Annual Report 2007
  • 01 Board of Directors
  • 02 Message to our Shareholders
  • 03 Consolidated Financial Statement

  • Sabih Taher Darwish Masri
    Chairman, Board of Directors

    Khaled Sabih Taher Masri
    Vice Chairman, Board of Directors

    Ahmad Saeed Al Sharif, Ph.D
    Member | Representing the Libyan Foreign Investments Company

    Bassam Wael Rushdi Kanaan
    Member | Representing the Social Security Corporation

    Amal Rafiq Suleiman Shabib
    Member | Representing the Social Security Corporation
    (successor to H. E. Dr. Hamad Al-Kassasbeh as of 1/10/2007)

    Kamal Ghareeb Abdel Rahim Al-Bakri
    Member | Representing Cairo Amman Bank (as of 14/6/2007)

    Mohammed Osama Jawdat Sha’sha’a
    Member | Representing Jordan Insurance Company

    Isam Halim Jeries Salfiti
    Member | Representing Union Bank for Savings and Investment

    Kamil Abdel Rahman Ibrahim Sadeddin
    Member | Representing Al Masira Investment Company

    Abdel Rahman Bin Ali Bin Abdel Rahman Al Turki
    Member

    Yassin Khalil Mohammed Yassin Talhouni
    Member

    Nafeth Saleh Odeh Mustafa
    Member

    Yazid Adnan Mustafa Mufti
    Member

    Saleh Mohammed Abdel Baqi Refai
    General Manager

    Ernst & Young
    Auditors

    Ittqan Law Firm Company
    Legal Advisor

  • I welcome you and proudly place into your hands the annual report for Zara Investment Holding Company for the year 2007 and its outlook for 2008, which coincides with the 14th annual meeting for the ordinary general assembly of the Company’s shareholders. On this occasion, please allow me to thank all those who have contributed to and supported the realization of the vision of Zara. In particular, I would like to thank our shareholders for placing their trust in Zara, our members of the board of directors for their relentless support, and our employees for their loyalty and impeccable commitment to excellence.

    In the year 2007, the Jordanian tourism sector witnessed an unprecedented level of growth attributed to favorable conditions that were conducive to its revival. This year we were delighted to see Petra voted as one of the new Seven Wonders of the World, which foreshadowed what was to transpire as a truly unique year for Zara and for tourism in Jordan as a whole. The financial results of Zara were positively impacted by the momentum witnessed in the hospitality sector during this year. The consolidated operating revenues of Zara for 2007 totaled JD 58.2 million compared to JD 44.6 million for 2006, which represents a 30% growth. In addition, the consolidated operating profits for 2007 grew by 44 %amounting to JD 21.2 million compared to JD 14.7 million for 2006.

    Zara Investment boasts today market leadership as far as the number of 5-star hotels it owns, its investments, and its geographical spread over prime touristic hubs. The investment of Zara in the hotel industry amounts to approximately 30% of the total investment in the 5-star hotel sector in Jordan. Today we see how the strategy of Zara of investing in the long term has paid off for the Company as well as the industry as a whole. Thanks to its properties, Zara paved the way to turning Jordan into a true 5-star destination through executing new projects and modernizing and developing existing ones.

    The drive to enhance and improve our existing properties continued throughout 2007. The Beach project at the Mövenpick Resort and Spa Dead Sea was completed at an investment of JD 6.4 million; another successful completion was witnessed at the Hotel Intercontinental Jordan, where an entire block of rooms (Block C) was renovated at an investment of JD 5.7 million. The reception area at the Grand Hyatt Amman Hotel was completely redesigned and renovated at an investment of JD 4.2 million; in addition a car park building was added to the Grand Hyatt Amman complex enhancing the operations of Zara Expo, the Grand Hyatt Amman Hotel as well as Zara Center. The construction of Zara Hotel within the Tala Bay project on the southern coast of Aqaba is expected to be completed during the last quarter of 2008 at an estimated total cost of JD 40 million. The Company is continuously striving to improve its leverage insofar its financing needs as well as its financial debts are concerned. Zara qualified for a $40 million loan from the International Finance Corporation (IFC) which will finance the 450-room 5-star hotel being built at Tala Bay in Aqaba. The Company has also rescheduled existing loans extended by the Arab Bank as well as a syndicated loan extended by a consortium of local banks headed by the Arab Bank. These procedures will help improve the Company’s cash flow over the coming decade. Finally I would like to end by quoting the words of Jonathan Swift; the creator of the very famous fictional traveler Gulliver: «Vision is the art of seeing the invisible». In 1994, the founders of Zara ventured into an unchartered territory envisioning what we see today and what was invisible then. Once again, this would not have been possible had it not been for the hard work and dedication of all those involved with Zara. On behalf of the board of directors, I wish you all continued progress and success.

    Sabih Taher Masri
    Chairman of the Board of Directors

  • TO THE SHAREHOLDERS OF
    ZARA INVESTMENT COMPANY (HOLDING COMPANY)
    AMMAN - JORDAN

    We have audited the accompanying financial statements of Zara Investment Company (Holding Company), which comprise the consolidated balance sheet as at 31 December 2007 and the consolidated income statement, consolidated statement of changes in equity and consolidated cash flow statement for the year then ended, and a summary of significant accounting policies and other explanatory notes.

    Management’s Responsibility for the Consolidated Financial Statements

    Management is responsible for the preparation and fair presentation of these financial statements in accordance with International Financial Reporting Standards. This responsibility includes: designing, implementing and maintaining internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances.

    Auditors’ Responsibility

    Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with International Standards on Auditing. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditors’ judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate for the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

    Opinion

    In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of Zara Investment Company (Holding Copmany) as of 31 December 2007 and its financial performance and cash flows for the year then ended in accordance with International Financial Reporting Standards.

    Amman – Jordan
    Ernst & Young
    April 29, 2008