9months 2010 Investors' Presentation - Palm Hills Developments

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APPENDIX Revenue recognition methodology Villas, Town, and Twin houses Revenue • Client buys a Villa for EGP 2,000,000, the value of the unit is broken down as follows (EGP 1,200,000 Land Price and EGP 800,000 Built Up Area (BuA) • Client Pays 10% (of the unit value) as a Reservation Fee ; EGP 200,000 , this amount goes in the Balance Sheet under “Advances From Customers” • Client decides to sign the Contract and pays an additional 5% (of the unit value) : EGP 100,000. • The Total cash amount paid by the client as of now is EGP 300,000. This amount is transferred from “Advances from Customers” to “Billing in Excess of Cost” . • The client writes down checks for the rest of the unit value; which now is EGP 1,700,000 . The written checks are discounted to represent their fair value by an NPV discount of 10% and are found under “Notes Receivables” • The land portion of the unit value, which we assumed was EGP 1,200,000, is automatically recognized as revenue at the Income Statement (Net Sales) after being reduced by 1) Estimated infrastructure expenditure and 2) The NPV discount portion that is related to land revenue. • The remaining unit value, which we assumed was EGP 800,000 for the BuA, is recognized in the Balance Sheet under “Billing in excess of cost” • The EGP 800,000 for the BuA will be amortized and recognized as BuA revenue only when the unit reaches 50% construction completion Cost • The land cost constitutes the acquisition cost plus actual infrastructure expenditures incurred for the sold unit and is recognized under the COGS • The Actual Expenditures incurred on the construction of the Villa will be recognized as construction cost under the Cost of Goods sold (COGS) only after it reaches the 50% construction completion threshold. Apartments Revenue • Revenue and cost for the Apartments are recognized upon unit delivery • The client writes down checks for the total unit value of the contracted apartment. The checks are then discounted to represent their fair value by an NPV fixed discount rate of 10% and the amount goes in the Balance Sheet under “Notes receivables” and “Billing in excess of cost.” Revenue will be recognized at the Income Statement (Net Sales) upon delivery. Cost • The actual expenditure spent on the land acquisition cost remain in the Balance Sheet under “Development Properties” and the actual expenditure spent on the construction cost remain in the Balance Sheet under “Billing in excess of cost” , both will be recognized on the Income Statement (COGS) upon delivery. Investors’ Presentation | November 2010 36
APPENDIX Projects’ key data Table I Total development cost Location Total areas (Sq.Mt) Cost(EGP)/sq.mt Land BUA 1 BUA 2 Infrast. Land BUA Infrast. Palm Parks West Cairo 474,600 0 332,980 474,600 544 2,122 289 Cascade, Bamboo, Golden West Cairo 520,380 102,663 36,372 520,380 246 1,200 100 Golf Views West Cairo 2,049,432 516,602 0 2,049,432 318 1,882 105 Golf Extension West Cairo 1,300,572 403,467 0 1,300,572 1,190 2,195 172 Down Town (VGO) West Cairo 236,376 46,660 0 236,376 933 2,566 87 Casa West Cairo 294,000 0 389,990 294,000 656 1,236 130 Bamboo Extension West Cairo 168,000 59,121 0 168,000 139 1,540 150 Botanica Cairo-Alex desert road 7,138,320 543,641 0 7,138,320 29 Katameya Palm Hills East Cairo 928,438 305,047 0 928,438 295 2,065 100 Village Gate East Cairo 131,040 0 138,043 131,040 113 2,037 190 The Village East Cairo 105,000 0 83,438 105,000 525 1,870 129 Palm Sokhna Ein Sokhna (Red Sea) 5,450,994 301,013 484,660 5,450,994 8 3,942 496 Park View East Cairo 97,642 0 76,920 97,642 1,849 1,471 202 Village Garden Katameya 1 East Cairo 275,100 31,670 121,410 275,100 886 Village Garden Katameya 2 East Cairo 284,794 47,575 265,457 284,794 817 1,489 149 Hacienda Bay (ZONE 1) North Coast 2,306,333 198,979 200,735 2,306,333 66 2,110 265 Hacienda White 1 North Coast 215,024 16,592 29,086 215,024 63 2,250 723 Hacienda White 2 North Coast 472,262 48,665 52,329 472,262 124 2,250 579 BUA 1: Built up areas for stand alone units (Villas, Twin house, Town house, etc) BUA 2: Built up areas for shared buildings (Apartments’ buildings, Chalets, condominiums, etc ) Investors’ Presentation | November 2010 37
Page 1 and 2: 9months 2010 Investors’ Presentat
Page 3 and 4: Agenda At a Glance Competitive Adva
Page 5 and 6: AT A GLANCE Palm Hills Developments
Page 7 and 8: AT A GLANCE Achieving impressive gr
Page 9 and 10: AT A GLANCE Shareholders value PHD
Page 11 and 12: AT A GLANCE Organizational and Gove
Page 13 and 14: Competitive Advantages Palm Hills D
Page 15 and 16: COMPETITIVE ADVANTAGES Strong marke
Page 17 and 18: COMPETITIVE ADVANTAGES One of the m
Page 19 and 20: COMPETITIVE ADVANTAGES Room for gro
Page 21 and 22: COMPETITIVE ADVANTAGES Cost control
Page 23 and 24: Forward Strategy Palm Hills Develop
Page 25 and 26: FORWARD STRATEGY Adding recurring r
Page 27 and 28: FORWARD STRATEGY . . . Without sacr
Page 29 and 30: 9M’2010 PERFORMANCE Activities wr
Page 31 and 32: 9M’2010 PERFORMANCE Financial hig
Page 33 and 34: H1 2010 PERFORMANCE Top line growth
Page 35: Appendices Palm Hills Developments
Page 39 and 40: APPENDIX Projects’ key data (Cont
Page 41 and 42: APPENDIX Projects’ key data (Cont

9months 2010 Investors' Presentation - Palm Hills Developments

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