STRATEGICALLY DECENTRALIZED ANNUAL REPORT 2016

Transcription

1 STRATEGICALLY DECENTRALIZED ANNUAL REPORT 2016 STRATEGICALLY DECENTRALIZED ANNUAL REPORT 2016

2 STRATEGICALLY DECENTRALIZED

3 01 04 Contents AT A GLANCE 1.1 Company Profile Destinations' Map Chairman's Note CEO's Letter BUSINESS SEGMENTS CORPORATE GOVERNANCE 4.1 Group Structure and Significant Shareholders Capital Structure Board of Directors Executive Management Compensation Shareholding and Loans Shareholders' Participation Changes of Control and Defense Measures Employees External Auditors Information Policy 74 CONSOLIDATED FINANCIAL STATEMENTS 2016 ORASCOM DEVELOPMENT HOLDING AG 6.1 Consolidated statement of comprehensive income F Consolidated statement of financial position F Consolidated statement of changes in equity F Consolidated statement of cash flows F Notes to the consolidated financial statements F Hotels Real Estate and Construction Destination Management Land Sales Other Operations INVESTOR INFORMATION 78 STATUTORY FINANCIAL STATEMENTS 2016 ORASCOM DEVELOPMENT HOLDING AG Breakthrough with Focus Income statement F Statutory balance sheet F Statement of changes in equity F Cash flow statement F Notes to the financial statements F COUNTRIES 3.1 Egypt Oman UAE Montenegro Switzerland Morocco UK 55 GLOSSARY OF TERMS 186 ORASCOM * FOCUS VISION

4 ORASCOM 01 DEVELOPMENT AT A GLANCE 1.1 Company Profile 1.2 Destinations Map 1.3 Chairman's Note 1.4 CEO's Letter

5 01 ORASCOM DEVELOPMENT AT A GLANCE 01 ORASCOM DEVELOPMENT AT A GLANCE Focusing on Life as it should be across all destinations Acquisition Phase Development Phase Operational Phase LAND BANK VALUE CREATION REAL ESTATE RE OWNER SERVICES NEW DESTINATION IDENTIFICATION ACQUISITION & INITIAL CONCEPT HOTEL DEVELOPMENT DESTINATION DEVELOPMENT PROJECT MANAGEMENT HOTEL OPERATIONS DESTINATION OPERATIONS OPERATIONS MANAGEMENT 1.1 Company Profile PLANNING AND DESIGN CONSTRUCTION PROPERTY AND FACILITY MANAGEMENT Orascom Development is a leading developer of fully integrated destinations, including hotels, private villas and apartments, leisure facilities such as golf courses, marinas and supporting infrastructure. The Group s diversified portfolio of destinations is spread over multiple jurisdictions such as Egypt, UAE, Oman, Switzerland, Morocco, Montenegro and United Kingdom. Orascom Development has a dual listing: a primary listing on the SIX Swiss Exchange; and a secondary listing on the EGX Egyptian Exchange Initial destination concept Detailed destination concept Marketing concept and sales strategy Product sign-offs Start of sales Start of construction Internal / Operator hand over Buyer hand over / opening Start of operation Periodic assessment of performance and service quality 6 Annual Report STRATEGICALLY DECENTRALIZED 7

6 01 ORASCOM DEVELOPMENT AT A GLANCE 01 ORASCOM DEVELOPMENT AT A GLANCE million m 2 TOTAL LAND AREA 17.7 million m 2 COMPLETED AREA 17.7% COMPLETED EGYPT OMAN UAE MONTENEGRO 1.2 Destinations Map The Group s diversified portfolio of destinations is spread over multiple jurisdictions such as Egypt, UAE, Oman, Switzerland, Morocco, Montenegro and United Kingdom. OPERATING DESTINATIONS El Gouna Taba Heights Haram City Makadi Fayoum DEVELOPING DESTINATION Qena Gardens OTHER HOTELS Royal Azur and Club Azur Zahra Oberoi OPERATING DESTINATIONS Jebel Sifah Hawana Salalah DEVELOPING DESTINATION As Sodah Island DESTINATION IN THE PIPELINE City Walk, Muscat OPERATING DESTINATION The Cove MOROCCO DEVELOPING DESTINATION Chbika OPERATING DESTINATION Luštica Bay U.K. DESTINATION IN THE PIPELINE Eco-Bos SWITZERLAND OPERATING DESTINATION Investment Held in Associates Andermatt Swiss Alps

7 01 ORASCOM DEVELOPMENT AT A GLANCE 01 ORASCOM DEVELOPMENT AT A GLANCE 1.3 Chairman s 1.4 Note CEO s Letter Samih O. Sawiris, Chairman of the Board of Directors Khaled Bichara, CEO of ODH I am very pleased with the management achievements during 2016 and the enhanced operational performance that was witnessed across our business segments, despite the difficult business environment that we operated in. The turbulence in the tourism market and the fluctuating foreign exchange rates, have required the company's management and its Board to be exceptionally active. Our commitment to our clients and to constantly evolve our organization to meet their needs is also central to our framework for creating long-term value for our shareholders. During 2016, the new management team headed by Khaled was mandated by the Board to focus more on identifying our challenges and development areas related to strategy and internal structure. We asked the management to come back to the Board at the end of the year with a thorough assessment of the current business model indicating areas of inefficiencies and enhancements and then providing their vision of how this company should look like 5 years down the road. The Board and I were pleased with the new strategy that was presented by the management in December I personally was glad to have more clarity on the 5 years direction that was put down for each destination independently and for the Group s business model in general. More importantly was that the team kept the same essence and true value of this Group intact and continued to capitalize on its core asset which remains to be its land bank. They did so by presenting the different approaches of how to generate and monetize the maximum value possible from this asset over the course of its development. I now believe that by the thorough implementation of this strategy the market and the shareholders will soon get to acknowledge the true value of this Group that has been severely discounted. I would like to extend my thanks and appreciation to our employees and their continuous commitment and endurance during those challenging times and also thank them for putting the company on the right track to noticeable success. On behalf of the entire Board of Directors, thank you all very much for your valued support and ongoing trust. Photographer: Marc Welt Samih O. Sawiris Chairman of the Board of Directors January 1 st, 2016, was my first official day as the CEO for the Group, I was fortunate enough to have succeeded Eng. Samih in this role, a founder that I greatly admire and respect and was also lucky to have found a talented and dedicated team that together with the Chairman have built a global touristic landmark, known in many parts of the world. Throughout the first half of the year, important positions within the organization have been changed and filled, in the executive and top management level. This team then worked together on conducting a thorough assessment of the current business model of the Group and how it has been managed. The assessment involved conducting business review sessions with several department heads and employees and meeting with external advisors, investors, analysts and shareholders of the company. Several challenges and areas of inefficiencies were identified as an outcome of those meetings. Challenges included the following: 1) The inefficient holistic structure of the organization and how complex it is to manage, thus not reflective of the potential value creation, 2) No clear visibility regarding the usage of the remaining land bank; and 3) Timing on when the company will be able to operationally break-even. The management team worked on revisiting the Group s strategy and drafted a guideline on how this business should be managed moving forward. The proposal that was then presented and approved by the Board was to revise the Company s medium to long term strategy along three guidelines (or Pillars ): 1. Establishment of enhanced business practices 2. Strengthening ODH balance sheet 3. Repositioning and enhancement of ODH s brand 1. Establishment of enhanced business practices: A. Destination based structure Our initial focus was on identifying our organizational challenges and development areas related to strategy, visibility and accountability. Accordingly, we started working on re-organizing the current segment structure to a destination based structure, pushing more authority and responsibility on the ground for each destination, to better increase operational efficiency, shorten the decision making process and improve market transparency. Depending on its level of maturity and scale of operations, each destination should become a separately managed entity headed by its own CEO or General Manager who will be ultimately in charge of all business segments (Hotels, Real Estate and Destination Management). We have already adapted this new structure in Taba and Fayoum. Now we have two General Managers overlooking the three business segments in both destinations. The model has already proved successful in Taba, whereby we were able to cut the annual GOP losses from CHF 4.5 million in FY 2015 to CHF 1.7 million in FY Several initiatives were adapted internally in terms of restructuring, reporting and communication in coordination with our Human Resources department, to better support our destination based structure and allow for better assessment of each business segment at the local level of each destination. B. Continuous land value creation This notion is built around capitalizing the core asset of the Group of which its business model is built upon its land bank and the huge value that it pertains. The Group holds one of the largest land 10 Annual Report STRATEGICALLY DECENTRALIZED 11

8 01 ORASCOM DEVELOPMENT AT A GLANCE 01 ORASCOM DEVELOPMENT AT A GLANCE banks globally; amounting to million m 2 of which only 17.7 million m 2 has been developed as of the 31 st of December 2016 and so the essence of its current operating model evolves around building the value of this land bank. The initial phase of the model entails cash flow generation by completing the developments mandated by the Minimum Build Obligations (MBO s) and by several in-house real estate and other developments that generate cash and add value to the destination. In parallel, with more valueadding developments in the destinations, the value of the remaining land bank continues to appreciate and becomes more appealing to other developers, investors and owners. During our meetings with external analysts and investors, it was clear that the market discount of the Group s land bank resulted from the lack of clarity provided regarding the usage of the remaining land in each destination. This triggered management to identify different approaches of how to generate and monetize the maximum value possible from this asset over the foreseen future, tying this monetization plan with definite milestones and targeted deliverables. While on the other hand, clearly communicating that there is still a part of this land bank of which its usage is yet to be identified, since it is very difficult to clearly masterplan and indicate the specific usage of approximately 82.0 million m 2 of undeveloped land over the course of the coming 5 years. As a result, management started this process by developing a much clearer masterplan for each destination to include the following: 1. A targeted short-term development plan that covers the MBO s that were pre-agreed upon with the Governments, in addition to in-house real estate and other developments that complements the Group s 3-5 years business view. 2. Identifying specific land plots for sale or sub-development of certain projects that might include but not limited to hotels, conference centers, business parks, aqua parks etc. that we believe are needed and will add value to the destination. 3. Clearly communicating to the market that there will still be remaining undeveloped land bank after points 1 and 2 above of which future use has not yet been determined- yet this land bank still pertains value and we will be providing the market with an updated fair value for this remaining land using an external valuator on an annual basis. We believe that by delivering on those 3 notions, the analyst community will be able to build their own business model of ODH and will have the needed input to have a more proper assessment of its value. We started by El Gouna, being the most mature destination to date and have worked with our development department to identify the future use of the land by zoning out the areas of which we will continue developing ourselves and have allocated some plots for sub-development. We have also communicated that we will be very selective with our future land sales in all destinations in general, especially when it comes to real estate sub-development. In countries where the off plan sales model doesn t work, then real estate sub-development may help us on the financing side. 2. Strengthening ODH balance sheet: Part of the ultimate goal of having a selfsustained destination is to make sure that not only is it profitable but also that it holds a sustainable and a solid balance sheet, that builds value to its equity and carries assets that could potentially generate cash. That s why as part of the assessment of each destination we decided to take out the necessary impairments on the investments that will not bring in value and will not generate the cash needed under our new strategy. We will also look into revaluing our assets that are currently booked at cost in our books to be able to give the market a much closer indication on those assets current true value. In line with the preliminary 5 years plan that we are putting together for each destination, management has come to the conclusion that it is necessary to further reduce and reschedule the outstanding debt that is mostly sitting at the Egyptian holding level; Orascom Hotels & Development (OHD). Even though we have successfully concluded the refinancing package that we had been working on since 2014, we still plan to further reduce our debt balance to levels that we foresee as sustainable enough to be covered by the projected levels of operations. Accordingly, management has put together an internal monetization list that includes non-core assets in addition to evaluating the opportunity of disposing some minority stakes in certain subsidiaries and using the proceeds of which to reduce the debt. Under this notion, Tamweel Holding Group was identified as a non-core asset to the Group and has been put in the monetization list and assigned as an asset held for sale. By selling Tamweel we will be able to deconsolidate its debt from our books and the proceeds of its sale are earmarked to further reduce the debt balance. We are identifying debt re-allocation and restructuring options across various levels of the corporate structure and have agreed that moving forward, debt should be taken at the project level as opposed to the holding level when feasible. We are also studying opportunities to employ new debt instruments with tenors that match the maturity profiles of our destinations. 3. Repositioning & enhancement of ODH s brand: We have been hearing a lot of complaints from the investor community regarding the illiquidity of both listed companies, the holding Group ODH and the Egyptian subsidiary OHD and the confusion behind having them both listed on the same stock exchange. Accordingly, management has proposed to the Board the delisting of ODH s Egyptian Depository Receipts (EDRs). The decision to delist aims to increase the free float and improve the liquidity of the company's shares on the SIX Swiss Exchange where ODH maintains its primary listing and remove the inconsistencies resulting from the listing of both the EDRs and the shares of ODH's largest subsidiary in Egypt, Orascom Hotels and Development (OHD), on the Egyptian Exchange, which should potentially enhance the liquidity and trading volumes of OHD s shares. Decision was then officially granted by the Board and we have been proceeding accordingly with the necessary steps and procedures with both stock exchanges and regulators in Switzerland and Egypt to conclude the delisting. Further actions that we are currently studying to help in solving the illiquidity issues include; a further stake-sale in OHD at acceptable price points and adapting a market making mechanism at the holding level. All those actions are studied in parallel with maintaining an open and active market presence and dialogue with the investor, analyst and shareholder community. Management have also proposed exploring the first and second home markets in Cairo and North Coast in Egypt, instead of only focusing on the third home markets. Management believes that with the solid track record that we have established in El Gouna we could capitalize on our development know-how and tap those markets where real demand exists. Finally, we are working on the branding of ODH by applying the Life as it should be statement across all destinations starting from the high end destinations such as El Gouna moving to Makadi and the Budget Housing segment of Harram City. The message behind this moto is that ODH is capable of providing the best level of living for each category within the destinations it builds. Operational and Financial highlights of 2016 During this past year, we have experienced and I believe successfully navigated through several periods of volatility and turbulences. Although we are not immune from what is happening around us, we were able to do a much better job operationally than the year before in most of our destinations. Results were impacted by the political and economic backdrop iin Egypt especially after the CBE s decision to float the EGP against the foreign currencies. However other destinations in Oman and Montenegro have witnessed higher levels of maturity and accordingly higher contributions to the Group s revenues. The decision taken by the Central Bank of Egypt in November 2016 to float the Egyptian pound in an attempt to stabilize the economy has had a significant impact on a lot of companies that operate in Egypt including the Group. The 102.7% appreciation of the U.S. Dollar against the EGP from 8.88 to 18.0 resulted in substantial revaluations of the debt held in US Dollars at the subsidiary and subsequently negatively impacted the Groups P&L statement with a noncash foreign exchange loss of CHF million. On the other hand, total debt of the Egyptian Subsidiary on ODH s balance sheet has decreased by 24% from CHF million to CHF million. In addition, results were also impacted by impairments in the amount of CHF 32.9 million. Gross profit reached CHF 11.3 million and the net loss attributable to shareholders for the reporting period amounted to CHF million vs. net loss of CHF 19.1 million in FY On the positive side, Adjusted EBITDA for the period reached CHF 19.6 million. When results are normalized for land sale in the 12 Annual Report STRATEGICALLY DECENTRALIZED 13

9 01 ORASCOM DEVELOPMENT AT A GLANCE 01 ORASCOM DEVELOPMENT AT A GLANCE comparative period the Adjusted EBITDA would have reached only CHF 15.6 million in FY Total revenues decreased by 22.5% to reach CHF million vs. CHF 3.1 million in FY 2015, mainly due to the strategic decision to become more selective with land sales which amounted to CHF 65.2 million in the comparative period and the drop-in Egypt s hotel revenues resulting from the ongoing travel bans. We successfully reached our real estate sales target for FY Value of contracted units increased by 29.2% to reach CHF million vs. CHF 94.8 million in FY 2015 and the net value of contracted units increased by 101% to reach CHF million vs. CHF 57.3 million in FY 2015 with main contributions coming from El Gouna, Jebal Sifah and Montenegro. The Enhanced sales performance resulted from the targeted sales and marketing activities that we started implementing with our new launches throughout our destinations. Total deferred revenue from real estate that is yet to be recognized until 2019 reached CHF million in FY 2016 vs. CHF million in FY In El Gouna, Egypt we launched 3 different projects this year with a total inventory of USD 84.6 million. Net value of contacted units for El Gouna increased by 31.9% in FY 2016 to reach CHF 80.6 million vs. CHF 61.1 million in FY Besides the newly introduced designs of 2016, we focused on controlling the construction costs in terms of value engineering to maintain quality while obtaining best market prices from suppliers. In Jebel Sifah, Oman, we launched a new real estate project Golf Lake Residence in October 2016, the destination s new real estate product launch in several years. The product offered a total of 118 units for a total value of CHF 19.3 million and has nailed great acceptance and success selling out 60% of the project in only two months from launch. Total net sales in Oman reached CHF 16.2 million in FY We also finalized the usufruct agreement for Oman s fourth project City Walk, Muscat, which was signed in November The project is planned to include a retail area with shops and restaurants, as well as a 5-star hotel with an upscale 123 rooms. Additionally, the project will feature a commercial area with offices and a dedicated cinema complex. Interest in Luštica Bay, Montenegro has continued to flourish, the year 2016 started as the busiest year yet on the development and construction fronts. We were able to record a significant increase in net sales to reach CHF 17.3 million vs. CHF 9.1 million in FY 2015, that further emphasized demand on our project and we also speeded up the construction of the new (F) & (G) buildings comprising 88 apartments with plans to be finalized during the first half of In addition, we finalized the marina superstructure, planning to launch the marina in the summer of On the hotels side, despite the severe decline in the Egypt s tourism sector overall which continued to affect our performance, total hotel segment revenues decreased by only 3.2% to reach CHF million in FY 2016 vs. CHF million in FY Nevertheless, the Adjusted EBITDA of the segment increased by 12.2% to reach CHF 20.3 million in FY 2016 compared to CHF 18.1 million in FY This boost in profitability resulted from the dual effect of the enhanced operational efforts and cost optimization coupled with the devaluation of the EGP against other currencies. El Gouna fostered its leading market position in the country recording an occupancy of 57% and we successfully opened a new 5-star hotel Ancient Sands with 56 rooms and 120 hotel apartments. Taba Heights, remained our mostly challenged destination to date given the extended travel bans on Sinai, yet demand has started to pick up since the end of Q due to the aggressive marketing campaigns targeted towards Jordanians and Egyptians. In 2016 we had 718 operating rooms in Taba and in January 2017 we opened an additional 100 rooms bringing the total count to 818 rooms out of 2,365 rooms and we are planning to open more rooms in the coming period. Our hotels in Makadi were affected by the Russian travel ban. We continued to operate only two hotels out of the four since December To reduce the losses of the destination, we successfully signed a 3-year lease agreement starting 1 st of November 2016, with FTI Group for 3 of our hotels there for a total of EUR 3.3 million per annum. In Fayoum, we successfully held the soft opening of Byoum Lakeside Hotel on September 2016 with 50 rooms, which reported very positive occupancy rate of 43% for FY In Oman, Salalah destination has been recently branded to "Hawana Salalah". We were able to launch our third hotel in Salalah, Al Fanar hotel in February with 218 rooms and thereby completing the 700- room phase 1 of our hotel development plan in Oman, making it the largest contributor to the development of high-end hotels in Oman during the last five years. We also witnessed a lot of demand on our hotels in Salalah during our visit to the ITB conference which has pushed us to add an extra 84 rooms in Al Fanar hotel that we have successfully opened in December 22, Today we have a total of 784 rooms in Salalah and all our hotels there outperformed this year recording an occupancy of 69% compared to 54% in Revenues of Salalah's Hotels alone increased by 61.5% to reach CHF 29.4 million vs CHF 18.2 million in FY The Cove Rotana, UAE has continued its positive momentum and reported a revenue increase of 7.9% to reach CHF 27.1 million in FY 2016 compared to CHF 25.1 million in FY 2015 with an increase in occupancy rate to reach 78% in FY 2016 vs. 70% in FY Finally, I believe that the new formulated strategy detailed above, will ensure our future competitiveness. We will continue to add value wherever we go to our shareholders, clients, partners and communities. I would like to thank all our employees for their tremendous efforts and commitment during those tough times. I look forward to continue working with you on achieving much better results in the coming years. Khaled Bichara Chief Executive Officer 14 Annual Report STRATEGICALLY DECENTRALIZED 15

10 ORASCOM 02 BUSINESS SEGMENTS 2.1 Hotels 2.2 Real Estate and Construction 2.3 Destination Management 2.4 Land Sales 2.5 Other Operations

11 02 ORASCOM BUSINESS SEGMENTS 02 ORASCOM BUSINESS SEGMENTS 2.1 Hotels HOTELS REVENUE CHF mn (2015: CHF mn) SHARE OF GROUPS REVENUE 50.6% (2015: 41.0%) ADJUSTED EBITDA CHF 20.3 mn (2015: CHF 18.7 mn) Hotels Segment in 2016 In 2016 travel bans from Russia, among other European countries, that were announced in October 2015 continued to apply. According to the latest figures Egypt tourist arrivals fell 42% in FY 16 compared to FY 15. Hotels in Makadi, Sahl Hasheesh and Taba Heights 50% of the Group s total inventory like most other Egyptian touristic destinations were drastically affected. Nonetheless, the crisis management program that Orascom Hotel Management started implementing late 2015, comprising strict cost-cutting measures, centralization of services and suspension of operations at some hotels, limited the impact of the industry parameters at the three destinations to a collective GOP decline of 18.8% going from CHF 3.2 million in FY 15 to CHF 2.6 million in FY 16 - while still maintaining a positive GOP. Conversely, at El Gouna 34% of the Group s total inventory - the optimization strategies introduced in 2014, coupled with the Destination s market positioning and strong ties with leading European tour operators, afforded a growth in the Hotels bottom line results with the GOP PAR growing from CHF 13 in FY 15 to CHF 15 in FY 16. On the GOP level, El Gouna hotels reported a 15.4% growth going from CHF 12.3 million in FY 15 to CHF 14.2 million in FY 16. In Taba Heights, our mostly challenged destination to date given the extended travel bans on Sinai by all major European countries, demand has started to pick up since the end of Q due to the aggressive marketing campaigns we implemented in Jordan and the local Egyptian markets. In FY 2016 we had a total of 718 operating rooms in Taba Heights out of 2,365 rooms with plans to open more rooms in the coming period. Total occupancy of the available rooms increased to 30% in FY 16 vs. 20% in FY 15. In Makadi, 2016 was a tough year for our hotels as a results of the ongoing travel bans by the Russian government. We continued A Challenging Start and an Optimistic Finale for a Promising Year Ahead to operate two hotels out of four since December Nevertheless, we have signed a 3-year lease agreement starting 1 st of November 2016, with FTI Group for 3 of our hotels in Makadi for a total of EUR 3.3 million per annum net to owner, subject to an annual increase of 5% to overcome the drop in business. It is worth noting that these hotels have reported a GOP loss in FY 16. In Fayoum, we successfully held the soft opening of Byoum Lakeside Hotel in September 2016 with 50 rooms recording an occupancy of 43% during FY 16. The Gulf Hotels 14% of the Group s total inventory maintained the positive trend that started in Hawana Salalah, the Group s rising destination, dominated the performance scene reporting a GOP PAR growth of 88.9% going from CHF 18 in FY 15 to CHF 34 in FY 16. Moreover, the opening of the first phase of Fanar Hotel & Residence that took place on December , afforded a notable boost in the Destination s overall GOP reporting a 166.7% growth going from CHF 3.3 million in FY 15 to CHF 8.8 million in FY 16. It s important to highlight that Salalah hotels managed to record a notable growth in occupancy rate during FY 16 to reach 69% vs. 54% in FY 15. Similarly, at the Cove, Rotana sustained its growth trend with the GOP PAR going from CHF 69 in FY 15 to CHF 85 in FY 16. The Cove reported a GOP growth of 22.5% going from CHF 8.9 million in FY 15 to CHF 10.9 million in FY 16. In addition, occupancy rate increased to reach 78% in FY 16 vs. 70% in FY 15. On the Group level, the Hotel Segment reported a year-end GOP growth of 31.3% rising from CHF 27.8 million in FY 15 to CHF 36.5 million in FY 16. Overall, total hotel segment revenues decreased by 3.2% to reach CHF million in FY 16 vs. CHF million in FY 15. The segment reported Adjusted EBITDA of CHF 20.3 million in FY 16 compared to CHF 18.1 million in FY 15 due to the devaluation of the Egyptian currency against others currencies. Situation Analysis To date and considering an efficient continuation of the strategies imposed on the challenged destinations in 2015, variables for a profitable hotel operation are all evident. In Egypt, the free float of the Egyptian pound and the increase in number of flights from Germany; add to that, the 3-year-lease agreement that the Group entered for the Makadi Hotels promise a high yield operation. In Oman, the product mix of our Hotels, in Hawana Salalah in particular, proved to be highly appealing to the European end-user making it an attractive investment for tour operators; accordingly, a new extension of 84 rooms was annexed to Fanar Hotel & Residence, making the total number of rooms in Hawana Salalah 784 guestrooms. In addition, we are studying the possibility of constructing new hotels in Salalah capitalizing on the huge demand for our hotels. The Cove in UAE has earned its success record. In FY 16, while The Cove Rotana s inventory represented only 5% of that of the Group, its GOP accumulated to 30% of that of the Group. Building on that a 145-guestroom extension is currently under development and due to open in Q2 17 making the total number of rooms at the hotel add up to 491 rooms. In Montenegro, we are also planning to start the construction of the first hotel in Luštica Bay during the first half of 2017, headed by the luxury hotel brand The Chedi Group REVENUES BY COUNTRIES (% TOTAL) 50.7 The Hotels Segment KPIs, as of December 31, 2016 Total number of hotel rooms Egypt Oman UAE Number of available hotel rooms Occupancyfor )%( total rooms Occupancyfor total rooms (%) Germany Egypt Russia Netherlands Belgium United Kingdom UAE Switzerland France Jordan TRevPAR* (CHF) Oman Italy Austria Sweden Israel Ukraine Poland Denmark Others GOP PAR ** (CHF) Country Destination FY 16 FY 15 FY 16 FY 15 FY 16 FY 15 FY 16 FY 15 FY 16 FY 15 FY 16 FY 15 Egypt El Gouna 1 2,650 2,627 2,650 2, Taba Heights 2 2,365 2, , )5( )11( Makadi 3 1,627 1,627 1,005 1, Fayoum )22( - Floating Hotels )20( )12( Oman Total Oman U.A.E UAE ODH Group 7,916 7,759 5,647 7,150 1 In Q2 16 Ancient Sands Hotel was opened with 56 rooms. Also In Q4 16 Bellevue Hotel: 33 rooms have been converted to real estate units resulting in reducing the total number of rooms to During the FY 2016, only 2 hotels were operating (Sofitel with 442 rooms) and Strand Beach Hotel with 276 rooms (out of 503 rooms) in Taba Heights. Whereby, during FY 2015 only 1 hotel was operating representing 442 rooms by end of In FY 2016, only 2 hotels were operating (Royal Azur with 491 rooms & Citadel Azur with 514 rooms) in Makadi, then we leased out (Royal Azur, Club Azur & Makadi Gardens) starting November * Financial KPIs are calculated based on the number of available rooms during the reported period of FY 16. ** Include all expenses of the hotels in the destinations. 4 NATIONALITY OF HOTEL GUESTS (% TOTAL) In September 1 st, 2016; soft opening of Byoum Lakeside Hotel with 50 rooms. 5 In December 22 nd 2016, Fanar Hotel extension was opened with 84 rooms, thus brining total number of the hotel rooms to 302 rooms. 18 Annual Report STRATEGICALLY DECENTRALIZED 19

12 02 ORASCOM BUSINESS SEGMENTS 02 ORASCOM BUSINESS SEGMENTS 2.2 Segment operational review in 2016 The real estate market in Egypt started out positively in Most of the real estate developers were able to achieve y-o-y growth in their sales figures, whereby real estate is still regarded as a safe haven against the devaluation of the local currency. We were able to successfully reach our sales target for the year. El Gouna remained to be the Group s most important sales contributor recording a net sales value of CHF 80.6 million compared to CHF 61.1 million in FY 15 on the back of aggressive targeted sales and marketing activities that we initiated with our new launches during the second half of the year, diversifying our offerings to cater for the different tastes of our target segment. Our first launch was "Fanadir Bay" project in April 2016, with a total inventory of USD 60.0 million. The project offered a luxurious yet comfortable units with a unique location and view of the bay and the sea. It witnessed solid demand and has sold almost 90% of its total inventory. We also launched a limited project called The West Villas in July 2016, consisting of 11 units for a total value of USD 3.0 million, which had also successfully sold out during the first 48 hours from its launch. Building on the success and the hype in demand on the launched projects, we introduced our latest project, Tawila in October 2016 with a total inventory of USD 21.6 million and we managed to sell 68% of its inventory. Tawila comprises different types and sizes of villas, in addition to town houses, which leaves prospective clients with a wide range of options to choose from. Besides the newly introduced designs of 2016, we focused on controlling the construction costs in terms of value engineering to maintain quality while obtaining best market prices from suppliers. We continued speeding up our construction progress to deliver some of our projects ahead of schedule, allowing for faster revenue Real Estate and Construction recognition and accordingly we were able to increase the segment s revenues. In Jebel Sifah, Oman, we launched a new real estate project Golf Lake Residence in October 2016, the destination s new real estate product launch in several years. The product offered a total of 118 units for a total value of CHF 19.3 million and has nailed great acceptance and success selling out 60% of the project in only two months from launch. The residential neighborhood consists of studio, one and two bedroom apartments, as well as lofts. The successful launch was a strong testament to how Jebel Sifah was becoming one of the most attractive destinations in the Muscat suburb with its continually expanding range of attractions. Total net sales in Oman reached CHF 16.2 million in FY We finalized the usufruct agreement for Oman s fourth project City Walk Muscat, which was signed in November The project which has an incredible sea-front location in one of the highest density areas in Muscat and is planned to include a retail area with shops and restaurants, as well as an upscale 5-star hotel. Additionally, the project will feature a commercial area with offices and a dedicated cinema complex. Interest in Luštica Bay, Montenegro has continued to flourish, the year 2016 started as the busiest year yet on the development and construction fronts. Besides the significant increase in sales that further emphasized demand on our project, we are strongly progressing with the construction of the new (F) and (G) buildings comprising 88 apartments and we finalized the marina superstructure, planning to launch the marina in the summer of Luštica Bay, continued its strong sales momentum since the beginning of the year. We were able to conclude a bulk sale s deal for EUR 3.9 million pushing the net sales value to CHF 17.3 million in FY 16 compared to CHF 9.1 million in FY 15. A Year of Success Across the Destinations Financial Review 2016 During FY 16 total real estate and construction revenues reached CHF 65.4 million compared to CHF 66.4 million in FY 15. The Group s total value of contracted units in FY 16 reached CHF million compared to CHF 94.8 million in FY 15 and the net value of contracted units reached CHF million compared to CHF 57.3 million in FY 15. The enhanced sales performance during the 2016 reflects the targeted sales and marketing activities that we started implementing with our new launches in 2016 throughout all our destination. Total deferred revenue from real estate that is yet to be recognized until 2019 reached CHF million in FY 16 compared to CHF million in FY 15. Outlook for 2017 Although 2016 started out on a positive note, the effects of the liberalization of the Egyptian pound which took place in early November had started to impact the overall buyer sentiment in Egypt. Nevertheless, we are building on the strong base that was established last year and are capitalizing on the successful launches of El Gouna. We are planning to launch new phases of Tawila and Fanadir Bay with an expected inventory of USD 40.0 million. There will also be a strong focus on existing projects like Sabina and Water Side Condos. We are also working on new product offerings that will include serviced hotel apartments in Fanadir, Bellveue and Mosaique. In Makadi, we started the construction of the Club House with plans to be finalized during In Fayoum, we are planning to launch new products with a total inventory of CHF 3.4 million in Q Finally, for Egypt, we are currently studying several opportunities for the first and second home markets. In Oman, we are capitalizing on the successful real estate comeback, with plans to launch new real estate products in both destinations Sifah and Salalah, catering for local, regional and international buyers. We are also on track on finalizing the construction of the 9-holes golf course in Sifah, scheduled to be opened in September 2017 and are planning the construction of the Water Park in Salalah, the new addition to the town which will serve real estate owners and hotel guests during the first half of the year, with plans to be finalized before the end of In Montenegro, we are speeding up the construction progress, expecting to deliver the (F) and (G) buildings in the first half of We are also planning to launch new products in addition to starting the construction of the first hotel in Luštica Bay during the first half of 2017, headed by luxury hotel brand The Chedi Group. The Real Estate Segment KPIs, as of December 31, 2016 REAL ESTATE AND CONSTRUCTION REVENUES CHF 65.4 mn (2015: CHF 66.4 mn) ADJUSTED EBITDA CHF 20.8 mn (2015: CHF 16.2 mn) Value of contracted units (CHF mn) Number of contracted units SHARE OF GROUPS REVENUE 27.5% (2015: 21.7%) VALUE OF DEFERRED INCOME CHF mn (2015: CHF mn) Average Selling Price (CHF/m 2 ) Value of deferred Income (CHF mn) Country Destination FY 16 FY 15 FY 16 FY 15 FY 16 FY 15 FY 16 FY 15 Egypt El Gouna * ,721 2, Fayoum Makadi Gardania ,276 1, Oman Jebel Sifah ,948 2, Hawana Salalah ,228 3, Montenegro Luštica Bay ,883 4, ODH Group ,692 2, Numbers net of cancellations 1 : ODH Group Egypt Oman Montenegro * 1 Cancellations of the accumulated sales from prior periods. * The numbers have been re-stated after taking out mansion-land sales VALUE OF CONTRACTED UNITS (CHF MN) Annual Report STRATEGICALLY DECENTRALIZED 21

13 02 ORASCOM BUSINESS SEGMENTS 02 ORASCOM BUSINESS SEGMENTS 2.3 Destination Management Destination Management Environment in 2016 A series of restructuring initiatives and new collaborations were initiated within several destinations. The main drivers behind those organizational structure reforms were to streamline operations, eliminate waste and improve profitability. The first steps taken included re-organizing the current segment structure to a destination based structure, pushing more authority and responsibility on the ground of each destination, to better increase operational efficiency. Key events Various maintenance works and upgrades within El Gouna were performed during the year, we focused more on the destination s livelihood and promoted the state of mind campaign. We renovated the marina flooring, street sidewalks, and multiple road pavements which enhanced the traffic and flow within the destination. We also added 19 new berths to Abu Tig marina. We successfully managed to rent 41 new stores during 2016 and currently studying further opportunities in expanding warehouses. We shifted more focus on improving the quality of services provided to owners and residents, though supporting the Customer Service unit with more tools so we introduced El Gouna mobile application, tracking system and short number. We collaborated with a number of service providers to enhance the portfolio of activities through adding land sailing and a dirt bike track. In addition, to building a squash court and signing a contract with 7 Sports Management to manage the renovated tennis and football pitch. Last but not least, we successfully organized a number of branded El Gouna events namely: New Year s Party, Squash Tournament, Sandbox Party and World Kiteboarding Championship. New Restructuring and More Life to the Destinations Jebel Sifah and Hawana Salalah are becoming amongst the leading ITC and tourism destinations in Oman, with ongoing additions to the destinations facilities and activities. In Jebel Sifah, the construction of the 9-holes Harradine golf course was fast tracked and construction also started on the beach-front infinity pool and clubhouse. New retail outlets also opened including an international cuisine restaurant and a gym, as well as the addition of the Wibit floating waterpark. Jebel Sifah hosted seasonal community beach events, as well as Oman s first and internationally acclaimed Spartan Race Arabia. In Hawana Salalah, we finalized the design of the waterpark and are planning its construction during the first half of We fast tracked work on the Souly Camp Eco-lodge and is nearing completion. A variety of retail outlets and activities were opened in the destination as well including a chocolatier, restaurants, Turkish silverware, greenhouse and Al Fanar Hotel and Residences watersports. In Lustica Bay, Montenegro, Rental Management Program (RMP) was successfully started in 2016 under the direction of sales department and supported by the facility team. We hosted two major events, Milos Karadaglic s concert and Joss Stone concert, along with numerous minor ones. We also focused on availing more activities to our residents and visitors including beach entertainment, water sport activities, golf lessons and driving range and a bar. Financial Review 2016 Revenues in the destination management has slightly increased by 1.9% in FY 16 to reach CHF 15.9 million compared to CHF 15.6 million in FY 15. Around 36.0% of the revenues were generated from utility functions such as water and electricity generation, while the remaining 64.0% were derived from commercial, urban and community services, infrastructure and maintenance activities. The segment reported Adjusted EBITDA losses of CHF 6.4 million in FY 16 compared to a loss of CHF 3.9 million in FY 15. Outlook for 2017 In Egypt, specifically in El Gouna, we will continue to strengthen our brand awareness and ensure that guests/residents experience our life as it should be vision in our destinations. We will work on positioning El Gouna as an all year round destination and widening the targeted audience by providing an all year round calendar of activities that lasts from morning till night for all age-groups, through different entertainment and sports events. In addition to focusing on creating more job opportunities through establishing a business park and startup hub to encourage more people DESTINATION MANAGEMENT REVENUES CHF 15.9 mn (2015: CHF 15.6 mn) DESTINATION MANAGEMENT REVENUES BY DESTINATION (% TOTAL) 80 to move to El Gouna on the other side, we are planning to add 12 new berths in Abu Tig Marina during the first half of Jebel Sifah is expected to launch the 9-hole Harradine golf course by the in September 2017, as well as the infinity pool and clubhouse. It is worth mentioning that first Desert Baja will take place in close proximity to Jebel Sifah, where all backend and rally activities will be hosted at the destination. The 2 nd Spartan Race Arabia will also take place in the second half of the year. Retail and facilities to be opened include barber shop, laundry, chocolate shop, sky lounge restaurant, and children s climbing SHARE OF GROUPS REVENUE 6.7% (2015: 5.1%) El Gouna Taba Heights Makadi Oman The Cove DESTINATION MANAGEMENT REVENUES BY SERVICE TYPE (% TOTAL) 25 wall. As for Hawana Salalah, the Eco-lodge is expected to launch in the first half of Also, the first Spartan s Race Arabia is planned to take place in Hawana Salalah. Construction will also start on the Hawana Salalah waterpark, during the first half of the year with plans to be finalized before the end of New retail shops include Turkish fashion, Sabaya abayas, houseware and women/children clothing. For Lustica Bay, Montenegro, the soft opening of Marina is also scheduled in summer 2018 and we shall expand our beach front space according to the growing number of homeowners. ADJUSTED EBITDA CHF (6.4 mn) (2015: CHF (3.9 mn) Utilities Commercial Services Infrastructure and Maintenance Urban Services Community Services Others 22 Annual Report STRATEGICALLY DECENTRALIZED 23

14 02 ORASCOM BUSINESS SEGMENTS 02 ORASCOM BUSINESS SEGMENTS Land Sales Other Operations 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. The drop in the Group s total revenues was mainly driven by the decrease in the land segment s revenue to reach CHF 2.0 million in FY 16 compared to CHF 67.6 million in FY 15. As a part of the new management strategy that started in 2016, moving forward, the company decided to be more selective in terms of land sales, opting to create the maximum value possible for its shareholders. As a result of this land revenues segment has tremendously decreased in FY 16 to reach CHF 2.0 million compared to CHF 67.6 million in FY 15. In FY 15 revenues included CHF 65.2 million from land sales in El Gouna, Egypt for sub-development agreements. The segment other operations combine 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 2016, revenues of the segment other operations increased by 5.0% to reach CHF 33.9 million compared to CHF 32.3 million in FY 15, in particular due to the increase of Tamweel Mortgage finance business operation. It is important to highlight that in-line with the company s initiative to focus on its core destinations in Egypt, Oman and Montenegro, the Group is undertaking efforts to sell its non-strategic assets and accordingly has reclassified Tamweel Group companies as an asset held for sale. Our other operations accounted for 14.3% of our total revenues in the financial year LAND SALES REVENUE (CHF) SHARE OF GROUPS REVENUE ADJUSTED EBITDA OTHER OPERATIONS REVENUE SHARE OF GROUPS REVENUE ADJUSTED EBITDA CHF 2.0 mn (2015: CHF 67.6 mn) 0.8% (2015: 22.1% ) CHF 2.4 mn (2015: CHF 68.6 mn) CHF 33.9 mn (2015: CHF 32.3 mn) 14.3% (2015: 10.6%) CHF 8.4 mn (2015: CHF 8.3 mn) Annual Report STRATEGICALLY DECENTRALIZED 25

15 03 ORASCOM COUNTRIES 3.1 Egypt 3.2 Oman 3.3 UAE 3.4 Montenegro 3.5 Switzerland 3.6 Morocco 3.7 United Kingdom

16 03 ORASCOM COUNTRIES 03 ORASCOM COUNTRIES 3.0 COUNTRIES Orascom Development Orascom Development has a diversified portfolio of destinations, which is spread over seven jurisdictions covering Egypt, UAE, Oman, Switzerland, Morocco, Montenegro and United Kingdom. It is a leading developer of fully integrated and infrastructure-supported destinations that include hotels, private villas, apartments and leisure facilities namely, golf courses and marinas. Our strategy is based on the creation of value in our land bank for the medium and long-term stakeholders. To that end, we accumulate large tracts of land with enough space to develop self-sufficient communities and towns. Subject to certain conditions, the Group has, up to this date, secured land banks of approximately million m 2 in several jurisdictions. Moreover, Orascom Development holds its undeveloped land banks Operating Towns million m 2 TOTAL LAND BANK 8,016 primarily by way of contractual rights or usufructs, with the option to acquire legal title. The Group has also developed ten operating destinations including tourist destinations such as El Gouna on the Red Sea Coast, Taba Heights in the Sinai Peninsula, Makadi in the Red Sea district and Byoum in Fayoum, The Cove in Ras Al Khaimah in UAE, Jebel Sifah and Hawana Salalah in Oman, Luštica Bay in Montenegro and Andermatt in Switzerland, in addition to the budget housing community of Harram City in the Greater Cairo in Egypt. Furthermore, several destinations are currently in various stages of development and planning in Oman, Morocco, and the United Kingdom. 35 million m 2 Hotels HOTEL ROOMS IN 7 OPERATING DESTINATION Orascom Development s Land Bank Destination Name Total land bank Completed Under construction Under development Undeveloped EGYPT El Gouna Taba Heights Haram City Fayoum Qena Gardens Makadi UAE The Cove OMAN Jebel Sifah Hawana Salalah As Sodah Island City Walk SWITZERLAND Andermatt MOROCCO Chbika MONTENEGRO Luštica UNITED KINGDOM Eco-Bos Total Percentage of Total Land bank Size % 9.34% 66.98% Land categories Total Land Bank Completed Under construction Under Development Undeveloped Definition 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 with zero infrastructure (raw land) 28 Annual Report STRATEGICALLY DECENTRALIZED 29

17 03 ORASCOM COUNTRIES 03 ORASCOM COUNTRIES EL GOUNA EGYPT OPERATING DESTINATION El Gouna is Orascom Development s flagship town and the Group s Life as it should be development benchmark. It is a self-sufficient, fully integrated resort town, with a water-tides naturally protected area, thanks to the surrounding reefs. The name of the town was driven from the ancient word El Gouna which meant protected. The town is stretching across 10 km of pristine shoreline on the beautiful Red Sea coast with a total land area of million m 2 of which million m 2 has been developed, El Gouna is a multinational community that continues to grow. El Gouna offers unparalleled lifestyle attracting a growing multinational community. Year-round sunshine, shimmering lagoons, turquoise beaches, and being a 4-hour flight from Europe make El Gouna the ultimate paradise escape. It boasts world class infrastructure, upscale services and is home to some of the world s most reputable brands in the tourism and leisure industries. El Gouna offers a wide range of international-standard facilities. It offers a wide range of real estate units, from exclusive private villas to cozy apartments, all in harmony, yet with a unique identity, 17 hotels with 2,650 guestrooms with a mix of 5, 4 and 3 star hotels, a landing strip, a world-class hospital, a nursing institute, two championships 18-hole golf course, three marinas with a capacity of 380 berths including dry docks, 463 commercial outlets, 100 restaurants, bars and eateries, a weather station, conference and meeting facilities, beauty salons, spas, post office, laundry service and banks. El Gouna also hosts a satellite campus of the Technische University Berlin, which offers three Master's degree programs, a variety of both international and Egyptian curriculum schools and a library linked to Bibliotheca Alexandrina as well as a slider cable park with a complete water sports facilities such as diving centers, kitesurfing, a mosque and church, in addition to cultural festivals and major events and many other facilities. El Gouna is honored to be the first destination in Africa and the Arab Region to receive the Global Green Award. Sponsored by the United Nations Environment Program, this award is handed to cities displaying substantial measures and efforts in progress within the field of environmental sustainability. El Gouna boasts world class infrastructure, upscale services and is home to some of the world s most reputable brands in the tourism and leisure industries Highlights 2016: million m 2 TOTAL PROJECT AREA million m 2 COMPLETED * Opened Ancient Sand Hotel in April 2016 with 56 rooms and 120 hotel apartments. * Launched a new real estate project in April 2016, Fanadir Bay, with a total inventory of USD 60 million and managed to sell more than 90% of the project. * Launched a limited project called The West Villas in July 2016, holding 11 units for a total value of USD 3.0 million, which has successfully sold out during 48 hours from its launch. * Launched first phase of Tawila real estate project in October 2016 with a total inventory of USD 21.6 million and managed to sell more than 68% of the project. * Upgraded the sports facilities and finalized a deal with a sports management company to manage the facility. * Expanded Abu Tig Marina by 19 new berths. * Rented 41 new stores during * Delivered 102 units during 2016 and started the construction of 134 units to be delivered in * Successfully launched El Gouna State of Mind marketing campaign and positioning. Events 2016: * Kitesurfing World Championship El Gouna Grand Slam * Kite Jamboree Spring and Fall 2016 * Women For Success Conference * Global Biking Initiative (GBI) * El Gouna Rally * El Gouna Fishing Competition * El Gouna International Spinning Marathon * El Gouna International Squash Open * Wellspring Kids Camp * MBC Green Apple Show Summer Finale Episode * Sandbox * Music Hall * Halloweekend * 3-Cushion Billiard World Cup * El Gouna Wonderland Weekend * Midnight in Wonderland New Year's Party * Mirror Mirror New Year's Party 30 Annual Report STRATEGICALLY DECENTRALIZED 31

18 03 ORASCOM COUNTRIES 03 ORASCOM COUNTRIES TABA HEIGHTS EGYPT OPERATING DESTINATION Taba Heights is our second fully selfsufficient resort town, located in Taba over a total land area of approximately 4.27 million m 2, of which approximately 2.56 million m 2 has been developed. The breathtaking natural setting is complemented by an offering of lavish four and five-star hotels. Worldwide hospitality leaders provide an unparalleled experience in relaxation and leisure million m 2 TOTAL PROJECT AREA 2.56 million m 2 COMPLETED AREA Taba Heights is located in Taba, a small Egyptian town near the northern tip of the Gulf of Aqaba on the Sinai Peninsula, approximately 200 km north of Sharm El-Sheikh and approximately 20 km south of the Israeli town Eilat, which makes it 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. Taba International Airport is only approximately 25 km away from Taba Heights. The town offers a wide range of international-standard facilities such as a Six (4- and 5-star Hotels with 2,365 guestrooms), a medical center, child daycare services and a town center and many other facilities. Furthermore, the town features 111 outlets including cafés, bars, restaurants and shopping facilities, 25 hotel swimming pools, various spas, 5-star water sports center, tennis and squash courts, man-made salt cave and an 18-hole championship golf course. In addition, Taba Heights offers a yacht marina with berthing capacity for 50 yachts and provides overnight mooring. Highlights 2016: * Taba hotels continued to suffer from travel bans to the Sinai Peninsula issued by most Western European countries since October As a results, five out of our six hotels were closed keeping only Sofitel Hotel open with 442 rooms as we are continuing with the cost-cutting measures. * In Q2 and Q demand for Taba Heights hotels started to pick up which led to the re-opening of 276 rooms in Strand Beach and Golf Resort out of the hotels 503 rooms. In 2016 we have a total of 718 operating rooms in Taba Heights out of 2,365 rooms. 32 Annual Report STRATEGICALLY DECENTRALIZED 33

19 03 ORASCOM COUNTRIES 03 ORASCOM COUNTRIES Grand Resorts Club Royal MAKADI BAY Club MAKADI BAY MAKADI EGYPT OPERATING DESTINATION ROYAL AZUR AND CLUB AZUR EGYPT Settled in the heart of the Red Sea only 30 km away from Hurghada International Airport, lays the unique residential and touristic community, Makadi. As the only residential community in Makadi Bay, the destination adds a different flavor to the area when compared to its neighboring resort based communities. Makadi stretches across approximately 3.44 million m 2 providing both its residents and visitors all the services and facilities that they would require and desire. With a mission to provide upper middle class families the opportunity to own a home at affordable prices, the town resort is now featuring a variety of residential units, and also an operating hotel with a total capacity of 283 rooms. Being the first gated community in Hurghada, Makadi is destined to provide the community with high quality services, among which is Hurghada s first "club house" that offers social and sports activities, not to mention the spacious commercial area, hotels, medical center and school. With such services being provided, not only owners and hotel visitors of Makadi will enjoy their stay, but also all of Hurghada will find something suitable in Makadi to fulfill their needs million m 2 TOTAL PROJECT AREA 0.45 million m 2 COMPLETED AREA OTHER HOTELS Located at Makadi bay, one of Hurghada s fascinating shores, 30 km away from Hurghada International Airport. Royal Azur Hotel with 491 guest rooms and Club Azur Hotel with 339 guest rooms. The two hotels overlook their own spacious private sandy beach, offering sixteen restaurants and bars, fully equipped water sports center, tennis courts, squash court, billiards, a fully equipped fitness room and swimming pools. Hotels occupancies were affected from the ongoing Russian travel bans, as a results of this, the management took the decision to shut down Club Azur and Makadi Gardens Hotels in December Nevertheless, we successfully introduced measures to overcome the drop in business and have signed a 3-year lease agreement starting 1 st of November 2016, with FTI Group for 3 of our hotels in Makadi for a total of EUR 3.3 million per annum net to owner, subject to an annual increase of 5%. Citadel Azur is a 5-star deluxe resort, built in It is located in Sahl-Hasheesh which is 18 km South of Hurghada International Airport and 20 km south of Highlights 2016: Hurghada City itself. * Hotels occupancies were affected from the ongoing Russian travel bans, as a results of this, the management took the decision to shut down Club Azur Hotel in December Nevertheless, we successfully introduced measures to overcome the drop in business and have signed a 3-year lease agreement starting 1 st of November 2016, with FTI Group for 3 of our hotels in Makadi for a total of EUR 3.3 million per annum net to owner, subject to an annual increase of 5%. * Delivered 16 units during 2016 and started the construction of the club house expected to be finalized during CITADEL AZUR EGYPT OTHER HOTELS The total site area is approximately 553,448 sqm on which there are 8 buildings. These 8 buildings comprise a total of 514 rooms. Citadel Azur has a private beach that extends to 1.6 km long on the Red Sea Coast, offering three swimming pools, restaurants and bars, fully equipped water sports center, a fully equipped fitness and many other amenities. In July 2016, we managed to take the full ownership of the hotel. 34 Annual Report STRATEGICALLY DECENTRALIZED 35

20 03 ORASCOM COUNTRIES 03 ORASCOM COUNTRIES FAYOUM EGYPT OPERATING DESTINATION Located 100 km southwest of Cairo in an ideal location overlooking the spiritual lake of Qarun. The plan is set to develop two luxury residential communities Byoum and Al Roboua, in Fayoum. In 1998, the Group acquired from third parties land rights initially acquired from the Government of Egypt at El Fayoum for a residential real estate development project. Total land parcels secured cover approximately 1.08 million m 2. Al-Roboua project offers 36 standalone villas in traditional Nubian style with all supporting amenities. During the third quarter of 2008, Byoum, a new residential real estate project, was launched covering a total area of approximately 446,507 m 2 out of the total awarded land. Byoum, is planned to offer real estate units, a 4-star hotel, beach club, hunting lodge, Pier and commercial areas. We are planning to launch new real estate products with a total inventory of CHF 3.4 million in Q Highlights 2016 * In September 2016, we successfully held the soft opening of Byoum Lakeside Hotel a four-stars hotel with a 50 rooms million m 2 TOTAL PROJECT AREA 0.32 million m 2 COMPLETED AREA 36 Annual Report STRATEGICALLY DECENTRALIZED 37

21 03 ORASCOM COUNTRIES 03 ORASCOM COUNTRIES HARRAM CITY EGYPT OPERATING DESTINATION During the last quarter of 20, Orascom Development entered the budget housing arena, a business strategically focused on developing affordable income housing throughout Egypt by establishing through its subsidiary Orascom Hotels and Development (OHD) the budget housing company Orascom Housing Communities (OHC). OHC is the first Egyptian company to focus on the development of high-quality affordable housing units within sustainable and fully-integrated townships in Egypt. Orascom Housing Communities, a 35.25% owned by Orascom Hotels and Development, manages this line of business. Launched in 2007 as the first of its kind in Egypt, Harram City s award winning model of affordable housing within a sustainable and fully integrated township encourages social responsibility and civil engagement. Located in 6th of October, 20 km west of Cairo, Harram City spans over approximately 2.60 million m 2 of land, and is now home to more than 40,000 residents. As a truly integrated development, Harram City offers comprehensive community facilities including schools, clinics, worship houses, sporting amenities, a cinema, police station, nurseries and 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 Harram City Language School and Orascom Language School, making them more affordable for the enrolled students to learn English, German, and Arabic. Highlights 2016: 2.60 million m 2 TOTAL PROJECT AREA 2.18 million m 2 COMPLETED AREA * Started the construction of 240 units to be delivered during 2017 and * Delivered 256 units during 2016 and started the excavation of 176 new units. * Continued the infrastructure of 120 acres (including roads, hardscape, planting, plumping pipes, water and fire pipes, and medium and low voltage cables). * Opened the police station and the church during * Proceeding with the construction of Electric station and Orascom Language School. 38 Annual Report STRATEGICALLY DECENTRALIZED 39

22 03 ORASCOM COUNTRIES 03 ORASCOM COUNTRIES QENA GARDENS EGYPT DEVELOPING DESTINATION ZAHRA OBEROI EGYPT OPERATING DESTINATION In 2010, following the success of Harram City, OHC was allocated 0.8 million m 2 of land in the Qena Governorate, Upper Egypt. Qena Gardens is to provide a high-quality affordable housing units within sustainable and fully-integrated townships in Qena. The project is planned to incorporate residential units, a school, clinics, shopping areas, and an entertainment venue. Described as one of Egypt s most spacious cruise ships with 27 cabins. Oberoi Zahra offers the highest standards of hospitality and service. The Oberoi Zahra is the only Nile Cruiser with a full service spa and has been recognized by the Egyptian Ministry of Tourism as the Best Cruiser on the River Nile. Highlights 2016 * Delivered 35 units in million m 2 TOTAL PROJECT AREA 40 Annual Report STRATEGICALLY DECENTRALIZED 41

23 03 ORASCOM COUNTRIES 03 ORASCOM COUNTRIES JEBEL SIFAH OMAN OPERATING DESTINATION A natural gateway located on the shores of Oman, Jebel Sifah is ODH s third biggest town. A natural gateway located on the shores of Oman, Jebel Sifah is a short drive from Muscat and located 20 minutes from Bandar Khayran. Nestled between the majestic Al Hajar Mountain range and the Arabian Sea, Jebel Sifah is spread over 6.20 million m 2, with 5 km of beautiful Omani beaches. It is ODH s third biggest town. Jebel Sifah boasts a range of freehold waterfront apartments, luxury ocean view villas and the recently launched Golf Lake apartments, overlooking the largest two holes of the Harradine golf course. As an integrated tourism complex, the destination offers individuals and investors alike an attractive proposal of freehold real estate options and residency status with an alternative lifestyle in a multicultural community. At the heart of Jebel Sifah is the 85-berth Marina, where yacht owners are assured a safe haven for their boats, with an additional capacity of 150 dry berths. The marina is home to the four-star 67-room Sifawy Boutique Hotel, the first of five planned 5-star exclusive hotels, featuring the Jebel Sifah Hotel, Resort and Spa, by Anantara, sub-developed by the leading property developer and investor Musstir million m 2 TOTAL PROJECT AREA 0.25 million m 2 COMPLETED AREA Also overlooking the Marina is an array of lively restaurants, shops and service outlets, all complemented by a host of first-class recreation and entertainment facilities. These include the chance to view Oman s amazing treasure chest of marine life up close, fun-filled water sports and the exhilarating floating waterpark. Adding to the mix is the Jebel Sifah 9-hole resort golf course and driving range designed with the environment in mind by the renowned Peter Harradine. This masterpiece is set to be launched in September Highlights 2016 * Progress with golf course construction. Expected to be launched in September * New amenities and shops openings including gym and SME restaurant serving international cuisine. * Infrastructure completed in the main resort boulevard and different villa zones including water plumbing, electrical linkage and landscape. * Partnered up with investors to develop two Eco Lodge Huts. * Launched a new real estate project Golf Lake Residence in October with a total inventory of CHF mn, comprising of 131 apartments and succeeded to sell 60% of the total project since launch. * Opened floating fuel station on the marina. * Plan to launch new real estate projects in Annual Report STRATEGICALLY DECENTRALIZED 43

24 03 ORASCOM COUNTRIES 03 ORASCOM COUNTRIES HAWANA SALALAH OMAN OPERATING DESTINATION Creating an environment that brings people together and nurturing local businesses, Hawana Salalah offers residents,visitors and tourists an exceptional range of facilities. Located in the ancient Governorate of Dhofar, and stretching over seven kilometers of phenomenally white beautiful Indian Ocean coastline and 13.6 million m 2 of land, Hawana Salalah is a sustainably built ever-evolving, low-density town. It is our flagship destination in Oman and following the model successfully built in El Gouna. Hawana Salalah incorporates luxury freehold villas and one, two and three bedroom apartments, all enjoying spectacular views of the breath-taking ocean, marina or the tranquil lagoons. With space for the community, public and recreation areas abound to encourage wellbeing, family time, get-togethers and connections. Central to the destination is its luxurious hotels and resort experiences with the first three hotels, of the seven planned hotels, already open: the 82-room marina-side Juweira Boutique Hotel; the luxurious 400-room 5-star Salalah Rotana Resort with its elegant waterways and coconut-fringed private beach, and the 218-room Fanar Hotel and Residences, which recently increased its capacity with an additional 84 rooms in December Thus bringing the number of rooms to 302 rooms. Creating an environment that brings people together and nurturing local businesses, Hawana Salalah offers residents, visitors and tourists an exceptional range of facilities and leisure options including a state-of-the-art 171 berth superyacht marina with an additional 109 dry berths, the community s social hub and a popular port of call for seafarers from around the world. Set to be a magnet for fun-seekers is the destination s world-class waterpark, which is scheduled for launch by the end of Hawana Salalah also offers a growing range of restaurants, cafés, and lounges, water activities and sea excursions, as well as cultural and retail outlets. Hawana Salalah is tucked away just 20 minutes from Salalah s newly refurbished international airport, with regular direct flights from neighboring and European destinations. Highlights 2016: million m 2 TOTAL PROJECT AREA 1.60 million m 2 COMPLETED AREA * Planning to start the construction of the water park with plans to be finalized by the end of * Partnered up with investors to develop new sub projects that will add critical mass to our destinations, including "Souly Lodge which comprises of 14 beach-front eco-lodge huts which launched in February * Opened Fanar Hotel & Residences extension (84 rooms) on December 22, * New hotel charter contracts from Poland and Slovakia. * Additional pontoon * Plan to launch new real estate projects in Annual Report STRATEGICALLY DECENTRALIZED 45

25 03 ORASCOM COUNTRIES 03 ORASCOM COUNTRIES AS SODAH ISLAND OMAN DEVELOPING DESTINATION CITY WALK MUSCAT OMAN DESTINATION IN THE PIPELINE City Walk Muscat, a vibrant beachfront commercial city complex located in North Al Hail, Muscat. The land covers an area of approximately 47,499 m 2 that will comprise a 355-meter water front, a retail area with shops and restaurants, as well as an upscale 123-room 5-star hotel. Additionally, the project will feature a commercial area with offices and a dedicated cinema complex. In November 2016, the Group signed the development agreement based on a usufruct concession for 50 years with fees payable starting from year six. A secluded island covering 11.0 million m 2, As Sodah is located off the southern coast of Oman opposite to Hawana Salalah. The Island is set to be the region s niche destination, comprising a 32 rooms 5-stars luxury boutique hotel. The hotel spans an area of 1.0 million m 2 and features exclusive pavilions with swimming pools and private access beach. The hotel s plan also includes a main lodge and a spa million m 2 TOTAL PROJECT AREA 1.00 million m 2 TOTAL PROJECT AREA 46 Annual Report STRATEGICALLY DECENTRALIZED 47

26 03 ORASCOM COUNTRIES 03 ORASCOM COUNTRIES THE COVE UAE OPERATING DESTINATION The Cove Rotana Resort is located on an idyllic water inlet on the Ras Al-Khaimah beachfront, offering spectacular views over the Arabian Gulf. Just 8 km from the City Centre, 20 km from the Ras Al-Khaimah Airport and an 87 km drive from Dubai. The Cove comprises a total area of around 290,000 m 2, of which approximately 285,000 m 2 have been developed. The Cove opening took place in early February 2009, offering 346 rooms. The total number of 346 rooms consists of 204 hotel rooms (hotel building) plus 142 rooms resulted from 80 residential units being leased back to the RAK TI and managed by Rotana as part of the hotel rooms inventory. Meanwhile, a new staff housing building was constructed and finished in November In addition to that, the Group decided to convert the old senior executives staff housing building into a 145 room hotel extension to increase the existing room capacity and it is expected to be finalized in The Cove Rotana Resort is an ideal destination for leisure travelers and weekend breakers. The Cove offers 3 fully-equipped and flexible meeting rooms with the latest audio-visual equipment, 6 attractive choices of restaurants, bars and lounges, the fully equipped Bodylines Fitness and Wellness Club, kids area, 600 meters of pristine beach, 2 swimming pools and 7 exquisitely designed massage treatment rooms are among the many facilities offered at The Cove Rotana Resort Ras Al Khaimah. Awards Received for 2016 World Luxury Hotel Award 2016 * Luxury Coastal Resort Country Winner United Arab Emirates Trip Advisor 2016 Winner * Certificate of Excellence Holiday Check Award 2016 * Voted as one of the most popular Hotels Worldwide 0.29 million m 2 TOTAL PROJECT AREA 0.29 million m 2 COMPLETED AREA 48 Annual Report STRATEGICALLY DECENTRALIZED 49

27 03 ORASCOM COUNTRIES 03 ORASCOM COUNTRIES LUŠTICA BAY MONTENEGRO OPERATING DESTINATION Luštica Bay offers a wide range of properties, from waterfront apartments, charming hillside townhouses. A diverse but distinct community for those who seek a life like no other. Luštica Development A.D. is developing a fully integrated, self- sufficient and luxury touristic destination on the Montenegrin Adriatic coast at the idyllic Trašte Bay with a land bank of approximately 6.90 million m 2, placed a short distance from three international airports (only 10 km from Tivat airport and Podgorica 90 km and Ćilipi - Dubrovnik 46 km). The Group had concluded the lease and development agreement with the Government of Montenegro and the Municipality of Tivat on the 23 rd of October The goal of Luštica Bay is to create a distinct community, within a self-sufficient extraordinary setting, where residents can create a home around the life they want to live. Combining Montenegro s beauty and culture with Orascom Development s experience of cultivating environmentally-centred, luxury residential living, it provides a foundation that will grow organically. Luštica Bay is set to become a sustainable, fullyintegrated, state-of-the-art town. Designed to blend seamlessly into its surroundings it will become a permanent home to a few thousand residents. It comprises a variety of residential offerings, hotels and lifestyle facilities, offering both tranquility and privacy, discovery and adventure. A secluded oasis and a gateway to the rest of Montenegro. docking support facilities on the Adriatic Sea, an 18- hole golf course with club house, commercial facilities, a town center, and basic infrastructure requirements and many other amenities. Construction started in September 2013 and the first two buildings clusters (10 buildings comprising 70 apartments) have been fully finished and delivered in 2015, with residents moving in the summer of After three years Luštica Bay is now live, and growing new town project will see heavy construction works being carried out in all directions from the marina, hotel and infrastructure to progress with other residential zones. The integrated project is planned to offer residential units, 7 world class hotels, 2 marinas with mooring and 6.90 million m 2 TOTAL PROJECT AREA 0.14 million m 2 COMPLETED AREA Highlights 2016 * Progressing ahead of schedule with the construction of the new F and G buildings comprising 88 apartments expected to be finalized by early * Finalized the marina superstructure, planning to launch the marina in the summer of * Excavation works for the Golf Course is completed and the construction permit has been obtained (the first Golf Course permit in Montenegro). * The first 5-star hotel in partner with world-renowned luxury hotel brand The Chedi. Set to become the second European hotel of The Chedi brand, the hotel will operate on a spectacular central position within the Luštica Bay main marina promenade, affording stunning views over the marina and the Adriatic Sea. * Planning to start the construction of the first hotel in Luštica Bay headed by luxury hotel brand The Chedi in the first half of Annual Report STRATEGICALLY DECENTRALIZED 51

28 03 ORASCOM COUNTRIES 03 ORASCOM COUNTRIES ANDERMATT SWITZERLAND OPERATING DESTINATION Andermatt is a place where you can breathe in the fresh alpine air and stay relaxed within a most fascinating setting. The Andermatt Swiss Alps development is transforming the traditional Swiss Alpine village into one of the best year-round destinations in Switzerland comprising some of the finest facilities. With a total land bank of approximately 1.57 million m 2, Andermatt is situated at 1,440 meters above sea level and lies approximately 1.5 hours by car from Zurich and 2 hours from Milan. Its central location results in excellent connections to the major national and international transport routes. Every building in Andermatt Swiss Alps Development has been individually designed by one of over 30 selected Swiss and international architects to create a beautiful and eclectic appearance for the master-planned resort. To maintain a perfectly harmonious and peaceful environment the village centre will be a car free zone and enough underground parking spaces are provided for visitors and residents. The new accommodation and sports facilities mean that whether you seek adrenalin or relaxation your needs are catered for in the most spectacular surroundings, 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. The highly integrated infrastructure and state of the art facilities will also make the village the perfect location for cultural events and congresses. The Group has a share of interest of 49 % in Andermatt Swiss Alps AG, remains committed to the project and will benefit from any future upside. In November 2015 ASA successfully sold bonds in the amount of CHF 50 million which will help in funding the necessary next steps of the development. Highlights in million m 2 TOTAL PROJECT AREA 1.28 million m 2 COMPLETED AREA * Official Opening of the Andermatt Swiss Alps Golf Course and hosting the Swiss PGA during its first year of operation * The 5-star deluxe Hotel The Chedi Andermatt was announced Gault Millau Hotel of the Year 2017, and best winter hotel of Switzerland by the national Swiss Newspaper Sonntags Zeitung * Occupancy rates continue to increase significantly in The Chedi Andermatt * Topping out ceremony of three new apartment houses, the Gotthard Residences with public spa and swimming areas and a 4-star hotel * Radisson Blu announced as the operator of the new 4-star Hotel * Starting the planning of the next apartment houses which upon its completion the destination will have its first village square * Offering new retail spaces with the new apartment houses * 70% of all the built and occupied apartments are sold with an increase in the number of rented apartments * The Ski Arena Andermatt-Sedrun has two new chairlifts in operation one is a Porsche Design unit with heated seats * Start of construction of the Gondola - core piece for the skiing area Nätschen - Gütsch * In the process to finalize the connection between the two ski areas Andermatt and Sedrun by a horse-drawn sledge * The valley runs in Andermatt and Sedrun are snow secure thanks to technical snow making 52 Annual Report STRATEGICALLY DECENTRALIZED 53

29 03 ORASCOM COUNTRIES 03 ORASCOM COUNTRIES CHBIKA MOROCCO DEVELOPING DESTINATION Coming across a location of such untapped beauty along with the unique landscape of the ocean, mountains and sand harmoniously co-existing; has contributed to the molding of Chbika s architecture with the natural surroundings. Chbika is ideally located approximately 400 km south of Agadir directly in front of the Canary Island of Fuerteventura on the Atlantic Ocean, with a total land area of 15.0 million m 2. The master plan of the project reflects a modern oasis of harmony characterized by a western, Moroccan cultural blend. Home to world class hotels, mix of villas and apartments, 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 shops, dining outlets, as well as a medina-style handcraft center and a medical facility. The project has been granted the status of new integrated tourism zone. The project company (Oued Chbika) has the right to acquire and transfer freehold title to the land area of approximately five million m 2 (Phase 1) and approximately ten million m 2 (Phase 2) subject to certain conditions. The project company has the right to transfer its rights under the development agreement subject to certain conditions. We aim at developing a tourist dynamic engine of social and cultural development in the provinces of southern Morocco, incorporating local people. ECO-BOS UK DESTINATION IN THE PIPELINE The Group formally established Eco-Bos Development Ltd in May 2010 as a joint venture with Imerys, a multinational industrial minerals company, to develop a series of sustainable communities in Cornwall United Kingdom. The total land bank is over 6.54 million m 2 divided over 6 separate sites. The scheme was originally conceived as part of the UK Government s Eco-town competition to promote the growth of sustainable communities and the innovative Eco-Bos proposals to regenerate land formerly used for minerals extraction and processing reflects the potential and aspirations of such green development initiatives. The Eco-Bos proposals will offer a mixed portfolio of around 5,000 real estate dwellings across all market sectors along with associated retail and employment spaces. Leisure and recreation facilities are also planned with proposals for one ocean-facing site including a 5-star hotel and 6.54 million m 2 TOTAL PROJECT AREA marina development. The company has focused on securing planning and commencing development for the first phase of these sites and the planning authority has recently taken a favorable view of the benefits these proposals would bring, in particular creating housing, employment and leisure facilities and voted in favour of granting a planning permit. This is a major step forward for the project and allows us to now finalise this stage of the process and then proceed to the next stage of detailed design and phased implementation million m 2 TOTAL PROJECT AREA 54 Annual Report STRATEGICALLY DECENTRALIZED 55

30 ORASCOM 04 CORPORATE GOVERNANCE 4.1 Group Structure and Significant Shareholders 4.2 Capital Structure 4.3 Board of Directors 4.4 Executive Management 4.5 Compensation Shareholding and Loans 4.6 Shareholders' Participation 4.7 Changes of Control and Defense Measures 4.8 Employees 4.9 External Auditors 4.10 Information Policy

31 04 ORASCOM CORPORATE GOVERNANCE 04 ORASCOM CORPORATE GOVERNANCE 4.1 Group structure and significant shareholders Group structure (Reporting Structure) Significant shareholders The operating business of Orascom Development Holding AG ( Orascom Development or the Company ) is organized into the following segments: Hotels, Real Estate & Construction, Land Sales, Destination Management, and Other Operations. The shares of the Company are listed on the SIX Swiss Exchange. In addition, the shares of the Company's subsidiary Orascom Hotels and Development S.A.E. are listed on the EGX Egyptian Exchange. See below for more information on the listing. Orascom Development Holding AG Land Sales Other Operations Destination Management Hotels Real Estate & Construction The following shareholders have disclosed as currently holding a participation in the Company of 3.0% or more in voting rights (in accordance with Art. 120 FMIA 1 ): Name of shareholder Number of shares as of December 31, 2016 Percentage of ownership of the total equity capital and voting rights 2 SAMIH O. SAWIRIS AND ONSI SAWIRIS 3 29,359, Company The market capitalization of Orascom Development as per December 31, 2016 is CHF 2.49 million. The shares of Orascom Development are listed on the SIX Swiss Exchange according to the International Reporting Standard. The secondary listing in the form of EDRs (Egyptian Depositary Receipts) on the EGX Egyptian Exchange (20 EDRs = 1 equity share) will be discontinued during the first half of 2017 and the EDRs will be delisted. Listing on the SIX Swiss Exchange Exchange SIX Swiss Exchange On April 4, 2016, Janus Capital Management Group disclosed that their participation in the Company had fallen below 3.0% in voting rights. On May 3, 2016, Samih O. Sawiris and Onsi Sawiris disclosed the creation of a shareholder group holding 72.7% of the voting rights in the Company. Aside from the above, the Company is not aware of a shareholder holding a participation of 3.0% or more voting rights. Cross-Shareholdings There are no cross-shareholdings between the Company and any other entity that would exceed 5.0% of capital or voting rights on both sides. ORASCOM DEVELOPMENT HOLDING AG (ALTDORF, SWITZERLAND) Symbol ODHN Security number ISIN CH EGX Registration ORASCOM HOTELS AND DEVELOPMENT S.A.E. (CAIRO, EGYPT) Exchange Market capitalization Symbol ISIN EGX Egyptian Exchange EGP 1, million ORHD EGS70321C012 For a list of the group's unlisted subsidiaries see note 18 of the notes of the consolidated financial statements. Orascom Hotels and Development S.A.E. is 84.79% owned by Orascom Development. 1 Swiss Federal Act on Financial Market Infrastructures and Market Conduct in Securities and Derivatives Trading (FMIA). 2 The table shows significant shareholders as last disclosed to the Company pursuant to Art. 120 FMIA. The number 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, 2016, given that a shareholder may have purchased or sold shares subsequent to the last disclosure, but may not have thereby reached or crossed a disclosure threshold. For information on the participations of shareholders exceeding 3.0% of voting rights as reflected in the Company s share register as of December 31, 2016, refer to Note 27.5 of the Company s non-consolidated financial statements. 3 The shares are held through the entities Thursday Holding, SOS Holding and OS Holding. 58 Annual Report STRATEGICALLY DECENTRALIZED 59

32 04 ORASCOM CORPORATE GOVERNANCE 04 ORASCOM CORPORATE GOVERNANCE 4.2 Capital Structure Capital As of December 31, 2016, the Company s issued share capital amounted to CHF and was divided into registered shares with a nominal value of CHF each. Authorized and conditional capital Authorized capital The ordinary meeting of shareholders held on May 18, 2015 authorized the Board of Directors to increase the share capital of the Company by a maximum of CHF 278,400, by issuing up to fully paid-up registered shares with a par value of CHF each until May 18, Partial increases are 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 subscription rights of the existing shareholders shall be granted directly or indirectly (e.g. by underwritten offering followed by an offer to the then-existing shareholders of the Company). Following an increase of the share capital out of the authorized share capital on December 15, 2015, the Board of Directors remains authorized to increase the capital of the Company by a maximum of CHF 3,090, by issuing of up to 133'221 fully paid-up registered shares with a par value of CHF each until May 18, For the full wording regarding the authorized share capital, see Art. 4a of the Articles of Incorporation which are available on the Company's website com, following the links to Investor Relations and Corporate Documents. Conditional capital Pursuant to Art. 4b of the Articles of Incorporation regarding the Company s conditional capital, the Company's share capital may be increased by a maximum amount of CHF 139,200,000 through the issuance of up to 6,000,000 fully paid registered shares with a nominal value of CHF each, (a) up to the amount of CHF 23,200,000 corresponding to 1,000,000 fully paid registered shares through the exercise of option rights granted to the members of the Board of Directors 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. As of December 31, 2016, no option rights, conversion rights, or warrants had been granted on the basis of Art. 4b. For the full wording regarding the authorized share capital, see Art. 4b of the Articles of Incorporation which are available on the Company's website com, following the links to Investor Relations and Corporate Documents. Changes in capital in the past three years 2014 The share capital was not changed during the 2014 financial year. The registered share capital as of December 31, 2014 amounted to CHF 662,201,010.40, divided into 28,543,147 registered shares with a par value of CHF each On December 14, 2015, the Company completed an authorized capital increase in the amount of CHF 275,309, through the issuance of 11,866,779 registered shares with a par value of CHF each. The shares were offered to the existing shareholders by way of a rights offering. The new shares were paid up in cash, by conversion of a loan from the Company s major shareholder, Samih O. Sawiris, and by conversion of capital contribution reserves into equity The ordinary share capital was not changed during the year under review. The Company's annual general meeting held on May 9, 2016, resolved to increase the conditional share capital pursuant to article 4b lit. a of the Articles of Incorporation from CHF 14,489,699.20, corresponding to 624,556 shares with a par value of CHF each, to CHF 23,200,000.00, corresponding to 1,000,000 shares with a par value of CHF each, and to amend article 4b lit. a of the Articles of Incorporation accordingly. Shares and participation certificates The 40,409,926 registered shares with a par value of CHF 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 one vote and an equal right to dividend payments. No preferential or similar rights have been granted. As of December 31, 2016, 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 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. Nominee registration 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% 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% 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 before, 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 the votes represented (see Section 4.7 below). Convertible bonds and warrants/options The Company has not issued any convertible bonds, warrants or options. 60 Annual Report STRATEGICALLY DECENTRALIZED 61

33 04 ORASCOM CORPORATE GOVERNANCE 04 ORASCOM CORPORATE GOVERNANCE 4.3 Board of Directors Photographer: Marc Welt Samih O. Sawiris Adil Douiri Franz Egle Jürgen Fischer Carolina Müller-Möhl Marco Sieber Naguib S. Sawiris Jürg Weber CHAIRMAN, NON-EXECUTIVE MEMBER NON-EXECUTIVE MEMBER NON-EXECUTIVE MEMBER NON-EXECUTIVE MEMBER NON-EXECUTIVE MEMBER NON-EXECUTIVE MEMBER NON-EXECUTIVE MEMBER LEAD DIRECTOR, 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 later merged to form Orascom Hotels and 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. As of April 1, 2014, Mr. Sawiris took over the position of the CEO on ad-interim basis of Orascom Development until December 31, He also serves as Chairman of the Board of Directors. Mr. Douiri is the founding shareholder and CEO of Mutandis, a Moroccan consumer goods manufacturing group established in Mr. Douiri served in His Majesty King Mohamed VI s Government as Minister of Tourism ( ) and later as Minister for Tourism, Crafts and Social Economy ( ). In 1992 Mr. Douiri founded Casablanca Finance Group (later renamed CFG Group), the country s first investment bank. Today CFG Goup has become CFG Bank, a full-fledged Moroccan technology driven bank, of which Mr Douiri currently serves as chairman of the board. He is also a board member of Residences Dar Saada, a publicly listed Moroccan real estate developer and of MFEx, a Stockholm based technology company serving the financial industry. Mr. Douiri graduated as an engineer from the Ecole Nationale des Ponts et Chaussées (ENPC) in Paris. 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 ( ). Before co-founding Dynamics Group, a Swiss company providing strategic consulting, communication management and research analysis, Mr. Egle was a partner of Hirzel.Schmid.Nef Konsulenten, a communication and financial consultancy firm ( ). Mr. Egle holds a Doctor s degree in sociology from the University of Zurich. Mr. Jürgen Fischer is founder of The Pearl Management Consultants in Dubai, UAE. Previously he was CEO of Dubai Properties LLC, a major real estate developer in the UAE. Besides looking after 20,000 residential leasing units, 50,000 sqm of retail space, thousands of Built to Sell apartments and villas and several master developments in Dubai, he was as well involved in international developments of Sama Dubai Group in, among others, Morocco and Oman. During his time with Dubai Properties he oversaw several theme park and tourist projects. Between 1995 and 2008 Jürgen Fischer held several senior positions with Hilton International, such as President Commercial Operations and President for Continental Europe, Middle East and Africa, as well as President of Scandic Hotels AB. Since 2008 Fischer is as well a Non Executive Board member of Movenpick Hotels & Resorts and Non Executive Chairman since 2014 to date. Prior to joining Hilton, he worked for the Walt Disney Company in different roles in Florida and Paris including Vice President Sales and Marketing for Disneyland Paris, Director of Resort Development at Disneyland Paris and General Manager of the «Grand Floridian Beach Resort and Spa» at Walt Disney World, Florida. Fischer held several hotel management positions in Europe and Middle East after starting his professional life as a chef in He later graduated from the Ecole Hôtelière Lausanne, Switzerland and obtained an MBA with Honors from IMEDE/ IMD, Lausanne in Ms. Müller-Möhl is a Swiss founder, investor and philanthropist. Since 2000, Carolina Müller-Möhl has managed and presided over the Müller-Möhl Group, a single-family office that actively manages the family's investments. She currently serves on the board of directors of Gebrüder Müller Immobilien AG (since 2000), AG für die Neue Zürcher Zeitung (since 2010), a major media group in Switzerland, and in 2015 also became a board member of Fielmann AG, Europe's largest optician. Ms. Müller-Möhl is highly committed to address socio-political causes and brings her efforts under the Müller-Möhl Foundation, which focuses on compatibility of work and family life, education, promotion of a free market in Switzerland and philanthropy in general. Furthermore, she sits on various foundation and advisory boards that support the above causes such as Department of Economics, University of Zurich, University of St. Gallen, MBA for Women Foundation, EDGE, Avenir Suisse, Swiss Economic Forum, Schweizerische Management Gesellschaft and Bertelsmann Stiftung, Germany. Ms. Müller-Möhl studied politics, history and law and graduated as M.A. Political Science from Freie Universität Berlin. In recognition of her success and her philanthropic commitment, the World Economic Forum nominated her as a Young Global Leader in Mr. Sieber, born in Lucerne, Switzerland, studied economics at the Business School in Lausanne. After graduating with a business degree, in 1989 he took over the family owned company SIGA Holding Ltd. together with his brother. Mr. Sieber managed to transform SIGA into a company which operates internationally and which has over 450 employees. SIGA develops and produces products for the construction sector, namely in the field of energy-saving sealings. Mr. Sieber is a member of several boards. Mr. Naguib S. Sawiris is the Founder and CEO of Yup (2014-present), a San Francisco based education technology company. Yup provides on-demand personalized learning through mobile chat with over 500,000 student sign-ups. Yup has raised USD 7.5 million from leading tech and education investors including Index Ventures, Floodgate Fund, and Stanford University's StartX Fund. Mr. Naguib S. Sawiris attended Stanford University where he designed his own major, Economic and Enterprise Engineering. He is an active angel investor, having invested in over 20 companies including DoctorOnDemand, Transcriptic, and Womply. His investments have went on to raise more than USD 200 million in subsequent rounds. Mr. Weber holds an MBA with a Major in Finance and Strategic Planning from the Wharton School, University of Pennsylvania. Mr. Weber previously studied Civil Engineering at the School of Engineering in Switzerland and Microeconomics and English at the University of California, Santa Barbara. Before his present position as Division CEO of SIX Payment Services and Chairman of the Board of TWINT, Mr. Weber was CEO and partial owner of Boyner Financial Services in Istanbul and an entrepreneur in card issuing, purchase finance and payment services. Previously he was a consultant at McKinsey & Company where he served Swiss banking clients and later co-lead the founding of the Istanbul Office, leading to his nomination for Partner. Before that Mr. Weber served as project assistant to the Vice Chairman of UBS Phillips & Drew in London and as project manager for the CEO of UBS North America in New York, where he was elected into the UBS Leadership Program with a sponsorship for MBA. 62 Annual Report STRATEGICALLY DECENTRALIZED 63

34 04 ORASCOM CORPORATE GOVERNANCE 04 ORASCOM CORPORATE GOVERNANCE Members of the Board of Directors Name Function Nationality Birth Elected first The current members of the Board of Directors are all non-executive. Mr. Sawiris served as Chief Executive Officer of the Company on an ad interim basis from April 1, 2014 to December 31, With the exception of the Chairman, none of the current members of the Board of Directors held executive positions with Orascom Development during the three Elected until Samih O. Sawiris Chairman Egyptian Audit Committee Adil Douiri Member Moroccan Member Nomination and Compensation Committee Franz Egle Member Swiss Member Jürgen Fischer Member Swiss Carolina Müller-Möhl Member Swiss Naguib S. Sawiris Member Egyptian Marco Sieber Member Swiss Chair Jürg Weber Member Swiss Chair 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. Elections and terms of office The members of the Board of Directors and its Chairman are elected by the general meeting of shareholders individually for a term of one year until the completion of the next ordinary general meeting. In accordance with the Articles of Incorporation, the Board of Directors is composed of a minimum of three and a maximum of fifteen members. The members may be re-elected. External mandates For restrictions regarding the number of external mandates see Art. 20 of the Articles of Incorporation which are available on the Company's website com, following the links to Investor Relations and Corporate Documents. Internal organizational structure Board of Directors 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 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 of Directors has delegated the management of the Company s business to the CEO. The Board of Directors appoints the CEO and the other members of Executive Management. Subject to the power of the general meeting, the Board of Directors constitutes itself autonomously and appoints its Secretary, who does not have to be a member of the Board of Directors. It is quorate 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 member of the Board of Directors 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. Committees Two permanent committees have been formed to support the Board of Directors; these are the Audit Committee and the Nomination and Compensation Committee. The duties and competences of both committees are outlined below. Audit Committee The Audit Committee currently consists of two non-executive members of the Board of Directors. The members and the chairman of the Audit Committee are elected by the Board of Directors. The two Audit Committee members currently appointed have broad experience in finance and accounting on the basis of their professional backgrounds. 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 of Directors 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 of Directors from time to time. The Audit Committee has no decisionmaking power. Nomination and Compensation Committee The Nomination and Compensation Committee currently consists of two non-executive members of the Board of Directors. The members are elected by the general meeting of shareholders individually for a term of one year until the completion of the next ordinary general meeting. The chairman of the Nomination and Compensation Committee is appointed by the Board of Directors. The mission of the Nomination and Compensation Committee is to assist the Board of Directors in the discharge of its responsibilities and to discharge certain responsibilities of the Board of Directors relating to compensation and nomination of members of the Board of Directors and the Executive Management. The Nomination and Compensation Committee issues recommendations to the Board of Directors regarding matters of the compensation of executive members of the Board of Directors and members of Executive Management and regarding other matters of compensation. It also issues recommendations regarding the nomination of members of the Board of Directors and of Executive Management, and other topics submitted to it by the Board of Directors for the committee s consideration. 64 Annual Report STRATEGICALLY DECENTRALIZED 65

35 04 ORASCOM CORPORATE GOVERNANCE 04 ORASCOM CORPORATE GOVERNANCE Work methods of the Board of Directors and its committees Definition of areas of responsibility Information and control instruments vis-a-vis senior management Invitations to attend meetings of the Board of Directors are extended by the Chairman or the Secretary of the Board of Directors. Any member of the Board of Directors may request the Chairman to convene a meeting. The members of the Board of Directors 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 and 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. 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 decisions, the supervision of certain tasks, as well as certain decision-making powers to the permanent committees. The Board of Directors 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 of Directors. Excluded from such delegation to the CEO are the inalienable duties of the Board of Directors as defined by law (Art. 716a Para. 1 of the Swiss Code of Obligations), the duties of the Board of Directors permanent committees (as described above), and certain matters which remain reserved to the Board of Directors pursuant to the Company's Internal Regulations. To ensure that 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 of Directors, 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 of Directors members supported Executive Management in various projects. Furthermore, members of the Board of Directors 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, PwC 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 pre-planned 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 at least on a monthly basis in which performance of operating projects is reviewed alongside the budget and previous financial year. Key performance indicators are reviewed and updates on new projects, whether off-plan or under construction, are shared and future steps agreed upon. In the 2016 financial year, the Board of Directors convened for nine meetings, and passed one circular resolutions. Of the nine meetings, four were held as physical meetings and five meetings were held by telephone conference. The Audit Committee convened for four meetings. The Nomination and Compensation Committee convened for one meeting. 66 Annual Report STRATEGICALLY DECENTRALIZED 67

36 04 ORASCOM CORPORATE GOVERNANCE 04 ORASCOM CORPORATE GOVERNANCE 4.4 Executive Management Definition of areas of responsibility Members of Executive Management The CEO who is responsible for the day-today operational management of the Company is supported by the Executive Management. The Executive Management assists the CEO in developing and implementing the strategic business plans for the Company overall as well as for the principal businesses, subject to approval by the Board of Directors. The Executive Management further reviews and coordinates significant initiatives, projects and business developments in the segments, regions and in the corporate services functions and implements Company-wide policies. Appointment of New Members Effective April 1, 2017, Ashraf Nessim has been appointed as an Executive Management member and Chief Financial Officer on a permanent basis after having already served in this function on an ad interim basis since May Nermine Faltas, Group Chief Human Resources & Organization Development Officer, and Tarek Gadallah, Group General Counsel, have also been appointed as members of the Executive Management with effect as of the same date. External mandates For restrictions regarding the number of external mandates see Art. 20 of the Articles of Incorporation which are available on the Company's website com, following the links to Investor Relations and Corporate Documents. KHALED BICHARA Chief Executive Officer An Egyptian national, born 1971, Mr. Khaled Bichara currently holds the position of Chief Executive Officer of Orascom Development Holding. He is also a Co-Founder of Accelero Capital. Mr. Bichara previously served as Group President and Chief Operating Officer of VimpelCom Ltd ( VimpelCom ). He was also Chief Executive Officer of Orascom Telecom Holding S.A.E. ( OTH ) as well as Chief Operating Officer of Wind Telecomunicazioni S.p.A. ( Wind Italy ). He played a pivotal role in the merger of VimpelCom with Wind Telecom S.p.A, ( Wind Telecom ) for a total consideration of USD 25.7 Billion to create the world s sixth largest telecommunications carrier. Mr. Bichara managed ten operations across the globe through OTH and Wind Italy and 22 operations across the globe through VimpelCom. In 2009, Mr. Bichara was appointed Chief Executive Officer of OTH and Wind Telecom, bringing with him a wealth of experience in both telecommunication and information technology coupled with strong management and entrepreneurial expertise. Prior to this position, Mr. Bichara was Chief Operating Officer ( COO ) of Wind Italy, which he joined in 2005, heading the fixed line and portal business unit before being promoted to COO of the company. He played a key role in restructuring the company s organization, resulting in the successful turnaround of Wind Italy from a continuously loss making company to a leading mobile, fixed line and broadband integrated operator in Europe within a three-year time span. Prior to joining Wind Italy, he was the co-founder, Chairman and CEO of LINKdotNET ( LDN ), one of the largest private Internet Service Providers in the Middle East. In 2001, following successful negotiations, Microsoft chose to partner with LDN to launch MSN Arabia, the Middle East s first global portal, bringing the full internet experience of MSN to users in the region. In 2011, Mr. Bichara also served as Group Executive Chairman of OTH as well as Chairman of Wind Italy. Mr. Bichara currently serves as a board member of various telecom and IT companies, including Orascom Telecom Media and Technology Holding S.A.E.; and SUPERNAP International S.A., the developer of the world-renowned SUPERNAP data centers. He is the chairman of the board of Italiaonline S.p.A. (a company listed on the Milan Stock Exchange), the Italian leader in internet services for SMEs (website, directories, local advertising), as well as the #1 internet platform and service in Italy. He is also a board member of Orascom Construction Limited, a company dually listed on NASDAQ Dubai and the Egyptian Stock Exchange, as well as a board member of Orascom Hotels and Development S.A.E., a company listed on the Egyptian Stock Exchange. Mr. Bichara is also a member of the Advisory Board for the Computer Science and Engineering Department of the American University in Cairo. He was previously a member of the GSMA board. Mr. Bichara holds a Bachelor of Science degree from the American University in Cairo. ASHRAF NESSIM Chief Financial Officer ad interim An Egyptian national, born 1965, Mr. Nessim has more than 20 years of experience in various fields including finance, infrastructure and hospitality. He currently holds the position of the Group s Chief Financial Officer of Orascom Development Holding. He is also the Chief Financial Officer of Orascom Hotels and Development the Egyptian largest subsidiary of the group. Prior to joining the group, he was the Chief Financial Officer representing Beltone Private Equity in their Pick Albatros Investment. From 2007 to 2010 he was the Group Chief Financial Officer of Mobiserve, a key player in the mobile telecom network infrastructure in 9 countries within the Middle East and South Asia. Prior to shifting his career to finance he established the operation of Raya Distribution in Algeria and managed merchandising activities in all 34 shops of Nokia and Samsung in Egypt. Mr. Nessim holds a Bachelor degree in Mechanical Engineering and he is also one of the earlier people in Egypt to hold the CFA designation in ABDELHAMID ABOUYOUSSEF Chief Hotel Officer An Egyptian national, born 1975, Mr. Abouyoussef is a tourism entrepreneur who started his career in design and installation of hotel electro-mechanical systems in 1998 moving on to Project Management and Owner s Representation until 2004 when he founded his first company Shores Hotels to manage a single hotel of 200 guestrooms. With the growth of Shores Hotels portfolio, Mr. Abouyoussef pursued Hotel Development developing three hotels in three different destinations across Egypt. Mr. Abouyoussef is a holder of a B.S. in Mechanical Engineering from the American University in Cairo and a Master s of Science from the University of California at Berkeley. He is also a commission member of the International Federation of the Automobile (FIA). 68 Annual Report STRATEGICALLY DECENTRALIZED 69

37 04 ORASCOM CORPORATE GOVERNANCE 04 ORASCOM CORPORATE GOVERNANCE 4.5 Compensation, 4.6 shareholdings and loans 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 2016, and on shares and options held by and loans granted to these persons as of December 31, 2016, please refer to the Compensation Report 2016 and to Note 12.1 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 For their service on the Board of Directors and its committees in 2016, the Board of Directors decided to pay compensation of gross CHF for all members of the Board of Directors. The compensation is paid out in the form of shares of the Company. The shares of the Company allocated to the members of the Board of Directors as compensation are, for that purpose and if not available to the Company already, purchased by the Company on the market and their valuation (for purposes of the calculation of the number of shares allocated to each member of the Board of Directors) is based on the average share price of the Company's shares on the SIX Swiss Exchange during the last six months of the previous financial year. In addition to the base compensation for all members of the Board of Directors, members (and chairs) of one of the Committees receive an additional compensation of gross CHF 20,000. The Lead Director receives an additional compensation of gross CHF 40,000. Executive Management Compensation of the members of Executive Management for their service in Executive Management consists of a base salary and a bonus payment which is annually determined, as further described below. The compensation of the members of Executive Management is based on an evaluation of the Company performance, of the individual performance of each member, as well as of the performance of the business area for which each member is responsible. The Nomination and Compensation Committee discusses the proposals presented by the CEO and subsequently presents a proposal to the Board of Directors for approval. Members of Executive Management do not have a right to attend meetings of the Nomination and Compensation Committee at which decisions are taken in respect to their compensation, or otherwise to participate in the decision process. Performance related remuneration In 2014, the Board of Directors revised the Company's bonus policy. The policy includes a cash-bonus and a deferred share-bonus. 100% of the cash-bonus and 40% of the share-bonus are based on the Executive Management member's personal performance. 60% of the share-bonus is based on the (financial) performance of the Group. The cash-bonus can reach at maximum 25% of the Executive Member s annual gross base salary. The share-bonus can reach at maximum 100% of the Executive Member s annual gross base salary. The share price that is relevant to determine the number of ODH shares to be granted to the member of the Executive Management is the average share price of the shares of the Company on the SIX Swiss Exchange during the last six months of the performance year. As the financial performance targets of the Company were not achieved in 2016 and due to the challenging economic and political environment, the Board of Directors decided that no bonus shall be paid to the Executive Management for their performance in Contingent compensation of the CEO In addition to the base salary, the CEO was granted a contingent compensation which is dependent solely on the development of the share price of the Company. The contingent compensation is determined according to a formula which takes into account the development of the Company's share price. In essence, the new CEO shall be entitled to 10% of the incremental market capitalization of the Company above a hurdle rate or minimum yield of 8% per annum. The award accrues over a vesting period of six years and is subject to usual forfeiture and acceleration provisions. For example, the contingent compensation will be forfeited and lost in case the CEO terminates his employment relationship with the Company without cause. The contingent compensation may be paid in cash or, at the Company's discretion, in (whole or in part in) shares of the Company. If payment is made in shares, the number of shares will be calculated according to a formula which is based on an average of the share price at the time immediately prior to the delivery of the shares. If the market capitalization of the Company does not exceed the hurdle rate of 8% per annum, the CEO does not receive any payments under the contingent compensation. The Board of Directors believes that a vesting period of six years rewards a long-term performance and shows a longterm commitment of the new CEO towards the Company. The award of 10% of the incremental market capitalization of the Company above a hurdle rate of 8% per annum aims ensures that the new CEO is paid for his contribution to Company performance. Principles on compensation in the Articles of Incorporation See Art. 21 of the Articles of Incorporation which are available on the Company's website following the links to Investor Relations and Corporate Documents. Shareholder approval of compensation See Art. 22 of the Articles of Incorporation which are available on the Company's website following the links to Investor Relations and Corporate Documents. Loans, credit and pension contributions See Art. 26 of the Articles of Incorporation which are available on the Company's website following the links to Investor Relations and Corporate Documents. Voting rights and representation restrictions With the exception of restrictions on the registration of shares (see Section 4.2. 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 need not himself be a shareholder. Statutory quora According to Art. 10 of the Articles of Incorporation, the holders of at least 25.0% 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 50.0% 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 75.0% 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. 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% 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 Official Gazette of Commerce (Schweizerisches Handelsamtsblatt) or by registered letter to the shareholders of record. There must be a time period of not less than 20 calendar 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. 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 Only shareholders who are registered in the share register as shareholders with voting rights at the record date are entitled to attend an ordinary general meeting and to exercise their voting rights. The Board of Directors ensures that the record date is set as close as possible to the date of the ordinary general meeting. The record date is published together with the invitation to the ordinary general meeting in the Swiss Official Gazette of Commerce. 70 Annual Report STRATEGICALLY DECENTRALIZED 71

38 04 ORASCOM CORPORATE GOVERNANCE 04 ORASCOM CORPORATE GOVERNANCE 4.7 Changes of control 4.9 and defense measures External auditors 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. 125 and Art. 135 FMIA. Clauses of change of control No change of control clauses benefiting members of the Board of Directors, Executive Management or other members of the Company s management have been agreed upon. 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, has been the statutory auditor 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 and Abdel Aziz, Cairo. The auditor in charge for the Company at Deloitte AG currently is Roland Muller since the 2013 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 9, 2017 to reelect Deloitte AG, Zurich as the statutory auditor for the 2017 financial year. Auditing fees Deloitte received the following fees for its services as the statutory auditor of the Company and the majority of Orascom Development companies on the one hand, and for non-audit services on the other hand: In Audit Services 1,860,000 1,790,322 IPO/Listing related services - 398,000 Tax Advisory Services 12,228 - Total 1,872,228 2,188, Employees Informational instruments pertaining to the external audit As of December 31, 2016, the Company had 8,549 employees worldwide, of which 7,316 were in Egypt. The number of employees decreased by 567 employees. compared to the end of 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 auditor, 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 auditor is in regular contact with the chairman of the Audit Committee to discuss matters arising in the performance of its 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 of Directors concerning the proposal to the general meeting of shareholders whether to re-elect the statutory auditors for the following year. 72 Annual Report STRATEGICALLY DECENTRALIZED 73

39 04 ORASCOM CORPORATE GOVERNANCE 04 ORASCOM CORPORATE GOVERNANCE 4.10 Information policy The CEO, the CFO, and the Investor Relations Department took care of the communication with investors during 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 SIX Swiss 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 of the SIX Swiss Exchange (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 law and the rules of the SIX Swiss Exchange. Invitations to the annual and extraordinary general meetings are published in the Swiss Official Gazette of Commerce and sent to registered shareholders by letter. 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 9, 2017 First quarter 2017 results: May 16, 2017 Second quarter 2017 results: August 15, 2017 Third quarter 2017 results: November 15, 2017 Further information and contact Investors and other interested stakeholders can find further information on Orascom Development online at News items are published on the website following the links to Investor Relations and News. Stakeholders may subscribe to the Company s alert service to receive news releases at en/media-center/news-alert.html. Investors may also contact the Investor Relations Department as follows: Sara El Gawahergy Head of Investor Relations T. : T. : ir@orascomdh.com Registered office The Company's registered office is at Gotthardstrasse 12, 6460 Altdorf, Switzerland. 74 Annual Report STRATEGICALLY DECENTRALIZED 75

40 ORASCOM 05 INVESTOR INFORMATION

41 05 ORASCOM INVESTOR INFORMATION 05 ORASCOM INVESTOR INFORMATION 5.0 Investor Information 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 Per share data 1 Date Date SWITZERLAND Shares held with SIS and registered in the share register 26,735,126 25,769,127 Dispo shares 3,739,307 4,599,165 EGYPT Share equivalents in custody of MCDR s depositary bank (EDRs) 9,0,077 9,935,493 Shares in custody of MCDR (Not Traded) 875, ,416 Total Shares 40,409,926 40,409,926 Market capitalization (in CHF Million) 2,49 414,20 Share price at year-end (in CHF) Highest share price during the year (in CHF) Lowest share price during the year (in CHF) Number of traded shares (in millions) Value of traded shares (in CHF million) Average number of traded shares per day 19,433 20,579 Average traded value per day (in CHF) 128, ,358 1 Source: Thomson Reuters. Share information 1 EDRs information 1 Per EDR data 1 Shares listing Zurich, Switzerland EDRs listing Cairo, Egypt Date Number of shares 31,349,849 Number of EDRs 2 181,201,540 Market price at year-end (in EGP) ISIN code CH ISIN code EGG676K1D011 Highest market price during the year (in EGP) Currency Swiss Franc Currency Egyptian Pound Lowest market price during the year (in EGP) Ticker code (Bloomberg) ODHN:SW Ticker code (Bloomberg) ODHR:EY Number of traded EDRs (in millions) Ticker code (Reuters) ODHN.S Ticker code (Reuters) ODHR.CA Value of traded EDRs (in EGP million) Average number of traded EDRs per day 300, ,525 Average traded value per day (in EGP) 1,336, ,573 1 As at end of Implying a conversion ratio of 20:1, where 20 EDRs are equivalent to 1 registered share. 1 Source: Thomson Reuters. 78 Annual Report STRATEGICALLY DECENTRALIZED 79

42 05 ORASCOM INVESTOR INFORMATION 05 ORASCOM INVESTOR INFORMATION Shareholding Structure A) Shares B) EDRs Shareholders by type Shareholders by country EDRs holders by type EDRs holders by country Categories Number of shareholders Number of Registered shares Country Number of shareholders Number of Registered shares Categories Number of EDRs Holders Number of EDRs Country Number of EDRs Holders Number of EDRs Legal persons 68 12,592,215 Egypt 10 18,716,314 Natural persons 1, ,920,245 Egypt 1, ,744,920 Natural persons 3,596 11,052,786 Banks 20 2,491,364 Investment trusts ,432 Pension funds 7 24,613 Foundations 3 8,356 Insurance companies 1 3,170 Public corporations Total 3,725 26,735,126 Switzerland 3,665 3,870,567 United Kingdom 7 2,408,283 Belgium 2 520,890 Cayman Islands 1 511,136 United States of America 6 400,792 Liechtenstein 5 242,515 Malta 2 17,600 Brazil 1 14,413 Legal persons ,779,301 Banks 2 1,417,980 Investment trusts 3 903,014 Pension funds 1 181,000 Foundations 0 0 Insurance companies 0 0 Public corporations 0 0 Total 1, ,201,540 United Kingdom 8 22,076,347 Saudi Arabia 23 9,615,653 Luxembourg 1 849,999 Lebanon 2 276,236 United Arab of Emirates 6 267,969 Germany 2 265,000 Yemen 1 27,941 Distribution of shareholdings 1 Luxembourg 1 10,118 Austria 4 9,100 Italy 2 5,880 Distribution of EDRs Holders 1 Tunis 1 20,000 Palestine 3 19,240 Number of Registered shares Number of Registered shares , ,045 57, ,000 1, ,134 1,001 10, ,584,305 10, , ,163, ,001 1,000, ,594,167 Germany 10 5,460 United Arab of Emirates Bahamas Ireland France Spain Saudi Arabia Number of EDRs Holders Number of EDRs , , ,002 1,001 10, ,817,983 10, , ,917, ,001 1,000, ,747,661 Jordan 2 12,360 Malaysia 1 9,100 Oman 1 8,240 Italy 1 3,850 United States of America 4 2,931 Libya 2 1,750 1,000, ,999, ,579,091 Denmark 1 2 1,000, ,999, ,417,477 Switzerland 1 4 Total 3,725 26,735,126 Total 3,725 26,735,126 Total 1, ,201,540 Total 1, ,201,540 1 Distribution of registered shares/edrs as at December 31, Annual Report STRATEGICALLY DECENTRALIZED 81

43 05 ORASCOM INVESTOR INFORMATION 05 ORASCOM INVESTOR INFORMATION Significant shareholders 1 Categories Number of shares issued Percentage of ownership (%) Number of shares issued Percentage of ownership (%) Samih Sawiris 2 27,391, ,355, OS Holding 2,049, Janus Capital Management LLC - - 1,494, Others 10,968, ,560, Total 40,409, ,409, Overview of significant shareholders as at December 31, The shares of Samih O. Sawiris are held directly and through his entities Thursday Holding and SOS Holding. Corporate Calendar Date Event 9 May th Annual General Meeting 16 May 2017 First Quarter 2017 Results 15 Aug 2017 First Half 2017 Results 15 Nov 2017 Nine Months 2017 Results Investor Contacts Sara El Gawahergy Head of Investor Relations T: ir@orascomdh.com For publications and further information visit 82 Annual Report STRATEGICALLY DECENTRALIZED 83

44 Orascom Financial Statements