
Company has the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities.
The Parent Company considers the existence and effect of potential voting rights that are currently exercisable or convertible,
including potential voting rights held by another entity such as a call and put option, when assessing whether it has the power to
govern the financial and operating policies of its subsidiary. Potential voting rights are not currently exercisable or convertible if
they cannot be exercised or converted until a future date or until the occurrence of a future event.
Income and expenses of subsidiaries acquired or disposed of during the year are included in the consolidated statement of
comprehensive income from the effective date of acquisition or up to the effective date of disposal, as appropriate. Total
comprehensive income of subsidiaries is attributed to the owners of the Parent Company and to the non-controlling interests even
if this results in the non-controlling interests having a deficit balance, except where attribution of total comprehensive income to
the owners of the parent and to the non-controlling interests has already started prior to 1 January 2010 (in which case the Group
does not restate any such attribution for reporting periods preceding that date) - as set out below in the same note – and rather
applies the new attribution rules as set out in IAS 27 (revised 2008) prospectively after that date.
Where necessary, adjustments are made to the financial statements of a Group entity to bring its accounting policies in line with
those used by other members of the Group.
All intra-group transactions, balances, income and expenses are eliminated in full on consolidation.
Non-controlling interests in subsidiaries are identified separately from the Group’s equity therein.
Where the non-controlling interests have arisen from business combinations for which the acquisition date is prior to 1 January
2010, the non-controlling shareholders are initially measured at the non-controlling interests’ proportionate share of the fair value
of the acquiree’s identifiable net assets, at the date of the original business combination. Subsequent to acquisition, the carrying
amount of non-controlling interests is the amount of those interests at initial recognition plus the non-controlling interests’ share
of subsequent changes in equity. Total comprehensive income is attributed to non-controlling interests to the extent of the
carrying amount of those non-controlling interests. Losses applicable to the non-controlling shareholders in excess of their
interests in a subsidiary’s equity are allocated against the interests of the Group except to the extent that the non-controlling
shareholders have a binding obligation and are able to make an additional investment to cover the losses.
Changes in the Group's ownership interests in existing subsidiaries
Changes in the Group's ownership interests in subsidiaries that do not result in the Group losing control over the subsidiaries are
accounted for as equity transactions. The carrying amounts of the Group's interests and the non-controlling interests are adjusted
to reflect the changes in their relative interests in the subsidiaries. Any difference between the amount by which the noncontrolling
interests are adjusted and the fair value of the consideration paid or received is recognised directly in equity and
attributed to owners of the Parent Company.
When the Group loses control of a subsidiary, the profit or loss on disposal is calculated as the difference between (i) the aggregate
of the fair value of the consideration received or receivable and the fair value of any retained interest and (ii) the previous carrying
amount of the assets (including goodwill), and liabilities of the subsidiary and any non-controlling interests. When assets of the
subsidiary are carried at re-valued amounts or fair values and the related cumulative gain or loss has been recognised in other
comprehensive income and accumulated in equity, the amounts previously recognised in other comprehensive income and
accumulated in equity are accounted for as if the Parent Company had directly disposed of the relevant assets (i.e. reclassified to
profit or loss or transferred directly to retained earnings as specified by applicable IFRSs). The fair value of any investment retained
in the former subsidiary at the date when control is lost is regarded as the fair value on initial recognition for subsequent
accounting under IFRS 9 Financial Instruments: Recognition and Measurement or, when applicable, the cost on initial recognition
of an investment in an associate or a jointly controlled entity.
3.4 Business combinations
Acquisitions of businesses are accounted for using the acquisition method. The consideration transferred in a business
combination is measured at fair value, which is calculated as the sum of the acquisition-date fair values of the assets transferred by
the Group, liabilities incurred by the Group to the former owners of the acquiree and the equity interests issued by the Group in
exchange for control of the acquiree. Acquisition-related costs are generally recognised in profit or loss as incurred.
At the acquisition date, the identifiable assets acquired and the liabilities assumed are recognised at their fair value at the
acquisition date, except that:
– deferred tax assets or liabilities and liabilities or assets related to employee benefit arrangements are recognised and
measured in accordance with IAS 12 Income Taxes and IAS 19 Employee Benefits respectively;
– liabilities or equity instruments related to share-based payment arrangements of the acquiree or share-based payment
arrangements of the Group entered into to replace share-based payment arrangements of the acquiree are measured in
accordance with IFRS 2 Share-based Payment at the acquisition date; and
– assets (or disposal groups) that are classified as held for sale in accordance with IFRS 5 Non-current Assets Held for Sale and
Discontinued Operations are measured in accordance with that Standard.
Goodwill is measured as the excess of the sum of the consideration transferred, the amount of any non-controlling interests in the
acquiree, and the fair value of the acquirer's previously held equity interest in the acquiree (if any) over the net of the acquisitiondate
amounts of the identifiable assets acquired and the liabilities assumed. If, after reassessment, the net of the acquisition-date
amounts of the identifiable assets acquired and liabilities assumed exceeds the sum of the consideration transferred, the amount
of any non-controlling interests in the acquiree and the fair value of the acquirer's previously held interest in the acquiree (if any),
the excess is recognised immediately in profit or loss as a bargain purchase gain.
Non-controlling interests that are present ownership interests and entitle their holders to a proportionate share of the entity's net
assets in the event of liquidation may be initially measured either at fair value or at the non-controlling interests' proportionate
share of the recognised amounts of the acquiree's identifiable net assets. The choice of measurement basis is made on a
transaction-by-transaction basis. Other types of non-controlling interests are measured at fair value or, when applicable, on the
basis specified in another IFRS.
When the consideration transferred by the Group in a business combination includes assets or liabilities resulting from a
contingent consideration arrangement, the contingent consideration is measured at its acquisition-date fair value and included as
part of the consideration transferred in a business combination. Changes in the fair value of the contingent consideration that
qualify as measurement period adjustments are adjusted retrospectively, with corresponding adjustments against goodwill.
Measurement period adjustments are adjustments that arise from additional information obtained during the ‘measurement
period’ (which cannot exceed one year from the acquisition date) about facts and circumstances that existed at the acquisition
date.
The subsequent accounting for changes in the fair value of the contingent consideration that do not qualify as measurement
period adjustments depends on how the contingent consideration is classified. Contingent consideration that is classified as equity
is not re-measured at subsequent reporting dates and its subsequent settlement is accounted for within equity. Contingent
consideration that is classified as an asset or a liability is re-measured at subsequent reporting dates in accordance with IFRS 9 (or
where applicable IAS 39 or IAS 37 Provisions, Contingent Liabilities and Contingent Assets, as appropriate, with the corresponding
gain or loss being recognised in profit or loss.
When a business combination is achieved in stages, the Group's previously held equity interest in the acquiree is re-measured to
fair value at the acquisition date (i.e. the date when the Group obtains control) and the resulting gain or loss, if any, is recognised
in profit or loss. Amounts arising from interests in the acquiree prior to the acquisition date that have previously been recognised
in other comprehensive income are reclassified to profit or loss where such treatment would be appropriate if that interest were
disposed of.
If the initial accounting for a business combination is incomplete by the end of the reporting period in which the combination
occurs, the Group reports provisional amounts for the items for which the accounting is incomplete. Those provisional amounts
are adjusted during the measurement period (see above), or additional assets or liabilities are recognised, to reflect new
information obtained about facts and circumstances that existed at the acquisition date that, if known, would have affected the
amounts recognised at that date.
Business combinations that took place prior to 1 January 2010 were accounted for in accordance with the previous version of IFRS
3.The policy described above is applied to all business combinations that took place on or after January 2010.
For common control transactions in which all of the combining entities or businesses ultimately are controlled by the same party
or parties both before and after the combination, and that control is not transitory, the Group recognises the difference between
purchase consideration and carrying amount of net assets of acquired entities or businesses as an adjustment to equity. This
accounting treatment is also applied to later acquisitions of some or all shares of the non-controlling interests in a subsidiary.
F-15
F-16

F-17 Orascom Development 2012 Annual Report F-18
3.5 Investment in associates
An associate is an entity over which the Group has significant influence and that is neither a subsidiary nor an interest in a joint
venture. Significant influence is the power to participate in the financial and operating policy decisions of the investee but is not
control or joint control over those policies.
The results, assets and liabilities of associates are incorporated in these consolidated financial statements using the equity method
of accounting, except when the investment is classified as held for sale, in which case it is accounted for in accordance with IFRS 5
Non-current Assets Held for Sale and Discontinued Operations.
Under the equity method, an investment in an associate is initially recognised in the consolidated statement of financial position
at cost and adjusted thereafter to recognise the Group's share of the profit or loss and other comprehensive income of the
associate. When the Group's share of losses of an associate exceeds the Group's interest in that associate (which includes any
long-term interests that, in substance, form part of the Group's net investment in the associate), the Group discontinues
recognising its share of further losses. Additional losses are recognised only to the extent that the Group has incurred legal or
constructive obligations or made payments on behalf of the associate.
Any excess of the cost of acquisition over the Group’s share of the net fair value of the identifiable assets, liabilities and contingent
liabilities of an associate recognised at the date of acquisition is recognised as goodwill, which is included within the carrying
amount of the investment. Any excess of the Group’s share of the net fair value of the identifiable assets, liabilities and contingent
liabilities over the cost of acquisition, after reassessment, is recognised immediately in profit or loss.
The requirements of IAS 39 are applied to determine whether it is necessary to recognise any impairment loss with respect to the
Group’s investment in an associate. When necessary, the entire carrying amount of the investment (including goodwill) is tested
for impairment in accordance with IAS 36 Impairment of Assets as a single asset by comparing its recoverable amount (higher of
value in use and fair value less costs to sell) with its carrying amount. Any impairment loss recognised forms part of the carrying
amount of the investment. Any reversal of that impairment loss is recognised in accordance with IAS 36 to the extent that the
recoverable amount of the investment subsequently increases.
Upon disposal of an associate that results in the Group losing significant influence over that associate, any retained investment is
measured at fair value at that date and the fair value is regarded as its fair value on initial recognition as a financial asset in
accordance with IFRS 9.The difference between the previous carrying amount of the associate attributable to the retained interest
and its fair value is included in the determination of the gain or loss on disposal of the associate. In addition, the Group accounts
for all amounts previously recognised in other comprehensive income in relation to that associate on the same basis as would be
required if that associate had directly disposed of the related assets or liabilities. Therefore, if a gain or loss previously recognised
in other comprehensive income by that associate would be reclassified to profit or loss on the disposal of the related assets or
liabilities, the Group reclassifies the gain or loss from equity to profit or loss (as a reclassification adjustment) when it loses
significant influence over that associate.
When a Group entity transacts with associates of the Group, profits and losses resulting from the transactions with the associate
are recognised in the Group’s consolidated financial statements only to the extent of interests in the associate that are not related
to the Group.
3.6 Goodwill
Goodwill arising on an acquisition of a business is carried at cost as established at the date of acquisition of the business (see note
3.4) less accumulated impairment losses, if any.
For the purposes of impairment testing, goodwill acquired in a business combination is allocated, starting from the acquisition
date, to each of the Group’s cash-generating units (or groups of cash-generating units) that is expected to benefit from the
synergies of the combination. When assessing each unit or group of units to which the goodwill is so allocated, the Group’s
objective is to test goodwill for impairment at a level that reflects the way the Group manages its operations and with which the
goodwill would naturally be associated under the reporting system in place.
A cash-generating unit to which goodwill has been allocated is tested for impairment annually, or more frequently when there is
indication that the unit may be impaired. If the recoverable amount of the cash-generating unit is less than its carrying amount,
the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other
assets of the unit pro-rata based on the carrying amount of each asset in the unit. Any impairment loss for goodwill is recognised
directly in profit or loss in the consolidated statement of comprehensive income. An impairment loss recognised for goodwill is not
reversed in subsequent periods.
On disposal of the relevant cash-generating unit, the attributable amount of goodwill is included in the determination of the profit
or loss on disposal.
The Group’s policy for goodwill arising on the acquisition of an associate is described in note 3.5.
3.7 Revenue recognition
Revenue is measured at the fair value of the consideration received or receivable. Revenue is reduced for estimated customer
returns, rebates and other similar allowances.
Different policies for revenue recognition apply across the Group's business segments. The following table shows the link between
the accounting policies for revenue recognition and segment information.
Accounting policies
3.7.1 Revenue on sale of land Sale of land
Segments classified by type of activity
3.7.2 Revenue from agreements for construction of real estate Real estate and construction
3.7.3 Construction revenue Real estate and construction
3.7.4 Revenue from the rendering of services
Hotels
Destination management
Other operations
3.7.5 Dividend and interest income Other operations
3.7.6 Rental income Other operations
3.7.1 Revenue on sale of land
Revenue from sale of land, sale of land right and associated cost are recognised when land is delivered and the significant risks,
rewards of ownership and control have been transferred to the buyer, the amount of revenue can be measured reliably, it is
probable that the economic benefits associated with the transaction will flow to the Group and the costs incurred or to be incurred
in respect of the transaction can be measured reliably. Management uses its judgment and considers the opinion obtained from
the legal advisors in assessing whether the Group’s contractual and legal rights and obligations in the agreements are satisfied and
the above criteria are met.
3.7.2 Revenue from agreements for construction of real estate
Management uses its judgment to analyze the Group's agreements for the construction of real estate and any related agreements
to conclude whether or not the contractual terms of such agreements indicate that they are, in substance, for the provision of
construction services or for the delivery of goods that are not complete at the time of entering into the agreement. Such
conclusion depends on the terms of the agreement and all the surrounding facts and circumstances and on whether such an
agreement meets the definition of a construction contract, as described in 3.7.3 below.
In accordance with IFRIC 15, an agreement for the construction of real estate will meet the definition of a construction contract
when the buyer is able to specify the major structural elements of the design of the real estate before construction begins and / or
specify major structural changes once construction is in progress, whether it exercises that ability or not. Where such conditions
are met, revenue and costs associated with such contracts are accounted for in accordance with IAS 11 Construction Contracts (see
3.7.3).
Where an agreement for the construction of real estate does not meet the definition of a construction contract and is not for the
rendering of services, then it is accounted for as a sale of goods under the scope of IAS 18 Revenue. Management concluded that
all contracts entered into for the construction of real estate meet the revenue recognition criteria for the sale of goods.
Accordingly, revenue from the sale of real estate is recognised when all the following conditions are satisfied: the Group has
transferred to the buyer the significant risks and rewards of ownership of the real estate, the Group retains neither continuing
managerial involvement to the degree usually associated with ownership nor effective control over the real estate sold, the
amount of revenue and the costs incurred or to be incurred in respect of the transaction can be measured reliably and it is probable
that the economic benefits associated with the transaction will flow to the entity.
3.7.3 Construction revenue
A construction contract is a contract specifically negotiated for the construction of an asset or a combination of assets that are
closely interrelated or interdependent in term of their design, technology and function or their ultimate purpose or use.
Where the outcome of a construction contract can be estimated reliably, revenue and costs are recognised by reference to the
stage of completion of the contract activity at the end of the reporting period measured based on the completion of a physical
proportion of the contract work. Variations in contract work, claims and incentive payments are included to the extent that they
have been agreed with the customer, their amount can be measured reliably and its receipt is considered probable.
Where the outcome of a construction contract cannot be estimated reliably, contract revenue is recognised to the extent of
contract costs incurred that is probable to be recovered. Contract costs are recognised as expenses in the period in which they are
incurred. When it is probable that total contract costs will exceed total contract revenue, the expected loss is recognised as an
expense immediately.
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F-19 Orascom Development 2012 Annual Report F-20
When contract costs incurred to date plus recognized profits less recognized losses exceed progress billings, the surplus is shown
as amounts due from customers for contract work. For contracts where progress billings exceed contract costs incurred to date
plus recognized profits less recognized losses, the surplus is shown as amounts due to customers for contract work. Amounts
received before the related work is performed are included in the consolidated statement of financial position, as a liability, as
advances received. Amounts billed for work performed but not yet paid by the customer are included in the consolidated
statement of financial position under trade and other receivables.
Construction contract revenue comprises revenue arising from finishing of sold units, extra works requested by customers and any
construction agreement with third parties.
3.7.4 Revenue from the rendering of services
Revenue from services is recognised in the accounting periods in which the services are rendered.
3.7.5 Dividend and interest income
Dividend income from investments other than in associates is recognised when the shareholder’s right to receive payment has
been established, provided that it is probable that the economic benefits will flow to the Group and the amount of income can be
measured reliably.
Interest income from a financial asset is recognized when it is probable that the economic benefits will flow to the Group and the
amount of income can be measured reliably. Interest income is accrued on a time basis, by reference to the principal outstanding
and at the effective interest rate applicable, which is the rate that exactly discounts estimated future cash receipts through the
expected life of the financial asset to that asset’s net carrying amount on original recognition.
3.7.6 Rental income
The Group’s policy for recognition of revenue from operating leases is described in 3.8.1.
3.7.7 Cost of sales
Cost of sales comprises costs related directly to the sale of goods or rendering of services. These costs include also administration
expenses of revenue generating entities in the Group. Under administration expenses are costs allocated for corporate and head
quarter functions as well as non revenue generating entities, such as corporate companies, holding companies and start up
companies. Companies providing these services are marked as HQ in the subsidiaries' list in note 19.
3.8 Leasing
Leases are classified as finance leases whenever the terms of the lease substantially transfer all the risks and rewards of ownership
to the lessee. All other leases are classified as operating leases.
3.8.1 The Group as lessor
Amounts due from lessees under finance leases are recognised as receivables at the amount of the Group's net investment in the
leases. Finance lease income is allocated to accounting periods so as to reflect a constant periodic rate of return on the Group's net
investment outstanding in respect of the leases.
Rental income from operating leases is recognized on a straight-line basis over the term of the relevant lease. Initial direct costs
incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognized on a
straight-line basis over the lease term.
3.8.2 The Group as lessee
Assets held under finance leases are initially recognised as assets of the Group at their fair value at the inception of the lease or, if
lower, at the present value of the minimum lease payments. The corresponding liability to the lessor is included in the statement
of financial position as a finance lease obligation.
Lease payments are apportioned between finance expenses and reduction of the lease obligation so as to achieve a constant rate
of interest on the remaining balance of the liability. Finance expenses are recognised immediately in profit or loss, unless they are
directly attributable to qualifying assets, in which case they are capitalised in accordance with the Group’s general policy on
borrowing costs (see 3.10 below). Contingent rentals are recognised as expenses in the periods in which they are incurred.
Operating lease payments are recognised as an expense on a straight-line basis over the lease term, except when another
systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed.
Contingent rentals arising under operating leases are recognised as an expense in the period in which they are incurred.
In the event that lease incentives are received to enter into operating leases, such incentives are recognised as a liability. The
aggregate benefit of incentives is recognised as a reduction of rental expense on a straight-line basis, except when another
systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed.
3.9 Foreign currencies
The individual financial statements of each subsidiary are presented in the currency of the primary economic environment in which
the entity operates (its functional currency). For the preparation of the Group’s consolidated financial statements, the results and
financial position of each subsidiary are translated into Swiss Franc (CHF), which is the Group’s presentation currency.
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In preparing the financial statements of each individual group entity, transactions in currencies other than the entity’s functional
currency (foreign currencies) are recognised at the rates of exchange prevailing at the dates of the transactions. At the end of each
reporting period, monetary items denominated in foreign currencies are retranslated at the rates prevailing at that date. Nonmonetary
items carried at fair value that are denominated in foreign currencies are retranslated at the rates prevailing at the date
when the fair value was determined. Non-monetary items that are measured in terms of historical cost in a foreign currency are
not retranslated.
Exchange differences on monetary items are recognised in profit or loss in the period in which they arise except for:
– Exchange differences on foreign currency borrowings relating to assets under construction for future productive use, which are
included in the cost of those assets when they are regarded as an adjustment to interest costs on those foreign currency
borrowings;
– Exchange differences on monetary items that qualify as hedging instruments in transactions entered into to hedge certain
foreign currency risks (see 3.22 below for hedging accounting policies); and
– Exchange differences on monetary items receivable from or payable to a foreign operation for which settlement is neither
planned nor likely to occur (therefore forming part of the net investment in the foreign operation), which are recognised
initially in other comprehensive income and reclassified from equity to profit or loss on repayment of the monetary items.
For the purpose of presenting consolidated financial statements, the assets and liabilities of the Group’s foreign operations are
translated into Swiss Francs (CHF) using exchange rates prevailing at the end of each reporting period. Income and expense items
are translated at the average exchange rates for the period, unless exchange rates fluctuate significantly during that period, in
which case the exchange rates at the dates of the transactions are used. Exchange differences arising, if any, are recognised in
other comprehensive income and accumulated in the Group’s foreign currency reserve, a separate component in equity
(attributed to non-controlling interests as appropriate).
On the disposal of a foreign operation (i.e. disposal of the Group’s entire interest in a foreign operation, or a disposal involving loss
of control over a subsidiary that includes a foreign operation, or a disposal involving loss of significant influence over an associate
that includes a foreign operation), all of the exchange differences accumulated in other comprehensive income in respect of that
operation attributable to the owners of the Parent are reclassified to profit or loss.
In the case of a partial disposal of a subsidiary that does not result in the Group losing control over the subsidiary, the
proportionate share of accumulated exchange differences are re-attributed to non-controlling interests and are not recognized in
profit or loss. For all other partial disposals (i.e. reductions in the Group's ownership interest in associates that do not result in the
Group losing significant influence), the proportionate share of the accumulated exchange differences is reclassified to profit or
loss.
Goodwill and fair value adjustments on identifiable assets and liabilities acquired arising on the acquisition of a foreign operation
are treated as assets and liabilities of the foreign operation and translated at the exchange rate prevailing at the end of each
reporting period. Exchange differences arising are recognised in equity.
The exchange rates for the major foreign currencies against CHF relevant to the annual consolidated financial statements were:
Currency table
2012 2011
Average Year end Average Year end
1 EGP Egyptian Pound 0.1544 0.1435 0.1491 0.1556
1 USD US Dollar 0.9377 0.9129 0.8866 0.9384
1 EUR Euro 1.2052 1.2073 1.2329 1.2171
1 OMR Oman Rial 2.4356 2.3711 2.3027 2.4372
1 AED United Arab Emirates Dirham 0.2553 0.2485 0.2414 0.2555
1 MAD Moroccan Dirham 0.1085 0.1081 0.1094 0.1095
1 JOD Jordanian Dinar 1.3235 1.2862 1.2508 1.3244
3.10 Borrowing costs
Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets that
necessary take a substantial period of time to get ready for their intended use or sale, are added to the cost of those assets until
such time, as the assets are substantially ready for their intended use or sale.
The following principles apply when borrowing costs are partly or fully capitalized by the Group as part of a qualifying asset:
– Where hedge accounting is not applied to minimize the interest rate risk on borrowings used to fund that asset and, therefore
derivatives are classified as at fair value through profit or loss, all gains / losses on non-hedging derivatives are immediately
recognized in profit or loss.
– Where variable rate borrowings are used to finance a qualifying asset and a derivative is designated to cash flow hedge the
variability in interest rates on such borrowings, any gain or loss on the hedging derivative that is effective and, therefore
previously recognized in other comprehensive income, is reclassified from equity to profit or loss when the hedged risk
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F-21 Orascom Development 2012 Annual Report F-22
impacts profit or loss. The hedged interest component of the qualifying asset (hedged risk) impacts profit or loss when the
qualifying asset is amortized, impaired or sold.
– Where fixed rate borrowings are used to finance a qualifying asset and a derivative is designated to hedge the fair value
exposure to changes in interest rates of such borrowings, the synthetic floating interest rate that is achieved as a result of a
highly effective hedge is capitalized, so that borrowing costs always reflect the hedged interest rate. The amount of borrowing
costs capitalized in such a case comprises the actual fixed rate on the borrowings plus the effect of swapping this fixed rate
into floating rates.
Investment income earned on the temporary investment of specific borrowings pending their expenditure on qualifying assets is
deducted from the borrowing costs eligible for capitalisation.
All other borrowing costs are recognised in profit or loss in the period in which they are incurred.
As the financing activity is co-ordinated centrally and generally by the parent and some of the main subsidiaries, the group
determines the amount of borrowing costs eligible for capitalisation by applying a capitalisation rate to the expenditures on that
asset. The group includes all borrowings of the parent and its subsidiaries when computing the weighted average of the borrowing
costs applicable to the borrowings that are outstanding during the period other than borrowings made specifically for the purpose
of obtaining a qualifying asset.
The amount of borrowing costs that an entity capitalises during the period shall not exceed the amount of borrowing costs it
incurred during that period, provided that the carrying amount of the qualifying asset on which eligible borrowing costs have been
capitalized does not exceed its recoverable amount (being the higher of fair value less costs to sell or amount in use for that asset).
3.11 Government grants
Government grants are not recognised until there is reasonable assurance that the Group will comply with the conditions attached
to them and that the grants will be received.
Government grants are recognised in profit or loss on a systematic basis over the periods in which the Group recognises as
expenses the related costs for which the grants are received.
Government grants whose primary condition is that the Group should purchase, construct or otherwise acquire non-current assets
are recognised as deferred revenue in the consolidated statement of financial position and transferred to profit or loss on a
systematic and rational basis over the useful lives of the related assets.
Government grants that are receivable as compensation for expenses or losses already incurred or for the purpose of giving
immediate financial support to the Group with no future related costs are recognised in profit or loss in the period in which they
become receivable.
The benefit of a government loan granted at below-market interest rates of interest is treated as a government grant and
measured as the difference between proceeds received and the fair value of the loan based on prevailing market interest rates.
3.12 Retirement benefit costs
Employee pension and retirement benefits are based on the regulations and prevailing circumstances of those countries in which
the Group is represented. In Switzerland, ordinary pension and retirement benefit plans qualify as defined-benefit plans and are
accounted for in conformity with IAS 19 Employee Benefits.
For defined benefit retirement benefit plans, the cost of providing benefits is determined using the Projected Unit Credit Method,
with actuarial valuations being carried out at the end of each reporting period. Actuarial gains and losses that exceed 10 percent of
the greater of (i) the present value of the Group’s defined benefit obligation and (ii) the fair value of plan assets as at the end of the
prior year are amortised over the excepted average remaining working lives of the participating employees.
Past service-costs are recognised immediately in profit or loss to the extent that the benefits are already vested, and otherwise are
amortized on a straight-line basis over the average period until the benefits become vested.
The retirement benefit obligation recognised in the consolidated statement of financial position represents the present value of
the defined benefit obligation as adjusted for unrecognised actuarial gains and losses and unrecognised past service cost, and as
reduced by the fair value of plan assets. Any asset resulting from this calculation is limited to unrecognised actuarial losses and
past service cost, plus the present value of available refunds and reductions in future contributions to the plan.
Payments to defined contribution retirement benefit plans are recognised as an expense when employees have rendered service
entitling them to the contribution.
3.13 Taxation
Income tax expense represents the sum of the tax currently payable and deferred tax.
3.13.1 Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from profit as reported in the consolidated
statement of comprehensive income because of items of income or expense that are taxable or deductible in other years and
items that are never taxable or deductible. The Group’s liability for current tax is calculated using tax rates that have been enacted
or substantively enacted by the end of the reporting period.
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3.13.2 Deferred tax
Deferred tax is recognised on temporary differences between the carrying amounts of assets and liabilities in the consolidated
financial statements and the corresponding tax bases used in the computation of taxable profit, and are accounted for using the
Balance Sheet Liability Method.
Deferred tax liabilities are generally recognised for all taxable temporary differences. Deferred tax assets are generally recognised
for all deductible temporary differences to the extent that it is probable that taxable profits will be available against which those
deductible temporary differences can be utilized.
Such deferred tax liabilities are not recognised if the temporary difference arises from goodwill and no deferred tax assets or
liabilities are recognised for temporary differences resulting from the initial recognition (other than in a business combination) of
other assets and liabilities in a transaction that affects neither the taxable profit nor the accounting profit.
Deferred tax liabilities are recognised for taxable temporary differences associated with investments in subsidiaries and
associates, and interests in joint ventures, except where the Group is able to control the reversal of the temporary difference and it
is probable that the temporary difference will not reverse in the foreseeable future.
Deferred tax assets arising from deductible temporary differences associated with such investments and interests are only
recognised to the extent that it is probable that there will be sufficient taxable profits against which to utilize the benefits of the
temporary differences and they are expected to reverse in the foreseeable future.
The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no
longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the period in which the liability is
settled or the asset realised, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the
reporting period. The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the
manner in which the Group expects, at the end of the reporting period, to recover or settle the carrying amount of its assets and
liabilities.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax
liabilities and when they relate to income taxes levied by the same taxation authority and the Group intends to settle its current
tax assets and liabilities on a net basis.
3.13.3 Current and deferred tax for the year
Current and deferred tax are recognised as an expense or income in profit or loss, except when they relate to items that are
recognised in other comprehensive income or directly in equity, in which case, the current and deferred tax are also recognised in
other comprehensive income or directly in equity respectively. Where current tax or deferred tax arises from the initial accounting
for a business combination, the tax effect is included in the accounting for the business combination.
3.14 Property, plant and equipment
Buildings, plant and equipment, furniture and fixtures held for use in the production, supply of goods or services or for
administrative purposes are stated in the consolidated statement of financial position at cost less any accumulated depreciation
and accumulated impairment losses.
Properties in the course of construction for production, administrative purposes or for a currently undetermined future use are
carried at cost less any recognised impairment loss. Cost includes professional fees and, for qualifying assets, borrowing costs
capitalized in accordance with the Group’s accounting policy as described in note 3.10. Such properties are classified to the
appropriate categories of property, plant and equipment when completed and ready for intended use. Depreciation of these
assets, on the same basis as other property assets, commences when the assets are ready for their intended use.
Depreciation of buildings, plant and equipment as well as furniture and fixtures commences when the assets are ready for their
intended use.
Freehold land is not depreciated.
Depreciation is recognized so as to write off the cost of assets (other than freehold land and properties under construction) less
their residual values over their estimated useful lives, using the straight-line method. The estimated useful lives, residual values
and depreciation method are reviewed at the end of each reporting period, with the effect of any changes in estimate accounted
for on a prospective basis.
Assets held under finance leases are depreciated over their expected useful lives on the same basis as owned assets. However,
when there is no reasonable certainty that ownership of the leased asset will be obtained by the end of the lease term, assets are
depreciated over the shorter of the lease term and their useful lives.
An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expected to
arise from the continued use of the asset. Any gain or loss arising on the disposal or retirement of an item of property, plant and
equipment is determined as the difference between the net sales proceeds and the carrying amount of the asset and is recognised
in profit or loss.
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F-23 Orascom Development 2012 Annual Report F-24
The following estimated useful lives are used in the calculation of depreciation:
Buildings
Plant and equipment
Furniture and fixtures
20 – 50 years
4 – 25 years
3 – 20 years
3.15 Investment property
Investment properties are properties (land or a building – or part of a building – or both) held by the Group entities to earn rentals
and / or for capital appreciation (including property under construction for such purposes). Investment properties are measured
initially at cost, including transaction costs. Subsequent to initial recognition, investment properties are measured at fair value at
the end of each reporting period. Gains and losses arising from changes in the fair value of investment properties are recognised in
profit or loss including an adjustment to the related deferred tax position in the period in which they arise.
Fair value is the amount for which an asset could be exchanged between knowledgeable and willing parties in an arm’s length
transaction. The fair value of investment properties reflects market conditions at the end of each reporting period and is
determined without any deduction for transaction costs which the Group may incur on sale or other disposal. The fair value of
investment properties is determined based on evaluations performed by independent valuators.
An investment property is derecognised upon disposal or when the investment property is permanently withdrawn from use and
no future economic benefits are expected from the disposal. Any gain or loss arising on de-recognition of the property (calculated
as the difference between the net disposal proceeds and the carrying amount of the asset) is included in profit or loss in the period
in which the property is derecognised.
3.16 Impairment of tangible assets
At the end of each reporting period, the Group reviews the carrying amounts of its tangible assets to determine whether there is
any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the
asset is estimated in order to determine the extent of the impairment loss (if any).
Where it is not possible to estimate the recoverable amount of an individual asset, the Group estimates the recoverable amount of
the cash-generating unit to which the asset belongs. Where a reasonable and consistent basis of allocation can be identified,
corporate assets are also allocated to individual cash-generating units, or otherwise they are allocated to the smallest group of
cash-generating units for which a reasonable and consistent allocation basis can be identified.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future
cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time
value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying
amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately
in profit or loss.
Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the
revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that
would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A
reversal of an impairment loss is recognized immediately in profit or loss.
3.17 Inventories
Inventories are stated at the lower of cost and net realizable value.
Costs, including an appropriate portion of fixed and variable production overheads as well as other costs incurred in bringing the
inventories to their present location and condition, are assigned to inventories by the method most appropriate to the particular
class of inventory, with the majority being valued on a weighted average basis. For items acquired on credit and where payment
terms of the transaction are extended beyond normal credit terms, the cost of that item is its cash price equivalent at the
recognition date with any difference from that price being treated as an interest expense on an effective-yield basis (see note 11).
Net realizable value represents the estimated selling price for inventories less all estimated costs of completion and costs
necessary to make the sale.
Estimates of net realisable value are generally made on an item-by-item basis, except in circumstances, where it is more
appropriate to group items of similar or related inventories.
The net realizable value of an item of inventory may fall below its cost for many reasons including, damage, obsolescence, slow
moving items, a decline in selling prices, or an increase in the estimate of costs to complete and costs necessary to make the sale.
In such cases, the cost of that item is written-down to its net realizable value and the difference is recognized immediately in profit
or loss.
Properties intended for sale in the ordinary course of business or in the process of construction or development for such a sale are
included in inventories. These are stated at the lower of cost and net realizable value. The cost of development properties includes
the cost of land and other related expenditure attributable to the construction or development during the period in which
activities are in progress that are necessary to get the properties ready for its intended sale.
3.18 Provisions
Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past event, it is probable
that the Group will be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation.
The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the end
of the reporting period, taking into account the risks and uncertainties surrounding the obligation. When a provision is measured
using the cash flows estimated to settle the present obligation, its carrying amount is the present value of those cash flows (where
the effect of the time value of money is material).
When some or all of the economic benefits required to settle a provision are expected to be recovered from a third party, a
receivable is recognised as an asset, if it is virtually certain that reimbursement will be received and the amount of the receivable
can be measured reliably.
3.19 Financial instruments
Financial assets and financial liabilities are recognised when a Group entity becomes a party to the contractual provisions of the
instrument.
Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are directly attributable to the
acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value
through profit or loss) are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on
initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair value
through profit or loss are recognised immediately in profit or loss.
3.20 Financial assets
All regular way purchases or sales of financial assets are recognised and derecognised on a trade date basis. Regular way
purchases or sales are purchases or sales of financial assets that require delivery of assets within the timeframe established by
regulation or convention in the market place.
All recognised financial assets are subsequently measured in their entirety at either amortised cost or fair value, depending on the
classification of the financial assets.
3.20.1 Classification of financial assets
Debt instruments that meet the following conditions are subsequently measured at amortised cost less impairment loss (except
for debt investments that are designated as at fair value through profit or loss on initial recognition):
– the asset is held within a business model whose objective is to hold assets in order to collect contractual cash flows; and
– the contractual terms of the instrument give rise on specified dates to cash flows that are solely payments of principal and
interest on the principal amount outstanding.
All other financial assets are subsequently measured at fair value.
3.20.2 Effective interest method
The effective interest method is a method of calculating the amortised cost of a debt instrument and of allocating interest income
over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash receipts (including all
fees or points paid or received that form an integral part of the effective interest rate, transaction costs and other premiums or
discounts) through the expected life of the debt instrument, or, where appropriate, a shorter period, to the net carrying amount on
initial recognition.
Income is recognised on an effective interest basis for debt instruments measured subsequently at amortised cost. Interest income
is recognised in profit or loss and is included in the “investment income” line item.
3.20.3 Financial assets at fair value through other comprehensive income (FVTOCI)
On initial recognition, the Group can make an irrevocable election (on an instrument-by-instrument basis) to designate
investments in equity instruments as at FVTOCI. Designation at FVTOCI is not permitted if the equity investment is held for
trading.
A financial asset is held for trading if:
– it has been acquired principally for the purpose of selling it in the near term; or
– on initial recognition it is part of a portfolio of identified financial instruments that the Group manages together and has
evidence of a recent actual pattern of short-term profit-taking; or
– it is a derivative that is not designated and effective as a hedging instrument or a financial guarantee.
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F-25 Orascom Development 2012 Annual Report F-26
Investments in equity instruments at FVTOCI are initially measured at fair value plus transaction costs. Subsequently, they are
measured at fair value with gains and losses arising from changes in fair value recognised in other comprehensive income and
accumulated in the investments revaluation reserve. The cumulative gain or loss will not be reclassified to profit or loss on disposal
of the investments.
The Group has designated all investments in equity instruments that are not held for trading as at FVTOCI on initial application of
IFRS 9.
Dividends on these investments in equity instruments are recognised in profit or loss when the Group’s right to receive the
dividends is established in accordance with IAS 18 Revenue. Dividends earned are recognised in profit or loss and are included in
the ‘investment income’ line item.
3.20.4 Financial assets at fair value through profit or loss (FVTPL)
Investments in equity instruments are classified as at FVTPL, unless the Group designates an investment that is not held for
trading as at fair value through other comprehensive income (FVTOCI) on initial recognition.
Debt instruments that do not meet the amortised cost are measured at FVTPL. In addition, debt instruments that meet the
amortised cost criteria but are designated as at FVTPL are measured at FVTPL. A debt instrument may be designated as at FVTPL
upon initial recognition if such designation eliminates or significantly reduces a measurement or recognition inconsistency that
would arise from measuring assets or liabilities or recognising the gains and losses on them on different bases. The Group has not
designated any debt instrument as at FVTPL.
Debt instruments are reclassified from amortised cost to FVTPL when the business model is changed such that the amortised cost
criteria are no longer met. Reclassification of debt instruments that are designated as at FVTPL on initial recognition is not
allowed.
Financial assets at FVTPL are measured at fair value at the end of each reporting period, with any gains or losses arising on
remeasurement recognised in profit or loss. The net gain or loss recognised in profit or loss is included in the 'other gains and
losses' line item in the consolidated statement of comprehensive income. Fair value is determined in the manner described in note
40.12.
Interest income on debt instruments as at FVTPL is included in the net gain or loss described above.
Dividend income on investments in equity instruments at FVTPL is recognised in profit or loss when the Group's right to receive
the dividends is established in accordance with IAS 18 Revenue and is included in the net gain or loss as described above.
3.20.5 Impairment of financial assets
Financial assets that are measured at amortised cost are assessed for impairment at the end of each reporting period.
Financial assets are considered to be impaired when there is objective evidence that, as a result of one or more events that
occurred after the initial recognition of the financial assets, the estimated future cash flows of the asset have been affected.
Objective evidence of impairment could include:
– significant financial difficulty of the issuer or counterparty; or
– breach of contract, such as a default or delinquency in interest or principal payments; or
– it becoming probable that the borrower will enter bankruptcy or financial re-organisation; or
– the disappearance of an active market for that financial asset because of financial difficulties.
For certain categories of financial asset, such as trade receivables, assets that are assessed not to be impaired individually are, in
addition, assessed for impairment on a collective basis. Objective evidence of impairment for a portfolio of receivables could
include the Group's past experience of collecting payments, an increase in the number of delayed payments in the portfolio past
the average credit period of 60 days, as well as observable changes in national or local economic conditions that correlate with
default on receivables.
The amount of the impairment loss recognised is the difference between the asset's carrying amount and the present value of
estimated future cash flows reflecting the amount of collateral and guarantee, discounted at the financial asset's original effective
interest rate.
The carrying amount of the financial asset is reduced by the impairment loss directly for all financial assets with the exception of
trade receivables, where the carrying amount is reduced through the use of an allowance account. When a trade receivable is
considered uncollectible, it is written off against the allowance account. Subsequent recoveries of amounts previously written off
are credited against the allowance account. Changes in the carrying amount of the allowance account are recognised in profit or
loss.
If, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event
occurring after the impairment was recognised, the previously recognised impairment loss is reversed through profit or loss to the
extent that the carrying amount of the investment at the date the impairment is reversed does not exceed what the amortised
cost would have been had the impairment not been recognised.
3.20.6 De-recognition of financial assets
The Group derecognises a financial asset only when the contractual rights to the cash flows from the asset expire, or when it
transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another entity.
If the Group neither transfers nor retains substantially all the risks and rewards of ownership and continues to control the
transferred asset, the Group recognises its retained interest in the asset and an associated liability for amounts it may have to pay.
If the Group retains substantially all the risks and rewards of ownership of a transferred financial asset, the Group continues to
recognise the financial asset and also recognises a collateralised borrowing for the proceeds received.
On derecognition of a financial asset measured at amortised cost, the difference between the asset’s carrying amount and the
sum of the consideration received and receivable is recognised in profit or loss.
On derecognition of a financial asset that is classified as FVTOCI, the cumulative gain or loss previously accumulated in the
investments revaluation reserve is not reclassified to profit or loss, but is reclassified to retained earnings.
3.21 Financial liabilities and equity instruments
3.21.1 Classification as debt or equity
Debt and equity instruments issued by a Group entity are classified as either financial liabilities or as equity in accordance with the
substance of the contractual arrangements and the definitions of a financial liability and an equity instrument.
3.21.2 Equity instruments
An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of its liabilities.
The instrument is an equity instrument if, and only if, both conditions (a) and (b) below are met:
a) The instrument includes no contractual obligation:
i. to deliver cash or another financial asset to another entity; or
ii.
to exchange financial assets or financial liabilities with another entity under conditions that are potentially unfavourable
to the issuer.
b) If the instrument will or may be settled in the issuer’s own equity instruments, it is:
i. a non-derivative that includes no contractual obligation for the issuer to deliver a variable number of its own equity
instruments; or
ii.
a derivative that will be settled only by the issuer exchanging a fixed amount of cash or another financial asset for a fixed
number of its own equity instruments.
A contract that will be settled by the Group entity receiving or delivering a fixed number of its own equity instruments in exchange
for a fixed amount of cash or another financial asset is an equity instrument.
Equity instruments issued by the Group are recognised at the proceeds received, net of direct issue costs.
Repurchase of the Company’s own equity instruments is recognised and deducted directly in equity. No gain or loss is recognised
in profit or loss on the purchase, sale, issue or cancellation of the Company’s own equity instruments.
3.21.3 Financial liabilities
All financial liabilities are subsequently measured at amortised cost using the effective interest method or at FVTPL.
A financial liability is classified as current liability when it satisfies any of the following criteria:
- It is expected to be settled in the entity’s normal operating cycle
- It is held primarily for the purposes of trading;
- It is due to be settled within twelve months after the reporting period;
- The entity does not have an unconditional right to defer settlement of the liability for at least twelve months after the
reporting period.
All other financial liabilities are classified as non-current
However, financial liabilities that arise when a transfer of a financial asset does not qualify for derecognition or when the
continuing involvement approach applies, financial guarantee contracts issued by the Group, and commitments issued by the
Group to provide a loan at below-market interest rate are measured in accordance with the specific accounting policies set out
below.
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F-27 Orascom Development 2012 Annual Report F-28
Financial liabilities at FVTPL
Financial liabilities are classified as at FVTPL when the financial liability is either held for trading or it is designated as at FVTPL.
A financial liability is classified as held for trading if:
– it has been acquired principally for the purpose of reselling it in the near term; or
– on initial recognition it is part of a portfolio of identified financial instruments that the Group manages together and has a
recent actual pattern of short-term profit-taking; or
– it is a derivative, except for a derivative that is a financial guarantee contract or a designated and effective hedging instrument.
A financial liability other than a financial liability held for trading may be designated as at FVTPL upon initial recognition if:
– such designation eliminates or significantly reduces a measurement or recognition inconsistency that would otherwise arise;
or
– the financial liability forms part of a group of financial assets or financial liabilities or both, which is managed and its
performance is evaluated on a fair value basis, in accordance with the Group’s documented risk management or investment
strategy, and information about the grouping is provided internally on that basis; or
– it forms part of a contract containing one or more embedded derivatives, and the entire combined contract is designated as at
FVTPL in accordance with IFRS 9.
Financial liabilities at FVTPL are stated at fair value. Any gains or losses arising on remeasurement of held-for-trading financial
liabilities are recognised in profit or loss. Such gains or losses that are recognised in profit or loss incorporate any interest paid on
the financial liabilities and are included in the ‘other gains and losses’ line item in the consolidated statement of comprehensive
income.
However, for non-held-for-trading financial liabilities that are designated as at FVTPL, the amount of change in the fair value of
the financial liability that is attributable to changes in the credit risk of that liability is recognised in other comprehensive income,
unless the recognition of the effects of changes in the liability’s credit risk in other comprehensive income would create or enlarge
an accounting mismatch in profit or loss. The remaining amount of change in the fair value of liability is recognised in profit or loss.
Changes in fair value attributable to a financial liability’s credit risk that are recognised in other comprehensive income are not
subsequently reclassified to profit or loss.
Financial liabilities subsequently measured at amortised cost
Financial liabilities that are not held-for-trading and are not designated as at FVTPL are measured at amortised cost at the end of
subsequent accounting periods. The carrying amounts of financial liabilities that are subsequently measured at amortised cost are
determined based on the effective interest method. Interest expense that is not capitalised as part of costs of an asset is included
in the 'finance costs' line item.
Derecognition of financial liabilities
The Group derecognises financial liabilities when, and only when, the Group’s obligations are discharged, cancelled or they expire.
The difference between the carrying amount of the financial liability derecognised and the consideration paid and payable,
including any non-cash assets transferred or liabilities assumed, is recognised in profit or loss.
3.22 Derivative financial instruments
The Group enters into a variety of derivative financial instruments mainly to manage its exposure to interest rate and foreign
exchange rate risk, including foreign exchange forward contracts and interest rate swaps. Further details of derivative financial
instruments are disclosed in notes 35 and 40.
3.22.1 Hedge accounting
The Group generally designates certain derivatives as hedging instruments in respect of foreign currency risk or interest rate risk.
Hedges of foreign currency risk on firm commitments, hedges of net investments in foreign operations as well as hedges of the
variability risk of interest rates are all accounted for by the Group as cash flow hedges.
At the inception of the hedge relationship, the entity documents the relationship between the hedging instrument and the hedged
item, along with its risk management objectives and its strategy for undertaking various hedge transactions. Furthermore, at the
inception of the hedge and on an ongoing basis, the Group documents whether the hedging instrument, in a hedging relationship,
is highly effective in offsetting changes in cash flows of the hedged item attributable to the hedged risk.
3.22.2 Cash flow hedges
The effective portion of changes in the fair value of derivatives that are designated and qualify as cash flow hedges is recognised in
other comprehensive income and accumulated under the heading of cash flow hedging reserve. The gain or loss relating to the
ineffective portion is recognised immediately in profit or loss, and is included in the ‘other gains and losses’ line item.
Amounts previously recognised in other comprehensive income and accumulated in equity are reclassified to profit or loss in the
periods when the hedged item is recognised in profit or loss, in the same line of the consolidated statement of comprehensive
income as the recognised hedged item. However, when the hedged forecast transaction results in the recognition of a nonfinancial
asset or a non-financial liability, the gains and losses previously recognized in other comprehensive income and
accumulated in equity are transferred from equity and included in the initial measurement of the cost of the non-financial asset or
non-financial liability.
Hedge accounting is discontinued when the Group revokes the hedging relationship, the hedging instrument expires or is sold,
terminated, or exercised, or when it no longer qualifies for hedge accounting. Any gain or loss recognised in other comprehensive
income and accumulated in equity at that time remains in equity and is recognised when the forecast transaction is ultimately
recognised in profit or loss. When a forecast transaction is no longer expected to occur, the gain or loss accumulated in equity is
recognised immediately in profit or loss.
3.23 Non-current assets held for sale
Non-current assets and disposal groups are classified as held for sale if their carrying amount will be recovered principally through
a sale transaction rather than through continuing use. This condition is regarded as met only when the sale is highly probable and
the non-current asset (or disposal group) is available for immediate sale in its present condition. Management must be committed
to the sale, which should be expected to qualify for recognition as a completed sale within one year from the date of classification.
When a Group entity acquires a non-current asset (or disposal group) exclusively with a view to its subsequent disposal, it classifies
the non-current asset (or disposal group) as held for sale at the acquisition date only if the one-year requirement above is met and
it is highly probable that the other criteria above that are not met at that date will be met within a short period following the
acquisition.
When the Group is committed to a sale plan involving loss of control of a subsidiary, all of the assets and liabilities of that
subsidiary are classified as held for sale when the criteria described above are met, regardless of whether the Group will retain a
non-controlling interest in its former subsidiary after the sale.
Non-current assets (and disposal groups) classified as held for sale are measured at the lower of their previous carrying amount
and fair value less costs to sell.
Derivatives are initially recognised at fair value at the date the derivative contracts are entered into and are subsequently remeasured
to their fair value at the end of each reporting period. The resulting gain or loss is recognised in profit or loss
immediately unless the derivative is designated and effective as a hedging instrument, in which event the timing of the
recognition in profit or loss depends on the nature of the hedge relationship.
A derivative with a positive fair value is recognized as a financial asset; a derivative with a negative fair value is recognized as a
financial liability.
A derivative that has a remaining maturity of less than twelve months from the end of the reporting period or has a remaining
maturity greater than twelve months but is expected to be settled within twelve months is presented as current asset or liability.
A derivative that is designated and effective in a hedging relationship with a non-current hedged item is presented as a noncurrent
asset or liability in accordance with the presentation of the hedged item.
A derivative that has a maturity of more than twelve months from the end of the reporting period and is not intended to be settled
within twelve months is presented as a non-current asset or liability, even if that derivative is not part of a designated and effective
hedge accounting.
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F-29 Orascom Development 2012 Annual Report F-30
4 CRITICAL ACCOUNTING JUDGMENTS AND KEY SOURCES OF ESTIMATION
UNCERTAINTY
In the application of the Group’s accounting policies, which are described in note 3, management is required to make judgments,
estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources.
The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant.
Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in
the period in which the estimate is revised if the revision affects only that period or in the period of the revision and future periods
if the revision affects both current and future periods.
4.1 Critical judgments in applying accounting policies
The following are the critical judgments, apart from those involving estimations (see note 4.2 below), that management have
made in the process of applying the Group’s accounting policies and that have the most significant effect on the amounts
recognised in the consolidated financial statements.
4.1.1 Revenue recognition – Real estate sales
The operating cycle of residential construction projects predominantly starts when the Group enters into agreements to sell the
real estate units off-plan. The Group treats the sale of real estate units as sale of goods in accordance with IAS 18 Revenue and
IFRIC 15 Agreements for the Construction of Real Estates. Management takes the view that the critical event of revenue
recognition hinges on the transfer of significant risks and rewards of ownership and control to the buyer. When management
makes this assessment it ensures that the detailed criteria for revenue recognition from the sale of goods as set out in IAS 18 and
IFRIC 15 - including the transfer of significant risks and rewards of ownership and control to the buyer - are satisfied and that
recognition of revenue from the sale of real estate is appropriate in the current reporting period.
Given the structure of the real estate sale contracts and the application of IAS 18 and IFRIC 15 as described above, revenue
recognition from residential construction projects can occur in independent stages which consist of the sale of land, constructed,
but unfinished units and finished units. The transfer of significant risks and rewards of ownership and control of each stage is
documented in an official delivery protocol and signed by representatives of the Group as well as the buyer.
Regarding the Acuro deal, which is further explained in note 42, no revenue has been recognized in 2012 due to management’s
assessment that significant risk and rewards will be transferred to the buyer on completion of construction stages and the handing
over of the properties.
4.1.2 Government grants
Acquisition by the Group entities of part of the land used in the construction of their real estate projects from governments of the
local jurisdictions in which they carry out their activities has not brought these transactions under the scope of IAS 20 Accounting
for Government Grants and Disclosure of Government Assistance and, therefore, has not resulted in the recognition of
government grants in the current or in prior periods.
In these cases the government is the only possible seller in the market and the Group purchases the land at market prices available
to all interested parties and does not obtain finance facilities from the government which would require accounting for
government grants.
4.1.3 Employee benefits expense
Employee benefits expense which are directly related to the sale of goods or rendering of services form part of the operation’s cost
of sales. Where employee benefit expense is incurred to perform head quarter functions or relate to non-revenue generating
entities, such as corporate companies, holding companies and start up companies, they are allocated to administration expenses.
4.1.4 Sale of 15% stake in Garranah investments and sale of tour operations
On 1 November 2012, the Group signed a share sale and purchase agreement to sell to the Garranah family an additional 15%
percent stake in five investments whereof four are operating floating hotels (International Stock Company for Floating Hotels &
Touristic Establishments, Mirotel for Floating Hotels Company, Tarot Garranah & Merotil for Floating Hotels, El Tarek for Nile
Cruises & Floating Hotels) and one is active as a tour operator (Tarot Tours Company (Garranah) SAE). The company that provides
tour transportation services (Tarot Garranah for Touristic Transportation) has been sold completely.
Pursuant to this agreement, the Group’s interest in the four operating floating hotels and the tour operator decreased from 45 to
30 percent however the Group keeps its significant influence over these investments in associates. All interests held in the
company providing tour transportations services have been sold. Legal procedures to transfer title were still in process at year end.
Included in this sale and purchase agreements is also the sale of the residual entity of the Group operation in the tour operations
segment. This sale is disclosed as a discontinued operation in accordance with IFRS 5 in these consolidated financial statements,
as management is of the opinion that being the residual entity of the tour operations segment the sale represents a separate
major line of business. This part of the transaction also included an additional purchase of 8.8% in the subsidiary Royal for
Investments.
4.1.5 Deferred taxation on investment property
For the purposes of measuring deferred tax liabilities or deferred tax assets arising from investment properties management
concluded that the Group’s investment properties are held under a business model whose objective is to consume substantially all
of the economic benefits embodied in the investment properties over time, rather than through sales. Therefore, in determining
the Group’s deferred taxation on investment properties, management has determined that the presumption that the carrying
amounts of investment properties measured using the fair value model are recovered entirely through sale is rebutted. As a result,
the Group has recognised any deferred taxes on changes in fair value of investment properties.
4.2 Key sources of estimation uncertainty
The following are the key assumptions concerning the future and other key sources of estimation uncertainty at the end of the
reporting period, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities
within the next financial year.
4.2.1 Impairment of tangible assets and investments in associates
At the end of each reporting period, the Group reviews the carrying amounts of its tangible assets and investments in associates to
determine whether there is any indication that those assets have suffered an impairment loss.
If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment
loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the Group estimates the
recoverable amount of the cash-generating unit to which the asset belongs. Where a reasonable and consistent basis of allocation
can be identified, corporate assets are also allocated to individual cash-generating units, or otherwise, they are allocated to the
smallest Group of cash-generating units for which a reasonable and consistent allocation basis can be identified.
In light of the political development in Egypt, management reconsidered the recoverability of the Group's significant items of
property, plant and equipment and its investments in associates, which are included in the consolidated statement of financial
position at 31 December 2012 at CHF 1,002,981,620 and CHF 18,852,835 respectively (31 December 2011: CHF 969,362,187 and
CHF 29,349,124).
As at 30 June 2o12 the impairment review of investments in associates resulted in an impairment loss of CHF 12.2 million on some
of the investments in Garranah entities. As at 30 September 2012 further indirect impairment of CHF 6.4 million was recognized
through provisions based on the estimated sales price of the 15% stake in Garranah Group subsidiaries. The impairment losses are
shown as other gains and losses (for further details see note 10).
Other than that no other items of property, plant and equipment or investments in associates were impaired. Management is
aware that the slow-down in processes and logistics still impacts the business operations considerably. However, occupancy rates
have started to improve in the last few months and management expects that the slowdown in construction activities mainly leads
to a shift of those revenues to other financial periods. These facts have reconfirmed management's previous estimates of
anticipated revenues from the projects. Management periodically reconsider their assumptions in light of the macroeconomic
developments regarding future anticipated margins on their products. Detailed sensitivity analysis has been carried out and
management is confident that the carrying amount of these assets will be recovered in full, even if returns are reduced. This
situation will be closely monitored, and adjustments made in future periods if future market activity indicates that such
adjustments are appropriate.
4.2.2 Valuation of financial assets at FVTOCI
Basically the fair value of financial assets at FVTOCI is based on stock quotes. However, due to extraordinary situations, as for
example the political situation in Egypt, such market prices might not reflect the real value at all times. In such cases alternative
valuation methods are used to determine the fair value.
4.2.3 Useful lives of property, plant and equipment
The carrying value of the Group's property, plant and equipment at the end of the current reporting period is CHF 1,002,981,620
(31 December 2011: CHF 969,362,187). Management’s assessment of the useful life of property, plant and equipment is based on
the expected use of the assets, the expected physical wear and tear on the assets, technological developments as well as past
experience with comparable assets. A change in the useful life of any asset may have an effect on the amount of depreciation that
is to be recognized in profit or loss for future periods.
Losses on disposal of the 15% stake in Garranah Group entities of CHF 6.4 million were recognized on sale of the 15% stake.
However, as such losses were already recognized as indirect impairment through provisions based on the estimated sales price in
the third quarter of 2012, they are shown as impairment and not as loss from disposal of part of the investments in associates.
Together with the gains from the sale of the tour transportation services company these losses were recognised through “other
gains and losses” (refer to note 10 for further details).
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F-31 Orascom Development 2012 Annual Report F-32
4.2.4 Impairment of goodwill
Determining whether goodwill is impaired requires an estimation of the value in use of the cash-generating units to which
goodwill has been allocated. The value in use calculation requires management to estimate the future cash flows expected to arise
from the cash-generating unit and a suitable discount rate in order to calculate present value.
The carrying amount of goodwill at the end of the current reporting period is CHF 7,331,756 (31 December 2011: 7,951,210). The
recoverability of goodwill is tested for impairment annually during the fourth quarter, or earlier, if an indication of impairment
exists. The value of goodwill is primarily dependent upon projected cash flows, discount rates (WACC) and long-term growth
rates. The significant assumptions are disclosed in note 18. As at 31 December 2012 the annual impairment test showed no
impairment loss (2011: none). Changes to the assumptions may result in further impairment losses in subsequent periods.
4.2.5 Provisions
The carrying amount of provisions at the end of the current reporting period is CHF 79,106,988 (31 December 2011: CHF
90,144,020). This amount is based on estimates of future costs for infrastructure completion, legal cases, government fees,
employee benefits and other charges including taxes in connection with the Group’s operations (see note 32). As the provisions
cannot be determined exactly, the amount could change based on future developments. Changes in the amount of provisions due
to change in management estimates are accounted for on a prospective basis and recognized in the period in which the change in
estimates arises.
4.2.6 Impairment of trade and other receivables as well as other current assets
An allowance for doubtful receivables is recognized in order to record foreseeable losses arising from events such as a customer’s
insolvency. The carrying amount of the allowance for trade and other receivables at the end of the current reporting period is
CHF 42,730,631 (31 December 2011: CHF 23,127,659) (see note 25). In determining the amount of the allowance, several factors are
considered. These include the aging of accounts receivables balances, the current solvency of the customer and the historical
write-off experience.
A similar assessment has been done in relation to the recoverability of other current assets amounted to CHF 74,015,193 (2011:
CHF 73,719,589) which includes amounts due from employees and management (see note 23), outstanding proceeds from the sale
of the six percent stake in the former Garranah subsidiaries and the entire interests in the Joud Funds 1, 2, 3 and 4 (see note 23). To
determine the need for the recognition of any impairment charge, management considered several factors, such as the
contractual repayment date, current solvency of the counterparty and historical write-off experience. In 2012 an impairment
charge of total CHF 9.9 million has been booked in relation to the amounts outstanding from employees and management. CHF
8.8 million were netted off whereas CHF 1.1 million are included in provisions
At 31 December 2011, an impairment charge of CHF 18 million was recorded in addition to the CHF 15 million charged in 2010 to
cover any shortfall that might occur in relation to Joud Fund 1, 2, 3 and 4.
The actual write-offs and / or impairment charges might be higher than expected if the actual financial situation of the customers
and other counterparties is worse than originally expected.
4.2.7 Deferred income taxes
The measurement of deferred income tax assets and liabilities is based on the judgment of management. Deferred income tax
assets are only capitalized if it is probable that they can be used. Whether or not they can be used depends on whether the
deductable tax temporary difference can be offset against future taxable gains. In order to assess the probability of their future
use, estimates must be made of various factors including future taxable profits. At 31 December 2012 deferred income tax assets
amounted to CHF 30,999,043 (31 December 2011: CHF 30,681,825) that have mainly resulted from the tax impact of carry forward
tax losses (see note 13.4). Such deferred tax assets are only recorded when the development phase of the project has been started
and it becomes evident that future taxable profits are probable. If the actual values differ from the estimates, this can lead to a
change in the assessment of recoverability of the deferred tax assets and accounting for such a change, if any, is to be made on a
prospective basis in the reporting periods affected by the change.
4.2.8 Retirement benefit obligations
The retirement benefit obligation is calculated on the basis of various financial and actuarial assumptions. The key assumptions for
assessing these obligations are the discount rate, future salary and pension increases and the probability of the employee reaching
retirement. The obligation was calculated using a discount rate of 2.00% (31 December 2011: 2.40%). Pension costs were
calculated on the basis of an expected return on investment on plan assets of 3.00% (31 December 2011: 3.00%). The calculations
were done by an external expert and the principal assumptions used are summarised in note 38. At 31 December 2012, the
underfunding amounted to CHF 2,935,142 (31 December 2011: CHF 2,352,983), whereby only CHF 871,355 (31 December 2011: CHF
416,295) were recorded as an obligation in the consolidated statement of financial position because the corridor approach is used.
Using other basis for the calculations could have led to different results.
4.2.9 Classification and valuation of investment property
Generally real estate units are constructed either for the Group’s own use or for the sale to third parties and carried at cost.
However, when a unit may not be sold, as soon as a long term rent contract over more than 1 year is agreed with a third party at
market conditions, the unit is classified as an investment property and measured at the fair value obtained from independent,
third party valuation experts. The fair value of investment properties at 31 December 2012 is CHF 78,903,321 (2011: CHF
76,366,131).
The fair value of each of these properties has been arrived at on the basis of valuations carried out, at the dates specified above, by
Messrs Alan Tinkler, Ramlackhan & Co and Fincorp, independent valuation specialists not related to the Group. Note 17 provides
detailed information about the valuation techniques applied and the key assumptions used in the determination of the fair value
of each investment property.
4.2.10 Net realisable value of inventory
Inventory mainly includes real estate construction work under progress which is recognised at cost or net realisable value. The
majority of real estate under construction (approximately three quarters) is already sold at market prices which are significantly
higher than construction cost. Therefore the estimation uncertainty only relates to the unsold real estate under construction. In
general the profit margins on these real estate projects are high and management currently does not expect any of these projects
to be sold below cost.
4.2.11 Infrastructure cost
The Group has an obligation under the terms of its sale and purchase agreements to develop the infrastructure of the sold land.
Infrastructure cost is deemed to form part of the cost of revenue and is based on management estimate of the future budgeted
costs to be incurred in relation to the project including, but are not limited to, future subcontractor costs, estimated labor costs,
and planned other material costs. The provision for infrastructure costs requires the Group’s management to revise its estimate of
such costs on a regular basis in light of current market prices for inclusion as part of the cost of revenue.
4.2.12 Liquidity shortages and related uncertainties
For further details on management’s plans to manage liquidity shortages and related uncertainty please refer to note 43.1.
5 THE GROUP AND MAJOR CHANGES IN GROUP ENTITIES
The Group is comprised of the Parent Company and its subsidiaries operating in different countries.
There have been no major changes in the group structure during the period except for the sale of the last remaining subsidiary
operating in the tour operations segment (note 36), the disposal of Lupp Middle East, an Omani subsidiary of the Group (note 36),
as well as the deemed loss of control of the Swiss subsidiary Andermatt Sedrun Sportbahnen AG due to the acquisition of two
companies operating skiing areas (note 37).
Orascom Hotels & Development SAE (“OHD”) remains the principal operating subsidiary and is located in Egypt.
The group controls its subsidiaries directly and indirectly.
6 REVENUE
An analysis of the Group’s revenue for the year is as follows:
CHF 2012 2011
Revenue from the rendering of services and rental income 195,491,243 184,537,743
Revenue from agreements for construction of Real Estate and construction
revenue
76,409,607 66,969,813
Revenue on sale of land - 2,254,067
TOTAL 271,900,850 253,761,623
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F-33 Orascom Development 2012 Annual Report F-34
7 SEGMENT INFORMATION
7.1 Products and services from which reportable segments derive their revenues
After selling the last subsidiary operating in the “Tours operations” segment and therefore showing the “Tours operations”
segment as discontinued operation (note 14), the Group has four remaining reportable segments, as described below, which are
the Group’s strategic divisions. The strategic divisions offer different products and services and are managed separately because
they require different skills or have different customers. For each of the strategic divisions, the Country CEOs and the Head of
Segments review the internal management reports at least on a quarterly basis. The following summary describes the operation in
each of the Group’s reportable segments:
– Hotels – Include provision of hospitality services in two to five star hotels owned by the Group which are managed by
international or local hotel chains or by the Group itself.
– Real estate and construction – Include acquisition of land in undeveloped areas and addition of substantial value by building
residential real estate and other facilities in stages.
– Land sales – Include sale of land and land rights to third parties on which the Group have developed or will develop certain
infrastructure facilities and where the Group does not have further development commitments.
– Town management – Include provision of facility and infrastructure services at operational resorts and towns.
Other operations include the provision of services from businesses not allocated to any of the segments listed above comprising
rentals from investment properties, mortgages, sports, hospital services, educational services, marina, limousine rentals, laundry
services and other services. None of these segments meets any of the quantitative thresholds for determining a reportable
segment in 2012 or 2011.
The following is an analysis of the Group's revenue from continuing operations by its major products and services.
(i)
Segment
Product
Revenue from external customers
2012 2011
Hotels Hotels managed by international chains 107,571,922 102,012,697
Hotels managed by local chains 26,584,114 24,282,196
Hotels managed by the Group 13,429,956 10,045,297
Segment total 147,585,992 136,340,190
Real estate and construction Tourism real estate 54,699,294 48,963,392
Budget Housing 14,262,654 12,413,287
Construction work 7,447,659 5,593,134
Segment total 76,409,607 66,969,813
Land sales Sales of land and land rights - 2,254,067
Destination management (i) Utilities (e.g. water, electricity) 16,500,275 17,680,163
Other operations Mortgage (Real estate financing) 6,626,927 5,132,459
Sport (Golf) 2,698,181 3,299,447
Rentals (ii) 8,542,561 8,043,705
Hospital services 3,635,022 3,304,702
Educational services 2,318,836 2,244,077
Marina 1,957,357 1,759,677
Limousine 522,438 568,145
Laundry services 83,845 135,284
Others 5,019,809 6,029,894
Segment total 31,404,976 30,517,390
TOTAL 271,900,850 253,761,623
The name of this segment has been changed from “Town Management” to “Destination Management” without any further
changes to the segment itself.
(ii) Rentals include income from investment property of CHF 6,170,558 (2011: CHF 5,943,966) and from other short term rent
contracts in hotels, marinas and golf courses of CHF 2,372,003 (2011: CHF 2,099,739).
7.2 Segment revenue, depreciation and results
The following is an analysis of the Group’s revenue and results from continuing operations by reportable segments:
Total segment revenue Inter-segment revenue Revenue external customers Cost of revenue Depreciation Gross profit/(loss) Segment result
CHF
2012 2011 2012 2011 2012 2011 2012 2011 2012 2011 2012 2011 2012 2011
Hotels 147,585,992 136,340,190 - - 147,585,992 136,340,190 (103,463,909) (102,911,153) (18,355,710) (15,406,495) 25,766,373 18,022,542 19,707,733 16,353,995
Real estate and construction 91,905,466 120,211,348 (15,495,859) (53,241,535) 76,409,607 66,969,813 (76,835,957) (60,689,287) (2,303,264) (3,324,903) (2,729,614) 2,955,623 (2,887,491) 5,141,429
Land sales 2,667,000 2,254,067 (2,667,000) - - 2,254,067 (343,541) (1,776,573) (991,611) (822,128) (1,335,152) (344,634) (3,120,496) (344,634)
Destination management 36,256,490 37,627,873 (19,756,215) (19,947,710) 16,500,275 17,680,163 (17,936,199) (19,024,460) (5,206,170) (5,022,111) (6,642,094) (6,366,408) (6,492,586) (6,620,684)
Other operations 56,763,136 44,882,127 (25,358,160) (14,364,737) 31,404,976 30,517,390 (21,794,408) (21,585,538) (3,361,355) (3,540,605) 6,249,213 5,391,247 12,370,600 338,178
Total 335,178,084 341,315,605 (63,277,234) (87,553,982) 271,900,850 253,761,623 (220,374,014) (205,987,011) (30,218,110) (28,116,242) 21,308,726 19,658,370 19,577,760 14,868,284
Unallocated items*:
Share of (losses) of associates (907,733) (4,980,563)
Other gains and losses (32,122,085) (5,763,837)
Investment income 316,351 4,991,948
Central administration costs and directors’ salaries (76,221,769) (81,434,322)
Finance costs (3,004,924) (3,940,130)
(Loss) before tax (continuing operations) (92,362,400) (76,258,620)
Income tax expenses (10,073,093) (35,619)
(Loss) for the year (continuing operations) (102,435,493) (76,294,239)
* For the purpose of segment reporting, part of the amounts reported for these items in the consolidated statement of comprehensive income have been allocated in the table above to their
relevant segments.
The accounting policies of the reportable segments are the same as the Group’s accounting policies described in note 3. Segment profit represents the profit earned by each segment without
allocation of central administration costs and directors’ salaries, share of profits (losses) of associates, investment income, other gains and losses, finance costs and income tax expense, as included
in the internal management reports that are regularly reviewed by the Board of Directors. This measure is considered to be most relevant for the purpose of resources allocation and assessment of
segment performance.
No single customer contributed ten percent or more to the Group’s revenue for both 2012 and 2011.
No impairment loss in respect of property, plant and equipment as well as goodwill was recognized in 2012 and 2011.
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F-35 Orascom Development 2012 Annual Report F-36
7.3 Segment assets and liabilities
7.3.1 Segment assets and liabilities
CHF 31 December 2012 31 December 2011
SEGMENT ASSETS
Hotels 738,364,607 702,711,544
Real estate and construction 974,017,458 1,109,734,159
Land sales 384,691,034 416,331,750
Destination management 175,807,577 185,121,198
Other operations 387,005,768 397,917,106
Segment assets before elimination 2,659,886,444 2,811,815,757
Inter-segment elimination (989,626,735) (1,028,758,550)
Segment assets after elimination 1,670,259,709 1,783,057,207
Unallocated assets 412,333,387 300,158,603
CONSOLIDATED TOTAL ASSETS 2,082,593,096 2,083,215,810
CHF 31 December 2012 31 December 2011
SEGMENT LIABILITIES
Hotels 421,486,508 367,301,571
Real estate and construction 773,067,961 831,270,468
Land sales 125,823,904 138,887,402
Destination management 114,786,374 122,058,920
Other operations 416,862,315 436,316,670
Segment liabilities before elimination 1,852,027,062 1,895,835,031
Inter-segment elimination (1,138,287,574) (1,223,067,481)
Segment liabilities after elimination 713,739,488 672,767,550
Unallocated liabilities 391,001,948 315,231,376
CONSOLIDATED TOTAL LIABILITIES 1,104,741,436 987,998,926
For the purpose of monitoring segment performance and allocation of recourses between segments, all assets and liabilities are
allocated to reportable segments except for the assets of holding companies or companies which are not yet operational. Goodwill
is allocated to reportable segments as described in note 18.
7.3.2 Additions to non-current assets
CHF 2012 2011
Hotels 102,988,784 21,360,865
Real estate and construction 2,665,624 20,210,653
Land sales - -
Destination management 403,040 355,308
Other operations 5,642,239 12,468,607
Unallocated 17,039,672 53,448,277
TOTAL 128,739,359 107,843,710
7.4 Geographical information
The Group currently operates in nine principal geographical areas – Egypt, Oman, United Arab Emirates, Jordan, Switzerland, UK,
Montenegro, Romania and Morocco. The Group's revenue from continuing operations from external customers by location of
operations and information about its non-current assets by location of assets are detailed below:
Revenue
Non-current assets
CHF 2012 2011 2012 2011
Egypt 210,659,247 205,706,165 552,055,026 608,582,843
Oman 17,575,560 6,052,255 170,966,706 128,371,343
United Arab Emirates 29,519,371 26,590,213 49,788,656 53,214,387
Jordan 4,144,485 4,424,362 16,463,538 17,429,087
Switzerland 179,427 356,343 184,326,790 145,630,120
UK - - 16,111,292 16,737,816
Montenegro - - 17,177,364 9,763,197
Romania - - 5,949,121 5,932,251
Morocco - 1,469 4,534,723 5,612,679
Others 9,822,760 10,630,816 71,843,481 62,405,805
TOTAL 271,900,850 253,761,623 1,089,216,697 1,053,679,528
Non-current assets exclude investments in associates, financial instruments and deferred tax assets.
7.5 Additional information on segment results
The aftermath of the Arab Spring continues to affect the Group’s performance in 2012 for a number of reasons, including:
– The political uncertainty and the after-effects of the extraordinary events that took place in Egypt and other countries in the
Middle East have had a significant impact on the general business environment in these countries. The slow-down in processes
and logistics does still impact the business operations considerably.
– The circumstances in Egypt had a noticeable impact on the tourism sector’s performance during the period under review,
following the issuance of security warnings and travel ban from almost all feeder markets. Nevertheless, occupancy rates
started to improve slowly in 2012.
– The events led to a slowdown in construction activities in the Group’s Egyptian operations since the beginning of 2011,
meaning that significantly less real estate and construction revenues were recognized from real estate units under
construction. Moreover, some events in the Middle East, including Oman, affected the pace of development in the Group’s
other operations within the region. Accordingly, real estate and construction revenues will be shifted to other financial periods.
Contrary to expectations of the Group last year, revenue increased rather slowly due to ongoing slow-down in processes and
logistics.
8 EMPLOYEE BENEFITS EXPENSE
CHF 2012 2011
Employee benefits expense 112,722,523 96,318,219
Thereof included in cost of sales 81,611,963 80,520,315
Thereof included in administration expenses 31,110,560 15,797,904
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F-36

F-37 Orascom Development 2012 Annual Report F-38
9 INVESTMENT INCOME
11 FINANCE COSTS
CHF 2012 2011
Interest income:
- Bank deposits 1,613,288 3,244,728
- Other loans and receivables 3,919,398 7,442,119
Dividends received from equity investments 105,906 1,157,774
TOTAL 5,638,592 11,844,621
Investment income earned on financial assets by category of assets is CHF 5,532,686 (2011: CHF 10,686,847) for loans and
receivables including cash and bank balances and CHF 105,906 (2011: CHF 1,157,774) for dividend income earned on financial
assets at FVTOCI.
Gain or (loss) relating to financial assets classified as at fair value through profit or loss is included in “Other gains and losses” in
note 10.
10 OTHER GAINS AND LOSSES
CHF 2012 2011
Gain on disposal of property, plant and equipment 390,539 413,555
Net foreign exchange losses (9,828,821) (11,321,328)
Impairment losses in relation to investments in associates (i) (18,582,682) -
Impairment losses in relation to reversed sales (ii) (7,371,785) -
(Loss)/Gain from change in fair value of investment property (iii) 3,951,870 (4,745,050)
Gain on disposal of subsidiaries (iv) 1,133,310 -
Other (losses)/gains (2,946,712) 2,428,752
TOTAL (33,254,281) (13,224,071)
(i) Impairment losses in relation to investment in Garranah (note 20). This amount also includes the losses on disposal of the 15%
stake in Garranah Group entities of CHF 6.4 million. However, as such losses were already shown as indirect impairment
through provisions based on the estimated sales price, they are shown as impairment and not as loss from disposal of part of
the investments in associates.
(ii) Impairment losses in relation to reversed sales from Iskan (note 42)
(iii) This net gain/loss represents the effect from the revaluation of the investment properties (note 17)
(iv) In 2012 the Group disposed of its investment in one of the Omani subsidiaries due to liquidation which resulted in a gain of
sale of CHF 3,126,051 (note 36). This gain was partly netted off by the loss resulting from the lost control over a Swiss
subsidiary (note 37) which resulted in a loss on disposal of CHF 1,992,741. In 2011 no subsidiaries or associates were sold.
CHF 2012 2011
Interest on bank overdrafts and loans (39,727,415) (34,849,416)
Interest on call and put option arrangements (1,019,092) (977,090)
Total interest expense for financial liabilities not classified as at fair value
through profit or loss
(40,746,507) (35,826,506)
Less: amounts included in the cost of qualifying assets (i) 31,820,572 27,703,851
TOTAL (8,925,935) (8,122,655)
(i)
The amount of capitalization cost of qualifying assets (project under construction and work in progress) has increased
compared to prior year. This is mainly due to increased activities in relation to the current hotel projects and real estate
projects (mainly Switzerland and Oman), which are eligible for the capitalization of interest expense and the increase in
the weighted average capitalization rate.
The weighted average capitalization rate on funds borrowed generally is 7.6% per annum (2011: 7.45% per annum). This is the rate
that the Group used to determine the amount of borrowing costs eligible for capitalization.
12 COMPENSATION OF KEY MANAGEMENT PERSONNEL
CHF 2012 2011
Salaries 4,473,530 4,328,504
Other short-term employee benefits 761,309 1,014,604
Post employment benefits 255,531 211,154
TOTAL COMPENSATION OF KEY MANAGEMENT PERSONNEL 5,490,370 5,554,262
There is a compensation plan in place for the Board of Directors which consists of a fixed compensation subject to an annual
review. As to the compensation of the members of Executive Management, the base salary is either (in case of members who have
served in that capacity since the Company was formed in 2008) carried over from their previous employment with Orascom Hotels
& Development SAE, or (in case of members appointed at a later time) determined in a discretionary decision of the CEO
approved by the Nomination & Compensation Committee. In respect of the bonus part of the compensation, proposals by the
CEO are presented to the Nomination & Compensation Committee which discusses such proposals and approves them if deemed
fit.
The annual proposals and decisions concerning the compensation of the members of Executive Management are based on an
evaluation of the individual performance of each member, as well as of the performance of the business area for which each
member is responsible (in case of the executive members of the Board, the performance of the Orascom Development Group as a
whole). The CEO forms the respective proposals in his discretion, based on his judgment of the relevant individuals' and business
areas' achievements.
Total compensation of directors and Executive Management is part of the employees benefit expense allocated between cost of
sales and administrative expenses (see note 8).
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F-38

F-39 Orascom Development 2012 Annual Report F-40
12.1 Board and Executive Compensation Disclosures as Required by Swiss Law
Compensation in 2012
CHF
Gross value
of salaries
and fees
Gross value
of cash
bonuses
Unrestricted
shares
Other
benefits
(car,
insurance)
Pension
contributions
BOARD OF
DIRECTORS
Samih Sawiris Chairman 85,333 - 85,333 - - 170,666
Franz Egle Member 85,333 - 85,333 - - 170,666
Adil Douiri Member 82,666 - 82,666 - - 165,332
Luciano Gabriel 1 Member 98,666 - 98,666 - - 197,332
Carolina Müller-Möhl Member 85,333 - 85,333 - - 170,666
Jean-Gabriel Pérès Member 85,333 - 85,333 - - 170,666
Nicolas Cournoyer Member 85,333 - 85,333 - - 170,666
TOTAL BOARD OF DIRECTORS 607,997 - 607,997 - - 1,215,994
EXECUTIVE MANAGEMENT
Gerhard Niesslein 2 1,240,008 - - 48,000 112,179 1,400,187
Total other members of Executive
Management
2,625,525 - - 105,312 143,352 2,874,189
TOTAL EXECUTIVE MANAGEMENT 3,865,533 - - 153,312 255,531 4,274,376
TOTAL COMPENSATION OF KEY
MANAGEMENT
1 acting as Lead Director
2 highest-compensated member of the Executive Management
Compensation in 2011
CHF
4,473,530 - 607,997 153,312 255,531 5,490,370
Gross value
of salaries
and fees
Gross value
of cash
bonuses
Total
remuneration
Unrestricted
shares
Other
benefits
(car,
insurance)
Pension
contributions
Total
remuneration
BOARD OF DIRECTORS
Samih Sawiris Chairman 85,000 - 85,000 3 - - 170,000
Amr Sheta
Vice-
Chairman
83,000 - 83,000 3 - - 166,000
Franz Egle Member 85,000 - 85,000 3 - - 170,000
Adil Douiri Member 83,000 - 83,000 3 - - 166,000
Luciano Gabriel Member 98,000 - 98,000 3 - - 196,000
Carolina Müller-Möhl Member 85,000 - 85,000 3 - - 170,000
Jean-Gabriel Pérès Member 85,000 - 85,000 3 - - 170,000
Nicolas Cournoyer 4 Member 85,000 - 85,000 3 - - 170,000
TOTAL BOARD OF DIRECTORS 689,000 - 689,000 - - 1,378,000
EXECUTIVE MANAGEMENT
Samih Sawiris 5 741,709 - - - - 741,709
Gerhard Niesslein 6 206,668 8,000 28,807 243,475
Total other members of Executive
Management 2,691,127 - - 317,604 182,347 3,191,078
TOTAL EXECUTIVE MANAGEMENT 3,639,504 - - 325,604 211,154 4,176,262
TOTAL COMPENSATION OF KEY
MANAGEMENT
4,328,504 - 689,000 325,604 211,154 5,554,262
A company which is among others owned by Mr. Samih Sawiris and a former member of the Board bought a property in 2010 that
has been leasing office space to the Group. The rent expenses paid to this company since the acquisition of this property
amounted to CHF 847,137 (2011: CHF 845,816).
In 2011, a consultancy firm, in which a member of the Board is a partner, was paid a fee amounted to CHF 492,291. In 2012 no such
fee was paid.
12.2 Holding of Shares
1
2
3
2012 2011
ODH shares
OHD
OHD
ODH shares
shares
shares
BOARD OF DIRECTORS
Samih Sawiris 1 Chairman 17,907,121 - 17,634,321 -
Amr Sheta 4 Vice-Chairman - - 45,943 -
Franz Egle Member 16,776 - 10,806 -
Adil Douiri Member 7,520 - 2,346 -
Luciano Gabriel Member 9,656 - 2,753 -
Carolina Müller-Möhl Member 10,276 - 4,306 -
Jean-Gabriel Pérès Member 8,970 - 3,000 -
Nicolas Cournoyer 5 Member 639,746 - 605,368 -
TOTAL BOARD OF DIRECTORS 18,600,065 - 18,308,843 -
EXECUTIVE MANAGEMENT
Samih Sawiris 3 CEO See above See above See above See above
Gerhard Niesslein 3 CEO - - - -
Amr Sheta 4 Co-CEO - - See above See above
Ahmed El Shamy 2 CFO - - -
Mahmoud Zuaiter 2 CEO Hotel 16,750 - 16,750 -
Julien Renaud-Perret VP International Destinations 6,000 - 6,000 -
Raymond Cron VP European Destinations 400 - 400 -
Hamza Selim VP Destination Management 8,000 - 8,000 -
Aly Elhitamy Chief Construction Officer - - - -
Stuart Siegel Chief Real Estate Officer - - - -
TOTAL EXECUTIVE MANAGEMENT 31,150 - 31,150 -
total includes direct and indirect holding ownership as per note 27.5.
As at 1 July 2012 Ahmed El Shamy was appointed as new CFO of the Group. Mahmoud Zuaiter was promoted to CEO for
the Hotel operations.
As at 1 November 2011 Gerhard Niesslein was appointed as new CEO of the Group. Mr. Samih Sawiris remains Chairman
of the Board of Directors (see above)
4 As at 7 May 2012 Amr Sheta has left the Group
5 The shares are held by investment funds managed or advised by Montpelier Investment Management LLP of which Mr.
Cournoyer is the Managing Director. In 2011 only the directly held shares were shown in this note which has been
corrected for this year’s note.
An amount of CHF 762,500 (2011: CHF 5,422,833) is due from key executives relating to the allocation of OHD shares in 2007 as
detailed in note 23.
No loans or credits were granted to members of the Board, the Executive Management or parties closely linked to them during
2012 and 2011.
3) has been paid out in February 2012
4) since June 2011
5) January – October 2011
6) November/December 2011
F-39
F-40

F-41 Orascom Development 2012 Annual Report F-42
13 Income taxes relating to continuing operations
13.1 Income tax recognised in profit or loss
CHF 2012 2011
CURRENT TAX
Current tax expense for the current year 6,110,045 4,640,658
Adjustments recognized in the current year in relation to the current tax of prior
years
- -
6,110,045 4,640,658
DEFERRED TAX
Deferred tax (income)/expense recognized in the current year 3,963,048 (4,854,441)
Deferred tax reclassified from equity to profit or loss - -
Write-down of deferred tax assets - -
Adjustments to deferred tax attributable to changes in tax rates and laws - 249,402
TOTAL INCOME TAX EXPENSE RECOGNIZED IN THE CURRENT YEAR
RELATING TO CONTINUING OPERATIONS
3,963,048 (4,605,039)
10,073,093 35,619
The following table provides reconciliation between income tax expense recognized for the year and the tax calculated by
applying the applicable tax rates on accounting profit:
CHF 2012 2011
(Loss) before tax from continuing operations (92,362,400) (76,258,620)
Income tax expense calculated at 16.86% (2011: 15.87%) (15,572,300) (12,102,243)
Previously unrecognized deferred tax assets - -
Unrecognized deferred tax assets during the year 17,436,820 7,195,656
Effect of income that is exempt from taxation 3,507,664 2,979,235
Effect of deferred tax balances due to change in income tax rate (see below) - (249,402)
Effect of expenses or (income) that are not (deductible) or added in determining
taxable profit
4,700,909 2,212,373
INCOME TAX EXPENSE RECOGNIZED IN PROFIT OR LOSS 10,073,093 35,619
The average effective tax rate of 16.86% (2011: 15.87%) is the effective tax rate from countries in which the company generates
taxable profit. The increase is mainly due to higher tax rates in Egypt. The new Presidential Decree in Egypt that changes some of
the Egyptian Tax Rules which has been issued but was deactivated on 7 December 2012 could affect the Group once it is activated.
13.2 Income tax recognized in other comprehensive income
CHF 2012 2011
DEFERRED TAX
Fair value measurement of hedging instruments entered into in a cash flow
hedge
(140,519) (175,251)
TOTAL INCOME TAX RECOGNISED IN OTHER COMPREHENSIVE INCOME (140,519) (175,251)
13.3 Current tax assets and liabilities
CHF 2012 2011
Current tax expense 6,110,045 4,640,658
Balance due in relation to the current tax of prior years - 1,867,976
Advance payment in relation to current tax of current year (559,455) -
Foreign currency difference (362,628) (375,153)
CURRENT TAX LIABILITIES 5,187,962 6,133,481
13.4 Deferred tax balances
Deferred tax assets and liabilities arise from the following:
2012
Recognized
Acquisition/
Opening Charged to Exchange in other
Closing
disposal of
balance income difference comprehensive
income
balance
Subsidiary
CHF
ASSETS
Temporary differences
Property, plant & equipment 10,626,114 974,423 (833,184) - - 10,767,353
Cash flow hedges 252,986 - - (140,519) - 112,467
Tax losses 14,615,389 1,559,082 (930,587) - - 15,243,884
Provisions 5,174,793 26,044 (361,466) - - 4,839,371
Pension plan 12,543 23,425 - - - 35,968
30,681,825 2,582,974 (2,125,237) (140,519) - 30,999,043
LIABILITIES
Temporary differences
Property, plant & equipment 27,531,272 5,498,221 (1,800,355) - (1,970) 31,227,168
Investment property 8,827,675 1,047,801 (779,314) - - 9,096,162
Pension plan 37,221 - - - - 37,221
36,396,168 6,546,022 (2,579,669) - (1,970) 40,360,551
NET DEFERRED TAX LIABILITY 5,714,343 3,963,048 (454,432) 140,519 (1,970) 9,361,508
2011
CHF
Opening
balance
Charged to
income
Exchange
difference
Recognized
in other
comprehensive
income
Acquisition/
disposal of
Subsidiary
Closing
balance
ASSETS
Temporary differences
Property, plant & equipment 11,308,002 (314,798) (367,090) - - 10,626,114
Cash flow hedges 428,237 - - (175,251) - 252,986
Tax losses 1,990,492 12,283,166 341,731 - - 14,615,389
Provisions 3,587,482 1,654,115 (66,804) - - 5,174,793
Pension Plan 5,232 7,311 - - - 12,543
17,319,445 13,629,794 (92,163) (175,251) - 30,681,825
LIABILITIES
Temporary differences - - - - - -
Property, plant & equipment 22,653,422 5,486,805 (608,954) - - 27,531,272
Investment property 5,302,598 3,537,950 (12,874) - - 8,827,675
Pension plan 37,221 - - - 37,221
27,993,241 9,024,755 (621,828) - - 36,396,168
NET DEFERRED TAX LIABILITY 10,673,796 (4,605,039) (529,665) 175,251 - 5,714,343
F-41
F-42

F-43 Orascom Development 2012 Annual Report F-44
13.5 Unrecognized deferred tax assets
Deferred tax assets not recognized at the reporting date:
CHF 2012 2011
Tax losses in Parent Company (expiry in 2016) (i) 275,640,031 275,640,031
Tax losses in Parent Company (expiry 2018) (i) 846,695,821 846,695,821
Tax losses in Parent Company (expiry 2019) (i) 1,032,630,753 -
Temporary differences in subsidiaries (ii) 316,992,509 229,117,480
(i) At 31 December 2011 the Parent Company’s tax losses amounted to CHF 1,122,335,852 which mainly related to tax
losses caused by impairment charges recognized on investments as a consequence of the recent restructuring of the
Group and the stock market listing in Switzerland.
The Parent Company incorporated in Switzerland is a holding company and enjoys a privileged taxation for dividend
income from subsidiaries, as such income is tax exempted if certain criteria are met.
The Parent Company does not expect to have any substantial income streams other than tax exempted dividend
income in the foreseeable future and therefore it is not probable that the unused tax losses can be utilized. As a
consequence and unchanged to prior year, all of the tax losses accumulated in the Parent Company which amounted to
CHF 2,154,966,605 at 31 December 2012 were treated as unrecognized deferred tax assets.
(ii) At 31 December 2012, the Group has not recognised deferred tax assets for gains recognized at the subsidiaries level
on intercompany land sales which took place in 2010 in the amount of CHF 233,390,930 (31 December 2011: CHF
229,117,480). During 2012, the Group has not recognised any deferred tax asset on the sale transaction as the
development of this land either has not yet been started or is still in the early stages of development and therefore it is
not evident that future taxable profits are probable. The residual temporary differences are unrecognized tax losses in
subsidiaries which expire in 2017.
14 Discontinued operations
14.1 Disposal of Tour Operations
As at 1 November 2012 OHD, a subsidiary of the Group, entered into shares sale and purchase agreements with Garranah
family. Besides reducing the ownership in several investments in associates, the Group sold their remaining subsidiary
operating in the tour operations business. Therefore the segment “tour operations” is considered a discontinued operation
and is presented accordingly.
CHF 2012 2011
CASH FLOWS FROM DISCONTINUED OPERATIONS
Net cash outflows from operating activities (69,512) (115,522)
Net cash flows from investing activities - -
Net cash flows from financing activities - -
CASH FLOWS FROM DISCONTINUED OPERATIONS (69,512) (115,522)
15 EARNINGS PER SHARE
Basic earnings per share is calculated by dividing the earnings from continuing operations attributable to ordinary shareholders by
the weighted average number of ordinary shares outstanding during the year. For diluted earnings per share, the weighted
average number of ordinary shares in issue is adjusted to assume conversion of all dilutive potential ordinary shares. As the
company does not have any dilutive potential, the basic and diluted earnings per share are the same.
CHF 2012 2011
BASIC AND DILUTED EARNINGS PER SHARE
From continuing operations (3.45) (2.46)
From discontinued operations 0.04 (0.00)
TOTAL BASIC AND DILUTED EARNINGS PER SHARE (3.41) (2.46)
The earnings from continuing operations and weighted average number of ordinary shares used in the calculation of basic and
diluted earnings per share are as follows:
CHF 2012 2011
Loss for the year attributable to the equity holders of the Parent Company (97,207,864) (69,704,752)
Less: (Gain)/loss for the year from discontinued operations (1,080,814) 140,881
Earnings from continuing operations (for basic and diluted earnings per share) (98,288,678) (69,563,871)
Weighted average number of shares for the purposes of EPS 28,516,898 28,328,422
14.2 Analysis of loss for the period from discontinued operations
The result of the discontinued operation included in the consolidated statement of comprehensive income is set out
below. The comparative loss and cash flows from discontinued operations have been re-presented to include this
operation classified as discontinued in the current period. The sale of the tour operations business resulted in a gain on
disposal of CHF 1.2 million which is further described in note 36.
CHF 2012 2011
GAIN/(LOSS) FOR THE PERIOD FROM DISCONTINUED OPERATIONS
Revenue 1,097,993 2,295,402
Cost of sales (1,008,290) (2,381,583)
Gross profit/(loss) 89,703 (86,181)
Other gains and losses (127,808) (11,008)
Administrative expenses (110,141) -
Finance costs - (43,692)
(Loss) before tax (148,246) (140,881)
Income tax (1,259) -
(Loss) after tax (149,505) (140,881)
Gain on disposal of discontinued operations 1,230,319 -
GAIN/(LOSS) FOR THE PERIOD FROM DISCONTINUED OPERATIONS 1,080,814 (140,881)
F-44

F-45 Orascom Development 2012 Annual Report F-46
16 PROPERTY, PLANT AND EQUIPMENT
CHF
Freehold
land
Buildings
Plant and
equipment
Furniture
and fixtures
Property
under
construction
Total
CHF
Freehold
land
Buildings
Plant and
equipment
Furniture
and fixtures
Property
under
construction
Total
ACCUMULATED DEPRECIATION AND IMPAIRMENT
Balance at
- 70,133,162 74,283,139 43,946,580 - 188,362,881
1 January 2011
COST
Balance at
1 January 2011
145,211,428 521,217,283 132,440,779 80,501,535 235,069,698 1,114,440,723
Additions 293,618 29,501,690 18,389,774 9,492,540 50,166,088 107,843,710
Disposals / Transfers (4,247,052) (2,045,770) (1,803,321) (3,218,523) - (11,314,666)
Transferred to
investment property
Derecognized on disposal
of a subsidiary
Foreign currency
exchange differences
Balance at
1 January 2012
- - (7,356,692) - - (7,356,692)
- - - - - -
(1,910,770) (12,366,436) (3,112,360) (1,673,546) (2,317,572) (21,380,684)
139,347,224 536,306,767 138,558,180 85,102,006 282,918,214 1,182,232,391
Additions 529,380 36,050,845 8,088,552 5,277,827 78,792,755 128,739,359
Disposals / transfers (195,635) (983,728) (2,467,290) (3,274,921) (3,474,928) (10,396,502)
Derecognized on disposal
of a subsidiary
Foreign currency
exchange differences
Balance at
31 December 2012
- (1,210,766) (2,482,463) (1,012,342) (1,731,778) (6,437,349)
(8,095,926) (37,431,633) (9,665,786) (5,348,730) (5,974,157) (66,516,232)
131,585,043 532,731,485 132,031,193 80,743,840 350,530,106 1,227,621,667
Eliminated on disposals of
assets
Transferred to investment
property
- (139,970) (742,290) (1,278,127) - (2,160,387)
- - (2,497,094) - - (2,497,094)
Depreciation expense - 12,958,029 11,785,655 8,755,841 - 33,499,525
Foreign currency
exchange differences
Balance at
1 January 2012
Eliminated on disposals of
assets
- (1,767,877) (1,753,655) (813,189) - (4,334,721)
- 81,183,344 81,075,755 50,611,105 - 212,870,204
- (58,185) (1,099,883) (2,928,395) - (4,086,463)
Derecognized on disposal
of a subsidiary
- (420,308) (1,456,943) (760,529) - (2,637,780)
Depreciation expense - 14,082,187 10,820,182 9,589,990 - 34,492,359
Foreign currency
exchange differences
Balance at
31 December 2012
- (6,102,790) (6,143,093) (3,752,390) - (15,998,273)
- 88,684,248 83,196,018 52,759,781 - 224,640,047
CARRYING AMOUNT
At 31 December 2011 139,347,224 455,123,423 57,482,425 34,490,901 282,918,214 969,362,187
At 31 December 2012 131,585,043 444,047,237 48,835,175 27,984,059 350,530,106 1,002,981,620
At 31 December 2012, property, plant and equipment (PPE) of the Group with a carrying amount of CHF 70.3 million (31 December
2011: CHF 92.9 million) were pledged to secure borrowings of the Group as described in note 31. See note 11 for the capitalized
finance cost during the year.
F-45
F-46

F-47 Orascom Development 2012 Annual Report F-48
17 INVESTMENT PROPERTY
The following table summarizes movements, which have occurred, during the current reporting period, on the carrying amount of
investment property.
CHF 2012 2011
FAIR VALUE OF COMPLETED INVESTMENT PROPERTY
Balance at the beginning of the year 76,366,131 78,355,235
Transfer from property, plant and equipment - 4,859,598
Revaluation gain/(loss) 3,951,870 (4,745,050)
Foreign currency translation adjustment (1,414,680) (2,103,652)
Balance at the end of the year 78,903,321 76,366,131
The Group’s investment properties are located in Mauritius and in Egypt.
Their fair values at 31 December 2012 and 2011 have been arrived at on the basis of valuations carried out at these dates by Messrs
Alan Tinkler, Ramlackhan & Co and Fincorp, independent valuation specialists not related to the Group. They are both accredited
valuators in Mauritius and Egypt and have appropriate qualifications and recent experience in the valuation of properties in the
relevant locations.
Both valuation companies have relied on the Discounted Cash Flow (DCF) method to determine the fair value of the investment
property. The Discounted Cash Flow (DCF) approach describes a method to value the investment property using the concepts of
the time value of money. All future cash flows are estimated and discounted to give them a present value. This valuation method
is in conformity with the International Valuation Standards.
For the valuation of the major investment property (86% of total value) in Mauritius the valuer used cash flow projections based on
the rental contracts and the financial budgets approved by the directors, covering a ten-year period and an average discount rate
of 10.52% per annum for Mauritius. The expected rental income based on the rental contracts was indexed using a historical
inflation index provided by Eurostat.
For the valuation of the residual investment property situated in Egypt the valuer used cash flow projections based on financial
budgets for the next four years and an average discount rate of 22.6% (cost of equity). For the terminal value a perpetual growth
rate of 3% was used.
All of the Group’s investment property is held under freehold interests. The following table summarizes income and direct
operating expenses from investment properties rented out to third parties.
CHF 2012 2011
Rental income from investment properties (i) 6,170,558 5,943,966
Direct operating expenses (including repairs and maintenance) arising from
investment properties that generated rental income during the period
1,689,212 1,253,799
18.1 Allocation of goodwill to cash-generating units
Annual test for impairment
An impairment test of goodwill was performed by the Group in order to assess the recoverable amount of its goodwill. No
impairment was recorded as a result of this test. All cash-generating units were tested for impairment using the Discounted Cash
Flow (DCF) method in accordance with IFRS.
The Group’s business segments have been identified as cash–generating units. The DCF model utilized to evaluate the recoverable
amounts of these units was based on a five year projection period. A further description of the assumptions used in the model is
given in the following paragraphs.
The carrying amount of goodwill that has been allocated for impairment testing purposes is as follows:
CHF Segment 2012 2011
Hotel companies * Hotels 7,331,756 7,951,210
*Each subsidiary considered separately
7,331,756 7,951,210
Hotels
As already mentioned, Egypt has been on the brink of social and political turmoils in the past couple of years. While the Egyptian
uprising has come with the promise of major political reform, it has led to the temporary disruption of economic activity. Looking
beyond the current crisis, Egypt can benefit from maintaining its current momentum towards economic liberalization,
privatization, and a more efficient government. This will improve Egypt’s economic position and help foster a sustained growth
once the inevitable global economic upturn materializes. In light of the previously mentioned analysis, the impairment model has
taken the current economical situation of Egypt into close consideration.
The recoverable amount of each cash-generating unit has been determined based on a value in use calculation which uses cash
flow projections based on the financial budgets approved by management covering a five-year period and an average discount
rate of 18% per annum (2011: 19% per annum). The discount rate is based on a risk free tax rate of 10.5% as well as a risk premium
of 7.5%. An average occupancy rate of 75% - 80% was used for the calculations.
Cash flow projections during the budget period were based on management’s expected growth rates for each hotel within the
cash-generating unit. The cash flows beyond that five year period were extrapolated using a growth rate between 0% and 3%.
No impairment loss (2011: CHF nil) was recognized due to impairment test described above.
Sensitivity analysis where the average discount rate was increased by 4.5% and the growth rate reduced by 0.5%, which according
to management is a reasonably possible change in key assumptions, did not cause the aggregate carrying amount to exceed the
aggregate recoverable amount of the cash-generating unit.
Furthermore, management believes that any reasonably possible change in the key assumptions (sensitivity analysis) on which the
recoverable amount is based would not cause the aggregate carrying amount to exceed the aggregate recoverable amount of the
cash-generating unit.
(i)
See note 7.1 for further information on the Group’s rental income.
18 GOODWILL
CHF 2012 2011
Cost 7,331,756 7,951,210
Accumulated impairment losses - -
Carrying amount at end of year 7,331,756 7,951,210
CHF 2012 2011
COST
Balance at beginning of year 7,951,210 8,208,807
Effect of foreign currency exchange differences (619,454) (257,597)
Balance at end of year 7,331,756 7,951,210
F-47
F-48

F-49 Orascom Development 2012 Annual Report F-50
19 SUBSIDIARIES
The Group has control over all the subsidiaries below either directly or indirectly through subsidiaries controlled by the Parent
Company. Details of the Group’s significant subsidiaries at the end of the reporting period are as follows:
Country – Company name Domicile FC
Egypt
Share/paidin
capital
Proportion
of
ownership
interest
and voting
power held
by the
Group
Abu Tig for Hotels Company Red Sea EGP 3,412,500 98.58% 2
Accasia for Hotels Company Cairo EGP 25,000,000 99.16% 5
Arena for Hotels Company S.A.E Cairo EGP 20,000,000 100.00% 4
Azur for Floating Hotels Company
S.A.E (ii)
Cairo EGP 3,000,000 50.84% 5
Captain for Hotels Company Red Sea EGP 768,750 59.69% 3
El Dawar for Hotels Company Cairo EGP 9,560,000 99.16% 3
El Khamsa for Hotels & Touristic
Establishments
El Golf for Hotels Company & Touristic
Establishments
Red Sea EGP 48,000,000 99.97%
Cairo EGP 19,000,000 99.16% 5
El Gouna for Hotels Company S.A.E Cairo EGP 79,560,000 70.12% 5
El Gouna Hospital Company Red Sea EGP 19,000,000 75.23%
El Gouna Services Company Red Sea EGP 250,000 99.68%
El Mounira for Hotels Company S.A.E Red Sea EGP 13,000,000 64.46% 4
El Tebah for Hotels & Touristic
Establishments Company
Cairo EGP 52,000,000 70.12% 5
El Wekala for Hotels Company Cairo EGP 39,000,000 74.58% 4
International Company for Taba
Touristic Projects (Taba Resorts)
International Hotel Holding
(previously: Orascom Hotels Holding
S.A.E)
Marina 2 for Hotels & Touristic
Establishments Company
Marina 3 for Hotels & Touristic
Establishments Company
Cairo EGP 96,000,000 64.47% 5
Cairo EGP 452,367,300 99.16%
Cairo EGP 19,250,000 59.50% 4
Cairo EGP 26,000,000 100.00% 4
Med Taba for Hotels Company S.A.E Cairo EGP 51,000,000 66.57% 4
Misr El Fayoum for Touristic
Development Company S.A.E
Cairo EGP 28,000,000 67.06%
Mokbela for Hotels Company S.A.E Cairo EGP 85,000,000 81.87% 5
Orascom Hotels & Development S.A.E Cairo EGP
1,109,811,63
0
99.68%
Orascom Housing Communities (OHC) Cairo EGP 185,000,000 69.34%
Haram City for Constructions and
Services S.A.E
Cairo EGP 1,500,000 69.56%
Orascom Housing Company Cairo EGP 22,000,000 99.68%
Paradisio for Hotels & Touristic
Establishments Company S.A.E
Red Sea EGP 18,500,000 99.16% 4
Rihana for Hotels Company S.A.E Red Sea EGP 13,000,000 59.50% 4
Roaya for Tourist & Real Estate
Development SAE
Royal for Investment & Touristic
Development S.A.E
Red Sea EGP 50,000,000 74.26%
Cairo EGP 50,000,000 59.61% 4
Taba First Hotel Company S.A.E Cairo EGP 105,000,000 59.57% 5
Taba Heights Company S.A.E
South
Sinai
EGP 157,510,000 98.65%
Tamweel Leasing Finance Co. ILC Cairo EGP 28,860,734 79.70%
Tamweel Mortgage Finance Company
S.A.E
Cairo EGP 100,000,000 87.66%
Tawila for Hotel Company S.A.E Cairo EGP 68,000,000 99.16% 5
Segment
HO* R&C LS DM Other HQ
Country – Company name Domicile FC
Jordan
Share/paid
in capital
Proportion
of
ownership
interest
and voting
power held
by the
Group
Golden Beach for Hotels Company Aqaba JOD 8,200,000 100.00% 4
Mauritius
Club Méditerranée Albion Resorts Ltd
(i)
Montenegro
Lustica Development Ad Podgorica
Morocco
Oued Chibika Development (SA)
Chbika Rive Hotel
Oman
Madrakah Hotels Management
Company LLC
Muriya Tourism Development
Company (S.A.O.C)
Salalah Beach Tourism Development
Company (S.A.O.C)
Sifah Tourism Development Company
(S.A.O.C)
Wateera Property Management
Company LLC
Switzerland
Andermatt Swiss Alps AG (previously
AADC AG)
Andermatt Hotels Holding AG
Bellevue Hotels and Apartment
Development AG.
United Arab Emirates
RAK Tourism Investment FZC
Port-
Louis
EUR 20,000,000 12.40%
Podgoric
a EUR 25,000 90.00%
Casablan
ca
Casablan
ca
MAD 286,117,692 64.99%
MAD 16,500,000 65.00% UC
Muscat OMR 4,350,000 70.00%
Muscat OMR 7,500,000 70.00%
Muscat OMR 16.600.000 70.00%
Muscat OMR 17,700,000 70.00%
Muscat OMR 270,000 70.00%
Altdorf CHF 42,000,000 100.00%
Anderma
tt
CHF 100,000 100.00%
Altdorf CHF 4,360,000 73.48% UC
Ras al
Kaimah
AED 7,300,000 73.00% 5
United Kingdom
Eco-Bos Development Limited Cornwall GBP 10,000,000 75.00%
Segment
HO* R&C LS DM Other HQ
(i) The Group has control over the Club Méditerranée Albion Resorts Ltd through a call and put option as described in note 35.
Abbreviations:
HO Hotels
R&C Real estate and construction
LS Land sales
DM Destination management
HQ Headquarter or not yet operational
Other Other operations
* Number of stars the hotel holds
UC Hotel under construction
F-49
F-50

F-51 Orascom Development 2012 Annual Report F-52
20 INVESTMENTS IN ASSOCIATES
Details of the Group’s associates at the end of the reporting period are as follows:
Name of associate
Jordan Company for Projects and Touristic
Development (i)
Place of
incorporation
Proportion of ownership
interest and voting power
held by the Group
Carrying value
(CHF )
2012 2012 2011
Jordon 15.64% 6,092,150 6,850,240
Orascom for Housing and Establishments (ii) Cairo 39.90% 1,113,972 1,208,091
International Stock Company for Floating Hotels
& Touristic Establishments (iii)
Cairo 30.00% 107,587 358,523
Mirotel for Floating Hotels Company (iii) Cairo 30.00% 21,517 732,039
Tarot Garranah & Merotil for Floating Hotels (iii) Cairo 30.00% 96,829 1,055,735
Tarot Tours Company (Garranah) S.A.E (iii) Cairo 30.00% 3,555,767 13,564,911
Tarot Garranah for Touristic Transportation (iii) Cairo - - 5,579,585
Al Tarek for Tourist & Hotel Cruises Cairo 30.00% 5,379 -
Andermatt-Sedrun Sport AG (iv) Switzerland 40.26% 7,859,634 -
TOTAL 18,852,835 29,349,124
Summarised financial information in respect of the Group’s associates is set out below.
CHF 2012 2011
Total assets 180,574,514 200,527,845
Total liabilities (132,846,883) (144,337,166)
Net assets 47,727,631 56,190,679
Group’s share of net assets of associates 12,904,901 13,084,459
Total revenue (4,614,320) 37,391,756
Total (loss) for the period (2,997,425) (11,167,476)
Group’s share of profit/(loss) of associates (907,733) (4,980,563)
(i) Jordan Company for Projects and Touristic Development (JPTD)
JPTD is investing in property, town management and development in Aqaba in Jordon. Since 2008 the Group exercised significant
influence with their two active board members out of eleven leading to changes in the JPTD’s Executive Management and
provision of essential technical information. The proportion of ownership interest held by the Group at 31 December 2012 is
unchanged to prior year.
Sale of 15% stake in Garranah investments
On 1 November 2012, the Group signed a share sale and purchase agreement to sell to the Garranah family an additional 15%
stake in five investment whereof four are operating floating hotels (International Stock Company for Floating Hotels & Touristic
Establishments, Mirotel for Floating Hotels Company, Tarot Garranah & Merotil for Floating Hotels, El Tarek for Nile Cruises &
Floating Hotels) and one is active as a tour operator (Tarot Tours Company (Garranah) SAE). The company that provides tour
transportation services (Tarot Garranah for Touristic Transportation) has been sold completely.
Pursuant to this agreement, the Group’s interest in the four operating floating hotels and the tour operator decreased from 45 to
30 percent however the Group keeps its significant influence over these investments in associates. All interests held in the
company providing tour transportations services have been sold. Legal procedures to transfer title were still in process at year end.
Losses on disposal of the 15% stake in Garranah Group entities of CHF 6.4 million were recognized on sale of the 15% stake.
However, as such losses were already recognized as indirect impairment through provisions based on the estimated sales price in
the third quarter of 2012, they are shown as impairment and not as loss from disposal of part of the investments in associates.
Together with the gains from the sale of the tour transportation services company these losses were recognised through “other
gains and losses ” (refer to note 10 for further details).
(iv) Andermatt-Sedrun Sport AG
As further explained in note 37, the Group lost control over its investment in Andermatt-Sedrun Sport AG (“ASS”) however with a
40.26% interest still has significant influence. The investment in associates is accounted for at its fair value on transaction date
plus the share of gains/losses of ASS since the transaction date. The fair value of ASS was assessed by using a DCF model for its
investment in the skiing area, which is the main asset of ASS. The DCF valuation is based on a five year business plan and a
relatively low discount rate of 5.5% which is due to favourable long-term government financing. In connection with the acquisition
of the skiing areas a total loss of CHF 1.9m resulted from this transaction. See note 37 for further details.
21 NON-CURRENT RECEIVABLES
CHF 2012 2011
Trade receivables 47,273,333 53,370,912
Notes receivable 26,846,506 35,796,968
TOTAL 74,119,839 89,167,880
Non-current receivables include long term receivables for real estate contracts, which will be collected over an average collecting
period of 5.5 years (2011: 5.5 years) and accounts receivables from the mortgage company (Tamweel Mortgage Finance Company
S.A.E.), one of OHD subsidiaries, with an average collecting period of 10 years (2011: 10 years). None of these non-current
receivables are impaired and/or overdue.
Tamweel Mortgage Finance Company S.A.E. has pledged trade receivable with carrying amount of CHF 18.7 million (2011: CHF
15.6 million) to secure borrowings (note 31).
(ii) Orascom for Housing and Establishment
The company develops real estate and housing projects located in Egypt for the low cost sector. The proportion of ownership
interest held by the Group at 31 December 2012 is unchanged to prior year.
(iii) ODH investments in Garranah Group subsidiaries
Impairment 2012
During 2012 an impairment loss of CHF 12.2 million was recognized in the statement of comprehensive income as “other gains and
losses” as described in note 10. The recoverable amount was determined using a DCF-model based on the latest financial
performance and financial forecasts of Garranah for five years. The discount rates used were between 14% and 17% and the
growth rates used were based on market expectations. As at 31 December 2012 no further impairment was necessary.
F-51
F-52

F-53 Orascom Development 2012 Annual Report F-54
22 OTHER FINANCIAL ASSETS
Details of the Group’s other financial assets are as follows:
CHF
Financial assets carried at fair value through profit or loss (FVTPL)
Held for trading non-derivative financial assets - certificates of
mutual funds (i)
Current
Non-current
2012 2011 2012 2011
291,121 7,294,817 - -
Financial assets carried at fair value through
other comprehensive income (FVTOCI)
Nasr City company for Housing & Development (N.C.H.R.) (ii) - - 27,447,108 12,601,741
Egyptian Resort Company (iii) - - 7,116,022 6,174,190
Green Power Uri AG - - 30,000 30,000
Sedrun Bergbahnen AG (iv) - - - 228,800
Andermatt Gotthard Sportbahnen AG (iv) - - - 481,208
Andermatt-Urserntal Tourismus GmbH Investments - - 5,000 5,000
Reclaim Limited - - 1,090,854 1,099,709
Falcon for Hotels SAE (v) - - 18,257,402 18,767,007
Egyptian Mortgage Refinance Company - - 143,450 155,570
Camps and Lodges Company - - 35,863 38,892
Palestine for Tourism Investment Company - - 24,569 26,645
El Koseir Company - - 488 529
Sasso San Gotthardo - - 125,000 -
Golfplatz Sedrun AG - - 7,300 -
Luzern Tourismus AG Investments - - 36,000 -
Financial assets carried at amortized cost
Bonds issued by the Egyptian Government (14.5%, 11
December 2012)
- 7,262,703 - -
(i)
Bonds issued by the Egyptian Government (14%, 3 December
2013)
7,958,036 - - -
TOTAL 8,249,157 14,557,520 54,319,056 39,609,291
Certificates – mutual fund
The Group holds certificates in Mutual Funds and these certificates are recorded at their redemption price at year end.
(ii) Nasr City Company for Housing & Development (N.C.H.R.)
The investment in N.C.H.R. remains unchanged to prior year at 7.07%. In 2009, a development management agreement was
signed between Orascom Development & Management (ODM) and N.C.H.R., an Egyptian listed real estate development
company with a total land bank of 10.13 million square meters. This agreement has been cancelled in 2012.
In general, the stock market in Egypt has recovered significantly in 2012 following the large losses in 2011. However, due to
low turnovers, the markets are still very volatile. In line with this overall recovery the fair value of N.C.H.R has increased by
CHF 14.8 million after it witnessed large losses in 2011.
(iii) Egyptian Resort Company
The investment in Egyptian Resort Company (“ERC”) remains unchanged to prior year. The company is acting as the
developer of the hotel and real estate project in Sahel Hashish (Egypt). Since March 2011, ERC is involved in a dispute with the
General Authority for Tourism and Development (“GATD”).
As mentioned above, the stock market in Egypt has recovered significantly in 2012 following the large losses in 2011.
However, due to low turnovers, the markets are still very volatile. In line with this overall recovery the fair value of ERC has
increased by CHF 0.9 million after it witnessed large losses in 2011.
(iv) Sedrun Bergbahnen AG / Andermatt Gotthard Sportbahnen AG
Due to the deconsolidation of one of the Group’s Swiss subsidiaries, which held these financial investments, they were
deconsolidated as well. For further information refer to notes 20 and 37.
(v) Falcon for hotels
The financial statements of Falcon Company for Hotels (“Falcon”) were incorporated into ODH’s consolidated financial
statements at 31 December 2008 in accordance with the International Financial Reporting Standards, as a result of the
business combination previously effected through one of ODH’s subsidiaries whereby control had existed over Falcon at that
time. Subsequent to the first time consolidation, but prior to the completion of the transfer of the legal title on the Egyptian
Stock Exchange (EGX), a dispute over the Falcon securities purchase agreement had arisen. At the beginning of October
2009, the Group ceased consolidating Falcon due to changes in Falcon’s management resulting in a loss of control for the
Group which was one of the reasons of the dispute. Management believes that the carrying amount of this investment is the
best estimate of its fair value as at 1 January 2011 and any period since then (for further details refer to note 2.1).
23 OTHER CURRENT ASSETS
CHF 2012 2011
Advance to suppliers (i) 10,836,547 9,741,155
Other debit balances (ii) 33,934,262 19,228,883
Amounts due from employees and the management team (iii) 1,831,250 12,995,352
Down payments for investments 42,605 186,217
Prepaid expenses 3,968,603 7,568,536
Deposit with others 3,823,240 4,040,411
Prepaid sales commissions related to uncompleted units 8,716,562 7,376,268
Withholding tax 5,603,634 3,268,261
Urban development authority 990,199 1,073,860
Letters of guarantee – cash margin 2,091,455 6,413,957
Cash imprest 285,667 298,172
Accrued revenue 1,891,169 1,528,517
TOTAL 74,015,193 73,719,589
(i) The increase in advance to suppliers mainly relates to prepayments in relation to construction activity in Switzerland.
(ii) Included in other debit balances as at 31 December 2012 is an amount of CHF 11.4 million which is the value of OHC withdrawn
land amounting to CHF 9.7 million as well as infrastructure expenditures located on the withdrawn land in Fayoum amounting
to CHF 1.7 million.. Further, other debit balances include deferred proceeds of net CHF nil million (2011: CHF nil million) from
the sale of all interests in Joud Fund 1, 2, 3 and 4 net of the impairment charge of CHF 33 million of which CHF 15 million was
recorded against other debit balances at 31 December 2010 to cover any shortfall that might occur as a result of the recent
political developments in the Middle East region. In 2011 an additional impairment charge of CHF 18 million was recorded.
(iii) This amount is due from employees and management team including executive board members as a result of receiving two
million OHD shares in 2007. These shares were previously issued based on a general assembly resolution in OHD dated 13
February 2006 authorizing the company to issue 2 million shares at par to be used to allocate to employees and management
team (see note 42). All of these shares were swapped at a rate of 1:10 for ODH shares in 2008. On one side payment of the
share price was deferred and payback period was extended each year, on the other side employees and management were
instructed not to sell their unpaid shares. Due to the fact that the share price decreased substantially since the allocation of the
shares, provisions against these receivables were recognized in 2011 and 2012. In March 2013, the terms and conditions of the
final settlement were ultimately determined by the Board of Directors based on the share price as at 31 December 2012. This
resulted in an amount of CHF 1,831,250 (2011: 12,787,116) which is due from employees and management team including
executive board members and a residual provision of CHF 1,068,750. All other amounts due were netted off. The reduction in
the amount due from employee and management is not considered remuneration as the shares were not ready for use until
this final settlement agreement. Therefore only the issuance of shares to the employees and management in 2007 should be
regarded as remuneration.
F-53
F-54

F-55 Orascom Development 2012 Annual Report F-56
24 INVENTORIES
(i)
CHF 2012 2011
Construction work in progress (i) 371,424,475 350,744,293
Land held for development under purchase agreements (ii) 71,318,624 66,831,436
Other inventories (iii) 56,384,331 60,578,871
TOTAL 499,127,430 478,154,600
This amount includes real estate construction work under progress. The real estate units are sold off plan. The growth is
mainly due to ongoing construction work in Switzerland. For further details on the net realisable value of construction work in
progress refer to note 4.2.10.
(ii) In 2008, the finance leases between OHD and General Authority for Touristic and Development (“GATD”) for development of
land were terminated and replaced with purchase agreements with GATD. On May 2008, OHD signed a new purchase
agreement with GATD to purchase a plot of land and paid a down payment of 27% and the remaining balance is payable in
equal annual instalment commencing upon the expiry of the grace period of three years. In addition, OHD is required to pay
an annual interest at the rate of 5% after the grace period with each instalment.
The value of land shown above is for those plots of land assigned for development and not yet sold by OHD.
(iii) This amount includes hotels inventory of CHF 23.9 million (2011: CHF 30.9 million as well as completed but unsold units of
CHF 34.6 million (2011: CHF 29.6 million)
There were no material write-downs or reversal of write-downs of inventory in 2012 and 2011.
25 TRADE AND OTHER RECEIVABLES
CHF 2012 2011
Trade receivables (i) 102,599,397 107,196,247
Notes receivable 30,396,931 49,498,453
Allowance for doubtful debts (see below) (42,730,631) (23,127,659)
TOTAL 90,265,697 133,567,041
(i) The average credit period on sales of real-estate is 5.5 years. No contractual interest is charged on trade receivables arising
from the sale of real estate units. Interest is only charged in case of customers default. The Group has recognised an allowance
for doubtful debts of 42% (2011: 22%) based on individual bad debts and allowances due to past due amounts which
significantly increased in 2012 compared to 2011 due to the difficult economic environment in Egypt and the other countries in
the middle east. Allowances for doubtful debts are recognised against trade receivables based on estimated irrecoverable
amounts determined by reference to past default experience of the counterparty and an analysis of the counterparty's current
financial position.
Aging of receivables that are past due but not impaired:
CHF 2012 2011
Less than 30 days 14,382,236 19,533,160
Between 30 to 60 days 7,805,512 6,123,969
Between 60 to 90 days 1,440,704 959,867
Between 90 to 120 days 1,517,196 1,526,522
More than 120 days 11,233,753 12,783,434
TOTAL 36,379,401 40,926,952
26 FINANCE LEASE RECEIVABLES
CHF 2012 2011
Current finance lease receivables 4,376,243 3,214,009
Non-current finance lease receivables 17,742,084 12,760,423
TOTAL 22,118,327 15,974,432
26.1 Leasing arrangements
Tamweel Leasing Finance Co., a subsidiary of the Group entered into finance lease arrangements for buildings, cars, equipments,
computer hardware and software as a lessor. All leases are denominated in EGP. The average term of finance leases entered into is
ten years.
26.2 Amounts receivable under finance lease
Minimum lease payments
Present value of
minimum lease payments
CHF 2012 2011 2012 2011
Not later than one year 7,667,979 5,676,716 4,376,243 3,214,009
Later than one year and not later than five years 22,460,952 15,366,748 17,189,670 12,311,059
Later than five years 638,241 1,310,407 552,414 449,364
30,767,172 22,353,871 22,118,327 15,974,432
Less: unearned finance income (8,648,845) (6,379,439) - -
Present value of minimum lease payments 22,118,327 15,974,432 22,118,327 15,974,432
The interest rate inherent in the leases is fixed at the contract date for the entire lease term. The average effective interest rate
contracted is approximately 16% (31 December 2011: 16%) per annum.
The finance lease receivables at the end of the reporting period include CHF 110,041 which are past due (31 December 2011:
CHF 14,123). None of these are impaired.
Movement in the allowance for doubtful debt:
CHF 2012 2011
Balance at beginning of year (23,127,659) (10,729,483)
Impairment losses recognised on receivables (20,739,967) (11,849,852)
Impairment losses reversed (allowance no longer used) 2,059,010 684,615
Foreign exchange translation gains and losses (922,015) (1,232,939)
Balance at end of year (42,730,631) (23,127,659)
Included in the Group’s trade and other receivable balance are debtors with a carrying amount of CHF 36,379,401 (2011: CHF
40,926,952) which are past due but not impaired at the reporting date. The Group has not built an allowance for impairment loss
for the past due amounts reported below as there has not been a significant change in credit quality and the amounts are still
considered recoverable (see note 40).
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F-57 Orascom Development 2012 Annual Report F-58
27 CAPITAL
27.1 Issued capital
CHF 2012 2011
Par value per share 23.20 CHF 23.20 CHF
Number of ordinary shares issued and fully paid 28,543,147 28,543,147
Issued capital 662,201,010 662,201,010
27.2 Fully paid ordinary shares
There were no changes to the share capital in the current financial year.
In 2011 the following transactions within the share capital occurred:
With reference to the authorizations of the general assembly meeting the board of directors has increased the share capital of the
Parent Company by a capital increase resolution on 14 July 2011 in the amount of CHF 7,871,191.65 through the issuance of
330,029 fully paid-up registered shares with a par value of CHF 23.85 each. The registered shares were issued at the price of CHF
29.00 each, corresponding to the closing price of the shares of the Parent Company on 11 July 2011, a total of CHF 9,570,841.
The 330,029 newly issued registered shares were fully paid up on 28 July 2011 by set-off against the claim of Mr. Samih Sawiris,
pursuant to the Securities Lending Agreement.
On 8 August 2011, the share capital was decreased based on a decision made by the General Meeting on 23 May 2011 by CHF
18,553,046 from CHF 680,754,056 to CHF 662,201,010 through a reduction in the par value of the registered shares by CHF 0.65
from CHF 23.85 to CHF 23.20. The capital reduction through a reduction in the par value of the registered shares included also the
newly issued registered shares mentioned above. The Company remitted to the shareholders the amount of CHF 18,553,046. Fully
paid ordinary shares, which have a par value of CHF 23.20 each, carry one vote per share and carry a right to dividends.
27.3 Authorized capital
The Board of Directors is authorized to increase the share capital of the Parent Company by a maximum CHF 108,343,327 by
issuing of up to 4,669,971 fully paid registered shares with a par value of CHF 23.20 each until 23 May 2013. A partial increase is
permitted. The Board of Directors determines the date of issuance, the issue price, the type of contribution, the date of dividend
entitlement as well as the allocation of non exercised pre-emptive rights. The Board of Directors may withdraw or limit the preemptive
rights of the shareholders.
27.4 Conditional capital
The share capital may be increased by a maximum amount of CHF 130,489,699 through the issuance of up to 5,624,556 fully paid
registered shares with a nominal value of CHF 23.20 each
a) up to the amount of CHF 14,489,699 corresponding to 624,556 fully paid registered shares through the exercise of
option rights granted to the members of the Board and the management, further employees and / or advisors of the
Parent Company or its subsidiaries.
b) up to the amount of CHF 116,000,000 corresponding to 5,000,000 fully paid registered shares through the exercise of
conversion rights and / or warrants granted in connection with the issuance of newly or already issued bonds or other
financial instruments by the Parent Company or one of its group companies.
The subscription rights of the shareholders shall be excluded. The Board of Directors shall determine the conditions of the option
rights, the issue price, the dividend entitlements as well as the type of contribution.
At 31 December 2012, no option rights, conversion rights or warrants had been granted on that basis.
27.5 Significant shareholders
The following significant shareholders are known to us.
2012 2011
CHF Number of shares % Number of shares %
Samih Sawiris (i) 17,907,121 62.74% 17,634,321 61.78%
Janus Capital Management LLC 1,542,643 5.40% 1,533,538 5.37%
Others 9,093,383 31.86% 9,375,288 32.85%
TOTAL 28,543,147 100.00% 28,543,147 100.00%
(i) The shares of Samih Sawiris are held directly and through his entities Thursday Holding (Ex-TNT Holding) and SOS Holding.
28 RESERVES (NET OF INCOME TAX)
CHF 2012 2011
Share premium (note ‎28.1) 243,799,019 243,799,019
Treasury shares (note 28.2) (768,308) (2,053,867)
Cash flow hedging reserve (note ‎28.3) (449,869) (1,011,945)
Investments revaluation reserve (note 28.4) (18,529,412) (35,775,216)
General reserve (note 28.5) 4,916,868 4,916,868
Foreign currencies translation reserve (note ‎28.6) (247,327,433) (213,420,597)
Reserve from common control transactions (note 28.7) (120,924,463) (121,217,626)
Equity swap settlement (note 28.8) (10,220,295) (10,220,295)
TOTAL (149,503,893) (134,983,659)
28.1 Share premium
CHF 2012 2011
Balance at beginning of year 243,799,019 242,272,821
Share capital increase (issuance of ordinary shares) - 1,699,649
Share capital increase costs - (173,451)
Balance at end of year 243,799,019 243,799,019
28.2 Treasury shares
CHF 2012 2011
Balance at beginning of year (2,053,867) (1,464,267)
Purchase of treasury shares (i) - (589,600)
Distribution of treasury shares (i) 1,285,559
Balance at end of year (768,308) (2,053,867)
As of 31 December 2012, the Company owned 26,249 own shares (31 December 2011: 70,171). 26,171 own shares were received on
30 December 2010 as part of the compensation for the sale of the six percent stake in the former Garranah subsidiaries. The
residual shares are shares not yet distributed to board members.
(i)
On 28 December 2011, the Company bought 44,000 own shares as a part of the board member remuneration for 2011. Most
of these shares have been forwarded to the board members during the first quarter 2012. The valuation difference has been
recognized in retained earnings (note 29)
28.3 Cash flow hedging reserve
CHF 2012 2011
Balance at beginning of year (1,011,945) (1,712,949)
Gain (loss) arising on changes in fair value of hedging instruments entered into
for cash flow hedges
Interest rate swaps 702,595 876,255
Income tax related to gains/losses recognised in other comprehensive income (140,519) (175,251)
Balance at end of year (449,869) (1,011,945)
The cash flow hedging reserve represents the cumulative effective portion of gains or losses arising on changes in fair value of
hedging instruments entered into for cash flow hedges. The cumulative gain or loss arising on changes in fair value of the hedging
instruments that are recognised and accumulated under the heading of cash flow hedging reserve will be reclassified to profit or
loss only when the hedged transaction affects the profit or loss, or included as a basis adjustment to the non-financial hedged
item, consistent with the relevant accounting policy. As the cash flow hedge is 100% effective at 31 December 2012 the cumulative
hedging gain up to that date is recognised in other comprehensive income (note 40.7).
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F-59 Orascom Development 2012 Annual Report F-60
28.4 Investments revaluation reserve
CHF 2012 2011
Balance at beginning of year (35,775,216) (1,025,518)
Net gain/(loss) arising on revaluation of financial assets at FVTOCI 17,245,804 (34,749,698)
Balance at end of year (18,529,412) (35,775,216)
The investments revaluation reserve represents the cumulative gains and (losses) arising on the revaluation of financial assets at
fair value through other comprehensive income (“FVTOCI”).
28.5 General reserve
CHF 2012 2011
Balance at beginning of year 4,916,868 -
Share capital increase (issuance of ordinary shares) - 4,916,868
Balance at end of year 4,916,868 4,916,868
On 3 December 2010, the Parent Company borrowed 1,286,353 ODH shares from Mr. Samih Sawiris free of charge under a
securities lending agreement. These shares were intended to be used for the tender offer regarding the buy-out of the remaining
shareholders of Orascom Hotels & Development SAE (OHD), a company listed at the EGX. The borrowed ODH shares were not
accounted for as treasury shares by the Group, as Mr. Samih Sawiris retained the significant rights, such as dividend and voting
rights, during the borrowing period as per contractual provisions. Under the above mentioned securities lending agreement the
Parent Company has returned 330 029 of the borrowed ODH shares to Mr. Samih Sawiris on 28 July 2011 by way of capital
increase, which is further explained in note 42. Part of the remaining 956,324 shares, which were not used during the above
mentioned tender offer, were already returned to Mr. Samih Sawiris. The residual 236,744 shares will be returned in 2013. The
difference between the balance, which was reported in equity as “equity swap settlement”, measured at the fair value of the share
at the end of the tender offer, and the fair value amount of the capital increase was recognised in ”General reserve”.
28.6 Foreign currencies translation reserve
CHF 2012 2011
Balance at beginning of year (213,420,597) (195,803,181)
Exchange differences arising on translating the foreign operations (33,906,836) (17,617,416)
Balance at end of year (247,327,433) (213,420,597)
Exchange differences relating to the translation of the results and net assets of the Group's foreign operations from their
functional currencies to the Group's presentation currency (CHF) are recognized directly in other comprehensive income and
accumulated in the foreign currency translation reserve. Exchange differences previously accumulated in the foreign currency
translation reserve in respect of translating the results and net assets of foreign operations are reclassified to profit or loss on the
disposal of the foreign operation.
28.7 Reserve from common control transactions
CHF 2012 2011
Balance at beginning of year (121,217,626) (106,255,917)
Reserve from common control transactions 293,163 (14,961,709)
Balance at end of year (120,924,463) (121,217,626)
The reserve from common control transactions mainly relates to the restructuring of the group and the set up of a new holding
company during May 2008. This new structure became effective by way of a share exchange between the shareholders of the
initial holding company (OHD) and the new holding company (ODH). Following this acquisition through exchange of equity
instruments, ODH became the parent of OHD with an ownership stake of 98.05%, later increased to 98.16% at 31 December 2008.
Whereas the new holding company (ODH) is ultimately owned and controlled by the same major shareholders, management
decided that this Group reorganisation was for the purpose of capital restructuring and it has been accounted for as a continuation
of the financial statements of the initial holding Group (OHD) in the 2008 consolidated financial statements
Management concluded that the above Group restructure is classified as a transaction under common control since the combining
entities are ultimately controlled by the same parties both before and after the combination and that control is not transitory.
However, since IFRS 3 Business Combinations excludes from its scope business combinations involving entities or businesses
under common control (common control transactions), IAS 8 requires management to develop and apply an accounting policy
that results in information that is relevant and reliable.
Management used its judgment in developing and applying an accounting policy for common control transactions arising from the
Group’s capital restructuring as follows:
Recognition of the assets acquired and liabilities assumed of the initial holding Group (OHD) at their previous carrying
amounts;
Recognition of the difference between purchase consideration and the previous carrying amount of net assets acquired as an
adjustment to equity;
Transaction costs, which were incurred in relation to the issuance of ODH shares, have been recognised as a reduction to the
reserve from common control transaction. Amount included in the consolidated statement of changes in equity.
In 2012 the movement in this reserve is due to the acquisition of the additional 8.8% stake in Royal for Investment. Legal
procedures to transfer title were still in process at year end. In 2011 the decrease was mainly due to the increase in ownership of
OHD to 99.68%.
28.8 Equity swap settlement
CHF 2012 2011
Balance at beginning of year (10,220,295) (10,220,295)
Equity swap settlement - 14,487,709
Share capital increase (issuance of ordinary shares) - (14,487,709)
Balance at end of year (10,220,295) (10,220,295)
The consolidated statement of changes in equity includes a balance of CHF -10.2 million outstanding at 31 December 2012 which is
the Group’s sale of the six percent stake in Garranah companies to the Garranah family during 2010. The unsettled consideration
at 31 December 2012 amounts to CHF 10.6 million of which CHF 10.2 million is reported as a negative component. The remaining
balance arising from such sale of CHF 0.4 million is classified as trade and other receivables.
During 2011 shares were borrowed from Mr. Samih Sawiris which has resulted in the recognition of an amount owed to Mr. Samih
Sawiris of CHF 14.5 million reported as a positive component.
Under the above mentioned securities lending agreement the Parent Company has returned 330,029 of the borrowed ODH shares
to Mr. Samih Sawiris on 28 July 2011 by way of capital increase, which is further explained in note 27.2. The difference between the
balance, which was reported in equity as “equity swap settlement”, measured at the fair value of the shares at the end of the
tender offer, and the fair value amount of the capital increase was recognised in “General reserve” in 2011 (note 28.5).
29 RETAINED EARNINGS AND DIVIDENDS ON EQUITY INSTRUMENTS
CHF 2012 2011
Balance at beginning of year 327,175,626 396,880,378
Profit/(loss) attributable to owners of the Parent Company (97,207,864) (69,704,752)
Distribution of treasury shares (note 28.2) (697,003) -
Balance at end of year 229,270,759 327,175,626
During 2011 and 2012 no dividends had been paid, but a capital reduction with payment to the shareholders took place in 2011 as
explained in note 27. In respect of the current year, the Board of Directors does not propose a dividend or a capital reduction to the
shareholders at the Annual General Meeting.
30 NON-CONTROLLING INTERESTS
CHF 2012 2011
Balance at beginning of year 240,823,907 197,589,888
Share of (loss)/profit for the year (4,146,815) (6,730,368)
Exchange differences arising on translation of foreign operations (6,896,360) (3,594,782)
Non-controlling interest share in equity of consolidated subsidiaries (i) 6,103,052 53,559,169
Balance at end of year 235,883,784 240,823,907
(i)
For 2012 and 2011 this figure represents NCI share in capital increases mainly due to share contribution to Salalah, Sifah, Soda
(Oman), Med Taba (Egypt) and Qued Chibika Development (Morocco). In 2012 the increase was smoothened by the purchase
of an additional interest in Royal for Investments (Egypt) as well as the disposal of Lupp Middle East (Oman).
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F-61 Orascom Development 2012 Annual Report F-62
31 BORROWINGS
Current
Non-current
CHF 2012 2011 2012 2011
Secured - at amortized cost
Credit facilities (i) 210,771,764 213,986,311 - -
Bank loans (ii) 40,584,879 67,871,362 279,376,296 254,353,148
Shareholder’s loan (iii) 73,127,911 - - -
TOTAL 324,484,554 281,857,673 279,376,296 254,353,148
31.1 Summary of borrowing arrangements
The weighted average contractual effective interest rate for all credit facilities and loans are 7.64% (2011: 6.69%). It is
calculated by dividing the forecasted contractual interest expense due next year by the total outstanding credit facilities
and bank loans at the end of the current reporting period. For a breakdown of debts bearing variable and fixed interest see
note 40.10.1.
(i) Credit facilities used by the group are revolving facilities used to finance working capital requirements and they are
available in multiple currencies. The average interest rate for the credit facilities for year 2012 is 8.76% (2011: 7.96%).
(ii) Bank loans are current and non-current loans and have in general variable interest rates including a mark up. Property,
plant and equipment with a carrying amount of CHF 70.3 million (2011: CHF 92.9 million) and non-current receivable
with a carrying amount of CHF 18.7 million (2011: CHF 15.6 million) have been pledged to secure borrowings (see notes
16 and 21). The shift from current to non-current loans is mainly due to rescheduling of loans (see note 31.2). In 2012
the Group entered into new bank loans in Egypt, Oman and Jordan at the total equivalent of CHF 30 million.
(iii) In order to finance working capital requirements, the Group, as part of its credit arrangements with the Chairman, has
withdrawn CHF 73 million.
31.2 Breach of loan agreement
In light of the political turmoil that has ensued in Egypt post the revolution; the Egyptian economy has been at a virtual
standstill throughout 2012 up to date. The tourism sector, the main pillar industry, has been adversely affected, which has
led to a decrease in the number of incoming tourists evidenced by a decline in occupancy rates. Our subsidiary in Egypt,
being the main pillar of the Group, has been greatly affected by the surrounding circumstances and this has had a direct
adverse influence, reflected in the declining profitability and cash flow of the Group.
Due to the aforementioned factors and the resulting low cash flow, which fell short of meeting financial obligations, the
Group has exerted a great deal of effort to negotiate with its banks a rescheduling scheme, which aims to reschedule all
2012 due instalments and their accompanying interest expense. By the end of 2011, the current portion of long term debts
(CPLTD) was CHF 56.9 million (hotels & real estate segments representing CHF 49.6 million) while the related interest
expense was CHF 29.4 million (hotels & real estate segments representing CHF 21.3 million).
Due to the long track record the Group has had with its banks and due to the current economic conditions, the Group has
succeeded in negotiating rescheduling its due instalments to the amount of CHF 33.2 million and interest expense in the
amount of CHF 6.4 million.
It is worth highlighting that to accomplish this rescheduling scheme, the Group was involved in negotiations, which have
led to the successful receipt of formal commitment letters from the relevant banks, in addition to that, the Group is
currently in the process of signing the ALA (Amended Loan Agreement) with the new runoffs which are expected to relieve
the burden of the current financial obligations. Furthermore, it is envisaged that the loan agreements will be finalized to
give further effect to the rescheduling scheme.
All such actions undertaken by the Group led to steadily waiving covenants testing by the banks, which in turn enabled the
Group to be in compliance with the financial covenants of the loans and ensured that no breach takes place.
32 PROVISIONS
CHF 31 December 2012 31 December 2011
Current 79,106,988 90,144,020
Non-Current - -
TOTAL 79,106,988 90,144,020
CHF
Provision for
infrastructure
completion
Provision
for legal
cases
Provision for
governmental
fees
Provision for
employee
benefits
Other
provisions
(i) (ii) (iii) (iv) (v)
Balance at 1 January 2012 24,880,492 19,629,349 4,529,185 4,463,340 36,641,654 90,144,020
Additional provisions
recognized
Reductions arising from
payments
Exchange differences
arising on translation of
foreign operations
Balance at 31 December
2012
Total
- 2,099,735 279,370 3,763,997 944,226 7,087,328
(4,145,782) (1,930,000) (51,733) (1,180,984) (6,981,293) (14,289,792)
(507,732) (842,810) (533,176) (268,873) (1,681,977) (3,834,568)
20,226,978 18,956,274 4,223,646 6,777,480 28,922,610 79,106,988
(i) Provision for infrastructure completion relates to committed cash outflows for the development of the necessary
infrastructure to make the project area that is usually located in remote regions, habitable and attractive. Such provisions are
recorded for land and real estate sales on the date on which all the criteria for revenue recognition are met, in case that the
cash outflows for related infrastructure costs have not yet been incurred and take place with the upcoming twelve months.
(ii) Provision for legal cases consists of expected cash outflows for the settlement of pending litigations and relates amongst
others to the Falcon case which is described in note 47.
(iii) Provision for government fees relates to cash outflows for fees due on the sale of land and / or any profit thereon which were
recorded during the current year. Such provision is calculated and recorded using the locally enacted fee structures.
Management expects the related cash outflow to take place within the upcoming twelve months.
(iv) Provision for employee benefits relates to compulsory termination payments to foreign employees in Oman. The provision is
based on their actual salaries. As the work permits for these employees are reconsidered by the Government on annual basis,
the related cash outflows are likely to take place within the upcoming twelve months. Additionally, in 2012, part of the
provision made for amounts due from employees and management in relation to the share plan (see note 23) was netted off
against the receivables. A residual provision of CHF 1.1 million is recognized under this category of provisions.
(v) This provision mainly includes charges, services and consultancy fees for the Group's current year's operations which have not
yet been finally negotiated. In addition it covers the Group’s exposures to tax risks amounting to CHF 11.0 million at 31
December 2012 which was increased by CHF 4.0 million (31 December 2011: CHF 7.7 million). Management expects the related
cash outflows to take place within the upcoming twelve months.
Management annually reviews and adjusts these provisions based on the latest developments, discussions and agreements with
the involved parties.
As per loan agreement entered between OHD and Arab International Bank (“AIB”), there are some financial covenants that
OHD shall adhere to, otherwise it will be considered as a breach of the loan agreement. One of those financial covenants is
the debt service coverage ratio (“DSCR”) which shall be maintained at level higher than 1.2 during the life of loan.
As at 31 December 2012, OHD’s DSCR was below that predefined ratio, and it has been deemed as a possible breach.
Accordingly the non-current portion of this AIB loan has been reclassified to current borrowings.
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F-63 Orascom Development 2012 Annual Report F-64
33 OTHER CURRENT LIABILITIES
CHF 2012 2011
Advances from customers (i) 185,144,818 114,379,708
Other credit balances 11,785,375 17,012,088
Accrued expenses (ii) 35,215,893 30,772,641
Deposits from others 7,900,172 8,483,834
Taxes payable (other than income taxes) 9,035,337 7,598,048
Amounts due to shareholders (iii) 8,574,896 22,871,079
Due to management companies 1,680,930 2,654,746
TOTAL 259,337,421 203,772,144
(i) Advances from customers include amounts received (progress payments) from buyers of real estate units between the time of
the initial agreement and contractual completion. The increase is mainly related to the construction of real estate in
Switzerland and Oman. The increases in Switzerland are mainly caused by the Acuro transaction which is further described in
note 42.
(ii) Accrued expenses mainly include operating costs for the hotel and town management activities.
(iii) Amounts due to shareholders include amounts owed to non controlling shareholders for planned capital increases in several
subsidiaries in Egypt in the total of CHF 1.1 million (2011: CHF 6.6 million) as well as amounts owed to Mr. Samih Sawiris in the
total of 7.5 million (2011: CHF 14.9 million).
34 TRADE AND OTHER PAYABLES
CHF 2012 2011
Non-current trade payables 32,139,626 31,717,802
Current trade and other payables 49,984,236 57,631,059
Trade and other payables decreased by CHF 11.5 million in 2012 as there was a slowdown in construction work in Egypt and Oman.
The decrease was partly compensated by construction work in Switzerland.
35 OTHER FINANCIAL LIABILITIES
CHF 2012 2011
Financial liabilities carried at amortized cost
Put option and call option agreement – CMAR (i) 10,821,075 11,001,067
Derivatives linked to unquoted equity instruments
Call option agreement –ADL 1,738,479 1,752,692
Derivatives that are designated and effective as hedging
instruments carried at fair value
Hedging liabilities 562,337 1,264,931
13,121,891 14,018,690
Current - -
Non-current 13,121,891 14,018,690
TOTAL 13,121,891 14,018,690
Put option and call option agreement - CMAR
(i) Pursuant to the Put option and Call option Agreement dated April 2006 between Orascom Holding for Hotels Company (IHH),
European Investment Bank (EIB), and Société de Promotion ET De Participation pour la Cooperation Economique
(PROPARCO). IHH (a subsidiary) unconditionally and irrevocably undertakes to purchase all or part of EIB and PROPARCO
shares in Club Méditerranée Albion Resort Ltd. (CMAR) during the put period ending 31 March 2016 if EIB and PROPARCO
exercise their rights.
In addition, IHH had a right to buy all or part of the shares of EIB and PROPARCO during the call period ending 31 March 2016.
A financial asset “right to buy” and a corresponding financial liability were initially recognised at fair value amounting to CHF 13
million which is the present value of the amount to be redeemed to the other shareholders if they were to exercise the option
on the last day of the option period (future value at 2016: CHF 28 million). The difference between the present value and final
redemption amount is interest expense that is recognized in profit or loss over the life of the financial liability using an effective
interest rate of 6.75%. This financial liability was subsequently measured at amortised cost in each subsequent period (details
of accounting policy are disclosed in note 3.21 to the financial statements). The interest expenses recognised in the year
amounted to CHF 1,019,092 (2011: CHF 977,090) (note 11).
On 5 October 2012, EIB served to IHH a letter notifying EIB’s intention to exercise the Put Option. Subsequently, on 15 January
2013, IHH served to PROPARCO a letter notifying IHH’s intention to exercise the Call Option.
Starting 1 January 2007, CMAR has been deemed to be controlled due to the potential voting rights arising from the call option
the Group has over 42.5% of EIB’s and PROPARCO’s interests in CMAR, in addition to the existing voting rights of 12.5%.
Therefore, CMAR was regarded as a subsidiary and consolidated for the first time in 2007 based on the Group’s present
ownership interest in CMAR of 12.5% with the financial asset derecognised. The Put Option agreement states that the
ownership benefits and the voting rights of the put shares are transferable to IHH only upon payment of the put price. Given
that fact, the group share will stay unchanged.
As of 31 December 2012, CMAR’s assets were CHF 44.4 million (2011: CHF 46.9 million), its total revenues amounted to CHF
5.0 million (2011: CHF 5.2 million) and profit for the year amounted to CHF 0.0 (2011: CHF 0.7 million losses).
36 DISPOSAL OF A SUBSIDIARY
36.1 Description of transactions
On 1 November 2012 OHD, a subsidiary of the Group, entered into shares sale and purchase agreements with Garranah family.
Besides reducing the ownership in several investments in associates, the Group is also selling their remaining subsidiary operating
in the tour operations business. Therefore the segment “tour operations” is considered a discontinued operation and is presented
accordingly. For further details refer to note 14.
36.2 Consideration received
CHF Tour operations LUPP
Consideration received in cash and cash equivalents - -
Other consideration received 153,562 6,732,750
Total consideration received 153,562 6,732,750
36.3 Analysis of assets and liabilities over which control was lost
CHF Tour operations LUPP
Non-current assets
Property, plant and equipment 5,591 2,062,198
Current assets
Inventory - 223,475
Trade and other receivables 441,186 1,804,631
Due from related parties 39,488 -
Other currents assets 197,166 5,619,032
Cash and bank balances 20,503 183,472
Non-current liabilities
Deferred tax liabilities (1,970) -
Current liabilities
Trade and other payables (25,021) -
Current borrowings (865,068) -
Due to related parties (895,710) (96,839)
Provisions (283,389)
Other current liabilities (61,321) (1,295,985)
Non-controlling interests 68,399 (4,609,896)
Net assets and non-controlling interests disposed of (1,076,757) 3,606,699
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F-65 Orascom Development 2012 Annual Report F-66
36.4 Gain on disposal of subsidiaries
CHF Tour operations LUPP
Consideration received 153,562 6,732,750
Net assets and non-controlling interests disposed of (1,076,757) 3,606,699
Gain on disposal 1,230,319 3,126,051
37.4 Net cash outflow from deemed loss of control
CHF
ASS
Consideration paid in cash and cash equivalents (5,600,000)
Less: cash and cash equivalent balances disposed of (472,877)
Total net cash outflow (6,072,877)
36.5 Net cash outflow on disposal of subsidiaries
CHF Tour operations LUPP
Consideration received in cash and cash equivalents - -
Less: cash and cash equivalent balances disposed of (20,503) (183,472)
Total net cash outflow (20,503) (183,472)
37 DEEMED LOSS OF CONTROL OF SUBSIDIARY
37.1 Description of transactions
In September and November 2012, Andermatt-Sedrun Sports AG (“ASS”), a subsidiary of ODH, has acquired two companies
operating skiing areas. The acquisitions were financed through capital increases in ASS. As Andermatt Swiss Alps AG (“ASA”),
another subsidiary of ODH and the sole shareholder in ASS before the capital increases, did not fully participate in all capital
increases, ASA has lost control over ASS during this transaction. As at 31 December 2012 the Group has a remaining share of
interest of 40.26% in ASS, therefore the investment is classified as an investment in associates (for further details refer to note 20).
37.2 Analysis of assets and liabilities over which control was lost
CHF
ASS
Non-current assets
Property, plant and equipment 1,731,778
Other financial assets 750,508
Current assets
Trade and other receivables 27,537
Cash and bank balances 472,877
Current liabilities
Trade and other payables (2,607)
Due to related parties (3,820,118)
Other current liabilities (912,458)
Net assets disposed of (1,752,483)
37.3 (Loss) from deemed loss of control
CHF
ASS
Consideration paid in cash 5,600,000
Consideration paid non-cash 6,004,857
Deconsolidated net assets (1,752,483)
Cost value of investment in associates 9,852,374
Fair value of investment in associates 7,859,633
Loss from deemed loss of control 1,992,741
The loss from deemed loss of control is recognised in the statement of comprehensive income as “other gains and losses” (see
note 10).
38 RETIREMENT BENEFIT PLANS
38.1 Defined contribution plans
Employees of specific subsidiaries in the Group (such as Eco-Bos Development Ltd (UK), Oued Chbika Development SA (Morocco),
Orascom International Hotel and Development (France) and Luštica Development a.d. (Montenegro)) are members of private or
state-managed retirement benefit plans operated by insurance companies or the relevant Jurisdictions’ Social Insurance
Authorities. The subsidiaries are required to contribute a specified percentage of payroll costs to the retirement benefit scheme to
fund the benefits. Qualifying employees of these subsidiaries are also required to contribute to such schemes at a different
percentage deducted from their salaries.
Benefits are payable to qualifying employees, by the relevant insurance companies and authorities, on attainment of a retirement
age specified in the plans. The only obligation of the Group with respect to the retirement benefit plan is to make the specified
contributions.
The total expense recognised in the consolidated statement of comprehensive income of CHF 757,103 (2011: CHF 645,611)
represents contributions payable to these plans by the Group at rates specified in the rules of the plans. At 31 December 2012,
contributions of CHF 149,055 are due in respect of the 2012 reporting period had not been paid over to the plans (2011:
contributions of CHF 63,683 were due in respect of 2011 reporting period). The amounts were paid subsequent to the end of the
reporting period.
38.2 Defined benefit plans
The Group operates fund defined benefit plans for qualifying employees in Switzerland. Under the plans, the employees are
entitled to retirement benefits and risk insurance for death and disability. No other post-retirement benefits are provided to these
employees. The most recent actuarial valuations of plan assets and the present value of the defined benefit obligation were
carried out on 31 December 2012.
The present value of the defined benefit obligation, and the related current service cost and past service cost, were measured
using the Projected Unit Credit Method.
The principal assumptions used for the purposes of the actuarial valuations were as follows:
2012 2011
Discount rates 2.00% 2.40%
Expected return on plan assets 3.00% 3.00%
Expected rates of salary increase 1.00% 1.00%
Expected pension increases 0.00% 0.00%
Expected average remaining working lives in years 9.85 years 10.05 years
Amounts recognised in profit or loss in respect of these defined benefit plans are as follows:
CHF 2012 2011
Current service cost 1,170,666 643,892
Finance cost (Interest on obligation) 234,896 217,985
Expected return on plan assets (217,924) (230,281)
Actuarial loss recognised in current year 97,611 82,709
Past service cost - 115,804
Expense recognised in profit or loss 1,285,249 830,109
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F-67 Orascom Development 2012 Annual Report F-68
The amount included in the consolidated statement of financial position arising from the Group’s obligation in respect of its
defined benefit plans is as follows:
CHF 2012 2011
Present value of funded defined benefit obligation 10,024,790 9,972,579
Fair value of plan assets (7,089,648) (7,619,596)
Funded status (deficit) 2,935,142 2,352,983
Net actuarial losses not recognized (2,063,787) (1,936,688)
Restrictions on asset recognized - -
Net liability arising from defined benefit obligation 871,355 416,295
The history of experience adjustments is as follows:
CHF 2012 2011 2010 2009 2008
Fair value of defined benefit obligation (9,529,270) (10,072,984) (6,923,328) (4,489,050) (3,309,876)
Expected plan assets 7,126,534 7,673,236 5,736,572 3,602,282 2,777,189
Deficit (2,402,736) (2,399,748) (1,186,756) (886,768) (532,687)
Experience adjustments on Defined Benefit
Obligation (gain)/loss
307,696 (592,234) (282,065) (178,318) (69,113)
Experience adjustments on plan assets gain/(loss) (36,886) (53,640) (20,599) (45,985) (136,081)
Movements in the present value of the defined benefit obligation in the current year were as follows:
CHF 2012 2011
Opening defined benefit obligation 9,972,579 7,389,547
Current service cost 1,170,666 643,892
Finance cost 234,896 217,985
Contributions from plan participants 830,193 613,460
Past service cost - 115,804
Benefits (paid)/deposited (2,371,368) 500,061
Actuarial losses 187,824 491,830
Closing defined benefit obligation 10,024,790 9,972,579
Movements in the present value of the plan assets in the current period were as follows:
CHF 2012 2011
Opening fair value of plan assets 7,619,596 5,715,973
Expected return on plan assets 217,924 230,281
Actuarial (losses) (36,886) (53,640)
Contributions from the employer 830,189 613,460
Contributions from plan participants 830,193 613,461
Benefits (paid)/deposited (2,371,368) 500,061
Closing fair value of plan assets 7,089,648 7,619,596
The major categories of plan assets, and the expected rate of return at the end of the reporting period for each category, are as
follows:
Expected return
Fair value of plan assets
CHF 2012 2011 2012 2011
Equity instruments (e.g. shares) – third party - 6.25% - 175,867
Debt instruments (e.g. bonds) – third party - 2.75% - 6,506,912
Property not occupied and not used by the group - 4.25% - 823,548
Others 2.20% 1.75% 7,089,648 113,269
Total plan assets at fair value 7,089,648 7,619,596
In 2012 all plan assets are shown as “Others” as Allianz is providing reinsurance on these assets and bears all market risk on these
assets.
The overall expected rate of return is a weighted average of the expected returns of the various categories of plan assets held.
Management's assessment of the expected returns is based on historical return trends and analysts' predictions of the market for
the asset over the life of the related obligation.
The actual return on plan assets was CHF 181,038 (2011: CHF 176,641).
The assets of the retirement benefit scheme have been invested under a collective insurance contract in accordance with an
affiliation contract concluded with Allianz Suisse Lebensversicherungs-Gesellschaft.
The Group expects to make a contribution of CHF 913,442 to the defined benefit plans during the next financial year (2011: CHF
669,104).
39 RISK ASSESSMENT DISCLOSURE REQUIRED BY SWISS LAW
Organizational and process measures have been designed to identify and mitigate risks throughout the Group at an early stage.
The responsibility for risk assessment and management is primarily allocated to the segments and entities. However, Group
Finance has implemented monitoring and consolidating measures. The Group’s entities report to the Group Finance on their
current operations and financial situation regularly. Various reports and analysis have been implemented to allow the Group to
monitor the operations closely and immediately identify risks and initiate mitigating actions. In addition, the Group Finance has
established during 2008 a new function for risk assessment and internal control. A risk matrix has been created that was populated
by the most significant entities of the Group. The Group has centralized certain functions (e.g. treasury, asset management,
information technology and human resources) to be able to identify and control risks more closely. The Group initiated a plan to
centralize the legal and internal audit functions in order to mitigate the risks in an effective and efficient way.
Group Finance assesses and consolidates all information from the entities and shares and discusses it with the Group Management
on a regular basis. A more formal reporting on risks over financial reporting was made prior to year-end to the Board of Directors.
The Board of Directors in turn has performed a risk assessment covering longer-term operational and strategic risks to the Group.
The conclusions of such risk assessments have also been considered by Group Finance. As the Group CFO is consistently and
closely involved in the risk assessment process and the preparation of the consolidated financial statements it is ensured that all
conclusions from the Group-wide risk assessment are adequately considered in the consolidated financial statements.
40 FINANCIAL INSTRUMENTS
40.1 Capital risk management
The Group manages its capital to ensure that entities in the Group will be able to continue as a going concern while maximising the
return to stakeholders through the optimisation of the debt and equity balance. The Group’s overall strategy remains unchanged
since 2010.
The capital structure of the Group consists of net debt (borrowings, as detailed in note, 31 offset by cash and bank balances) and
equity of the Group (comprising issued capital, share premium, reserves, retained earnings and non-controlling interests as
detailed in notes 27 to 30).
The Group is not subject to any externally imposed capital requirements.
According to the Group’s internal policies and procedures, the Executive Management reviews the capital structure on a regular
basis. As part of this review, the committee considers the cost of capital and the risks associated with each class of capital. The
Group has a target gearing ratio of 40% to 45% determined as the proportion of net debt to equity.
The gearing ratio at 31 December 2012 of 51.36% (see below) was above the revised target of 50% recommended by the
committee. This is mainly due to the losses for the period.
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F-69 Orascom Development 2012 Annual Report F-70
The gearing ratio at the end of the reporting period was as follows:
CHF 2012 2011
Debt (i) 603,860,850 536,210,821
Cash and cash equivalents (101,668,196) (79,399,104)
Net debt 502,192,654 456,811,717
Equity (ii) 977,851,660 1,095,216,884
Net debt to equity ratio 51.36% 41.71%
(i) Debt is defined as long- and short-term borrowings (excluding derivatives), as detailed in (note 31).
(ii) Equity includes all capital and reserves of the Group and non- controlling interests that are managed as capital.
40.2 Significant accounting policies
Details of the significant accounting policies and methods adopted, including the criteria for recognition, the basis of
measurement and the basis on which income and expenses are recognised, in respect of each class of financial asset, financial
liability and equity instrument are disclosed in 3.19 Financial instruments.
40.3 Categories of financial instruments
CHF 2012 2011
Financial assets
Cash and bank balances 101,668,196 79,399,104
Fair value through profit or loss ( FVTPL)
Held for trading non-derivative financial assets 291,121 7,294,817
Fair value through other comprehensive income (FVTOCI) 54,319,056 39,609,291
Financial assets measured at amortized cost 246,852,041 337,305,329
Financial liabilities
Derivative instrument in designated hedge accounting relationship 562,337 1,264,931
At amortised cost 1,008,615,520 784,305,564
40.4 Financial risk management objectives
In the course of its business, the Group is exposed to a number of financial risks. This note presents the Group’s objectives, policies
and processes for managing its financial risk and capital.
The Group’s Corporate Treasury function provides services to the business, co-ordinates access to domestic and international
financial markets, monitors and manages the financial risks relating to the operations of the Group through internal risk reports
which analyse exposures by degree and magnitude of risks. These risks include market risk (including currency risk, interest rate
risk and other price risk), credit risk and liquidity risk. Other price risk includes equity price risk, settlement risk and commodity
price risk.
It is, and has been throughout 2012 and 2011, the Group’s policy not to use derivatives without an underlying operational
transaction or for trading (i.e. speculative) purposes.
The Group seeks to minimise the effects of these risks mainly through operational and finance activities and, on occasional basis,
using derivative financial instruments to hedge these risk exposures. The use of financial derivatives is governed by the Group’s
internal policies and procedures approved by the Board of Directors, which provide written principles on foreign exchange risk,
interest rate risk, credit risk, the use of financial derivatives and non-derivative financial instruments, and the investment of excess
liquidity. The Group does not enter into or trade financial instruments, including derivative financial instruments, for speculative
purposes.
The Corporate Treasury function reports monthly to the Executive Management. The Group Treasury Director carries out risk
management under the Group’s guidelines.
40.5 Market risk
The Group’s activities expose it primarily to the financial risks of changes in foreign currency exchange rates (see 40.6 below) and
interest rates (see 40.7 below).
Driven by the need, the Group’s policy is to enter into a variety of derivative financial instruments to manage its exposure to
foreign currency risk and interest rate risk, including:
– forward foreign exchange contracts to hedge the exchange rate risk arising on sales in foreign currency to the tourism / real
estate industry;
– interest rate swaps to mitigate the risk of rising interest rates
40.6 Foreign currency risk management
The Group undertakes certain transactions denominated in foreign currencies. Hence, exposures to exchange rate fluctuations
arise. The currencies, in which these transactions primarily are denominated, are US Dollar (USD), Euro (EUR) and Egyptian Pound
(EGP). Exchange rate exposures are managed within approved policy parameters utilising forward foreign exchange contracts.
The Group’s main foreign exchange risk arises from sales in foreign currency to the tourism / real estate industry, which generates
a net foreign currency surplus for the Group. The Group has strong inflows in foreign currency, mainly US Dollar, Euro, Oman Rial
and Egyptian Pound.
Out of the total receivables on hand at the end of the reporting period, receivables in USD have accounted for 32% (2011: 40%), in
EUR for 7% (2011: 6%),in EGP for 46% (2011: 41%) and in CHF for 13% (2011: 11%) respectively.
To mitigate the above risk exposures, where possible, the Group borrows in matching currencies to create a natural hedge. The
following table shows the carrying amounts of borrowings, at the end of the reporting period, in the major currencies in which
they are issued.
Borrowing
CHF 2012 2011
USD 215,885,556 36% 243,970,612 46%
EGP 212,183,963 35% 194,250,742 36%
CHF 82,594,428 14% 9,307,207 2%
EUR 68,706,387 11% 77,275,959 14%
OMR 14,226,606 2% - -
AED 5,540,243 1% 11,406,301 2%
JOD 4,723,667 1% - -
Total 603,860,850 100% 536,210,821 100%
At the end of the reporting period, the carrying amounts of the Group’s major foreign currency denominated monetary assets
(mainly receivables and finance lease receivables) and monetary liabilities (mainly borrowings), at which the Group is exposed to
currency rate risk, are as follows:
CHF Liabilities Assets
2012 2011 2012 2011
Currency-USD 215,885,569 243,970,615 60,683,312 105,229,240
Currency-EUR 68,706,387 77,275,959 13,680,237 15,755,310
Currency-EGP 212,183,963 194,250,742 86,127,603 109,624,884
Residual foreign exchange exposure is managed by hedging through entering into foreign currency forward contracts.
Currency risk has also recently developed due to the Group’s investments in different markets such as those in Egypt, UAE, Oman,
Jordan, Morocco, Switzerland, Romania and the UK. Again, the Group borrows in the local currency of the investment and uses
the above mentioned strategies to mitigate residual currency risk.
40.6.1 Foreign currency sensitivity analysis
As discussed above, the Group is mainly exposed to the US Dollar (USD), Euro (EUR) and Egyptian Pound (EGP) arising from sales
in these currencies to the tourism / real estate industry.
The following table details the Group’s sensitivity to a 5% increase and decrease in CHF against the relevant foreign currencies.
The (5%) is the sensitivity rate used when reporting foreign currency risk internally to key management and represents
management’s assessment of the reasonably possible change in foreign exchange rates. The sensitivity analysis includes only
outstanding foreign currency denominated monetary items and adjusts their translation at the period end for a 5% change in
foreign currency rates.
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F-71 Orascom Development 2012 Annual Report F-72
The sensitivity analysis includes outstanding borrowings, impact of the changes in the fair value of derivative instruments
designated as cash flow hedges and receivables in foreign currencies and, where appropriate, loans to foreign operations within
the Group where the denomination of the loan is in a currency other than the functional currency of the lender or the borrower.
A positive number below indicates an increase in profit or equity where the CHF strengths 5% against the relevant currency. For a
5% weakening of the CHF against the relevant currency, there would be a comparable impact on the profit or equity, and the
balances below would be negative.
CHF Currency USD Impact Currency EUR Impact Currency EGP Impact
2012 2011 2012 2011 2012 2011
Profit or loss 7,760,113 6,937,068 2,752,375 3,075,846 6,301,744 4,253,738
Equity 55,887 52,135 - - - -
The Group's sensitivity to foreign currency has changed in accordance with the changes in EGP, USD and AED borrowings.
Forward foreign exchange contracts
It is the policy of the Group to enter into forward foreign exchange contracts to cover specific foreign currency receipts within 25%
to 30% of the exposure generated. At 31 December 2012, the Group has no outstanding forward foreign currency exchange
contracts. However, the Group entered during the current year into several forward foreign currency exchange contracts to hedge
part of the Group’s receivables denominated in EUR and USD.
At 31 December 2012, no ineffectiveness has been recognised in profit or loss arising from the Group’s hedging activities.
40.7 Interest rate risk management
The Group is exposed to interest rate risk because entities in the Group borrow funds at both fixed and floating interest rates. The
risk is managed by the Group by maintaining an appropriate mix between fixed and floating rate borrowings, and by the use of
interest rate swap contracts. Hedging activities are evaluated regularly to align with interest rate views and defined risk appetite,
ensuring the most cost-effective hedging strategies are applied. The Group's exposures to interest rates on financial assets and
financial liabilities are detailed in the liquidity risk management section of this note.
At 31 December 2012, the Group held one interest rate swap contract (IRS) under which the Group agrees to exchange the
difference between fixed and floating rate interest amounts calculated on the agreed notional principal amount. The notional
amount of the IRS contract is based on the outstanding amount of one of the long-term borrowings. The group was engaged in
this contract on September 2008 and it will expire on June 2014.
As the interest rate swap exchanges floating rate interest amounts for fixed rate interest amounts it is designated as a cash flow
hedge in order to reduce the Group’s cash flow exposure resulting from variable interest rates on borrowings. The interest rate
swap and the interest payments on the borrowing occur simultaneously and the amount accumulated in equity is reclassified in
profit or loss over the period that the floating rate interest payments on debt affect profit or loss.
The Group receives the fair value of the swap from the counterparty bank at the end of each reporting period and is disclosed
below. The average interest rate is based on the outstanding balances at the end of the reporting period.
Management has assessed that the cash flow hedge is 100% effective and therefore the entire change in fair value of the interest
rate swap is recognised in other comprehensive income and accumulated in equity (note 28.3).
The following table details the notional principal amount and remaining terms of the interest rate swap contract outstanding at
the end of the reporting period.
40.7.1 Interest rate sensitivity analysis
The sensitivity analyses below have been determined based on the exposure to interest rates for both derivatives and nonderivative
instruments at the end of the reporting period. For floating rate liabilities, the analysis is prepared assuming the amount
of liability outstanding at the end of reporting period was outstanding for the whole year. A ‘100 basis point’ (1%) increase or
decrease is used when reporting interest rate risk internally to key management personnel and represents management’s
assessment of the reasonably possible change in interest rates.
If interest rates had been 100 basis points higher / lower and all other variables were held constant, the Group’s profit for the year
ended 31 December 2012 would decrease / increase by CHF 2.5 million (2011: decrease / increase by CHF 2.6 million). This is mainly
attributable to the Group’s exposure to interest rates on its variable rate borrowings.
40.8 Other price risks
The Group is exposed to equity price risks arising from equity investments. Equity investments are held for strategic rather than
trading purposes. The Group does not actively trade these investments.
40.9 Credit risk management
Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the Group.
The Group credit risk arises from transactions with counterparties, mainly individual customers and corporations. The Group has
adopted a policy of only dealing with creditworthy counterparties and obtaining sufficient collateral, where appropriate, as a
means of mitigating the risk of financial loss from defaults.
The Group’s exposure to credit risk is, to a great extent, influenced by the individual characteristics of each customer. Risk control
assesses the credit quality of the customer, taking into account its financial position, past experience, other publicly available
financial information, its own trading records and other factors, where appropriate, as a means of mitigating the risk of financial
loss from defaults. The Group’s exposure is continuously monitored and the aggregate value of transactions concluded is spread
amongst approved counterparties.
Trade receivables consist of a large number of customers, spread across various industries and geographical areas. The Group
does not have any significant credit risk exposure to any single counterparty or any Group of counterparties having similar
characteristics. The Group defines counterparties as having similar characteristics if they are related entities. The credit risk on
sales of real estate is limited because the Group controls this risk through the property itself by registering the unit in the name of
the customer only after receiving the entire amount due from the customer.
Counterparty risk is also minimized by ensuring that 80% of derivative financial instruments, money market investments and
current account deposits are placed with financial institutions whose credit standings are above Aa1 and 20% above BB+.
The carrying amount of financial assets recorded in the financial statements, which is net of impairment losses, represents the
Group’s maximum exposure to credit risk without taking account of the value of any collateral obtained.
40.10 Liquidity risk management
Ultimate responsibility for liquidity risk management rests with the Board of Directors, which has established an appropriate
liquidity risk management framework for the management of the Group’s short-, medium- and long-term funding and liquidity
management requirements. The Group manages liquidity risk by maintaining adequate reserves, banking facilities and reserve
borrowing facilities, by continuously monitoring forecast and actual cash flows and matching the maturity profiles of financial
assets and liabilities. Regarding management’s plans to manage liquidity shortages and related uncertainty please refer to note
43.1.
As of 31 December 2012, total un-drawn facilities, that the Group has at its disposal in order to further reduce liquidity risk, are
CHF 23.7 million (31 December 2011: CHF 6 million).
Last instalment date Average contracted Notional principal amount Fair value assets (liabilities)
Fixed interest rate CHF CHF
2012 2011 2012 2011 2012 2011
30-Jun-14 3.50% 3.50% 34,856,237 35,827,969 (562,337) (1,264,931)
The interest rate swap settles on a half-yearly basis. The floating rate on the interest rate swaps is based on LIBOR for 6 months.
The Group settles the difference between the fixed and floating interest rate on a net basis.
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40.10.1 Liquidity and interest risk tables
The following tables detail the Group's remaining contractual maturity for its non-derivative financial liabilities with agreed
repayment periods. The tables have been drawn up based on the undiscounted cash flows of financial liabilities based on the
earliest date on which the Group can be required to pay. The tables include both interest and principal cash flows. To the extent
that interest cash flows are floating rate, the undiscounted amount is derived from interest rate curves at the end of the reporting
period. The contractual maturity is based on the earliest date on which the Group may be required to pay.
Maturities of non-derivative financial liabilities
2012 Weighted
average
effective
CHF
interest
rate
Less than 6
month
6 months to
one year
1 – 5 years 5 + years Total
Non-interest bearing 457,843,181 - 5,986,046 - 463,829,227
Variable interest rate
instruments 5.62% 21,221,935 170,911,581 201,639,484 55,467,342 449,240,342
Fixed interest rate instruments 9.96% 14,814,897 84,851,916 54,527,135 23,581,821 177,775,769
TOTAL 493,880,013 255,763,497 262,152,665 79,049,163 1,090,845,338
2011 Weighted
average
effective
CHF
interest
rate
Less than 6
month
6 months to
one year
1 – 5 years 5 + years Total
Non-interest bearing - 150,433,926 5,986,045 156,419,971
Variable interest rate
instruments
5.57% 35,101,835 189,012,669 188,952,426 40,222,376 453,289,306
Fixed interest rate instruments 10.05% 14,173,492 78,085,279 50,707,845 18,534,713 161,501,329
TOTAL 199,709,253 267,097,948 245,646,316 58,757,089 771,210,606
In January 2012, ODH has finalized credit agreements in the total amount of CHF 125 million which enable the Group - together
with existing cash reserves and existing credit lines - to finance all its activities in 2012. The terms and conditions of these credit
agreements, which materialized due to commitments of the majority shareholder Samih Sawiris, will reduce the average cost of
debt of the Group. If necessary, Samih Sawiris would also secure the funding of the 2013 investment program with additional
contributions.
The Group has access to financing facilities as explained above. The Group expects to meet its other obligations from operating
cash flows and proceeds of maturing financial assets. The Group target is not to exceed a revised debt to equity ratio of 50%. As at
31 December 2012 the Group is above this target however expects to meet the target during 2013.
CHF 2012 2011
Counterparty Rating Credit limit Carrying amount Credit limit Carrying amount
Bank 1 B3 31,801,755 31,700,580 31,321,277 31,431,569 *
Bank 2 Aa3 14,345,000 11,580,424 15,557,000 15,179,094
Bank 3 - 34,896,433 38,901,674 36,217,682 38,003,417
Bank 4 Aa3 22,822,536 19,455,389 23,458,789 23,456,674 *
Bank 5 B3 12,715,265 12,667,986 13,272,766 12,790,742
* Outstanding amount includes interest charged
The average interest rate for credit facilities is 8.76% (2011: 7.96%).
The amounts included above for variable interest rate instruments for liabilities is subject to change if changes in variable interest
rates differ to those estimates of interest rates determined at the end of the reporting period.
F-73
40.11 Impairment losses on financial assets
CHF 2012 2011
Impairment loss on trade receivables 20,739,967 11,849,852
Impairment loss on other current assets carried at amortized cost - 17,993,639
TOTAL 20,739,967 29,843,491
40.12 Fair value of financial instruments
40.12.1 Fair value of financial instruments carried at amortised cost
Except as detailed in the following table, management considers that the carrying amounts of financial assets and financial
liabilities recognised in the consolidated financial statements approximate their fair values.
31 December 2012 31 December 2011
CHF Carrying amount Fair value Carrying amount Fair value
Financial liabilities
Borrowings/bank loans 603,860,850 633,002,158 536,210,821 619,354,040
40.12.2 Valuation techniques and assumptions applied for the purposes of measuring fair value
The fair values of financial assets and financial liabilities are determined as follows:
– The fair values of financial assets with standard terms and conditions and traded on active liquid markets are determined with
reference to quoted market prices (includes unlisted and listed equity investments classified as at FVTPL and FVTOCI
respectively).
– The Group receives the fair values of foreign currency forward contracts and interest rate swaps from the counterparty banks.
Foreign currency forward contracts are usually measured using quoted forward exchange rates and yield curves derived from
quoted interest rates matching maturities of the contracts. Interest rate swaps are usually measured at the present value of
future cash flows estimated and discounted based on the applicable yield curves derived from quoted interest rates.
– The fair values of other financial assets and financial liabilities (excluding those described above) are determined in accordance
with generally accepted pricing models based on discounted cash flow analysis. Specifically, significant assumptions used in
determining the fair value of the following financial assets and liabilities are set out below.
Finance lease receivables
The fair value of finance lease receivables is estimated to be CHF 22.1 million (31 December 2011: CHF 15.9 million) using a 16%
discount rate (31 December 2011: 16%) based on an average six year tenor and adding a credit margin that reflects the secured
nature of the receivables.
40.12.3 Fair value measurements recognised in the consolidated statement of financial position
The following table provides an analysis of financial instruments that are measured subsequent to initial recognition at fair value,
grouped into Levels 1 to 3 based on the degree to which the fair value is observable.
– Level 1: fair value measurements are those derived from quoted prices (unadjusted) in active markets for identical assets or
liabilities.
– Level 2: fair value measurements are those derived from inputs, other than quoted prices included within Level 1, that are
observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).
– Level 3: fair value measurements are those derived from valuation techniques that include inputs for the asset or liability that
are not based on observable market data (unobservable inputs).
2012
CHF Level 1 Level 2 Level 3 Total
Financial assets at FVTPL
Non-derivative financial assets held for trading 291,121 - -
291,121 - -
Financial assets at FVTOCI
Listed and unlisted shares measured at FV 34,563,130 - 19,755,926 54,319,056
34,563,130 - 19,755,926 54,319,056
Derivative financial liabilities designated in a
effective hedge relationship
- 562,337 - 562,337
- 562,337 - 562,337
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F-75 Orascom Development 2012 Annual Report F-76
2011
CHF Level 1 Level 2 Level 3 Total
Financial assets at FVTPL
Non-derivative financial assets held for trading 7,294,817 - - 7,294,817
Financial assets at FVTOCI
7,294,817 - - 7,294,817
Listed and unlisted shares measured at FV 18,775,931 - 20,833,360 39,609,291
Derivative financial liabilities designated in a
effective hedge relationship
18,775,931 - 20,833,360 39,609,291
- 1,264,931 - 1,264,931
- 1,264,931 - 1,264,931
There were no transfers between Level 1 and 2 in the period. The financial assets at FVTOCI were measured at fair value based on
a method that combined the earning and net equity book values of the companies.
Reconciliation of Level 3 fair value measurements of financial assets
Unquoted equity
securities
CHF 2012 2011
Opening balance 20,833,360 19,295,157
Total gains or( losses) recognized in other comprehensive income (535,726) 433,494
Transferred to investments in associates (see note 22-iv) (710,008)
Purchases 168,300 1,104,709
Closing balance 19,755,926 20,833,360
40.13 Derivatives
The financial statements include interest rate swaps which are measured at fair value (note 28.3). Fair value is determined by the
counterparty (financial institution) at mark to market.
Management considers that the carrying amounts of financial liabilities recorded at amortised cost in the financial statements
approximate their fair values
41 SHARE-BASED PAYMENTS
At 31 December 2012 and unchanged to prior year, the Group did not have any share option or participation schemes in place and
had not granted any ODH shares to the members of the Board or the Executive Management.
The Group compensated the members of the Board with a fixed fee whereof 50% was paid in cash and the other 50% in
unrestricted shares of the Parent Company. The shares received by the board members had a fair value of CHF 607,997 based on
the quoted market prices at the grant date, and have been recognized in the consolidated statement of comprehensive income as
part of administrative expenses. They will be transferred to the members of the Board in 2013.
42 RELATED PARTY TRANSACTIONS
A party (a company or individual) is related to an entity if:
a) directly, or indirectly through one or more intermediaries, the party:
i. controls, is controlled by, or is under common control with, the entity (this includes parents, subsidiaries and fellow
subsidiaries);
ii.
has an interest in the entity that gives it significant influence over the entity; or
iii. has joint control over the entity;
b) the party is an associate (as defined in IAS 28 Investments in Associates) of the entity;
c) the party is a joint venture in which the entity is a venturer (as defined in IAS 31 Interests in joint ventures);
d) the party is a member of the key management personnel of the entity or its parent;
e) the party is a close member family of any individual referred to in (a) or (d);
f) the party is an entity that is controlled, jointly controlled or significantly influenced by, or which significant voting power in
such entity resides with, directly or indirectly, any individual referred to in (d) or (e); or
g) the party is a post-employment benefit plan for the benefit of employees of the entity, or of any entity that is related party of
the entity.
Balances and transactions between the Group and its subsidiaries, which are related parties of the Group, have been eliminated on
consolidation and are not disclosed in this note. Details of transactions between the Group and other related parties are disclosed
below.
During the year, the Group purchased services from companies in which members of the Board have a partnership or significant
influence through ownership during the reporting period. These services related to the provision of consultancy services and the
leasing of office space (see note 12).
The following balances were outstanding at the end of the reporting period:
Due from related parties
Due to related parties
CHF 2012 2011 2012 2011
Financial instruments
Three Corners Company 7,479,863 7,202,170 - -
El Gouna Football Club 4,583,355 9,322,175 - -
Falcon for Hotels - - 10,055,238 5,699,176
Kingdom Co. 1,376,136 1,389,044 - -
Camps and lodges 1,145,363 1,111,671 - -
Iskan International Projects 2,140,680 22,276,835 - -
Besix Group SA - - 3,871,000 -
Other (balances less than CHF 120 000 each) 836,273 385,231 1,062,775 61,608
Non controlling shareholders
Tarot Tours Garanah 12,601 1,375,785 2,092,946 -
Mirotel For Floating Hotels 648,774 756,990 - -
Tarot Garranah for touristic transportation 88,996 97,382 - -
Tarot & Merotil Garranah for hotels 181,219 196,530 - -
Close family members
Samih Sawiris – (i) - - - -
Close family companies
Orascom for Touristic Establishments company
(OTEC)
1,148,366 1,242,063 - -
Total 19,641,626 45,355,876 17,081,959 5,760,784
Current 17,500,946 45,218,733 17,081,959 5,760,784
Non-current 2,140,680 137,143 - -
Total 19,641,626 45,355,876 17,081,959 5,760,784
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F-77 Orascom Development 2012 Annual Report F-78
(i) Loans from Mr. Samih Sawiris are disclosed in note 31. Transactions involving Mr. Samih Sawiris, Chairman, CEO and
major shareholder:
Purchase of shares from OHD
On 17 January 2007 OHD allocated to employees and the management team (including the chairman and the executive
board members) an amount of 2 million shares for full consideration being the market price as of that day. Mr. Samih
Sawiris acquired under this transaction 330,000 shares at the market price. Amounts due from Mr. Samih Sawiris under
this transaction are included in “Other assets” as amounts due from employees and management team and amounted to
CHF0.4 million at 31 December 2012 (31 December 2011: CHF 2.15 million). Amounts due from executive board members
under this transaction are included in “Other assets” as amounts due from employees and management team and
amounted to CHF 0.6 million in 2012 (CHF 3.27 million in 2011) (see note 23(iii)).
Taba Heights Company transactions
One of the Group companies had been granted the right to acquire freehold title to the project's land by the Tourism
Development Authority. Due to foreign ownership restrictions on the Sinai Peninsula becoming applicable in connection
with the reorganization, the respective Group company had to be transferred to Mr. Samih Sawiris, major shareholder and
of Egyptian nationality. Mr. Samih Sawiris entered into a binding agreement to retransfer these shares subject to approval
of the competent authorities, and that until such retransfer, the Group would be put into a position as the full economic
beneficiary of these shares. This entails, inter alia, an irrevocable assignment of dividends and the authorization to collect
dividends, exercise voting rights related to these shares and cause the sale of shares with no additional rights of Mr. Samih
Sawiris in any value received.
Iskan International Project W.L.L. Inc. Transaction
Iskan International Project W.L.L. Inc. (Iskan) entered into a purchase agreements with Sifah Tourism Development
Company (S.A.O.C) and Salalah Beach Tourism Development Company (S.A.O.C) to acquire a total of 172 real estate
properties. Mr. Samih Sawiris is a major shareholder in Iskan. The contracts are based on normal commercial terms and
conditions. In the second quarter of 2012, 51 real estate properties of the remaining 134 units were re-acquired by the
Group to increase the number of available hotel rooms in the Oman subsidiaries. The residual 83 units owned by Iskan as at
31 December 2012 have a value of USD 28.2 million (equals CHF 25.7 million). As a result of the re-acquisition trade and
other receivables balances in the Group’s consolidated financial statements were reduced from US$ 23.7 million (equals
CHF 21.6 million) as at year end 2011 to US$ 2.3 million (equals CHF 2.1 million) as at 31 December 2012. Losses in relation
to the reversal of the sales of CHF 7.4m were recognized in “other gains and losses”. No related revenue has been
recognized during the current period.
Acuro Transaction
Acuro Immobilien AG (“Acuro”) has purchased 73 apartments in The Chedi Andermatt, Switzerland from one of the Swiss
subsidiaries of the Group for CHF 122.7 million plus participation in future sales profits on the properties. 50% of the agreed
purchase price has been collected at closing of this transaction with the residual 50% payable in pre-agreed instalments
according to the progress of construction work.
Acuro is a real estate investment vehicle that is managed by third parties. Mr. Samih Sawiris, Chairman of the Board of
Directors and major shareholder of Orascom Development, and his family invested into Acuro as an important minority
shareholder.
As at 31 December 2012 there are no receivables due from Acuro outstanding. The related revenue has been deferred as
not all criteria necessary to recognize revenue have been met. Revenue will be recognized upon completion of The Chedi
Andermatt, Switzerland.
Securities lending agreement
On 3 December 2010, the Parent Company borrowed 1,286,353 ODH shares from Mr. Samih Sawiris free of charge under a
securities lending agreement. These shares were intended to be used for the tender offer regarding the buy-out of the
remaining shareholders of Orascom Hotels & Development SAE (OHD), a company listed at the EGX. For information on
the outcome of this tender offer which was completed on 18 January 2011 (see note 27).
The borrowed ODH shares were not accounted for as treasury shares by the Group, as Mr. Samih Sawiris retained the
significant rights, such as dividend and voting rights, during the borrowing period as per contractual provisions.
Under the above mentioned securities lending agreement the Parent Company has returned 330 029 shares of the
borrowed ODH shares to Mr. Samih Sawiris on 28 July 2011 by way of capital increase, which is further explained in note
27.2. Part of the remaining 956,324 shares, which were not used during the above mentioned tender offer, were already
returned to Mr. Samih Sawiris. The residual 236,744 shares will be returned in 2013. The difference between the balance,
which was reported in equity as “equity swap settlement”, measured at the fair value of the share at the end of the tender
offer, and the fair value amount of the capital increase was recognised in ”General reserve” (note 28.5).
Rental contract for office building in Cairo
Orascom Hotel and Development, a wholly owned subsidiary of Orascom Development Holding AG, has a five year rental contract
for 1,701 square meters office space in Nile City office building- Cairo where its owned headquarters are currently situated, the
contract was transferred in 2010 among other similar contracts totalling 11,274 square meters to a Joint Stock company which is
majority owned by the Chairman amongst others. The basic annual rental value under this contract is USD 903,420 payable in
advance on quarterly basis which is in line with the other contracts transferred (there are other standard parking, deposit and
maintenance clauses in the contract that are the same for all other units in the same building).
TU Berlin transaction
In October 2012, the Technische Universität Berlin (TUB) opened its satellite campus in El Gouna. TUB is one of the global leading
technical universities. The campus was built by a subsidiary of ODH and the building costs have been charged to the current
account of Mr. Samih Sawiris. The complex spans an area of 10,000 square meters and encompasses a lecture hall, an exhibition
and reader panel as well as seven seminar, office and laboratory buildings. The opening is the result of a successful collaboration
between the Egyptian and German Ministries of Education, the TUB, Orascom Development and the Sawiris Foundation for Social
Development.
Explanation of other movements
Part of the amount due from El Gouna Football Club was settled by Mr. Samih Sawiris, which is the main reason for the decrease in
related party receivables. The residual balance will be settled over the next five years as a settlement of the dues on El Gouna
Football Club to OHD resultant from the sponsorship agreement.
The increase in payables is mainly caused by payables in connection with Falcon due to net operating profits taken over from a
joint project as well as Tarot Tours in connection with the Garranah deal in 2012. In 2011 the increase was due to the Hotel 4b
Development Ltd project, which is a project to plan, design, construct and operate a Hotel and sell the apartments and related
facilities. The project is run by a subsidiary of ODH and Besix Group, which is a related party of the Group.
43 CASH AND CASH EQUIVALENTS
For the purposes of the consolidated cash flow statement, cash and cash equivalents include cash on hand, demand deposits and
balances at banks. Cash equivalents are short-term, highly liquid investments of maturities of three months or less from the
acquisition date, that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in
value.
CHF 2012 2011
Cash and cash equivalents 101,668,196 79,399,104
43.1 Management’s plans to manage liquidity shortages and related uncertainty
Following the political turmoil in Egypt and other Arab countries the market segments where the group operates became severely
affected. The Group’s real estate and hotel operations in Egypt initially suffered significantly. Oman destinations have been facing
a reduction in tourism and real estate revenues due to secondary impact of the Arab spring and the slowdown of the Gulf
Cooperation Council (GCC) economies; a trend that is now reversing in the GCC countries. Accordingly, the operating cash flows of
the group have significantly decreased in 2011 and recovered partially in 2012. Key indicators in Egypt have also started to show
initial signs of slow recovery.
The current cash flows from normal operations are not, on their own, sufficient to finance the current operational costs, the capital
expenditures commitment as well as the other planned but not committed investments in the Group’s destinations in addition to
the debt repayment obligations.
Although there is certain flexibility in the timing of capital expenditures and management believes that debt repayment may be
re-negotiated, there is a need to generate extra liquidity in addition to the operational cash flows.
The actions taken by the group so far towards managing this situation are as follows:
Partial sale of the Swiss operations
On 26 March 2013 the board agreed with the Chairman, Mr. Samih Sawiris, that he converts his previously extended loans to the
Group into the equity of the Swiss subsidiary Andermatt Swiss Alps (ASA) reducing the Group share in ASA to 49% and that he
becomes responsible for the funding of the resort by investing at least CHF 150 million into ASA (see note 49 Subsequent events).
This move, not only relieves ODH from further funding needs from ASA, but also reduces debt and its burden on ODH and
significantly improves the debt / equity ratio.
New Loan from Chairman
Mr. Samih Sawiris further agreed to lend the Group CHF 60 million until 30 April 2014l, of which CHF 9.4 million have already been
received after the balance sheet date.
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F-79 Orascom Development 2012 Annual Report F-80
Monetization plan
Management has also prepared a monetization plan to sell certain assets and implement other actions to generate cash. This will
free up cash to be injected into the business of the group. This monetization plan would generate between CHF 29 million on a
worst case basis in 2013 up to more than CHF 90-100 million on best case basis in 2013.
However, should the action steps under the monetization plan not be sufficient to fund the Group’s operations for the next twelve
months assuming conservative cash generation of only CHF 29 million in the initial phase of monetization, then the group intends
to postpone certain planned capital expenditure investments that are discretionary; such postponement of these projects will
result in shifting their related revenues forward to the future until they are completed. Such related revenues in any case were not
assumed in the current 2013 plans.
From an operational perspective management is also working on several cost saving initiatives that should generate savings in
overhead expenses, direct expenses and interest expenses. These initiatives target enhancing the performance of the group in
certain segments where we believe that there is room for enhancement mainly in the hotel segment in Egypt.
Management believes that these plans are sufficient to substantially mitigate the liquidity risk.
Given that there is a certain degree of uncertainty in major countries where the Group operates, namely Egypt and Oman, the loan
from our Chairman is extended to support the company in the coming few months should such uncertainties prevail.
However management keeps monitoring the events as they unfold in case further immediate action is required.
44 NON-CASH TRANSACTIONS
During the current year, the Group entered into the following non-cash investing and financing activities which are not reflected in
the consolidated statement of cash flow:
– Capitalization of interest of CHF 11.6 million over projects under constructions (see note 11).
– Transfer of treasury shares to the members of the Board of Directors of CHF 0.6 million
– Non-cash acquisition of properties of CHF 3.1 million
– Additions to Property, plant and equipment related to transferred assets of CHF 10 million.
– Transactions related to disposal of LUPP Middle East, Tab Heights Tours (see note 36) and deemed disposal of ASS (see note
37)
45 OPERATING LEASE ARRANGEMENTS
45.1 The Group as lessee
45.1.1 Leasing arrangements
Operating leases relates to car lease with lease terms of between 2 to 4 years and office facilities with lease terms of 25 years. The
Group (as a lessee) does not have an option to purchase these leased assets at the expiry of the lease periods.
45.1.2 Payments recognised as an expense in the period
CHF 2012 2011
Minimum lease payments 1,629,825 1,692,922
TOTAL 1,629,825 1,692,922
45.2 The Group as lessor
45.2.1 Leasing arrangements
Operating leases relate to the investment property owned by the Group with lease terms of between 1 and 4 years for premises in
El Gouna (Egypt) and 25 years for the resort in Mauritius. These lease contracts do not include a lease extension option and are
subject to renegotiation at the end of the lease term. The lessee does not have an option to purchase the property at the expiry of
the lease period.
Rental income earned by the Group from its investment properties and direct operating expenses arising on the investment
properties for the year are set out in note 17.
45.2.2 Non-cancellable operating lease receivables
CHF 2012 2011
Not later than 1 year 5,189,230 6,248,417
Later than 1 year and not longer than 5 years 21,815,733 26,268,597
Later than 5 years 36,141,306 51,287,319
TOTAL 63,146,269 83,804,333
46 COMMITMENTS FOR EXPENDITURE
The following commitments for expenditure have been made for the future development of the respective projects:
CHF 2012
Salalah Beach Tourism Development Company (S.A.O.C) 14,226,600
Sifah Tourism Development Company (S.A.O.C) 2,371,100
Andermatt Swiss Alps AG (i) 37,985,000
Eco-Bos Development Limited (ii) 5,325,607
(i) The Swiss subsidiary Andermatt Swiss Alps AG (ASA) has obligations towards the canton of Uri and the municipality of
Andermatt. ASA is responsible for the construction of certain parts of the tourism resort Andermatt. Within certain periods of
time or should the construction work be stopped for whatever reason, ASA has the obligation to rebuild the relevant plots of
land to the original state. At 31 December 2012, 36,985 ASA shares with a nominal value of CHF 1,000 each, amounting to a
total book value of CHF 36,985,000, have been pledged as a security to the canton and municipality. Additionally, land with a
value of CHF 1,000,000 is pledged under this transaction and the security towards the canton of Uri amounts to CHF
33,347,000.
(ii) The UK subsidiary Eco-Bos Development Ltd. is committed to purchase three plots of land from Imerys, a multinational
industrial minerals company, to develop an integrated Eco Town in Cornwall, UK.
One part of the Group’s business is to acquire land for the development of touristic projects. Out of these business opportunities
often no legally binding commitments incur however the Group has unbinding business opportunity commitments in relation to
their projects. Such commitments should be considered together with the legally binding commitments for expenditure listed
above.
45.1.3 Non-cancellable operating lease commitments
Total of future minimum lease payments
CHF 2012 2011
Not longer than 1 year 210,600 236,612
Longer than 1 year and not longer than 5 years 842,400 842,400
Longer than 5 years 3,369,600 3,580,200
TOTAL 4,422,600 4,659,212
In respect of non-cancellable operating leases, no liabilities have been recognised.
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F-81 Orascom Development 2012 Annual Report F-82
47 LITIGATION
Falcon
The financial statements of Falcon Company for Hotels (“Falcon”) were incorporated into ODH’s consolidated financial statements
at 31 December 2008 in accordance with the International Financial Reporting Standards, as a result of the business combination
previously effected through one of ODH’s subsidiaries whereby control had existed over Falcon at that time.
Subsequent to the first time consolidation, but prior to the completion of the transfer of the legal title on the Egyptian Stock
Exchange (EGX), a dispute over the Falcon securities purchase agreement had arisen. At the beginning of October 2009, the Group
ceased consolidating Falcon due to changes in Falcon’s management resulting in a loss of control for the Group which was one of
the reasons of the dispute.
Several arbitration and litigation proceedings involving Falcon, the Group and third parties have been and are still pending.
However, during the 2012 some positive progress has been achieved in one of the major arbitration proceedings involving Falcon’s
original owners and a third party having a direct impact on the whole dispute. This positive progress improves chances for ultimate
recovery of the Group’s investments.
Withdrawals of land by the government
Land withdrawal of 6th of October in Egypt
2000 Acres
With reference to the purchased land in Sixth of October city (2000 acres) in Egypt, the Urban Communities Authority related to
the Ministry of Housing issued its resolution on 11 December 2011 to grant one of the subsidiaries of ODH an area of 1,000 acres
rather than 2,000 acres on the condition of completing the construction works on this area not later than 30 September 2013.
Since it is challenging for the subsidiary to fulfil the construction obligation during that period of time and as it is contrary to the
terms of the initial contract with the Authority, the Group’s entity challenged this decision and filed an administrative complaint
against it. This has resulted in further complications; as the Urban Communities Authority has then decided to withdraw the
allocation of another 380 acres, accordingly the Group’s entity now has just 620 acres. The Group’s subsidiary further challenged
this decision and is in the process of going through several administrative and judicial channels to overturn. No administrative
resolution or decision has been issued as of the date of this report. It is expected that this process will be lengthy.
200 Acres
On 5 May 2008 one of the subsidiaries of ODH signed a contract with the Ministry of Housing for receiving 50 acres and a promise
of sale for another 150 acres to construct a project for low and middle income housing.
On 15 March 2010 the subsidiary received the declaration from the Ministry of Housing in Egypt permitting the subsidiary to apply
for necessary construction licenses; on 13 July 2010 the subsidiary received a letter from the Ministry of Housing cancelling the
project and to withdraw the land. The company has taken legal actions to protect its rights over the land and the court case has
not been finalized yet.
Land withdrawal at Al Fayoum Project:
In addition, Fayoum Governorate, Egypt, issued a resolution on 11 June 2011 to terminate the contract signed 9 June 2007 for the
purchase of a piece of land in Fayoum Governorate, Egypt, taking into consideration that the Group started major construction
work on that land worth EGP 11 million (equals CHF 1.7 million). The subsidiary of ODH requested the cancelation of this decision.
As a result, the Conciliation Commission within the Governorate of Fayoum issued a resolution on 3 October 2011 recommending
the cancelation of the termination decision issued by the Fayoum Governorate. On the basis of this decision, the subsidiary has
raised a law suit to the Egyptian judiciary to cancel the decision and, alternatively, to request compensation for the construction
works. No judgement or decision has been issued as of the date of this report.
Land withdrawal at Royal Azur
In January 2012, Royal Azur for Tourism and Real Estate Development (“Royal”) agreed, as part of an overall settlement with the
Tourism Development Authority (“TDA”), to voluntarily relinquish its legal claims and return the land. As part of the settlement,
Royal would take the land subject of dispute on a leasing basis together with the buildings until an agreement is reached for the
repurchase of the land by Royal. This undoubtedly allows Royal the time to rethink the entire purchasing scheme and avoids a
lengthy litigation with the TDA.
48 OTHER SIGNIFICANT EVENTS THAT OCCURRED DURING THE REPORTING
PERIOD
Political situation in Egypt
The substantial political events that took place in Egypt since January 2011 continue to impact the economic sectors in general and
the tourism sector in particular. A few months after the election of a new president in June 2012, political disputes and violent
street confrontations disrupted regular activities. On top of that, there is currently a highly debated and contested constitution in
place and the newly introduced parliament election law has been rejected by the judges and is subject to further legal
investigation Therefore the low level of economic activities in Egypt and other parts of the middle east region continues to be
substantial. As described in note 7, these political events in Egypt had a significant impact on the Group’s operations in the current
period. Management expects that the situation in Egypt, which is still insecure, may have a further impact on the Group’s
operations in future financial periods.
However, the following should be considered regarding the future of the Group’s performance:
– With Egypt in specific, the Group has endured two challenging years with the current political situation and its inevitable effect
on the economy as security and political uncertainty being the primary issues of concern for tourists and investors alike. This
does not mean that Egypt’s tourism and foreign investment will not recover; in fact, Egypt’s Tourism has suffered a hard blow
in 1997 and almost immediately recovered a year later.
– Additionally, Egypt will remain a hub for foreign investment, whereas, the economic fundamentals are still intact to a large
extent; its attractive location at a crossroad between Europe, the Middle East and Africa as well as the fact that Egypt remains
one of the Arab world’s most diversified economies.
– Oman on the other hand, has been affected by the Arab spring from one end as well as general economic slowdown in the Gulf
Cooperation Council (GCC) area. However, there are optimistic forecasts that the Omani tourism and real estate industry will
continue to witness some recovery in the next year. This recovery has been reflected slowly in the Group’s performance in the
Muriya destinations in 2012.
49 SUBSEQUENT EVENTS
Partial sale of Swiss operations
On 26 March 2013, the Board of Directors of ODH and Mr. Samih Sawiris agreed to improve the capitalization of its Swiss
subsidiary Andermatt Swiss Alps (ASA). As a result of the transaction, Mr. Samih Sawiris becomes the new majority shareholder
with a 51% share by converting his loans to the Group into ASA equity, and will act as new Executive Chairman of ASA. ODH
remains shareholder with a 49% share.
Furthermore, Mr. Samih Sawiris will invest at least CHF 150 million of new equity or subordinated loans into ASA in order to secure
funding of the resort Andermatt until 2017. ASA will be deconsolidated in the first half of 2013. As a consequence of the
transaction existing loans between the Group and Mr. Samih Sawiris will be fully offset and the indebtedness of the Group will be
reduced. The transaction will improve the debt-to-equity ratio of the Group and lower interest expense.
Acquisition of further interest in CMAR and intended disposal of CMAR
On 5 December 2012, European Investment Bank (EIB) served a letter to a subsidiary of the Group notifying EIB’s intention to see
their interest in the shares of Club Méditerranée Albion Resort Ltd. (CMAR) based on the Put option and Call option Agreement
dated April 2006 between International Holding for Hotels Company (IHH), European Investment Bank (EIB), and Société de
Promotion ET De Participation pour la Cooperation Economique (PROPARCO). Subsequently, on 15 January 2013, IHH served to
PROPARCO a letter notifying IHH’s intention to exercise the Call Option, through which the Group will acquire the residual
interests in the share capital of CMAR.
It is the Group’s intention to sell its investment in CMAR within the next few months to a third party. Necessary measures have
been initiated since February 2013.
50 APPROVAL OF FINANCIAL STATEMENTS
The financial statements were approved by the directors and authorized for issue on 10 April 2013.
F-81
F-82

F-83 Orascom Development 2012 Annual Report F-84
Deloitte AG
General Guisan-Quai 38
Postfach 2232
CH-8022 Zürich
Tel: +41 (0)58 279 60 00
Fax: +41 (0)58 279 66 00
www.deloitte.ch
REPORT OF THE STATUTORY AUDITOR
To the General meeting of Orascom Development Holding AG, Altdorf
Orascom Development
Report on the consolidated financial statements
As statutory auditor, we have audited the accompanying consolidated financial statements of Orascom Development Holding AG,
Altdorf, which comprise the statement of comprehensive income, statement of financial position, cash flow statement, statement
of changes in equity and notes (pages F-3 to F-82) for the year ended 31 December 2012.
Board of Directors’ Responsibility
The Board of Directors is responsible for the preparation of the consolidated financial statements in accordance with International
Financial Reporting Standards and the requirements of Swiss law. This responsibility includes designing, implementing and
maintaining an internal control system relevant to the preparation and fair presentation of consolidated financial statements that
are free from material misstatement, whether due to fraud or error. The Board of Directors is further responsible for selecting and
applying appropriate accounting policies and making accounting estimates that are reasonable in the circumstances.
Auditor’s Responsibility
Our responsibility is to express an opinion on these consolidated financial statements based on our audit. We conducted our audit
in accordance with Swiss law and Swiss Auditing Standards and the International Standards on Auditing. Those standards require
that we plan and perform the audit to obtain reasonable assurance whether the consolidated financial statements are free from
material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial
statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material
misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk assessments, the
auditor considers the internal control system relevant to the entity’s preparation and fair presentation of the consolidated financial
statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the entity’s internal control system. An audit also includes evaluating the appropriateness of the
accounting policies used and the reasonableness of accounting estimates made, as well as evaluating the overall presentation of
the consolidated financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to
provide a basis for our audit opinion.
Holding AG
Statutory financial statements
together with auditor's report for the
year ended 31 December 2012
Opinion
In our opinion, the consolidated financial statements for the year ended 31 December 2012 give a true and fair view of the financial
position, the results of operations and the cash flows in accordance with International Financial Reporting Standards and comply
with Swiss law.
Report on Other Legal Requirements
We confirm that we meet the legal requirements on licensing according to the Auditor Oversight Act (AOA) and independence
(article 728 CO and article 11 AOA) and that there are no circumstances incompatible with our independence.
In accordance with article 728a paragraph 1 item 3 CO and Swiss Auditing Standard 890, we confirm that an internal control
system exists, which has been designed for the preparation of the consolidated financial statements according to the instructions
of the Board of Directors.
We recommend that the consolidated financial statements submitted to you be approved.
Deloitte AG
Hans-Peter Wyss
Licensed audit expert
Auditor in charge
Zurich, 10 April 2013
Thomas Schmid
Licensed audit expert
F-84

F-85 Orascom Development 2012 Annual Report F-86
Orascom Development Holding AG
Income statement
CHF Notes 2012 2011
Revenue
Interest income 6,386,327 6,916,679
Management fee 807,000 423,800
Other revenues 35,499 200,372
Total revenues 7,228,826 7,540,851
Operating expenses
Personnel expenses (9,230,810) (6,784,871)
Marketing expenses (618,079) -
Depreciation of fixed assets (23,792) (129,664)
Impairment of receivables 12 (7,268,864) (32,993,640)
Other operating expenses (8,337,780) (5,407,251)
Total operating expenses (25,479,325) (45,315,426)
Other income/expenses
Amortization of incorporation and organization costs 4 (6,234,903) (6,211,020)
Impairment on investments 8 (998,292,000) (795,148,339)
Interest expense (3,655,709) (1,831,901)
Other finance expenses 8 (5,000,000) -
Exchange rate differences 991,925 (5,729,984)
Total other income/(expenses) (1,012,190,687) (808,921,244)
Extraordinary revenues and expenses
Extraordinary revenues from previous years 56,938 -
Extraordinary expenses from previous years (2,246,507) -
Total extraordinary revenues and expenses (2,189,569) -
Net (loss) for the period (1,032,630,755) (846,695,821)
Orascom Development Holding AG
Statutory balance sheet
CHF Notes 31 December 2012 31 December 2011
Assets
Current assets
Cash at bank 14,174,082 6,847,093
Other receivables
- Affiliated companies 13 311,665,582 303,276,209
- Related party 20 119,164 -
- Third parties 12/20 2,073,853 9,485,012
Own shares 11 332,050 2,053,867
Total current assets 328,364,731 321,662,181
Non-current assets
Fixed assets 5 308,466 43,996
Incorporation and organization costs 4 6,063,854 12,298,757
Investments 8 1,334,083,963 2,327,369,382
Total non-current assets 1,340,456,283 2,339,712,135
Total assets 1,668,821,014 2,661,374,316
Liabilities and shareholders’ equity
Short-term liabilities
Bank overdraft 10,678,409 10,833,284
Other payables
- Shareholder 7 73,127,911 15,257,372
- Affiliated companies 60,357,907 78,822,091
- Third parties 6 517,594 557,007
Accrued expenses 1,779,731 2,373,785
Provisions 2,348,673 1,150,000
Total short-term liabilities 148,810,225 108,993,539
Long-term liabilities
Long-term liabilities 260,767 -
Total long-term liabilities 260,767 -
Total liabilities 149,070,992 108,993,539
Shareholders’ equity
Share capital 9 662,201,010 662,201,010
Reserve for own shares 11 589,600 589,600
Capital contribution reserve (privileged) 10
- Additional paid-in capital (agio) 2,507,026,456 2,507,026,456
- Reserve for own shares 11 178,708 1,464,267
- Other reserve 9 492,767,017 491,481,458
Other reserve 9 11,953,838 11,953,838
Accumulated losses (1,122,335,852) (275,640,031)
Net (loss) of the period (1,032,630,755) (846,695,821)
Total shareholders' equity 1,519,750,022 2,552,380,777
Total liability and shareholders‘ equity
1,668,821,014 2,661,374,316
Samih Sawiris Gerhard Niesslein Ahmed El Shamy
Chairman Group CEO Group CFO
F-85
F-86

F-1
F-87 Orascom Development 2012 Annual Report F-88
Orascom Development Holding AG
Statement of changes in equity
Other reserves Retained earnings Total
Reserve for own
shares
Additional paid-in
capital (agio)
CHF Share capital
Balance at 1 January 2011 672,882,864 2,505,326,807 1,464,267 499,108,028 (275,640,031) 3,403,141,935
Share capital decrease (18,553,046) - - - - (18,553,046)
Share capital increase 7,871,192 1,699,649 - 4,916,868 - 14,487,709
Acquisition of own shares - - 589,600 (589,600) - -
(Loss) for the period - - - - (846,695,821) (846,695,821)
Balance at 31 December 2011 662,201,010 2,507,026,456 2,053,867 503,435,296 (1,122,335,852) 2,552,380,777
Balance at 1 January 2012 662,201,010 2,507,026,456 2,053,867 503,435,296 (1,122,335,852) 2,552,380,777
Reduction of own shares - - (1,285,559) 1,285,559 - -
Loss for the period - - - - (1,032,630,755) (1,032,630,755)
Balance at 31 December 2012 662,201,010 2,507,026,456 768,308 504,720,855 (2,154,966,607) 1,519,750,022
Orascom Development Holding AG
Cash flow statement
CHF 2012 2011
Cash flows from operating activities
(Loss) for the period (1,032,630,755) (846,695,821)
Depreciation of fixed assets 23,792 129,664
Amortization of incorporation and organization cost 6,234,903 6,211,020
Other finance cost 5,000,000 -
Impairment on investments 998,292,000 795,148,339
Movements in working capital
Decrease in trade and other receivables 7,291,995 15,744,621
Increase in due from affiliated parties (13,394,188) (127,389,437)
(Decrease) in trade and other payables (39,413) (319,826)
(Decrease)/Increase in due to affiliated parties (18,464,183) 17,121,867
Increase in other liabilities 604,619 2,411,552
Cash generated from (used in)operating activities (47,081,230) (137,638,021)
Cash flows from investing activities
Payments for fixed assets (29,262) (22,801)
Increase in investments of subsidiaries (5,000,000) (17,770,579)
Net cash used in investing activities (5,029,262) (17,793,380)
Cash flows from financing activities
Increase in liabilities against shareholder 57,870,539 15,079,995
(Decrease)/increase in bank overdrafts (154,875) 10,833,284
Incorporation and organization cost - (282,866)
Capital reduction - (18,553,046)
Acquisition of own shares - (589,600)
Decrease of own shares 1,721,817 -
Net cash generated from/ (used in) financing activities 59,437,481 6,487,767
Net increase/(decrease)in cash and cash equivalents 7,326,989 (148,943,634)
Cash and cash equivalents as at beginning of the financial year 6,847,093 155,790,727
Cash and cash equivalents as at end of the financial year 14,174,082 6,847,093
F-88

F-89 Orascom Development 2012 Annual Report F-90
Notes to the financial statements
1 GENERAL
The purpose of the Company is the direct or indirect acquisition, durable management and disposal of participations in domestic
or foreign enterprises, in particular in the field of real estate, tourism, hotels, construction, resort management, financing of real
estate and related industries as well as the provision of related services.
2 PLEDGED ASSETS TO SECURE OWN OBLIGATIONS
The Swiss subsidiary Andermatt Swiss Alps AG (ASA) has obligations towards the canton of Uri and the municipality of
Andermatt. ASA is responsible for the construction of certain parts of the tourism resort Andermatt. Within certain periods of time
or should the construction work be stopped for whatever reason, ASA has the obligation to rebuild the relevant plots of land to the
original state. As at 31 December 2012, 36,985 ASA shares (2011; 32,347) with a nominal value of CHF 1,000 each, amounting to a
total book value of CHF 36,985,000 (2011: CHF 32,347,000), have been pledged as a security to the canton and municipality.
Additionally, land with a value of CHF 1,000,000 has been pledged (31 December 2011: CHF 1,000,000).
3 OFF-BALANCE-SHEET LEASING COMMITMENTS
CHF 2012 2011
Cars - 26,012
Office rent 4,422,600 4,633,200
4 INCORPORATION COSTS
Incorporation costs relate to costs incurred in relation to the incorporation of the Company, the related capital increase and
exchange offer, as well as the listing of the shares at the SIX Swiss Exchange and the EGX Egyptian Exchange in 2008 and the
public offering in relation to the capital increase in September 2010. Incorporation costs are capitalised and amortised over a
period of five years.
5 FIRE INSURANCE VALUE OF FIXED ASSETS
The fire insurance value of fixed assets at 31 December 2012 amounts to CHF 731,000 (31 December 2011: CHF 731,000).
6 LIABILITIES TOWARDS STAFF PENSION SCHEMES
Current liabilities at 31 December 2012 amount to CHF 7,777 (31 December 2011: CHF 63,683).
7 OTHER PAYABLES – SHAREHOLDER
As in prior year the position of “other payables – shareholder” at 31 December 2012 includes CHF 5,013,504 (2011: CHF 4,925,982
due to the Egyptian counterparty “Misr for Central Clearing, Depository and Registry” (MCDR), which will pay out the amount of
CHF 0.65 per share to the shareholders with shares which are registered and traded on the Egyptian Stock Exchange (EGX). The
difference between the value of 2011 and 2012 is accrued interest with an amount of CHF 87,522.
The amount of CHF 68,114,407 due to Mr. Samih Sawiris (31 December 2011: CHF 10,331,389) is also included within this position.
8 INVESTMENTS
Investments are valued at acquisition cost less adjustments for impairment, if any. On a regular basis the Company’s management
reviews the recoverable value of the Company’s investments in the various destinations, and accordingly amends the carrying
value with impairment losses if there are any.
The Egyptian revolution in 2011 has negatively affected the performance of the Company’s Egyptian arm under Orascom Hotels &
Development S.A.E. (“OHD”). OHD’s different operating segments, especially the real estate and hotels being the key revenue
and value drivers of OHD, have been negatively affected by the deteriorated economic conditions that took place in Egypt. This is
represented in downsized demand on real estate purchases and declined flow of tourists. During 2012 the performance of OHD’s
different segments started to recover partially and perform in a better manner than 2011. However, the recovery was not as
comprehensive and quick as anticipated in prior year. There still remains uncertainty and the foreseen performance over the
coming five years does not indicate a full recovery.
The valuation model of the Company captures the different investments, whether greenfield projects, brownfield projects, or
operating projects. The valuation model adopts various approaches depending on the category of the project, as for the greenfield
projects and brownfield projects, the model keeps it at investment cost given the uncertainty of the future assumptions and the
absence of track record for those projects. One of the major contributors to the investments’ value are land banks in Egypt. Its
value depends very much on developments and sales that are achievable over a long-term period. Due to this long-term view and
the current political and economic situation there remains a significant uncertainty.
For the operating projects, DCF valuation techniques have been applied in addition to net asset value techniques for the hotels
segment. Major underlying assumptions are occupancy and average room rates for hotels and the number of real estate units to
be sold. The various assumptions and future projections incorporate the various political, economic and operational facts
prevailing at the time of preparing the valuations. Future developments may impact the value.
The valuation model of Egypt resulted in an enterprise value for OHD of CHF 1,143 million against the carrying amount of CHF
2,141 million which resulted in an impairment loss of CHF 998 million. The Company’s management considers the carrying amount
of OHD after this impairment as fairly stated and reflecting its realizable value as at December 31, 2012. However, there remains a
significant uncertainty as to the assumptions used in the valuation.
At 31 December 2012, the Company directly holds the following investments:
Company, domicile, purpose Ownership % Share capital
31 December
2012
31 December
2011
Orascom Hotels & Development S.A.E. 99.68% 99.68% EGP 1,109,811,630
(previously: EL Gouna Development & Hotels S.A.E.), Egypt
Real estate development, hotel management
Arena for Hotels Company S.A.E., Egypt 99.85% 99.85% EGP 20,000,000
Hotel operation
Orascom Development Holding International Ltd, British
Virgin Islands (BVI) - 100.00% USD 1
International holding company
Orascom Development & Management Limited, Cyprus 100.00% 100.00% EUR 1,000
Management company
ORH Investment Holding Ltd, BVI 100.00% 100.00% USD 125,000,000
International holding company
ONSA Holding Ltd, BVI - 100.00% USD 1
International holding company
Lustica Development AD, Montenegro 51.00% 51.00% EUR 25,000
Real estate development, hotel management
Andermatt Swiss Alps AG, Switzerland (ASA) 100.00% 100.00% CHF 42,000,000
Real estate development
Orascom Development International AG, Switzerland 100.00% 100.00% CHF 100,000
Real estate development
F-89
F-90

F-91 Orascom Development 2012 Annual Report F-92
Orascom Hotels & Development S.A.E. (OHD)
On 22 December 2010 the Company launched a tender offer to the remaining minority shareholders to acquire the outstanding
OHD shares. The registration process for approximately 2% of these shares was not completed at the time of launching the tender
offer and therefore this portion was also included in the tender offer. The Company had control over the voting rights and borne all
the risks and rewards of these shares including dividend rights.
The tender offer to buy-out the minority shareholders of OHD ended on 18 January 2011. The Company acquired a total of
8,117,758 OHD shares and thereby increased its share of OHD to 99.66%. 330,029 borrowed ODH shares were used to acquire
6,997,392 OHD shares. Furthermore 1,120,366 OHD shares were acquired by cash-payments.
During the second and the third quarter 2011, the Company acquired 3,752 additional shares for an amount of CHF 21,592 and
increased its share in OHD to 99.68%.
ORH Investment Holding Limited (ORH)
On 12 April 2010, ODH bought all outstanding shares from group companies and has increased its ownership to 100.00%. In Q1,
2012 Orascom Development Holding International Ltd was merged into ORH. The shares of ONSA Holding Ltd were transferred
from ODH to ORH.
Andermatt Swiss Alps AG (ASA)
On 15 December 2011, the capital was increased in the amount of CHF 10,000,000 by paying off a credit balance due to the
Company. On 18 December 2012, the Company issued a waiver for an intercompany loan amounting to CHF 5,000,000 granted to
ASA and recorded the respective costs as finance expenses in the income statement. Also, a capital increase in the amount of CHF
5,000,000 took place on 12 December 2012.
9 SHAREHOLDERS’ EQUITY
As at 31 December 2012 the Company's share capital of CHF 662,201,010 was divided into 28,543,147 registered shares with a par
value of CHF 23.20 each. The share capital is fully paid-in. The registered shares of the Company are listed on the Swiss Exchange
(SIX). The Company has also issued Egyptian Depository Rights (EDRs) which are traded on the Egyptian Stock Exchange (EGX).
Par Value CHF Shares # CHF
Share capital 23.20 28,543,147 662,201,010
Authorized capital 23.20 4,669,971 108,343,327
Conditional capital 23.20 5,624,556 130,489,699
The table below shows the development of issued capital and additional paid-in capital (agio):
Par
Value
Shares
Issued capital
Additional paid-in capital
(agio)
# CHF CHF
Date Transaction CHF Change Total Change Total Change Total
01/01/2011 Opening balance 23.85 - 28,213,118 - 672,882,864 - 2,505,326,807
a) 28/07/2011 Capital increase 23.85 330,029 28,543,147 7,871,192 680,754,056 1,699,650 2,507,026,456
b) 08/08/2011 Capital reduction 23.20 - 28,543,147 (18,553,046) 662,201,010 - 2,507,026,456
a) According to the resolution of the general shareholder meeting held on 23 May 2011, the board of directors has approved on 14
July 2011 a capital increase in the amount of CHF 7,871,192 (made up of 330,029 shares with a par value of CHF 23.85) at a total
issue price of CHF 9,570,841. The capital increase has been completed on 28 July 2011. Therefore, the additional paid-in capital
increased by CHF 1,699,649 to CHF 2,507,026,456 in total.
On 3 December 2010, the Company borrowed 1,286,353 ODH shares from Mr. Samih Sawiris free of charge under a securities
lending agreement. These shares were intended to be used for the tender offer regarding the buy-out of the remaining
shareholders of Orascom Hotels & Development SAE, a company listed at the EGX. During this offer 330,029 shares have been
swapped against ODH shares. At the time when Mr. Sawiris lent the shares, the market value for the shares swapped was CHF
14,487,709. The difference between this amount and the issue price of CHF 9,570,841 amounting to CHF 4,916,868 was
recorded within general reserves
b) As per resolution of the general shareholder meeting held on 23 May 2011, the share capital was reduced by decreasing the
nominal value per share from CHF 23.85 to CHF 23.20. The amount of CHF 0.65 per share was distributed to the shareholders
on 15 September 2011.
10 PRIVILEGED CAPITAL CONTRIBUTION RESERVES
As of 1 January 2011, Swiss tax authorities introduced a new regulation concerning capital contribution reserves. The new
regulation foresees the exemption of distributions from the capital contribution reserves, which were received after 31 December
1996 from Swiss income and withholding tax. In order to reflect this new regulation, capital contribution reserves have been
classified separately in the balance sheet. The tax authorities have approved capital contribution reserves in the amount of CHF
2,999,972,182.
11 OWN SHARES
As of 31 December 2012, the Company owned 26,249 own shares (31 December 2011: 70,171). 26,171 own shares were received on
30 December 2010 at a value of CHF 55.95 each as part of the compensation for the sale of the six percent stake in the former
Garranah subsidiaries.
On 28 December 2011, the Company bought 44,000 own shares at the price of CHF 13.40 as a part of the board member
remuneration for 2011. 43,922 of these shares were forwarded to the board members during the first quarter 2012.
12 ACCOUNTS RECEIVABLES FROM THIRD PARTIES
Accounts receivables are included after a deduction for bad debtors in the amount of CHF 32,993,640 (31 December 2011: CHF
32,993,640), the receivables position concerned was fully impaired. Further, accounts receivables include a position in the amount
of CHF 1,918,897 (31 December 2011: CHF 9,306,925), whose value is determined by the market value of ODH shares and EDRs.
13 ACCOUNTS RECEIVABLES FROM AFFILIATED COMPANIES
Receivables from affiliated companies include an amount of CHF 34 million (31 December 2011: CHF 30 million) due from ASA,
which is subordinated to all other existing and future claims against the Company.
14 RISK ASSESSMENT
Orascom Development Holding AG, as the Parent Company of the Group, is fully integrated into the Group-wide internal risk
assessment process. Such assessment is performed bottom-up and top-down with final conclusions consolidated in the Group
Finance Function.
The Group’s entities report periodically to the Group Finance on their current operations and financial situation. Various reports
and analysis have been implemented to allow the Group to monitor the operations closely and immediately identify risks. In
managing the Companies vital activities and controlling the risks within those activities the Company pursuits a policy of
centralization at the corporate level in which the bank accounts, the fixed assets, the collection of receivables and material
transactions are controlled at the corporate level with certain approvals required to exercise or execute any of the above.
Management is efficiently and effectively assisted into taking decisions based on the short term operating level and long term
strategic level through the various reports that are provided through the system. In addition to that there is a monthly as well as
quarterly reporting package and a set of key performance indicators on the entity and segment level that enable the management
to monitor the business, take decisions and undergo corrective action whenever necessary.
In addition, the Group Finance has a function for risk assessment and internal control. A risk matrix is regularly updated for the
most significant entities of the Group. All information from the entities is reviewed and consolidated by Group Finance and is
shared and discussed with the Executive Management on a regular base. A more formal reporting on risks over financial reporting
was made prior to year-end to the Board of Directors.
The Board of Directors in turn has performed a risk assessment covering more long-term operational and strategic risks to the
Group. The conclusions of such risk assessment are also considered by Group Finance.
The risk mitigating actions are performed on the segment and entity level. The Group has centralized certain functions to be able
to identify and control risks more closely. This risk assessment also covers the specific risks related to unconsolidated financial
statements of Orascom Development Holding AG.
F-91
F-92

F-93 Orascom Development 2012 Annual Report F-94
15 SIGNIFICANT SHAREHOLDERS
Name of holder
Number of
shares
31 December 2012 31 December 2011
%-ownership of
total equity capital
and
voting rights
Number of
shares
%-ownership of
total equity capital
and
voting rights
Samih Sawiris (i) 17,907,121 62.74% 17,634,321 61.78%
Janus Capital Management LLC 1,542,643 5.40% 1,533,538 5.37%
Others 9,093,383 31.86% 9,375,288 32.85%
TOTAL 28,543,147 100.00% 28,543,147 100.00%
(i)
The shares of Samih Sawiris are held directly and through his entities Thursday Holding (Ex-TNT Holding) and SOS Holding.
16 REMUNERATION OF THE BOARD OF DIRECTORS AND EXECUTIVE
MANAGEMENT
Proposed appropriation of reserves
As accumulated losses exceed more than half of the share capital and legal reserves, the Board of Directors proposes to the
General Assembly the reallocation of CHF 250,000,000 Additional paid-in capital (agio) to Other reserve in order to meet its
obligations in relation to article 725 paragraph 1 CO:
Capital Contribution Reserve (in CHF)
Before
Reallocation
Reallocation
After
Reallocation
Additional paid-in capital (agio) 2,507,026,456 (250,000,000) 2,257,026,456
Reserve for own shares 178,708 - 178,708
Other reserve 492,767,017 250,000,000 742,767,017
Total capital contribution reserve 2,999,972,181 - 2,999,972,181
A detailed overview of the remuneration of the Board of Directors and Executive Management is provided in the consolidated
financial statements.
17 JOINT LIABILITY IN FAVOUR OF THIRD PARTY
The company together with certain Swiss subsidiaries act as a group against confederate value-added tax authorities. This leads to
a joint liability from group taxation for value added tax purposes.
18 CONTINGENT LIABILITIES
On 6 September 2012, Bellevue Hotels and Apartments Development AG (BHAD) and Acuro Immobilien AG entered into a real
estate purchase agreement (the Purchase Agreement) and Orascom Development Holding AG as the major shareholder of BHAD
guarantees for this agreement in case that BHAD should not be able to fulfil its duties against Acuro. The guaranty is limited to
CHF 100 million. This agreement is in the sense of article 111 of the Swiss Code of Obligations and not as a surety pursuant to
article 492 et seqq of the Swiss Code of Obligations.
19 SUBSEQUENT EVENTS
Partial sale of Swiss operations
On 26 March 2013, the Board of Directors of ODH and Mr. Samih Sawiris agreed to improve the capitalization of its Swiss
subsidiary Andermatt Swiss Alps (ASA). As a result of the transaction, Mr. Samih Sawiris becomes new majority shareholder with a
51% share by converting his loans to the Group into ASA equity, and will act as new Executive Chairman of ASA. ODH remains
shareholder with a 49% share.
Furthermore, Mr. Samih Sawiris will invest at least CHF 150 million of new equity or subordinated loans into ASA in order to secure
funding of the resort Andermatt until 2017. ASA will be deconsolidated in the first half of 2013. As a consequence of the
transaction existing loans between the Group and Mr. Samih Sawiris will be fully offset and the indebtedness of the Group will be
reduced. The transaction will improve the debt-to-equity ratio of the Group and lower interest expenses.
20 RECLASSIFICATIONS
Certain reclassifications in the prior year balance sheet and the cash flow statement have been made in order to be in line with the
2012 presentation.
F-93

F-95 Orascom Development 2012 Annual Report F-96
Deloitte AG
General Guisan-Quai 38
Postfach 2232
CH-8022 Zürich
Tel: +41 (0)58 279 60 00
Fax: +41 (0)58 279 66 00
www.deloitte.ch
Report on Other Legal Requirements
REPORT OF THE STATUTORY AUDITOR
To the General meeting of Orascom Development Holding AG, Altdorf
Report on the financial statements
As statutory auditor, we have audited the accompanying financial statements of Orascom Development Holding AG, Altdorf,
which comprise the income statement, statutory balance sheet, statement of changes in equity, cash flow statement and notes
(pages F-85 to F-93) for the year ended 31 December 2012.
Board of Directors’ Responsibility
The Board of Directors is responsible for the preparation of the financial statements in accordance with the requirements of Swiss
law and the company’s articles of incorporation. This responsibility includes designing, implementing and maintaining an internal
control system relevant to the preparation of financial statements that are free from material misstatement, whether due to fraud
or error. The Board of Directors is further responsible for selecting and applying appropriate accounting policies and making
accounting estimates that are reasonable in the circumstances.
We confirm that we meet the legal requirements on licensing according to the Auditor Oversight Act (AOA) and independence
(article 728 CO and article 11 AOA) and that there are no circumstances incompatible with our independence.
In accordance with article 728a paragraph 1 item 3 CO and Swiss Auditing Standard 890, we confirm that an internal control
system exists, which has been designed for the preparation of financial statements according to the instructions of the Board of
Directors.
We further confirm that the proposed appropriation of reserves (F-94) complies with Swiss law and the company’s articles of
incorporation. We recommend that the financial statements submitted to you be approved.
Furthermore, we draw your attention to the fact that half of the share capital and legal reserves are not covered by net assets as
required by article 725 paragraph 1 CO. The approval of the proposed appropriation of reserves will remedy this situation.
Deloitte AG
Auditor’s Responsibility
Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance
with Swiss law and Swiss Auditing Standards. Those standards require that we plan and perform the audit to obtain reasonable
assurance whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements.
The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the
financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers the internal control
system relevant to the entity’s preparation of the financial statements in order to design audit procedures that are appropriate in
the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control system. An
audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of accounting estimates
made, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have
obtained is sufficient and appropriate to provide a basis for our audit opinion.
Opinion
In our opinion, the financial statements for the period ended 31 December 2012 comply with Swiss law and the company’s articles
of incorporation.
Without qualifying our opinion, we draw your attention to note 8 to the financial statements disclosing the existence of a
significant uncertainty relating to the valuation of the investments in subsidiaries.
Hans-Peter Wyss
Licensed audit expert
Auditor in charge
Zurich, 10 April 2013
Thomas Schmid
Licensed audit expert

168 Orascom Development
9. Glossary of Terms
AG
Aktiengesellschaft (abbreviation AG) is the German name for a stock
corporation.
ARR
Average Room Rate is a statistical unit often used in the lodging industry.
The ARR is calculated by dividing the room revenue (excluding services and
taxes) earned during a specific period by the number of occupied rooms.
Company
Orascom Development Holding AG.
EBIT
Earnings Before Interest and Taxes is an indicator of a company’s
profitability, calculated as total revenue minus total expenses, excluding
tax and interest. EBIT is also referred to as “Operating Earnings”,
“Operating Profit” and “Operating Income”. The indicator is also known
as Profit Before Interest and Taxes (PBIT), and is equal to the net income
with interest and taxes added back to it.
EBITDA
Earnings Before Interest, Taxes, Depreciation and Amortization is an
indicator of a company’s financial performance, calculated as total
revenue less total expenses, excluding tax, interest, depreciation and
amortization. EBITDA is essentially net income with interest, taxes,
depreciation, and amortization added back to it, and can be used to
analyze and compare profitability between companies and industries
because it eliminates the effects of financing and accounting decisions.
EDRs
Egyptian Depository Receipts.
EFSA
Egyptian Financial Supervisory Authority.
EGX
The Egyptian Exchange is one of the oldest stock markets established
in The Middle East. The origins of the Egyptian Exchange date back to
1883 when the Alexandria Stock Exchange was established, followed
by the Cairo Stock Exchange in 1903.
GOP
Gross Operating Profit means the profit of our hotel business after
deducting operating costs and before deducting amortization and
depreciation expenses. It excludes all costs related to non-hotel operations.
Group
Orascom Development Holding AG and its subsidiaries.
KPI
Key Performance Indicators are financial and non-financial metrics used to
help an organization define and measure progress toward organizational goals.
M 2
Square meter.
M 3
Cubic meter.
MBA
The Master of Business Administration is a master’s degree in business
administration.
MCDR
Misr for Central Clearing, Depository and Registry provides securities
settlement and custody services in Egypt by applying a central depositary
system, effecting central registry of securities traded in the Egyptian
capital market and facilitating securities trading on dematerialized shares.
MENA
Middle East and North Africa.
MV
Megavolt.
NAV
Net Asset Value is a term used to describe the value of an entity’s assets
less the value of its liabilities.
RevPAR
Revenue Per Available Room equals average room rate (ARR) multiplied
by average occupancy.
SESTA
Swiss Federal Act on Stock Exchanges and Securities Trading of
24 March 1995 (Bundesgesetz vom 24. März 1995 über die Börsen
und den Effektenhandel, BEHG)
SIS
SIS SegaInterSettle AG provides securities settlement and custody
services in Switzerland.
SIX Swiss Exchange
The SIX Swiss Exchange is Switzerland’s principal stock exchange and
part of the Cash Markets Division of the SIX Group. It operates several
trading platforms and is the marketplace for various types of securities.
The SIX Swiss Exchange is supervised by the Swiss Financial Market
Supervisory Authority (FINMA).
SYNCHRO
The Synchro project is a comprehensive group wide business re-engineering
project that aims to increase the company’s transparency, efficiency
and effectiveness by defining a common process landscape and business
processes that are based on leading practices across the Group.
TRevPAR
Total Revenue Per Available Room is similar to RevPAR but also takes
into account other room revenues e.g. food and beverage, entertainment,
laundry and other services.
UAE
United Arab Emirates.
UK
United Kingdom.

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