Annual Report 2009

Orascom Construction Industries

Orascom Construction Industries
Nile City Towers
2005A Corniche El Nil
Cairo, Egypt 11221

Tel: +20 22 461 1111

Fax: +20 22 461 9400

www.orascomci.com

Annual report 2009

Invest
Grow
HARVEST
Overview
Orascom Construction Industries is
a leading international construction
01 2009 highlights
02 Letter to shareholders
04 The business

Operational review
contractor and fertilizer producer based
06 Construction in Cairo, Egypt. We are one of the
region’s largest corporations with projects
08 Construction group
10 Orascom Construction
14 BESIX Group
18 Contrack
20 Construction materials and investments across Europe, the
Middle East and North Africa.
22 National Steel Fabrication
24 Alico Egypt
25 United Holding Company
25 United Paints and Chemicals
25 National Pipe Company
25 SCIB Chemical We aspire to be a company that our
26 Property management
28 Contrack FM
29 Suez Industrial Development Company
clients are proud to work with and
30 fertilizer Manufacture
32 Fertilizer group
our employees are proud to work for,
34 Egyptian Fertilizers Company
36 Egypt Basic Industries Corporation a company committed to delivering
quality work and products, safely and
38 Notore Chemical Industries
38 Sorfert Algérie
38 Gavilon
40 Corporate & Social Responsibility
42 OCI’s internal community
on schedule, and a company with an
44 OCI’s greater community
open mind ready to embrace new
opportunities and driven to deliver
Governance

48 Board of Directors
50 Report of the Directors
52 Corporate governance
55 Management’s discussion and analysis
exceptional value.
of financial condition and results of operations
60 Report of the Audit Committee of the
Board of Directors

Financial statements

63 Auditor’s report
64 Director’s statement in respect of
responsibility for financial reporting
65 Consolidated income statement
66 Consolidated balance sheet
68 Consolidated statement of changes in equity
70 Consolidated cash flow statement
71 Notes to the consolidated financial statements
98 Selected financial data
102 Management and corporate information
103 Business segments and activities
104 Investor Relations and Shareholder information

Designed by dmicreative www.dmicreative.com

Printed by Park Communications on FSC certified paper. Park is a CarbonNeutral® company and its Environmental Management
System is certified to ISO14001:2004.
100% of the electricity used is generated from renewable sources, 100% of the inks used are vegetable oil based, 95% of press
chemicals are recycled for further use and on average 99% of any waste associated with this production will be recycled.
This document is printed on Hello Silk and Colourplan. The pulp of Hello Silk is bleached using a mixture of Totally Chlorine Free (TCF)
and Elemental Chlorine Free (ECF) processes. Both Hello Silk and Colourplan are made using virgin fibre sourced from FSC certified
forests, both can be disposed of by recycling, incineration for energy recovery or are biodegradable.
 2009
highlights

Highlights

Overview
REVIEW
OPERATIONAL
• New construction awards totaled EBITDA MARGIN

$ 3.16 billion (EGP 17.3 billion). +20.7%

• Year end construction backlog totaled

GOVERNANCE
$ 6.65 billion (EGP 36.5 billion).
• Produced and sold 1.36 million tons of RETURN ON EQUITY

granular urea at an average price of

+14.3%

STATEMENTS
FINANCIAL
$ 266 per ton.
• Fertilizer group contributed to 41.5%
of net income.
DIVIDEND YIELD

+4.0%
2009 2009 2008 2008
EGP millions $ millions EGP millions $ millions

Revenue 21,312.8 3,829.9 20,252.6 3,717.1

EBITDA 4,421.4 794.5 4,800.5 881.1
Net income (after disc. ops) 2,416.6 434.3 3,933.2 721.9
Earnings per share 11.7 2.1 18.9 3.5
Dividends per share 10.0 1.8 10.9 2.0
Capital expenditures 6,427.0 1,154.9 4,440.5 815.0
Total assets 46,857.5 8,543.3 43,025.5 7,823.1
Cash & cash equivalents 5,924.6 1,080.2 8,268.7 1,503.5
Total debt 13,485.4 2,458.7 11,424.7 2,077.3
Minority interest 750.2 136.8 226.7 41.2
Shareholders’ equity 16,392.8 2,988.8 17,354.7 3,155.5
Egyptian Pounds (EGP) and US Dollars ($) figures in millions except per share data. Growth percentages
calculated based on US Dollar figures.

Orascom Construction Industries 1

Annual report 2009
 Letter to
shareholders

Onsi Sawiris
Chairman Emeritus
Dear Shareholders,
OCI has managed to weather difficult global
economic conditions during 2009. Despite low
fertilizer prices and diminished construction
activity in the commercial sector throughout the
year, both our business groups have continued to
deliver solid financial results and create value for
shareholders.

For the year, consolidated revenue rose to

nassef Sawiris
Chairman and Chief Executive Officer
$ 3.8 billion, EBITDA declined to $ 791.9
million and net income fell to $ 434.2 million.
Our consolidated EBITDA margin decreased to
20.7% from 23.6% last year. We continue to
have a strong balance sheet with more than $ 1
billion in cash, even after paying $ 372.4 million
of interim dividends. Based on our results and
our positive outlook for the future, the Board
of Directors has approved an additional cash
dividend of $ 1 per ordinary share.

“WE ENTER THE NEW YEAR WITH A
STRONG BALANCE SHEET AND MORE THAN
$ 1 BILLION OF CASH. WE ARE WELL POSITIONED
TO BENEFIT AS THE GLOBAL ECONOMY RECOVERS
AND WILL CONTINUE TO PURSUE OUR PROVEN
BUSINESS STRATEGIES WHICH HAVE CONSISTENTLY
DELIVERED SOLID FINANCIAL RESULTS.”
CONSTRUCTION GROUP
During 2009, the Construction Group recorded
revenue growth of 6.2% and EBITDA growth
of 22.6% while maintaining an impressive
EBITDA margin of 15.0%. The Construction
Group secured $ 358 million of new work during
the fourth quarter bringing the total value of
new awards for the year to $ 3.1 billion. Our
consolidated construction backlog at year end
was $ 6.65 billion, a decline of only 4.0% from
our record backlog at the end of last year. Our
consolidated backlog was impacted by a 2.1%
decline in the value of Euro-based contracts
and approximately $ 200 million worth of
project scope reductions and cancellations to
BESIX contracts in Dubai. We continue to serve
a diversified client base across Europe, the
Middle East, North Africa and Central Asia with
infrastructure work predominate in our backlog.
Another measure of our success during these
difficult times is that Orascom Construction
rose to #41 from #77 in the annual ranking of
the world’s top 225 international contractors
complied by the Engineering News Record.

In June, Orascom Construction in joint venture

with Aqualia from Spain was awarded Egypt’s

2 Orascom Construction Industries

Annual report 2009

REVENUE EBITDA
3.8 BN 791.9 M 434.2 M 6.65 BN
$ 3.8 BILLION IN 2009 $ 791.9 MILLION IN 2009
COMPARED TO $ 3.7 COMPARED TO $ 878.1
BILLION IN 2008 MILLION IN 2008
first Public Private Partnership (PPP) concession
to build and operate the New Cairo Wastewater
Treatment Plant. The overall contract value
during the 20 year concession period is $ 472
million. The wastewater treatment plant will
have a capacity of 250,000 m3 per day and will
serve over one million people. The Egyptian
Government intends to award several additional
wastewater treatment and desalination plants
under its PPP concessions program during 2010.
Contrack continues to work steadily on the
construction of the Sidra Medical and Research
Center in Qatar in partnership with OHL from
Spain. The Sidra project is the single largest
project our construction group has undertaken
valued at more than $ 2.4 billion. Located in
Doha on the Qatar Foundation’s Education City
campus, the Sidra Medical and Research Center
will have more than 400 beds and offer specialty
care for women and children.
Looking ahead, the Construction Group has
started the new year quite well. BESIX has been
awarded several notable contracts in Abu Dhabi
including the Cleveland Clinic for a total contract
value of € 940 million ($ 1.3 billion), of which
BESIX has a 60% share, and the state guests’
reception airport terminal for € 85 million ($ 118
million). Orascom Construction has also picked
up several new contracts since the beginning
of the year and we are witnessing accelerated
bidding activity in the infrastructure sector in our
core regional markets of Egypt, Qatar and Abu
Dhabi. Both BESIX and Orascom Construction
will also continue to ramp up their presence
in Morocco and Saudi Arabia as both markets
show signs of promise on the back of sizeable
infrastructure spending plans.
FERTILIZER GROUP
During 2009, the Fertilizer Group sold a total of
1.358 million tons of urea at an average price
of $ 266 per ton and sold a total of 384,000
tons of ammonia at an average price of $ 251
per ton. In addition, the Group exported 22,300
tons of ammonium sulfate at an average price
of $ 112 per ton. During the fourth quarter,
NET INCOME
$ 434.2 MILLION IN 2009
COMPARED TO $ 719.8
MILLION IN 2008
the average selling price of urea rose 13.4% to
$ 283 per ton and the average selling price of
ammonia surged 26.0% to $ 274 per ton. We
are optimistic that market conditions for urea and
ammonia will continue to improve during 2010.
During the year, the Fertilizer Group announced
$ 200 million of new capital expenditure
initiatives which include the upgrade of the
annual urea production capacity at Egyptian
Fertilizers Company to 1.6 million tons, the
addition of a new ammonium sulfate production
line with an annual production capacity of
300,000 tons, and the addition of a new urea
ammonium nitrate (UAN) line with an annual
production capacity of 325,000 tons. These new
initiatives are on track to fully contribute to our
results in 2012. Construction of Sorfert Algeria
continues to progress well with the plant 85.3%
complete at year end. Commissioning of the new
plant is scheduled to begin later this year with full
production beginning in early 2011. The Sorfert
plant will be able to produce 2 million tons of
nitrogen fertilizer annually making it one of the
largest plants in the world.
During the year, the Fertilizer Group formed a
strategic alliance with Group Fertipar to supply
and distribute granular urea fertilizer products
in Brazil. Working together with Fertipar, we
shipped more than 169,077 tons to Brazil and
became the largest supplier of urea to market in
2009. We believe this relationship has room to
grow as we pursue other potential opportunities
in the country.
CORPORATE SOCIAL RESPONSIBILITY
As one of the largest businesses in the Middle
East and North Africa, we are committed to
improving the communities where we live
and work. We do this in many ways including
reinvesting our capital in new plants and
businesses in the region which provide essential
supplies or services and provide employment
opportunities both direct and indirectly. We
are committed to maximizing the use of local
resources whenever possible – bringing local
people into our company and developing their
CONSTRUCTION
Overview
BACKLOG
$ 6.65 BILLION IN 2009
COMPARED TO $ 6.9
REVIEW
OPERATIONAL
billion IN 2008
skills, choosing local partners to supply materials
GOVERNANCE
and other services. This differentiates us from our
competitors, increases our operational efficiency,
and ensures our ability to operate uninterrupted
in the communities we serve.
VALUE CREATION
We are confident that our business strategies
will continue to generate exceptional returns
STATEMENTS
FINANCIAL
for shareholders. In construction, we will pursue
industrial and infrastructure projects on a selective
basis in our core geographic markets where
we believe we have a competitive advantage.
In fertilizer, we intend to actively pursue new
greenfield and acquisition opportunities to
increase our global production and distribution
capacity in both the nitrogen and phosphate-
based fertilizer sectors. We are one of the few
companies in the world with the proven ability to
take large, complex greenfield fertilizer projects
from concept to completion often under difficult
working conditions. Over the coming years, we
believe our investments in the fertilizer industry
will generate substantial free cash flows enabling
us to take advantage of emerging opportunities
as they arise while maintaining a strong dividend
payout policy.
We have also embraced new ideas which can
create value for shareholders. In January 2010,
we announced a 50/50 joint venture with
Morgan Stanley to invest in infrastructure assets
in the Middle East and Africa. The proposed
joint venture will capitalize on Morgan Stanley’s
infrastructure investing expertise and on the
strength of OCI’s local and regional presence,
awareness of infrastructure needs to originate
investment opportunities and execution
capabilities. The joint venture emphasizes our
conviction that the Middle East and Africa shall
require a significant increase in infrastructure
spending in order to sustain economic
growth and cater to population growth. The
joint venture is expected to focus on equity
investments in sovereign-backed and greenfield
infrastructure projects.
Orascom Construction Industries 3
Annual report 2009
the business REVENUE BY GEOGRAPHY

Middle East 33.3%

Egypt 19.1%

EUROPE 19.3%

North America 1.8%

South America 2.0%
Asia 7.8%

Africa 1.2%
North Africa 15.5%

The group EBITDA CONTRIBUTION

Orascom Construction Industries is a leading international

construction contractor and fertilizer producer based in Cairo, Egypt.
We are one of the region’s largest corporations with projects and
CONSTRUCTION
investments across Europe, the Middle East and North Africa. 61.9%

Our Construction Group ranks among the world’s top global

contractors and operates under three distinct and separate FERTILIZER
38.1%
business units. Orascom Construction targets large industrial and
infrastructure projects principally in North Africa and the Middle
East. The BESIX Group undertakes major commercial, industrial
and infrastructure projects throughout Europe, the Middle East and
northern and central Africa. Contrack pursues institutional projects in
the Middle East and Central Asia. To complement our construction NET INCOME CONTRIBUTION
businesses, we have investments in manufacturers of fabricated steel
products, glass curtain walling, paints and concrete pipes, as well as
investments in two property management companies.
Our Fertilizer Group produces nitrogen-based fertilizers. We have CONSTRUCTION
58.5%
investments in facilities in Egypt and Nigeria, with one fertilizer plant
under construction in Algeria. These operations alone will rank
FERTILIZER
us among the region’s largest fertilizer producers. We are actively 41.5%
looking for new investment opportunities to grow this business into
a global leader.

4 Orascom Construction Industries

Annual report 2009
“As world economies continue to recover, our industrial and infrastructure

Overview
construction capabilities should be in high demand. Only a handful of
companies in the Middle East and North Africa have the experience,
management capabilities and financial strength to handle large, complex
industrial and infrastructure projects in challenging geographic locations.”
Osama Bishai, Managing Director, Orascom Construction

our strategy
Targeting large, complex construction
projects in emerging markets.
Expanding investments in fertilizer
production and select downstream
activities.
our values
Excellence in every aspect –
premium quality and performance
resulting from our expertise, efficiency,
attention to detail and passion.
Exceptional value – value based on
REVIEW
OPERATIONAL
GOVERNANCE
our core strengths
Our people – their expertise,
hunger for knowledge and passion
to excel. Above all, their loyalty
and commitment to Orascom
Construction Industries.

Working in partnership with local and our local knowledge and our technical that enable us to respond faster than
global leaders.
Investing in the best people and
technologies.
Maintaining our commitment to
quality and safety.
Being a good corporate citizen
wherever we operate.
Providing products and services for
people in developing economies.
Searching for new opportunities in
order to deliver exceptional value.
STATEMENTS
FINANCIAL
the depth of our financial resources, Our resources – capital resources
expertise. our construction competitors’ and
raw materials that enable us to trade
Constructive partnerships – strong, fertilizers at market leading prices.
enduring relationships with clients and
partners based on trust, transparency Our experience – a tradition for
and results. excellence and achievement reaching
back over 50 years; an ability to share
Safety focused – important our clients’ perspective that gives us a
consideration in every aspect of our unique understanding of their needs
operations. throughout the project cycle.
Setting global standards and Our investment capability –
respecting local sensitivities – financial resources that allow us to
putting our expertise and experience partner with clients as both investor
to work for our clients, our and contractor. The ability to self
partners and our host communities. perform and to diversify into new
Developing our people to match industries.
global standards and maintaining a
commitment to use local materials Our entrepreneurial attitude – a
and suppliers. strong appetite for investment and
diversification to grow our business
and increase revenue streams.

Orascom Construction Industries 5

Annual report 2009
Construction

Our Construction Group ranks among the leading infrastructure

contractors in the Middle East and North Africa. During 2009,
66% of new awards were infrastructure contracts. Our backlog
held steady at $ 6.65 billion, of which 78% was in our core
geographic markets of Egypt, Algeria, Qatar and the United Arab
Emirates. Our client base remains secure with regional sovereign
clients representing 54% of our backlog.

6 Orascom Construction Industries

Annual report 2009
 Abu Quir thermal power plant

Construction Group 08
Orascom Construction 10
BESIX Group 14
Contrack 18

Orascom construction BESIX Group Contrack

A leading engineering, procurement and A global multi service group offering engineering, An international engineering, procurement and
construction contractor targeting large industrial, procurement and construction services with core construction contractor focusing on institutional
commercial and infrastructure projects for public competencies in super high rise buildings and projects principally financed by the US
and private clients. Orascom Construction maritime projects. The Group is based in Brussels, government. Contrack is based in Virginia,
is based in Cairo, and traces its roots in the and was founded in 1909. USA and was founded in 1985.
construction industry back to 1950.
Ownership Ownership Ownership
100% 50% 100%
Markets Markets Markets
Active across the Middle East and North Africa. Active across Europe, the Middle East and Africa. Active in Qatar, Bahrain, the UAE, Egypt and
Afghanistan.
Employees Employees Employees
54,000 18,000 8,250
WWW WWW WWW
www.orascomci.com wwww.besixgroup.com www.contrack.com

Orascom Construction Industries 7

Annual report 2009
construction

CONSTRUCTION GROUP

Sidi krir power station

Our Construction Group specializes in large-scale

BACKLOG BY REGION BACKLOG BY SECTOR infrastructure projects. The sector’s high barriers
to entry ensure our strong competitive edge in
our core geographical markets and competencies
and its limited correlation to business cycle
Europe & other Industrial
Algeria fluctuations protects us from inflationary and
18.0% 14.5%
19.7%
other economic cycle risks.
Dubai Commercial
3.6%
Our Construction Group’s focus on sovereign-
25.4%
backed large-scale infrastructure projects in
EGypt the Middle East and North Africa proved to be
27.8% highly advantageous in the midst of the global
Abu Dhabi
15.1% recession. As part of their stimulus efforts,
Infrastructure
60.1% governments in our key markets of Egypt,
qatar Algeria, Qatar and the United Arab Emirates
15.8%
announced significant infrastructure-focused
spending packages with an estimated combined
value of $ 210 billion to be spent in 2010. The
ORDER BACKLOG GROWTH NEW CONTRACTS GROWTH
MENA region as a whole is planning or executing
$ Billions $ Billions
an estimated $ 2.2 trillion worth of infrastructure
projects, of which approximately $ 100 billion are
5.5
6.9 expected to be tendered in the form of Public-
6.7
4.8 Private Partnerships (PPP’s) through 2013. Only
$ 50 billion of these packages were awarded
4.7
during 2009 for concessions in water, waste
3.2 water, power and roads.
2.6
2.3 We expect to see a recovery of private industrial
2.7
2.2 projects in 2011 and 2012, allowing for a more
1.8 1.2 diverse client base. As industrial clients benefit
from the recovery of the global economy, we
2004 2005 2006 2007 2008 2009 2004 2005 2006 2007 2008 2009 expect higher capital spending on new plants
and equipment.

During the year, project scope reductions and

cancellations related to BESIX contracts in
Dubai reduced our consolidated backlog by
approximately $ 200 million, representing 2.7%
of our backlog at the time of cancellation. All
of their contracts have compensation clauses,

8 Orascom Construction Industries

Annual report 2009

Sokhna Port
including cover for demobilization costs to
minimize the impact of cancellations. The risk of
cancellations is expected to be minimal in 2010
due to our focus on sovereign-backed low-risk
infrastructure work, which guarantees a steady
backlog and new awards visibility in the near
term.
POSITIVE OUTLOOK FOR
INFRASTRUCTURE SPENDING
To sustain economic growth and meet the needs
of growing populations, MENA countries need to
invest an average of 9.2% of their annual GDP
through 2015 on infrastructure, representing
$ 75-100 billion per year.
In November 2009, Egypt’s Ministry of
Investment detailed its plan to award a total of
EGP 130 billion worth of projects ($ 24 billion)
by June 2011, or 5.2% of GDP for 2010e and
2011e combined. The infrastructure portion
stands at a significant 62.5% or approximately
$ 15 billion split into 47 projects in water, power,
transportation, and social infrastructure. To
sustain Egypt’s real GDP growth prospects of
7-8% per year, the government has estimated
that it should allocate from 5.5% - 7.0% of
annual GDP to infrastructure.
In Algeria, the government has earmarked
$ 150 billion to be spent on infrastructure
by 2013 on various projects including the
Algiers metro and national motorways worth a
combined $ 22.4 billion and the construction
of 1 million homes to help alleviate its severe
housing shortage. The government also plans to
implement $ 120 billion worth of energy projects
by 2020. Additionally, the country suffers from
water scarcity and inadequate local expertise
in water desalination and distribution projects.
Cairo Metro
Foreign companies have increasingly begun to
invest in this sector to address this need.
Qatar’s “National Vision 2030” aims to
make Qatar a fully advanced country with
high standards of living for its people through
comprehensive spending programs. Infrastructure
development plans include the quadrupling of
electrical power capacity by 2036 and a five-year
$ 3.5 billion water infrastructure development
program to overhaul 99% of the country’s
outdated water supply network. Transportation
will see the most spending in the near term, with
a five-year $ 20 billion road building program
focusing on new roads and related drainage
and infrastructure already announced. Doha will
also be spending $ 25 billion on upgrading the
capacity of its airports, ports and rail network.
In the United Arab Emirates, Abu Dhabi is
planning infrastructure development worth
AED 1 trillion ($ 272 billion) over the next 5-7
years with increased focus on public utility
infrastructure spending. Abu Dhabi has also
announced a $ 68 billion public transport
program to be spent by 2020 which will include
a 340-kilometre-long light rail transit or tram
system, more than 1,500 kilometers of highway
improvements, new buses and ferries, and a
130 kilometer high-speed urban metro. Abu
Dhabi has also launched the construction of
the $ 8 billion Union Railway, which will provide
passenger and freight services across the UAE.
The UAE has announced $ 7.5 billion worth of
projects in water and sewage infrastructure to
be tendered over the next 5 years, and plans to
spend $ 8 billion to increase the country’s power
Overview
REVIEW
OPERATIONAL
Burj Al Arab airport
GOVERNANCE
generation capacity by more than 50% over the
next eight years.
Saudi Arabia has announced an infrastructure
spending package budgeted at $ 130 billion in
key areas, including education, health, water,
transport and power. The government has
progressively implemented PPP projects by
STATEMENTS
FINANCIAL
issuing a Privatization Strategy, which sets out
a framework for private sector involvement in
infrastructure. Saudi Arabia is set to spend an
additional $ 3.16 billion on 6,400 kilometers of
new roads in 2010. In the medium term, the
country has allocated approximately $ 120 billion
in power funding which is needed to achieve its
target capacity expansion of 20 GW by 2019,
while another $ 200 billion is required to meet
water demand over the next 15 years.
Morocco is planning $ 15 billion worth of
infrastructure development through to 2015
with $ 9 billion being spent on energy projects to
keep up with the country’s 7.5% per year power
demand growth. The government has also
put forward plans for an accelerated road and
high speed railways program, aiming to build a
total of 1,500 kilometers of high speed railways
by 2035. Over $ 4 billion worth of projects
for highway expansion, highway construction
and high speed rail links have already been
announced.
Orascom Construction Industries 9
Annual report 2009
construction
Orascom construction
Orascom Construction is a leading engineering,
procurement and construction contractor active in
emerging markets across the Middle East and North
Africa. We target large, complex and demanding
industrial, commercial and infrastructure projects,
which by their nature have fewer competitors
and higher margins. We have earned a reputation
for safely delivering quality work under difficult
conditions on schedule and at competitive prices.
Orascom Construction won $ 2.1 billion in new
awards during 2009, a 68.0% increase over
2008. 25.0% of new awards and 30.6% of the
company’s turnover was from outside Egypt. As
at 31 December 2009, their order backlog was
$ 3.4 billion, an increase of 23.1% over the same
period last year.
With 60 years of construction experience,
Orascom Construction is strategically positioned
to benefit from the surge of infrastructure work
announced by governments in our key regions.
We began to benefit from these spending
plans in 2009 having been awarded Egypt’s first
Public Private Partnership (PPP) in consortium
with Aqualia for the New Cairo Wastewater
Treatment Plant, significant road work including
the Cairo-Alexandria Freeway and several
power and petrochemical contracts.
POWER PLANTS
During 2009, Orascom Construction was
involved in the construction of five power plants
in Egypt and Algeria simultaneously. Work
continued steadily on the Sidi Krir 750MW
Combined Cycle Project in Alexandria for the
West Delta Electricity Production Company
(WDEPC), and on the El Tebbin Thermal
Power Plant 2 x 350MW Gas/Oil Fired
Units in Cairo for Cairo Electricity Production
Company (CEPC). By year-end both projects
were over 95% complete and on schedule for
10 Orascom Construction Industries
Annual report 2009
handover in June 2010. These projects are valued
at $ 102.1 million (EGP 560.0 million) and
$ 186.7 million (EGP 760.0 million), respectively.
Most of the construction works on the solar
island of the Kuraymat Solar Power Plant and
the Combined Cycle Power Plant in Egypt was
completed on schedule by year end. Testing of
the first loop began in December 2009 with all
loop testing scheduled for completion by April
2010. Pre-commissioning and commissioning
activities are expected to proceed alongside the
adjacent combined cycle power plant. Once
commissioning is complete, OCI’s two year
operation and maintenance (O&M) contract
commences.
Work on the Terga Combined Cycle Power
Plant in Algeria, valued at $ 826.1 million (EGP
4.5 billion) progressed on schedule, with the
plant due for commissioning in Q3 2011.
In March, Orascom Construction was awarded
the civil works package for the Abu Qir
Thermal Power Plant 2 x 650MW Gas/Oil
Fired Units in Alexandria, due for completion
in 2013. At $ 258 million (EGP 1.4 billion), the
project exceeds the combined value of both
Sidi Krir and El Tebbin. The scope of work
includes extensive piling, concrete works, two
chimney stacks, underground piping, and the
procurement, fabrication and erection of steel
structures.
BACKLOG BY SECTOR
Commercial
11.4%
Industrial
21.6%
Infrastructure
67.1%
In November, the East Delta Electricity
Production Company (EDEPC) awarded a site
services contract to Orascom Construction for the
Ain El Sokhna Supercritical Thermal Power
Plant Units 1&2 – 2 x 650MW Gas/Oil Fired
Units.
PETROCHEMICALS
Work on the Skikda LNG plant in Algeria
saw high productivity during the year with
the completion of the first package: steel
driven piles. Over 39,000 cubic meters of
concrete were poured and 2,500 meters of
underground piping were laid during the year
as work progressed on the civil works package.
Over 800 concrete piles ranging from 40-65
meters were placed in the ground for the LNG,
propane and butane tanks. Nearly 40,000 cubic
meters of concrete were cast in these piles and
ground slabs. 10 buildings’ concrete structures
are currently under construction. By year-end,
all concrete frame work for the blast resistant
building was completed. Despite some delays
caused by unrest in Algeria towards the end of
the year, work is expected to be completed on
schedule. The foundation work valued at $ 50
million progressed steadily and was completed
in December jointly with Trevi Spa. The scope
of work required the driving of 5,400 pipe piles
totaling 258,000 meters. Further piling works at
the site were completed ahead of schedule for
VINCI, which required the installation of 767
bored piles totaling 46,050 meters.
Between April and May, Orascom Construction
was awarded Lots 1 and 7 of the El Merk
Central Processing Facility and Lot 6 in
consortium with Bentini. OCI’s share of these
contracts exceeds $ 280 million (EGP 1.5
billion). The scope of work covers civil works,
underground utilities, building works, fabrication
and erection of structural over 13,000 tons of
steel, placing of 38,000 cubic meters of concrete
and testing of 16 kilometers of underground
piping. More than 1,000 employees are currently
on-site. The project is scheduled for completion
in Q4 2011 and was approximately 5%
completed at year-end.
BACKLOG BY REGION

Overview
EGypt
53.7%
Algeria
38.7% New Awards

REVIEW
OPERATIONAL
$ 2.1 BN
Middle East Africa
7.3% 0.3% $ 2.1 BILLION IN 2009
COMPARED TO $ 1.4
Cairo Alexandria road BILLION IN 2008

GOVERNANCE
STATEMENTS
FINANCIAL
El Tebbin thermal power plant

Nagaa Hammadi barrage & hydro power plant Sidi Krir power station

FIRST PUBLIC-PRIVATE
PARTNERSHIP IN EGYPT

$ 472 M
New Cairo Wastewater
Treatment Plant

Cairo Metro

Orascom Construction Industries 11

Annual report 2009
construction

Orascom construction

El Tebbin thermal power plant

WATER & WASTEWATER

INFRASTRUCTURE
During the year, the Egyptian Ministry of
Housing, Utilities & Urban Developments
awarded our 50/50 joint venture with Spanish
group Aqualia the country’s first Public-Private
Partnership (PPP), the New Cairo Wastewater
Treatment Plant. The 20-year concession for the
construction and operation of the 250,000 cubic
meter per day plant is valued at $ 472 million
(EGP 2.6 billion). Construction commenced in
Q4 2009 and will take 24 months to complete,
at which time it will serve one million people.
After completion of the plant, the joint venture
company which has been named Orasqualia will
operate and maintain the plant for the remaining
18 years of the concession. Egypt has announced
more wastewater PPP’s and BOT’s to be tendered
as part of its infrastructure-focused spending
package.

In September, work commenced on phase one

of the South Wastewater Treatment Plant
in 6th October City, a 100,000 cubic meter per
day tertiary wastewater treatment plant. The
$ 40.3 million (EGP 221.0 million) greenfield
design-build project was commissioned by the
Egyptian Ministry of Housing, Utilities & Urban
Development and includes a one year operations
and maintenance contract. The fully automated
plant will utilize an ‘extended aeration system’
that produced high quality effluent water with
Skikda low energy consumption.

In December, work commenced on the

intake booster station and pipelines to the
6th October City Water Treatment Plant. The
1.7 million cubic meters per day plant is a 50/50
joint venture with Hassan Allam and is valued
at $ 382.9 million (EGP 2.1 billion). The intake
booster station will feed 6th October City with
raw water using 12 pumps with a combined
capacity of 18 MW and requires piping totaling
118.5 kilometers in length between El Badrashain
and Dahshour. The steel pre-cast and pre-stressed
reinforced concrete pipes will be 2.2 meters
in diameter. The intake booster will include a
fully controllable SCADA system designed to

12 Orascom Construction Industries

Annual report 2009

Kuraymat solar power plant
ensure efficient electrical power consumption
and protect against water leakage. Other work
includes underground water tanks and ancillary
buildings. The project is scheduled for completion
in Q4 2012.
TRANSPORT INFRASTRUCTURE
Work continued on schedule on Emaar Misr’s
Uptown Cairo residential development, for
which we were awarded phase one of the main
roads and utilities. Work on the $ 27.0 million
(EGP 148.1 million) project includes road works,
water, sewage, lighting and electrical networks,
telecommunications, 19 transformer buildings
and a holding tank. The project is scheduled for
completion during Q2 2010.
Work continues on the new air traffic control
tower at Cairo International Airport, which
is due for completion during Q3 2010. The
contract was awarded in June 2007 and is
valued at $ 29.6 million (EGP 162.5 million).
The state-of-the-art 120 meter tower is situated
at the centre of the airport’s three runways.
Construction has proceeded without any
disruption to airport operations.
In Alexandria, the modernization of the Borg
El Arab International Airport is scheduled
for completion during Q2 2010. OCI and Besix
are constructing a new passenger terminal
building capable of serving 1,000 passengers
per hour. Work also includes a cargo terminal
building capable of handling 10,000 tons of
freight per year, aircraft aprons and taxiways, an
administration building, service buildings, a car
park, an aircraft fuel station, a metrological data
centre and air traffic control towers.
During the year we were awarded phase two
of line three of the Greater Cairo Metro
by the Egyptian National Authority for Tunnels.
The $ 140.0 million (EGP 767.9 million) contract
covers the project’s civil, electromechanical and
railway work.
During the year, Orascom Road Construction
completed phase one of the New Assuit road
on schedule. Work on the 112 kilometer road
Smart Village
included excavation and backfilling, construction
of the base course and batching for the road
slopes as well as construction of the asphalt
pavement. New awards during the year included
phase two of the New Assuit road, which
requires ORC to double the road’s lanes through
13.5 million cubic meters of earthwork, 1.4
million square meters of base course work and
2.2 million meters of asphalt work. The contract
is valued at $ 47.4 million (EGP 260.0 million)
and is scheduled for completion in Q3 2011.
Work was also completed on phase three of
the Assuit Sohag link road, which required
over 1.5 million square meters of asphalt works
among other requirements. Phases one and two
of the Assuit road variation, valued at $ 31.4
million (EGP 172.0 million) were also completed.
Work included over 6.6 million square meters
of excavation and backfilling as well as the
transportation of 900,000 square meters of
excavated rock.
As of December 31, 2009, 90% of the Sohag
Airport roadwork was complete. The $ 19.0
million (EGP 104.2 million) contract requires the
construction of runways, aprons and roads for
the new airport.
In May, Orascom Road Construction was
awarded the construction of section 5 of
the Cairo-Alexandria desert road valued at
$ 132.7 million (EGP 727.8 million). The
landmark project consists of upgrading the
existing road into a highway through two double
level u-turns and two high level bridges. Other
work includes the addition of a service road of
two lanes each on both sides of the existing 160
kilometer Cairo-Alexandria desert road. The
project is scheduled for completion in Q1 2012
and was 10% completed as of the end of the
year.
Orascom Road Construction was also awarded
the El Minya-Assuit road during the year.
Works include excavation and backfilling as well
as the construction of the base course, asphalt
pavements and culverts. The project is scheduled
for completion in Q3 2010.
Overview
REVIEW
OPERATIONAL
Ezz Steel factory
GOVERNANCE
BUILDINGS
At the Smart Village Cairo, Orascom
Construction continued to construct ten buildings
with a combined value of nearly $ 210 million
(EGP 1.2 billion). Clients range from banks to
real estate companies and include Commercial
International Capital Holding, HC Securities,
Corplease, Sphinx Real Estate, Smart Village
STATEMENTS
FINANCIAL
Infrastructure, Smart Schools, Beltone
Financial, Bank of Alexandria, Piraeus Bank
and EFG-Hermes.
Work continued on new headquarters for both
Misr for Clearing, Depository and Registry
(MCDR) and BNP Paribas in New Cairo and
on the new $ 23.9 million (EGP 131.1 million)
Oman Embassy in Cairo.
New awards for the year include a $ 54.7 million
(EGP 300.0 million) contract to complete the
finishing work for 31 buildings at the Marassi
Sidi Abdul Rahman waterfront development,
$ 27.3 million (EGP 150 million) worth of
infrastructure work for Uptown Mokattam in
Cairo, the Housing and Development Bank’s
building valued at $ 28.3 million (EGP 155
million) and enabling works for the Industrial
Development and Workers Bank’s building
valued at $ 3.0 million (EGP 16.5 million).
Looking Ahead
Our strategic positioning in the construction
market should enable us to benefit from the
visible pipeline of power and water infrastructure
projects across the Middle East and North Africa
over the coming years. For more than 10 years,
we have played a leading role in energy and
water projects intended to support growth in
emerging markets. We have built a successful
track record and have assembled an impressive
team of construction managers, engineers and
craftsmen. We are confident that Orascom
Construction will continue to be a contractor
of choice for both public and private sector
infrastructure developers in the region.
Orascom Construction Industries 13
Annual report 2009
construction
Besix Group
Established in 1909, BESIX Group is a global multi-
service group offering engineering, procurement
and construction services. The Group operates in the
construction, real estate and concessions sectors of
19 countries. Their core construction competencies
include buildings, infrastructure and environmental
projects, industrial civil engineering, maritime and
port works and real estate development.
BESIX won € 1.3 billion ($ 1.8 billion) in new
awards during 2009, replenishing the backlog
to remain at € 3.0 billion ($ 4.2 billion) as at
31 December 2009. 42.2% of new awards
and 52.7% of the Group’s turnover was from
outside the France-Benelux region. The Group’s
backlog continues to be present in a wide array
of markets, including the Middle East, Benelux-
France region and Central and North Africa.
In January, BESIX concluded the acquisition of
the Franki Foundations Group Belgium and
its subsidiaries. Franki Foundations offers total
solutions for numerous types of foundations,
from engineering, consultancy and design to the
execution of a wide range of techniques for pile
foundations and slurry walls, deep excavations
and soil improvement. It is a renowned leader
in this industry and is known for its technical
robustness and engineering capabilities. Franki
Foundations is an innovator in the ‘deep
foundations’ market.
The Group, which has continued to target large-
scale projects in the Gulf and Europe into 2010,
has been awarded several notable contracts in
Abu Dhabi including the Cleveland Clinic for
a total contract value of € 940 million ($ 1.3
billion), of which BESIX has a 60% share, and the
state guests’ reception airport terminal for € 85
million ($ 114.9 million).
14 Orascom Construction Industries
Annual report 2009
TRANSPORT INFRASTRUCTURE
BESIX has continued to benefit from the surge
in transportation infrastructure tendered by
governments in Europe, Africa and the Middle
East, especially Abu Dhabi, which represents
62.1% of the Group’s total backlog.
In September, construction began on the second
Coentunnel, parallel to the first Coentunnel in
order to relieve heavy congestion during rush
hour. The contract is one of Amsterdam’s largest
Public-Private Partnerships under a Design,
Build, Finance, Maintain (DBFM) structure. The
second tunnel will consist of three fixed lanes
and two variable lanes, which will be opened in
the direction which traffic is the heaviest. As an
18% share of the winning consortium, BESIX will
take part in construction of the second tunnel,
renovation of the first and the maintenance of
both for 30 years. Construction is scheduled for
completion in 2013.
Work on the DoDo tunnel in Utrecht, the
Netherlands is scheduled for completion at the
end of 2010. The Netherlands’ first overland
tunnel, consisting of four 1,650 meter shafts,
will make it possible to channel traffic between
Amsterdam and Utrecht on two five lane
carriageways. The tunnel will relieve congestion
in the area and will replace the old A2 motorway,
creating room for housing.
BACKLOG BY SECTOR
Industrial
11.0%
Infrastructure
27.4%
Commercial
61.6%
The Shamaha-Saadiyat Freeway and
incorporated 1.4 kilometer Sheikh Khalifa
Bridge was inaugurated in October. The scope
included the construction of a 27 kilometer
expressway with three interchanges and 17
bridges, each with ten lanes and all associated
utilities and lighting. The freeway stretches from
Port Zayed on the Abu Dhabi mainland to the
Shahama District, passing through Saadiyat
and Yas islands and was commissioned by
Aldar Properties. This is part of a larger 30
bridge project signed with Aldar to develop the
transportation in and around Yas Island. This
includes the Sheikh Khalifa Bridge, one of the
largest infrastructure developments in Abu Dhabi.
The bridge required 15,000 tons of asphalt and
15,500 tons of reinforced steel to complete.
In November, Yas Island’s Ferrari Experience
superstructure (core and shell) was completed
by Six Construct in time for the first Formula 1
race in Abu Dhabi. Over 25,000 tons of steel
was required to reinforce the structure. The
uniquely shaped 170,000 square meter red roof
is adorned with the largest Ferrari logo ever
created, measuring 65 meters x 48.5 meters.
Work continues as scheduled on phase one
of the Al Sufouh Transit System in Dubai,
the UAE’s first tram network. The network will
have 11 trains and 13 stations running 9.5
kilometers along the Al Sufouh Road to link
Madinat Jumeirah, Mall of the Emirates, Dubai
Marina and Jumeirah Beach Residence. It will also
connect to three stations of Dubai Metro’s Red
Line. The project was nearly 20% complete at
year-end and will be operational by April 2011.
BESIX expects additional work on phase two, a
4 kilometer extension with six more stations.
The Group is currently designing and building
the largest civil engineering project underway
in Equatorial Guinea: the Riaba bridges on
Bioko Island, due for completion mid 2010. The
project involves the construction of three pre-
stressed reinforced concrete bridges of 185, 139
and 192 meters long, spread over a distance of
5 kilometers.
BACKLOG BY REGION

Overview
other
2.7%
Nemetschek
Engineering User
Europe Contest 2009

REVIEW
OPERATIONAL
28.4%

SPECIAL PRIZE
Middle East
OF THE JURY
68.9%
Awarded for the
Tornado Tower in
Brussels square Doha, Qatar

GOVERNANCE
STATEMENTS
FINANCIAL
Maastoren, Netherlands

Saint Avold power plant, France Yas Island’s Ferrari Experience superstructure

Global Water
Awards 2009

WINNER OF
WATER DEAL
OF THE YEAR
Awarded for the Abu
Dhabi Independent
Sewerage Treatment Plant
(ISTP2) with Six Construct

Orascom Construction Industries 15

Annual report 2009
construction

Besix Group

Riaba bridges, Bioko Island, Equatorial Guinea

BESIX was also awarded the Uccle portion of

Belgium’s new 60 kilometer-circumference
Réseau Express Régional (RER) line, which will
encircle Brussels upon completion in 2015. The
scope of work includes expanding the current
infrastructure to four lines over 23 kilometers,
raising all platforms and equipping them for
those with limited mobility and widening the
track bed which will be placed on top of a new
three-storey, 750-place car park. Civil work is
scheduled for completion mid 2011.

MARINE INFRASTRUCTURE
Known for its marine works expertise, BESIX is
currently working on two ports in the Middle
East. In Qatar, Six Construct is working on the
civil engineering package and construction of
pontoons for the expansion of the Ras Laffan
Port for Qatar Petroleum and is on track for
completion in 2011.

Following the successful delivery of Morocco’s

Tanger Med Port in 2008, BESIX was awarded
the second phase, Tanger Med II, in consortium
with Bouygues, Saipem and Somagec. The
€ 825 million ($ 1.2 billion) project, of which
BESIX has a 20% share, requires the construction
of 3,800-metre long main breakwater and a
1,200-metre secondary breakwater, 2,800 metres
of quay, and a 150-hectare logistics platform.
The port is scheduled for completion in 2015.

In November, Six Construct completed the

construction of the 3.8 kilometer quay wall,
inner harbor and dredging and excavation of
approximately 4 million cubic meters at Sharjah’s
Hamriyah Port. The project was the Hamriyah
Free Zone Authority’s largest endeavor to date.

Burj Khalifa, Dubai

16 Orascom Construction Industries

Annual report 2009

Wathba waste water treatment plant
WATER TREATMENT
With a view to strategically position itself in the
rapidly growing water treatment market, BESIX
added additional UAE-based water treatment
contracts to its backlog during the year.
One such project is the Saja’a wastewater
treatment plant in Sharjah’s Al-Saja’a Industrial
area, for which BESIX is constructing the
discharge tanker and sewage treatment plant.
The plant’s total water treatment capacity, which
will be commissioning in three equal phases, will
be 300,000 cubic meters a day of wastewater.
The project is scheduled for completion in 2012.
Work on the Abu Dhabi and Al Ain
wastewater treatment plants was
approximately 32% complete at year end. The
25-year contract to build, own and operate the
plants was awarded to BESIX and Veolia Water
by the Abu Dhabi Water and Electricity Authority
in 2008 for a combined value of a € 525.0
million ($ 752.0 million).
In May, the Jumeirah Golf Estate Sewerage
Treatment Plant in Dubai was renegotiated
with Nakheel in 2009 to have the capacity to
treat 110,000 cubic meters per day. BESIX and its
consortium partners will design build and operate
the membrane biological reactor plant for an
extended period of 30 years from ten.
POWER AND INDUSTRIAL PLANTS
In May, the first phase Georges Besse II
uranium enrichment plant in the South of France
was inaugurated by AREVA. The two wings of
the plant should reach total a capacity of up
to 7.5 million separative work units per year in
2016, enriching uranium up to a maximum of
6%. BESIX is also constructing the plant’s second
phase. The € 3.0 billion ($ 4.3 billion) plant is
a landmark project in France and is one of the
country’s largest investments of the decade.
Mazagan Beach Resort, Morocco
Also in France, BESIX is constructing a new
natural gas-fired power plant at Emile
Huchet, the existing power plant site in Saint
Avold for Siemens. The plant consists of two
units, each having a capacity of 430 MW,
making the facility France’s largest new combined
cycle plant to date. The plant is scheduled to go
into operation in 2010.
BUILDINGS
BESIX is a leading contractor for landmark
buildings across Europe and the Middle East.
Significant projects include the Burj Khalifa,
which was inaugurated on January 4th, 2010.
Standing at a height of 828 meters, the Burj
Khalifa is the world’s tallest man-made structure.
The 160 storey multi-purpose development
houses a 42 floor hotel, 98 floors of residential
accommodation and 21 office levels, including an
observatory. Since construction began in 2005,
it required more than 365,000 cubic meters of
concrete and 10,000 workers to complete.
In October, the 5 star Mazagan Beach Resort in
Morocco was inaugurated. BESIX and Somagec
constructed the 500-room hotel sprawling
over 250 hectares inspired by traditional
Moroccan architecture. The project, valued at
€ 115.0 million ($ 164.8 million) required the
construction of roads and utilities networks, a
waste water treatment and recycling plant and
landscaping.
In Europe, landmark building projects completed
during the year include the construction of
two high-rise towers in the Netherlands: the
165 meter Maastoren, the country’s tallest
building, and the 158 meter New Orleans, the
country’s tallest residential tower. The final phase
of the Schiecentrale, a former power station
being converted into a multifunctional office
complex, was also completed during 2009. The
complex required 5,000 cubic meters of stainless
steel gauze and covers a total surface area of
approximately 40,000 cubic meters.
Overview
REVIEW
OPERATIONAL
Schiecentrale office complex, Rotterdam
GOVERNANCE
In Brussels, the newly renovated Brussels
Square Meeting Center (previously called the
`Palais des Congrès’) was delivered on schedule
in July. The new center offers 35,000 cubic
meters of buildings and 15,000 cubic meters
of parking space, giving a total surface area of
approximately 50,000 cubic meters. The complex
is entered via a 15 meter high glass cube inspired
STATEMENTS
FINANCIAL
by the Louvre pyramid and includes three
auditoriums, a 4,000 square meter, 5.5 meter
high multifunctional exhibition space and twenty
meeting rooms.
LOOKING AHEAD
In October, € 6.5 million ($ 9.3 million) capital
expenditure on the Ambiorix, BESIX’s impressive
backhoe dredge, was decided upon. The
upgrades will provide BESIX with a state-of-
the-art vessel capable of completing BESIX’s
large-scale harbor and marine projects. The
Ambiorix will re-launch at the Tanger Med II
port in Morocco and will complete the project’s
conversion works in June 2010.
As part of the Group’s growth strategy, BESIX set
up a new branch in Saudi Arabia in 2009. Other
markets targeted include Trinidad & Tobago and
the Republic of Azerbaijan, where the Group
completed a dock and storage yard.
In order to capitalize on the growing number of
government-backed awards in its key markets
and develop alternative revenue streams, BESIX
has expanded its range of skills over the past
years to establish itself as a specialist in long-
term concessionary forms of contracts including
Public-Private Partnerships (PPP), concessions
and DBFM’s. BESIX will continue to cater to the
increasingly complex construction projects in its
core competencies while targeting new markets.
Orascom Construction Industries 17
Annual report 2009
construction
Contrack
Contrack is a leading international construction
company. It provides engineering, procurement
and construction services as well as facilities
operation and maintenance primarily on
institutional and infrastructure projects
throughout the Middle East and Central Asia.
Contrack delivered outstanding performance in
2009. New awards of $ 271.0 million sustained
Contrack’s backlog at $ 1.1 billion for the year.
Revenue increased by 19.7% to $ 441.5 million
from $ 368.7 million last year.
Ranked 196th in Engineering News Record’s (ENR)
2009 Top 400 Contractors list, Contrack has
proven the effectiveness of its diversified business
model. With large institutional and infrastructure
focused operations in Qatar and the United Arab
Emirates and projects in Afghanistan, Bahrain,
and Egypt, Contrack is able to successfully
complete large and complex turnkey projects
in several construction competencies and
geographies. As a testament to Contrack’s
superior performance, the United States
Government recognized the company for its
outstanding safety record in Afghanistan, where
Contrack has logged over 63 million man hours
with a Lost-Time Frequency Rate (LTFR) of 0.054.
INSTITUTIONAL
Contrack extended its U.S. Government client
base in 2009 to include the U.S. Air Force, AFCEE
Division, with a new project valued at $ 113.0
million for a design and build contract at Camp
Bastion Airbase near Lashkar Gah, Afghanistan.
Work includes the construction of a 67,900
square meter medium load aircraft apron, a
3,050 meter-long runway with a 900 meter-long
extension to an existing runway and a 45,000
square meter rotary wing parking apron. Work
also includes taxiways, airfield lighting, roads,
site drainage, utilities and power generation. The
18-month project is scheduled for completion by
18 Orascom Construction Industries
Annual report 2009
March 2011. Contrack expanded its Afghanistan
operations and maintenance presence with the
U.S. Army Corps of Engineers by adding more
locations in the country’s most volatile regions on
a contract valued at over $ 199.5 million covering
over 50 different sites throughout Afghanistan.
The U.S. Army Corps of Engineers also awarded
two new contracts at Kandahar Airfield in
Afghanistan currently valued at $ 63.0 million
and an Above Ground Fuel Line in the UAE.
The former contract requires Contrack to
build two fixed wing aircraft parking ramps,
concrete aprons and taxiways, fabric aircraft
shelters, upgrades to the existing Ammunition
Supply Point and Munitions Storage Area and
a Parking Ramp for Rotary Wing aircraft. The
latter project replaces dilapidated rubber and
flexible connected fuel lines with new steel
pipelines. The new fuel line construction is critical
to the Airfields in the region and will resolve
environmentally unsound leakages.
INFRASTRUCTURE
Contrack’s largest project, Qatar Petroleum
Foundation’s Sidra Medical and Research
Center was awarded as a design and build
contract to the Contrack – OHL Spain consortium
in February 2008 for $ 2.4 billion, of which $ 1.1
billion is Contrack’s share.
The medical center is located on the Education
City campus near Weill Cornell Medical College.
It will provide world-class clinical care, medical
education and biomedical research facilities.
Featuring a three-zone design for patient,
BACKLOG BY SECTOR
Infrastructure
81.9%
INSTITUTIONAL
18.1%
family and staff, the all-digital, wireless clinical
care facility will house 382 beds with potential
expansion to 550. The biomedical research
component will house five core facilities.
Construction at Sidra is scheduled for completion
in 2012. Work includes the construction of
the main hospital, the outpatient clinic, an
underground car park, a multi-storey car park
and the central services building, as well as
numerous ancillary buildings and facilities.
Work on Bunya Enterprise’s Al Reem Island
infrastructure and roads project in Abu Dhabi
progressed steadily during the year. Awarded
in February 2008, the $ 318.7 million project
includes the construction of 11 kilometers of
regional roads inside Al Reem Island with a total
asphalt finish area of 280,000 square meters,
a 600 meter by 11 meter underground tunnel,
a satellite traffic control building, a storm water
reservoir and outfall structures, a 520 meter long
earth retaining wall and all underground utilities
including water, irrigation, DC make-up water,
and sewerage. Further work includes all street
lighting, telecomm and IT systems and a natural
gas network. The project will be delivered in
two stages. Stage 1 was delivered on schedule
on July 31, 2009 and Stage 2 is scheduled for
completion in March 2010.
Marassi Sidi Abdul Rahman, Emaar
Properties’ flagship waterfront development
on Egypt’s north coast is on-track for handover
at the end of 2010. Awarded in April 2008, the
$ 73.0 million project includes the construction
199 villas, 64 townhouses, a 9,400 square meter
beach club house and associated facilities.
LOOKING AHEAD
To support its rapidly growing operations in
Qatar and Afghanistan, Contrack purchased over
$ 22.0 million of new construction equipment
in 2009. Contrack will continue to grow its
presence in its key geographies and construction
competencies and expand its human resources
capacity to keep up with upcoming demands.
BACKLOG BY REGION

Overview
Qatar
Egypt 78.3%
1.8%

Afghanistan

REVIEW
OPERATIONAL
16.9%

UAE
Jordan 0.4%
0.1%
Bahrain
Lebanon
2.4%
0.1%
Al Reem Island Al Reem Island

GOVERNANCE
STATEMENTS
FINANCIAL
Qatar Petroleum Foundation’s Sidra Medical and Research Center

Qatar Petroleum Foundation’s Sidra Medical and Research Center

Qatar Petroleum Foundation’s Sidra Medical and Research Center

Orascom Construction Industries 19

Annual report 2009
CONSTRUCTION
MATERIALS
National Steel Fabrication 22
Alico Egypt 24
United Holding Company 25
United Paints & Chemicals 25
National Pipe Company 25
SCIB Chemical 25

National Steel Fabrication Alico Egypt United Paints & Chemicals

Manufacturers of fabricated steel products Fabrication and installation of aluminium and Manufacturers of Dry Mix: cement based
primarily for energy, petroleum, industrial and glass curtain walls, doors, and windows as well ready mixed mortars in powdered form used
construction clients. NSF was founded in 1995. as architectural aluminium works primarily for by the construction industry. United Paints and
building projects. Alico was established in 2000. Chemicals was founded in 1997.

Ownership Ownership Ownership

100% 50% 56.5%
Markets Markets Markets
The company operates from three plants in Egypt The company operates from a plant in Egypt, The company operates from a plant in Egypt,
and one in Algeria, supplying clients primarily in supplying products to clients primarily in Egypt supplying products to clients primarily in Egypt
North Africa, the Middle East and Europe. and North Africa. and North Africa.

Employees Employees Employees

3,650 607 200
WWW WWW WWW
www.nsfegypt.com www.alicoegypt.com www.drymixegypt.com

20 Orascom Construction Industries

Annual report 2009
 Kuraymat integrated solar combined cycle power plant

United Holding Company National Pipe Company SCIB Chemical

Group of companies manufacturing building Manufacturers of precast concrete pipes and Manufacturers of decorative paints and industrial
plasters and chemicals for the construction pre-stressed concrete cylinder pipes primarily for coatings primarily for the construction industry.
industry and provides waterproofing contracting infrastructure projects. SCIB was founded in 1981.
services

Ownership Ownership Ownership

56.5% 40% 15%
Markets Markets Markets
The company operates from three plants in The company operates a plant in Egypt, The company operates a plant in Egypt,
Egypt, supplying products to clients primarily supplying products to clients primarily in Egypt supplying products to clients primarily in Egypt
in Egypt and North Africa. and North Africa. and North Africa.

Employees Employees
500 345
WWW
www.scibpaints.com

Orascom Construction Industries 21

Annual report 2009
CONSTRUCTION MATERIALS
NATIONAL STEEL
FABRICATION
National Steel Fabrication (NSF) is a leading heavy
steel structure fabricator and erector for the
construction industry. NSF ships a sophisticated
range of products to customers across North
Africa, the Middle East and Europe in sectors
including cement, fertilizer, oil & gas and power
generation. With fabricated steel annual capacity
of 120,000 tons, NSF is able to provide clients
with complete solutions to meet all their project
requirements.
2009 saw the full ramp-up of NSF’s fabricated
steel capacity, taking operations from one plant
producing 36,000 tons in 1995 to four plants
with a total production capacity of 120,000 tons
in Egypt and Algeria. The production facilities in
Egypt and Algeria cover a total area of 1 million
square meters.
NSF completed its investment programme for
specialist equipment adding the latest laser
machines for plate thickness, automated CNC
machines and a chemical analysis test machine
to its plant portfolio and employee skills. NSF’s
modern equipment and technologies, combined
with a highly experienced and skilled workforce,
allow the company to deliver unparalleled quality
on a wide range of precise and complex projects.
NSF also implemented its revamped branding
strategy with the introduction of its new
logo, literature and interactive website. The
contemporary image more accurately reflects
NSF’s efficiency, technical expertise and ability to
deliver solutions to clients’ most complex and
sophisticated requirements.
PROJECT UPDATES
During the year under review, NSF completed
several major projects in Egypt, Saudi Arabia and
Algeria including:
22 Orascom Construction Industries
Annual report 2009
Cement
A total of 30,400 tons were delivered for the
supply and fabrication of equipment and steel
structures for the factories of Al Safwa Cement
in Saudi Arabia, Misr Beni Suef Cement in
Egypt and the Syrian Cement Company.
Power
Six contracts for power plant steel works in Egypt
and Algeria were completed totaling 29,400
tons. The Nubaria III combined cycle power
plant, Cairo West thermal power plant,
El Tebbin thermal power plant and Sidi
Krir thermal power plant were completed
on schedule in Egypt along with the Kuryamat
solar power plant – the first of its kind in the
country. Cairo West and Nubaria III are NSF’s first
projects for pressure parts under the cooperation
agreement signed with Babcock-Hitachi KK of
Japan in September 2008 and for TSF S.p.A of
Italy, respectively.
In Algeria, the supply, fabrication and erection
of steel structure, plate works, tank materials
and accessories for the Terga combined cycle
power plant for Sonelgaz was completed using
almost 7,000 tons of fabricated steel.
Oil & Gas
Algeria’s 400 kilometer Skikda Liquid Natural
Gas (LNG) plant received 5,000 tons of steel
piles during the year, completing one of OCI’s
four contracts with Kellogg, Brown and Root.
PRIMARY MARKETS
Tunisia
12.5%
Morocco
2.8%
Egypt
84.7%
Other Industrials
Other projects completed during 2009 include
the 4,500 ton billet caster for Ezz Steel, 3,600
tons of steel structure works and equipment
fabrication for the sugar beet factory of the
Nile Sugar Company and 1,850 tons for the
Burj El Arab Airport in Egypt.
Ongoing work in 2009 totaled the supply of over
45,000 tons of fabricated steel works in Egypt,
Morocco, Tunisia and Algeria to projects ranging
from cement plants to power stations.
NEW CONTRACTS
New contract awards in 2009 surpassed 44,800
tons, the majority of which is scheduled for
delivery in 2010. Significant contracts include:
• Supply and fabrication of more than 16,000
tons of steel structure for the El Merck
Central Processing Facility in Algeria.
• Fabrication and painting of 12,000 tons of
steel structure for the gas/oil fired power
stations units in the Abu Qir thermal power
plant in Egypt.
• Supply and fabrication of the steel structure
and plate works for the Rouifa and Cimatfa
cement factories in Tunisia and Morocco,
respectively.
• Supply and fabrication of the steel structure
and plate works for the TCDRI Cement plant
in Al Areesh, Egypt.
• Supply, fabrication and erection of the steel
structure for the Ezz Steel factory in Egypt.
EXPANSION
In April 2008 the Suez Industrial Development
Company signed over 500,000 square meters
of land in its industrial park in Ain Sokhna to
house NSF’s latest 60,000 ton capacity state-of-
the-art workshop facility. Full ramp-up took place
in 2009 and has approached full production
capacity. With Ain Sokhna now on-stream, total
annual capacity is 120,000 tons.
NSF has further expanded its regional presence
with the establishment of two new offices in
Dubai and Libya, taking the total number of
worldwide branches to 15 offices in 12 countries.
 Overview
FABRICATED STEEL
ANNUAL CAPACITY

REVIEW
OPERATIONAL
120,000
tons
Three plants in Egypt and
one in Algeria
Steel rebar NSF factory

GOVERNANCE
STATEMENTS
FINANCIAL
Damietta Port

Kuraymat integrated solar combined cycle power plant

Production facilities

1,000,000
Sq m

NSF factory

Orascom Construction Industries 23

Annual report 2009
CONSTRUCTION MATERIALS
Construction materials
ALICO
2009 was a year of continued transformation
for Alico. The company welcomed a new Board
member and General Manager along with new
product lines serving the residential sector in its
core markets of Egypt, Algeria, Libya and Sudan.
Among the newly launched products for the
residential sector is a new window system to aid
the construction of villas and compounds.
Following 2008’s review of company operations
and procedures, Alico achieved an impressive
50% increase in revenues during the year. This
was attained through stricter compliance with
schedules, the maximization of labor force
productivity, improvements on project and cost
control procedures, a 30% increase in production
capacity, an expanded product range and deeper
penetration of its export markets.
The company streamlined communication
between its Cairo and Alexandria offices and
with its plant in Ain Sokhna through the
installation of new IT servers, placing all three
sites on one shared network. The new system
has sped up workflow between the sites and
significantly increased Alico’s capacity to store
and process information.
PROJECT UPDATES
During the year under review, Alico completed
major projects with a total combined value of
$ 20.0 million (EGP 109.6 million).
The Fairmont Hotel at Nile City Towers
was completed in March. The $ 1.9 million
(EGP 10.3 million) contract includes the supply
of 600 square meters of curtain walls, aluminum
windows, a skylight and 1,400 square meters of
external aluminum cladding.
Further work was completed at the new terminal
three building at Cairo International Airport.
The prestigious contract worth $ 12.0 million
(EGP 66.0 million) includes the supply of 38,000
square meters of glazed curtain walls and 30,000
square meters of external aluminum cladding.
24 Orascom Construction Industries
Annual report 2009
At the Smart Village Cairo works were
completed on the office buildings of Piraeus
Bank, HSBC and Commercial International
Capital Holding (CICH) for a combined value of
$ 4.1 million (EGP 22.5 million). Other completed
work in Egypt includes a $ 1.4 million (EGP 7.8
million) contract for a private office building and
the Sonesta Cairo Hotel new extension worth
$ 0.6 million (EGP 3.2 million).
Ongoing work in the 2009 backlog include over
$ 29.2 million (EGP 160.6 million) of contracts
in progress, comfortably taking Alico through
to 2011. Projects due for completion in 2010
include the Saudi Arabian Embassy’s Residential
and Mission Towers, three buildings in the Smart
Village Cairo worth $ 3.8 million (LE 20.9 million),
villas and townhouses at Marassi Sidi Abdel
Rahman and five office buildings for high profile
clients worth $ 7.5 million (EGP 40.9 million).
NEW CONTRACTS
New contract awards in 2009 surpassed $ 25.0
million (EGP 139.0 million), a 14.0% increase
over 2008. Significant contracts include:
Banking and Finance
• Aluminum curtain walls, cladding, architectural production capacity and enhance quality. Alico
canopies windows and doors for the new BNP also struck initial agreements to purchase a new
Paribas Bank headquarters in New Cairo
worth $ 2.6 million (EGP 14.0 million).
• A skylight, sun-breaker, aluminum curtain walls
and cladding for the Bank of Alexandria San New machinery to expand production lines will
Paolo building worth $ 1.3 million (EGP 6.9
million).
• Aluminum curtain walls, cladding and doors
for the Housing and Development Bank
worth $ 1.1 million (EGP 6.0 million).
• Aluminum curtain walls, cladding, architectural
canopies and doors for the El Amwal
El Arabia office building worth $ 0.9 million
(EGP 4.9 million).
• Aluminum windows, curtain walls,
cladding and doors for the new National
Development Bank headquarters worth
$ 0.7 million (EGP 3.8 million).
Smart Village
Real Estate Development
• Aluminum windows and doors for villas and
townhouses at Marassi Sidi Abdel Rahman
worth $ 0.8 million (EGP 4.3 million).
• Aluminum windows and store fronts for the
El Souk open mall at Madinaty in New Cairo
worth $ 0.6 million (EGP 3.4 million).
Corporate Offices
• Aluminum curtain walls, windows,
architectural canopies, skylights and suspended
glass walls at the Sphinx office building in
Cairo worth $ 1.9 million (EGP 10.5 million).
• Aluminum curtain walls, doors, windows and
architectural canopies for the Kuwait Real
Estate Investment office worth $ 1.1 million
(EGP 5.9 million).
• Aluminum curtain walls, cladding, sun-breakers
and windows for Act and Incolease, an
advanced computer technology and incolease
company in Cairo worth $ 0.6 million (EGP 3.1
million).
EXPANSION
As part of 2009’s expansion strategy, the
company purchased a new double head saw
machine for aluminum fabrication to increase
glass processing line to expand its market reach
in the glass supply business.
be installed during 2010. Alico also plans to
launch new products in the coming year.

Maadi City Centre mall
UNITED HOLDING COMPANY
In 2009 UPC spun off its investments in Egyptian
Gypsum Company, BASF Construction Chemicals
Egypt and A-Build Egypt to the newly created
United Holding Company (UHC), of which OCI
owns 56.5%.
The Egyptian Gypsum Company is a leading
supplier of building plasters in Egypt; BASF
CC Egypt manufactures chemicals for the
construction industry and A-Build Egypt is a
waterproofing contractor.
UNITED PAINTS & CHEMICALS
United Paints and Chemicals (UPC) is the largest
manufacturer of cement based ready mix mortars
in powdered form used by the construction
industry in Egypt. Its product is sold under the
brand name Dry Mix. During the year, OCI
increased its stake in UPC to 50.6% from 50%.
During the year, the company added a 12,000
ton per year production line at its state-of-the-art
plant at 6th October City, taking its total annual
production capacity to 240,000 tons.
Significant contracts awarded during 2009
include the supply of products to the Porto
Marina and Porto Sokhna resorts in Egypt, as
well as Al Rehab City and Madinat City, both
major new urban developments in New Cairo.
2009 saw the company develop its retail sales
and distribution channels through promotional
demonstrations and workshops across the
country. Both retail and export sales are expected
to continue to grow in contribution in 2010.
Business priorities for 2010 include the
development of the company’s cement based
dry putty products, used for smoothing prior to
coating and paint application as well as UPC’s
Wet Areas Systems, a range of products ensuring
the waterproofing, sealing and adhesion of tiles
and other surfaces.
El Tebbin thermal power plant
NATIONAL PIPE COMPANY
The National Pipe Company (NPC) is Egypt’s
leading manufacturer of precast and pre-stressed
concrete pipes. Pipes are primarily for water
transmission pipelines and wastewater force
mains applications in infrastructure projects.
In August, NPC commissioned a new production
line at its factory in 6th October City, taking its
annual production capacity to 86 kilometers of
concrete piping.
During the year NPL was awarded $ 32.8 million
(EGP 180 million) in new work, taking the
company’s backlog to $ 54.6 million (EGP 300.0
million). Significant projects include 8 kilometers
worth of piping ordered by the Arab Contractors
at 10th of Ramadan City. The pipes ordered are
some of the largest ever produced in the region
with dimensions of 2.5 meters high by 6 meters
long. The project is scheduled for completion
in August 2010. The 6th October Electricity
Company also ordered 73 kilometers worth
of piping, with dimensions of 2.2 meters high
by 6 kilometers long. The first batch of pipes is
scheduled for delivery in May 2010.
Overview
REVIEW
OPERATIONAL
Colour palette
GOVERNANCE
SCIB CHEMICAL
SCIB Chemical manufactures decorative paints
and industrial coatings primarily for contractors
across Egypt. Their factory in 6th October City is
capable of producing up to 70,000 kiloliters of
paint annually. Materials are provided for projects
across the country, often in conjunction with
Orascom Construction.
STATEMENTS
FINANCIAL
During the year the company launched
AQUALAC, the first and only water-based, non-
yellowing enamel available in Egypt. It is a lead
free quick-drying acrylic based paint. The product
has enjoyed successful market integration
through an aggressive marketing campaign by
SCIB’s sales team.
SCIB was also awarded designation as a
Superbrand in Egypt for the third consecutive
year. The award is managed by the Superbrands
organization, an international independent
arbiter of branding.
A new factory adjacent to their current complex
is currently under construction. Once complete in
October 2010, SCIB will be capable of producing
up to 120,000 kiloliters of paint annually.
Orascom Construction Industries 25
Annual report 2009
Property
management
Contrack FM 28
Suez Industrial Development Company 29

Our investments in property management and

infrastructure concessions provide needed services
for commercial and industrial clients in Egypt. These
businesses are expected to continue to deliver solid
financial returns over their lifetime.

26 Orascom Construction Industries

Annual report 2009
 Smart Village

Contrack FM Suez Industrial Development

Integrated property and facilities management Company
company providing a full range of operations and Owner, developer, operator and utility facilitator
maintenance services in Egypt. Contrack FM was of an 8.75 million square meter industrial park
founded in 2004. located in Ain Sokhna, Egypt.
Ownership Ownership
100% 60.5%
Markets Markets
Services are provided to a broad range of Develops industrial land and provides utility
commercial, industrial and residential real estate services for light, medium and heavy industrial
owners in Egypt. users in Ain Sokhna, Egypt.
Employees Employees
2,300 95
WWW WWW
www.contrackfm.com www.sidc.com.eg

Orascom Construction Industries 27

Annual report 2009
Property
management
Contrack FM
Contrack FM is Egypt’s premier facility and
property management services provider, offering
expertise in a full menu of facility services to assist
clients in managing, maintaining and operating
their properties. Contrack FM undertakes all
non-core services, from hard engineering to
housekeeping and janitorial needs for the
maximization of asset value.
2009 was a year of continued growth for
Contrack FM, cementing the company’s status as
Egypt’s leading Facilities Management company
and the number one choice for companies in
the financial sector. Within the first five years
of operations, Contrack FM has grown from a
150-employee company servicing one complex
to employing over 2,300 people in sites across
Egypt.
The company’s newest service center in Abu
Rawash, complete with a central warehouse and
administrative building, opened its doors in 2009
and strategically places Contrack FM to service
all projects west of the river Nile. Contrack FM
continues to finance its growth from its own cash
flow by reinvesting all earnings into the business,
which is reflected in bottom line earnings.
Contrack FM offers total property and facility
management. Services include operation and
maintenance of technical systems, housekeeping,
janitorial, cleaning and catering services,
landscaping, gardening and pest control, security
and risk management. At a time when finances
are tight, the company’s services will maintain
and add value to the physical assets of their
clients.
28 Orascom Construction Industries
Annual report 2009
BACKLOG BY SECTOR
INDUSTRIAL
4%
RESIDENTIAL
1%
MEDICAL
4%
FINANCIAL
17%
CORPORATE
78%
CLIENTS AND CONTRACTS
Contrack FM retained and grew its client
portfolio to reach a total combined value of
$ 12.0 million in 2009, with no cancellations
of services since the company’s inception. The
company provides services to over 70 local and
international client companies in Egypt.
At the Smart Village Cairo, a 300-acre site for
offices of high tech and financial businesses,
Contrack FM provides total facilities management
services to 25 clients in 33 buildings. Services
include electromechanical, civil, façade and
architectural maintenance, janitorial and security
services. The combined value of all Smart Village
contracts is $ 3.6 million (EGP 20.0 million)
annually.
Other on-going full service contracts include
Mobinil and the Nile City Towers complex: two
34-storey office towers with over 200,000 square
meters of office space, valued at a combined
$ 3.2 million (EGP 18.0 million) annually.
In the financial sector, Contrack FM counts
both public and private institutions as clients,
including HSBC Egypt and the Central Bank
of Egypt under on-going annual contracts.
Contrack FM was first contracted by HSBC in
2006 to service 36 branches; today, Contrack FM
provides electromechanical, civil and architectural
Contrack FM
maintenance services to over 70 HSBC locations
including HSBC’s headquarters in Cairo.
Contrack FM continues to provide at-cost
janitorial services to the Children’s Cancer
Hospital Egypt, the region’s first children’s cancer
hospital developed by an international team of
experts to meet the strictest international health
standards.
INVESTMENT
Contrack FM successfully achieved its investment
targets during 2009, receiving ISO 9001
accreditation for quality management and
ISO 18001 accreditation for health and safety.
The Archibus computerized maintenance
management system was also implemented,
allowing Contrack FM to automate the
generation and follow-up of work orders as well
as scheduling for preventative maintenance of all
assets under management.
Both Archibus and other significant employee
and business development investments have
resulted in marked improvement in all services
offered to clients, demonstrated by Contrack
FM’s renewal of all contracts awarded since its
incorporation.
LOOKING AHEAD
With the Abu Rawash service center targeting
a new area in Egypt, more buildings scheduled
for completion at the Smart Village and ISO
accreditation for both quality management and
health and safety, Contrack FM is on-track to
broaden its growth prospects in 2010.
Key targets for the coming year include the
area of New Cairo to the south of the city and
the consideration of possible expansion into
the Gulf.
Suez REVENUE

Overview
TOTAL REVENUE EGP 35.1 MILLION

Industrial ($6.3 MILLION)

Development
Company
LAND SALE
64%

REVIEW
OPERATIONAL
SERVICES & UTILITIES
0.1%

SIDC

GOVERNANCE
The Suez Industrial Development Company
(SIDC) owns an 8.75 million square meter
industrial park in Ain Sokhna Egypt. During 2009
SIDC sold a total of 90,521 square meters of
land, with 3,173,664 square meters remaining

STATEMENTS
FINANCIAL
for sale. Based on client numbers and land sold,
they lead the market in the Suez area.

Clients operating from the industrial park
include four of Orascom Construction Industries’
companies: Egyptian Fertilizers Company
(EFC), Egypt Basic Industries Company (EBIC),
Alico Egypt and National Steel Fabrication
(NSF).
The workshop for Orascom Construction’s
precast concrete products is also located at the
Suez Industrial Development Company (SIDC), as
well as our mobilization unit, warehousing and
workshops for all Ain Sokhna based projects.
By having these companies and facilities based
within SIDC’s industrial park we benefit from
business synergies. Orascom Construction
Industries as a whole benefits from money
staying within the group.
During the year contracts were negotiated and
signed with two new clients and one existing
client for land totaling 90,521 square meters
at a combined value of $ 2.9 million (EGP 15.9
million). The new clients, all freeholders, include
the International Environmental Services
Limited Company (IES) (an oil treatment and
recycling company) and the Poly Kim for PET
Manufacturing Company (manufactures
granules of Poly Ethylene Terephthalate). Our
existing client, the Egyptian Chinese High
Voltage Networks Company (manufactures
high voltage cables), purchased additional land
for its phase 2 expansion.
As the developer and utilities facilitator SIDC is
responsible for all onsite facilities, from irrigation,
roads and street lighting to water, gas, electricity
and telecommunications networks. Client’s
annual maintenance fee includes the provision
and upkeep of all these services. Housing for
employees of SIDC and its clients is also available
at an additional cost.
SITE DEVELOPMENT
During the year major site developments were
initiated and/or completed, including:
• Increasing SIDC’s electricity capacity for existing
and future clients to 25 MVA by installing a
new electricity distributor;
• Completing phase 1 of its landscape and
irrigation network;
• Commissioning of a water pumping station to
increase water capacity to 30,000 cubic meters
per day. This excludes EBIC‘s and EFC’s water
needs of about 42,600 cubic meters per day;
• Construction and operation of HSBC, the first
bank in the Sokhna Industrial Zone, inside
SIDC Industrial Park;
• Obtaining environmental approval for the non-
hazardous solid waste disposal dumping area.
LOOKING AHEAD
In 2010 further improvements are planned,
including:
• Phase 2 of its landscape and irrigation
network;
• Increasing the SIDC Industrial Park landline
services with Telecom Egypt and capacity/
speed with LINKdotNET, an internet and
data service provider, through high-speed fiber
optic cables;
• Phase 2 of its water & electricity network for
new clients;
• Construction and establishment of a central
control center to operate and monitor all of
SIDC’s infrastructure;
• Increasing electricity capacity and cabling for
new clients, such as Verdi (manufactures
ceramics) and NSF.
Orascom Construction Industries 29
Annual report 2009
Fertilizer
manufacture
Fertilizer Group 32
Egyptian Fertilizers Company 34
Egypt Basic Industries Corporation 36
Notore Chemical Industries 38
Gavilon Group 38
Sorfert Algérie 38

Orascom Construction Industries is a leading investor,

producer and distributor in the global nitrogen-based
fertilizer industry. Our fertilizer group outperformed
against the regional commodity prices – selling urea
and ammonia at an average price of $ 266 per ton
and $ 251 per ton respectively.

Egyptian Fertilizers Company Egyptian Basic Industries Sorfert Algérie

Located near the Sokhna Port, the company is Corporation Upon completion, the complex will have the
the largest fertilizer producer and exporter in Located near the Sokhna Port, the company is capacity to manufacture 800,000 tons of
Egypt. the largest ammonia exporter in Egypt. ammonia and 1.2 million tons of granular urea
annually. Located in the industrial zone of Arzew,
it is set to become one of the largest fertilizer
exporters on the Mediterranean Sea.
Ownership Ownership Ownership
100% 60% 51%
Markets Markets Markets
Principally in Europe, North and South America, Off take agreement with Transammonia – a Sales strategy in progress.
Africa and South East Asia. global fertilizer trader.
Employees Employees Employees
847 331 Staffing strategy in progress

30 Orascom Construction Industries

Annual report 2009
 Egypt Basic Industries Corporation

Notore Chemical Industries Gavilon

The plant has a capacity to manufacture 800,000 The largest independent importer of fertilizer
tons of granular urea annually and to blend NPK. into the USA. They provide distribution,
Located in Onne, Cross Rivers State in Nigeria, it merchandising and trading across basic
has direct access to the Atlantic Ocean. agricultural commodities globally.

Ownership Ownership
24% 18.1%
Markets Markets
Principally Nigeria and export markets. Principally in the USA, Mexico and Africa.

Employees Employees
Staffing strategy under review. 930

Orascom Construction Industries 31

Annual report 2009
fERTILIZER

fERTILIZER GROUP

2009 saw the continued growth of our fertilizer

GRANULAR UREA PRICES AMMONIA PRICES
group, beginning with the commissioning of our
MIDDLE EAST, FREIGHT ON BOARD ARAB GULF, FREIGHT ON BOARD
($/TON) ($/TON) 0.7 million ton per year ammonia plant, Egypt
Basic Industries Corporation (EBIC), in May. Its
752
707 successful start-up allowed the facility to sell
over 360 thousand tons of ammonia during
577 the second half of the year. We also increased
our stake in Notore Chemical Industries to 24%
460
418 419 through a capital increase and have carefully
387
monitored the plant’s ongoing rehabilitation.
321
284 267 265 284 Once operational, Notore will produce 0.5 million
277 229 221 tons of urea per year and will have NPK blending
183
capabilities of 0.8 million tons annually.

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Fertilizer prices saw a sharp drop during the

2008 2009 2008 2009 year due to the global commodity slowdown.
Sustained prices below production costs,
combined with a shortage in gas supply in
GLOBAL TRADED UREA 2005-2009 GLOBAL UREA CONSUMPTION
BY REGION 2009 several major exporting countries and difficult
Million TONS
Fertilizer and non-fertilizer use trade finance conditions resulted in significant
totaled 148 million tons, up 4.9% capacity shutdowns in Europe, the Ukraine and
Y-o-Y the Americas throughout the year. During the
36.8 third quarter of 2009, unpredictable weather
34.5 35.0
changes delayed the planting seasons in several
31.4 Asia 73.5%
29.6 importing markets, including India and Brazil,
SoUTH America 6.5% putting further pressure on urea and ammonia
prices. Despite global fertilizer market’s volatility,
North America 6.5%
OCI’s low cost production and growing market
Africa 2.9% share in key importing countries allowed our
plants to continue to operate at full capacity,
Europe 8.3%
making a combined EBITDA margin of 64% at
2005 2006 2007 2008 2009 year-end.
Middle East 3.3%
With half a year’s worth of contribution from
EBIC, our fertilizer group contributed 35% of
overall net income. We are confident that our
new, state-of-the-art production plants, with
long term gas supply agreements at competitive
prices, combined with our sophisticated
distribution network will enable our fertilizer
group to continue to outperform its peers in the
current economic climate.

32 Orascom Construction Industries

Annual report 2009

EDF Suez Gulf Power, gas powered plant
PRODUCT DIVERSIFICATION
As part of our strategy to become a ‘one-stop-
shop’ for nitrogen-based fertilizer consumers and
distributors, we have embarked upon several
initiatives at our plants in Egypt to include the
production of derivative nitrogen-based products
by 2012.
OCI is currently constructing a 325 thousand ton
per year urea ammonium nitrate blending facility
at EFC, scheduled for completion in 2010. OCI
currently produces ammonium sulphate on a
toll-manufacturing basis and expects to complete
its own 300 thousand ton per year ammonium
sulphate production plant during 2012.
GLOBAL TRADING & DISTRIBUTION
NETWORK
During the year, our experienced trading team
extended OCI fertilizer product presence by
penetrating several new markets on all five arable
continents. Through our strategic alliance and
50/50 joint venture with FITCO/Fertipar for the
exclusive supply and import of OCI granular urea,
we were able to acquire over 30% market share
in Brazil, one of the world’s largest consumers of
nitrogen-based fertilizer.
Egyptian Fertilizer Trading (EFT), our trading arm
based in Dubai, trades external OCI-branded
product to create a home in the international
market for Sorfert product coming on-steam in
2011. In its first year of operation, EFT traded
over 1.1 million tons of nitrogen-based fertilizers,
of which 139.1 thousand tons were external
OCI-branded product and 930 thousand tons
were urea produced at EFC. Consequently, our
fertilizer group exceeded its planned sales volume
by nearly 5%, up 4.2% over 2008. Distribution
costs were 7% below budget for the year due to
the team’s intelligent freight management and
capitalization on possible economies of scale.
Egyptian Fertilizers Company
Our ammonium sulphate, produced using OCI
ammonia on a toll manufacturing basis with the
Egyptian Financial and Industrial Corporation
(EFIC), is exclusively marketed by OCI in the
international export market. We have successfully
introduced nearly 22 thousand tons of product
to several markets in Africa, Asia and South
America to unequivocal praise regarding quality.
STRATEGY
Our goal is to become a global leader in the
fertilizer industry, without losing our focus on the
bottom line. It is not our strategy to become the
biggest producer, or to be active in every market,
or to produce every product. Our strategy is
purely to become the most profitable fertilizer
producer.
By investing in new plants utilizing the latest
production technologies in countries with
competitively priced raw materials or feed stocks,
we have positioned our fertilizer group as a high
quality, low cost producer. By developing our
distribution channels in key countries, we are
creating long term customer relationships and
building a recognizable brand identity. Through
implementing this strategy, we will be able to
deliver value to all our stakeholders and generate
exceptional returns for shareholders.
BUSINESS DEVELOPMENT
As a leading industrial contractor with a proven
track record in the construction of fertilizer plants
in partnership with technology leaders such
as ThyssenKrupp Uhde and Kellogg Brown &
Root, we are able to leverage our construction
capabilities with greenfield fertilizer projects,
reducing the time and cost of development and
maintenance.
During 2010, we will focus on the timely
construction of both our fertilizer derivatives
and of Sorfert Algérie, our greenfield ammonia
Overview
REVIEW
OPERATIONAL
Sokhna Port
GOVERNANCE
and urea plant in Algeria. Construction work on
Sorfert Algérie was 85% complete at year end
and is scheduled to begin urea production in late
2010. Sorfert will be able to produce 2.0 million
tons of nitrogen fertilizer annually making it one
of the largest plants in the world.
Our distribution arm intends to expand into new
STATEMENTS
FINANCIAL
markets during the coming year, targeting new
destinations in Africa and Latin America. We are
also exploring opportunities to strengthen our
presence in Sudan, including the use of physical
outlets to overcome trade finance difficulties.
Given our proximity to Sudan, the consequent
freight advantage will maximize our profits.
We will also continue to develop our distribution
channels in Brazil, Western Europe and South-
East Asia, allowing us to quickly respond to the
chronic nitrogen-based fertilizer product deficits
in those markets. By ensuring an established
presence in these markets as a reliable, high
quality producer, we will create a natural route
for Sorfert once it begins production.
BUSINESS SYNERGIES
During 2009, we embarked on several synergy-
building and cost-saving activities leveraging
the proximity and location of EFC and EBIC.
These initiatives have resulted in an additional
56 thousand tons of annual urea production
capacity at EFC, through the construction of
both an ammonia pipeline and a CO2 pipeline
between the plants.
As our product portfolio develops, we will
continue to explore new debottlenecking
opportunities at both EBIC and EFC in close
discussion with our equipment suppliers, and
will continue to seek further tie-ins between our
facilities where it geographically and economically
makes sound business sense.
Orascom Construction Industries 33
Annual report 2009
fertilizer
EGYPTIAN FERTILIZERS
COMPANY
The Egyptian Fertilizers Company is the largest
private sector integrated nitrogen fertilizer producer
in Egypt and the largest Egyptian exporter of
fertilizer. It is capable of producing 1.3 million tons
a year of granulated urea. Both its production lines
were constructed by OCI in 2000 and 2006.
Acquired from Abraaj Capital in February 2008,
Egyptian Fertilizers Company (EFC) is now the
flagship and principal operating business of OCI's
growing fertilizer group. EFC achieved record
sales volumes in 2009 moving 1.358 million tons
of granular urea to end users in Europe, Central
Asia, and North and South America. Average
selling prices declined to $ 266 per ton during
the year, down from the record selling prices
of $ 488 per ton during 2008. Driven by high
demand for its product, EFC ended the year
with a zero stock balance and maintained its 4%
market share of global traded urea supply.
BUSINESS SYNERGIES
The EFC plant is located on the grounds of
Suez Industrial Development Company’s (SIDC)
industrial park in Ain Sokhna and across the
street from the Egypt Basic Industries Corporation
(EBIC) plant. The close proximity of both plants
allowed the realization of synergies with EBIC.
During the year, the fertilizer group management
team identified several cost-cutting initiatives
including bulk purchase of raw materials,
products and services, shared utilities and
34 Orascom Construction Industries
Annual report 2009
equipment and the maximization of how the
products and by-products of both plants are
produced and used. Through management’s cost
initiatives and new procurement processes, EFC
achieved significant cash cost savings during the
year of over $ 10.0 million.
By 2012, EFC will increase production to 1.6
million tons of urea through a production
line revamp and tie-ins with EBIC, including
an ammonia pipeline linking the facilities for
seamless supply of excess ammonia from EBIC
to EFC. This enables essential maintenance of
EFC’s ammonia plant, without disruption of urea
production. During maintenance shutdowns,
EFC will temporarily get all of its ammonia supply
from EBIC.
A second pipeline supplying EFC with EBIC’s
‘waste’ CO2 began flowing in mid-2009. EFC
is able to reduce production costs by using less
natural gas in its production process and EBIC
is able to decrease its pollutant CO2 emissions.
During the year, EFC was able to produce an
additional 56 thousand tons of urea using EBIC’s
CO2, contributing to a lower cash cost per ton.
These and other tie-ins became fully operable in
August 2009.
SALES BY REGION
Middle East 3%
South America 17.8%
North America
11.6%
Other 4.4%
Africa 9.9%
Europe 29.2%
Asia 23.6%
In addition, both plants have been tuned to
share some utilities, primarily electricity and
waste water. This not only generates savings in
capital expenditure, but also allows each plant
to depend on the other for backup in case of
a malfunction, making our operations at both
plants even more reliable.
PRODUCT DIVERSIFICATION
During the year, EFC sold 22 thousand tons
of ammonium sulfate (AS) to the international
export market, produced through its toll
manufacturing agreement with the Egyptian
Financial and Industrial Corporation (EFIC).
Additionally, OCI expects to complete its own
300 thousand ton per year ammonium sulfate
production plant during 2012.
OCI is currently constructing a 325 thousand ton
per year urea ammonium nitrate (UAN) blending
facility at EFC, scheduled for completion in 2010.
 Overview
GRANULAR UREA

1.3

REVIEW
OPERATIONAL
MILLION TONS

EFC EFC
ANNUAL CAPACITY

GOVERNANCE
STATEMENTS
FINANCIAL

EFC EFC

EFC

Orascom Construction Industries 35

Annual report 2009
fertilizer
EGYPT BASIC INDUSTRIES
CORPORATION
Egypt Basic Industries Corporation (EBIC) is
an export-focused state-of-the-art 2,000 ton
per day greenfield ammonia plant. Upon its
commissioning in May 2009, it became the
largest plant of its kind in Egypt.
Orascom Construction Industries is a 60%
stakeholder in EBIC, with the balance of the
equity held by Kellogg Brown & Root (KBR),
government-owned EGAS, and a number of
private investors. Orascom Construction, in
partnership with KBR constructed the plant
over 36 months. KBR supplied its latest and
commercially proven KBR Advanced Ammonia
Process (KAAP) technology.
EBIC’s first shipment set sail from Sokhna Port in
May 2009, transported from the plant to two
40,000 ton port storage tanks via an 8 kilometer
pipeline. EBIC’s storage tank capacity is unique in
the region giving it marketing and vessel logistics
flexibility to take advantage of scale economies in
the global freight market.
EBIC will begin its first full year of production
in 2010, constituting approximately 5% of the
global traded ammonia supply.
36 Orascom Construction Industries
Annual report 2009
SUCCESSFUL COMMISSIONING
EBIC exported over 360 thousand tons of
ammonia during the year in 16 shipments. In
addition, EFC purchased 35 thousand tons of
ammonia for the production of granular urea.
The geographic location of the plant and
its logistics infrastructure give EBIC a unique
advantage in the market place as it is a cost
effective exporter to the east and west of the
Suez Canal having a competitive reach from
the US Gulf Coast to Japan. This advantage is
evident in EBIC’s varied sales destinations, which
include the United States, China, Jordan, Taiwan,
Belgium and South Korea, among others.
BUSINESS SYNERGIES
In the spirit of cost effectiveness and extracting
synergies, EBIC and Egyptian Fertilizers Company
(EFC) actively maintain several storage and raw
materials tie-ins, including water, ammonia,
nitrogen, wastewater and CO2 tie-ins currently in
service. Several other tie-in initiatives are currently
being engineered.
SALES BY REGION
Asia
44.4%
Middle East
19.5%
North America
25.6%
Europe
10.6%
Through a CO2 pipeline, EBIC supplies EFC with
the excess CO2 produced in the manufacture
of ammonia. During 2009, EBIC reduced its
carbon emissions by approximately 80 million
cubic meters. In manufacturing ammonia, EBIC
would have vented its CO2 into the atmosphere.
The pipeline has proven to be beneficial to
the environment and enables EFC to produce
additional urea.
LOOKING AHEAD
With EBIC’s first full year of production beginning
in 2010, OCI is studying the availability of
strategically dedicating storage tanks to EBIC
in chronic deficit markets, facilitating speedy
delivery and increasing the plant’s profit margins.
EBIC is set to benefit from tight supply-demand
balance east of the Suez Canal. This, along with
signs of a strong spring season and EBIC’s ability
to command the best possible market price place
the OCI fertilizer group in a positive starting
position in the coming year.
 Overview
ANHYDROUS
AMMONIA

0.7

REVIEW
OPERATIONAL
MILLION TONS

EBIC ANNUAL CAPACITY

GOVERNANCE
STATEMENTS
FINANCIAL
EBIC

EBIC EBIC

EBIC

Orascom Construction Industries 37

Annual report 2009
fERTILIZER

fERTILIZER

Notore Chemical Industries

NOTORE CHEMICAL INDUSTRIES

In February 2008, OCI acquired a 20% stake in
Notore Chemical Industries when we purchased
all remaining shares in Egyptian Fertilizers
Company. Our stake in Notore grew a further
4% in 2009 through an $ 11.0 million capital
increase.

Once operational, Notore will manufacture

granulated urea as well as specialized bulk
blended NPK fertilizers – compositions of
Nitrogen (N), Phosphate (P) and Potassium (P) –
the three main plant nutrients.

Strategically located in Onne, the plant has an

abundant supply of natural gas and has enough
gas allocation for an additional two production
lines. Its location close to the Atlantic Ocean
makes it easy to both import raw materials and
service the export market. It will be the only
fertilizer manufacturer in Nigeria.

Notore was formed in 2005 when the company

bought the assets of the National Fertilizer
Company of Nigeria. During 2008 the plant has
undergone a rehabilitation program to upgrade
the facility and increase production capacity.
Production is due to recommence during 2011.

Sorfert Algérie

38 Orascom Construction Industries

Annual report 2009
GAVILON Group
NITROGEN FERTILIZERS, Percentage
TRADED OCI VOLUME BY MARKET
Bangladesh
17.6%
USA
22.6%
Pakistan
15.2%
Mozambique
10.2%
Mexico 34.4%
GAVILON
In July 2008, we announced our investment in
the acquisition of the ConAgra Trade Group,
subsequently renamed the Gavilon LLC. We
invested a total consideration of $ 340.0 million
for an effective 18.1% equity stake in the
business alongside Ospraie Management.
Our investment in Gavilon has allowed us to
access several new markets across the Americas
and Asia. In 2009, Gavilon traded over 216
thousand tons of OCI granular urea in countries
including Mexico, Bangladesh and Mozambique.
During the year, Gavilon completed several
expansion initiatives and acquisitions, including
the acquisition of a sugar terminal in Brisbane,
Australia and nine grain facilities across Texas.
Gavilon further expanded its grains distribution
reach by completing its latest grain elevator in
Montana and finalizing the lease agreement of
three Ceres-owned grain elevators located across
Indiana.
Gavilon’s fertilizer operations have also seen
significant expansion with the establishment of
new distribution and merchandizing subsidiaries
in South Africa and Spain. The company has
added two new fertilizer storage facilities in
Mexico and North Dakota, each capable of
storing 40,000 tons of fertilizer product. The
Mexican facility opened its doors in June 2009
Loading ammonia
and features a dry blend plant and truck and
railroad scales. Mexico is the second largest
agricultural market in Latin America, after Brazil.
The new facility allows Gavilon to expand its
reach in Mexico’s 20 million hectares of crops,
ranging from coffee to sugarcane.
Plans for the North Dakota facility include
high-speed, 110-car unit train unloading and
blending capabilities for all three fertilizer inputs.
Construction of the facility began in June 2009
and is scheduled for completion in spring 2010.
Gavilon is headquartered in Omaha, Nebraska
with 930 employees worldwide and 144
facilities on six continents. They provide physical
distribution, merchandising and trading across
basic inputs and outputs, including grains,
feed ingredients, fertilizer and energy products.
They also provide comprehensive logistical
and risk-management services to customers in
the agriculture and energy markets including
commodity infrastructure for agricultural
activities. Gavilon is the largest independent
importer of fertilizer into the United States.
Overview
REVIEW
OPERATIONAL
Sorfert Algérie
GOVERNANCE
SORFERT ALGÉRIE
We have a 51% stake in Sorfert Algérie in
partnership with state-owned oil and gas
conglomerate Sonatrach. When the € 1.6 billion
plant is fully operational, it will be North Africa’s
largest fertilizer production facility. Anhydrous
ammonia and granular urea will be exported
primarily to Western Europe, North and South
STATEMENTS
FINANCIAL
America.
The plant is scheduled for commissioning
during the fourth quarter of 2010, at which
point the 20 year gas supply agreement signed
with Sonatrach in February 2009 commences.
Orascom Construction, in partnership with Uhde
is constructing the new complex, which is located
35 kilometers east of Oran, near three Algerian
ports. Uhde is supplying the process technology.
Engineering, procurement and work on site
started from July 2007 through an early works
agreement signed with both contractors.
As a testament to our commitment to position
ourselves as a ‘local’ company in Algeria, a
comprehensive Sorfert training program for 190
fresh Algerian graduates commenced during the
year. In 2010, 60 of these trainees will receive
between 4-6 weeks of practical training with our
highly skilled operational staff at EFC, ensuring
the Algerian staff’s full understanding of and
expertise in Uhde’s process technology. During
the peak of construction in 2009 there were
5,630 workers on site, of whom 77.0% were
Algerian nationals.
At year end overall progress was 89.1%
complete, with engineering at 97.9%,
procurement at 100% and construction at
55.2%.
Orascom Construction Industries 39
Annual report 2009
Corporate & Social
Responsibility
OCI’s internal community 42
OCI’s greater community 44

The support provided by our home and host

communities is integral to our success. In return,
we believe that it is our responsibility to continue
to earn their support and set global good corporate
citizenship standards by supporting the economic and
social well-being of our stakeholders and communities
while respecting local sensitivities.

40 Orascom Construction Industries

Annual report 2009
The global nature of our industries allows us As a major business, we employ thousands We believe that good corporate citizenship can
the privilege of working in over 25 countries on of people and provide goods and services to provide business benefits and improve business
5 continents. Our fertilizer products optimize thousands of clients in many countries. We have performance by enhancing our corporate
yields, strengthen crops and accelerate growth a commitment to maximize the use of local reputation, lowering our risk profile, increasing
and maturity. With nearly 2 million tons of resources whenever possible – drawing local our attractiveness as an employer, improving our
OCI fertilizer products being directly applied in people into our company and developing their relations with potential investors and our access
over 40 countries, we have produced 3.8% skills, choosing local partners to supply materials to capital, encouraging creativity and innovation
of the world’s traded urea and ammonia in and other services. We also work in a socially inside our company, differentiating our company
2009. Based on our current and completed responsible way – following accepted best from our competitors, increasing our operational
construction projects, we will have built enough practices for corporate governance, corporate efficiency, and ensuring our ability to operate
power generation capacity to provide nearly citizenship and sustainable development. uninterrupted in the communities we serve.
25 million homes with power across Egypt and
Algeria upon completion of the Abu Qir power
plant in 2012. Our work in wastewater projects
will process over 534,000 cubic meters per day
to be used for agricultural irrigation or safely
discharged into oceans and rivers. Our work at
Naga Hammadi alone irrigates 60,000 additional
hectares for agriculture land.

Orascom Construction Industries 41

Annual report 2009
Corporate & Social
Responsibility

OCI’S INTERNAL
COMMUNITY
NUMBER Of
EMPLOYEES

86,000
El Tebbin thermal power plant

Burj El Arab airport

NUMBER OF
APPLICANTS TO
OCI LEADERSHIP
PROGRAM

104

Worker on Sidi Krir power station

42 Orascom Construction Industries

Annual report 2009
In 2009 OCI employed 86,000 people around the
world, a 5.0% increase over 2008. We believe our
burgeoning internal community is fundamental to
the success of our business. Our people’s expertise,
hunger for knowledge and passion to excel make
our business what it is today. It is our strategy to
invest in our people and the technology to help us
look after them.
Training
We are committed to fostering an environment
that encourages employees to seek opportunities
for professional growth and enrichment. We
recognize the importance of training and
development of all staff. Our training budget is
equal to 5% of the company’s annual budget –
in 2009 that equated to approximately EGP 2.5
million ($ 0.5 million).
Our training programs cover four key areas:
• Education of new employees.
• Developing the skills of existing employees.
• Training to solve specific operational problems.
• Succession management.
In addition to these programs we offer financial
assistance to selected employees, enabling them
to significantly improve their effectiveness in our
business and enhance their career opportunities.
We regularly send employees to leading
institutions in America and the United Kingdom
to study specialist subjects in business and
management.
Following annual performance appraisals and in
line with business requirements, we review and
modify the annual training and development
plan. This allows us to develop employee’s
capabilities and competencies in order to meet
our changing business needs and to provide
employees with appropriate opportunities to
improve their performance.
In 2007 our training capability was enhanced
with the launch of the OCI Academy and in
2009 the Onsi Sawiris Institute for Vocational
Training was inaugurated to deliver young new
talent into the business at an operational level.
Both initiatives represent a positive step forward
in the development of our people and our
business.
OCI Academy
In 2007 we launched the OCI Academy, the
center for learning and development for new
and existing employees at Orascom Construction
Industries. The aim of the Academy is to
recognize and nurture talent from within the
business. Through structured training it helps
employees develop their talents, give them the
skills to progress further in their career and help
them work towards promotion.
The Academy launched with the ‘Talent
Program’, a vocational program aimed at
engineering graduates with up to two years
experience working in the field. Students
learn on a 27 month rotation working within
key departments, onsite and at head office.
This exposes students to different working
environments, people and activities and helps
them to develop a thorough understanding
of our business; increase their knowledge and
develop their skills. The program took in 39
students in 2009.
During the year the Academy expanded its
portfolio by adding two more programs under its
umbrella.
The ‘Internship Program’ offers undergraduate
engineering students with an opportunity to
work in OCI during June to August in order
to gain hands on experience to apply the
knowledge they have previously learned in their
respective universities. The selected students are
allocated in different projects and departments
in their selected concentration and are mentored
by an OCI manager. The program took in 20
students in June 2009.
The ‘Leadership Program’ is a competitive
management development program designed
to identify, retain and reward loyal employees by
investing in them through continuous training
and feedback. The program entails both technical
and theoretical training, including management
and soft skills courses, direct coaching, special
role assignments and optional job rotation. Of
the 104 applicants, the program took in 11
students in 2009.
LOST TIME INJURY
Overview
RATE (LTIR)
0.033
Number of lost time
REVIEW
OPERATIONAL
injuries per million hours
worked
GOVERNANCE
A Growing Population
During the year our Human Resources
department was tasked with structuring the
human resources departments of our fertilizer
group and construction subsidiaries. We
successfully established the migration of our
colleagues at Egyptian Gypsum Company,
BASF CC and A-Build Egypt from United Paints
STATEMENTS
FINANCIAL
Company to United Holding Company while
ensuring minimal disruption to operations.
Equal opportunity
Orascom Construction Industries firmly believes
in equal employment opportunity even though
Egyptian law does not impose any affirmative
action program. It is our belief that all employees
should enjoy equal opportunities to develop their
professional careers, and promotion decisions
are always based on objective circumstances and
assessments.
To ensure equality, right at the start of the
employment process we do not ask for
information about religion, gender, or age.
We select people based on their qualifications
and experience. However, by the nature of our
industry and society we do employ more men
than women. We have increased the number of
women employed globally by 18% to 870, of
whom 5% hold management or director level
positions.
Professional Enhancement
We are constantly looking to create effective
solutions which will enhance our people’s
performance and create value for OCI.
During 2010 we will focus on designing and
implementing an organization wide leadership
model and competency framework through a
partnership with SHL, a global behavioral and
ability assessment tools and services provider. We
will continue to work on the improvement of
our succession planning on all levels as well as
review our compensation structure to tie it to the
competency framework.
Orascom Construction Industries 43
Annual report 2009
Corporate & Social
Responsibility

OCI’S GREATER
COMMUNITY
GHG EMISSIONS
REDUCTION

80
MILLION CUBIC METERS
OF CO2 Farmer in Cairo

Refa Tahtawy school

OCI Foundation

44
provided scholarships
to 44 Egyptian graduate
and undergraduate
students to date

A recipient of the Onsi Sawiris Scholarship Program

Donations

$ 2.2 M
total donations during
2009

44 Orascom Construction Industries

Annual report 2009
We contribute to sustainable development and

Overview
provide training and sponsorships in the communities
in which we operate. Our commitment to the social
and economic development of our home country
Egypt is absolute.

REVIEW
OPERATIONAL
GOVERNANCE
Environment Fostering Education potential for success and that can be promoted
We realize that there are threats to the We believe that a high quality, well-rounded as a model to be replicated and adapted by other
environment from our project operations and education promoting critical thinking and institutions.
manufacturing facilities that must be eliminated entrepreneurship is imperative to the positive
or minimized. It is our intention to prevent development of our communities. Accordingly, In 2009 the Foundation continued to provide
environmental pollution during and as a result of we have been a tireless contributor to sustainable grants to fund projects implemented by
our operations. development by providing training and charitable organizations, educational institutions,
sponsorships in the communities in which we local government and private business.

STATEMENTS
FINANCIAL
We take precautions to mitigate possible operate. We have funded and built schools,
environmental threats. We believe in working including the Sohag Military Academy, provided Sponsorship & charitable
closely with our clients, government agencies 44 students with full scholarships to top US and donations
and the public to ensure all environmental issues International universities through the Onsi Sawiris During 2009 we made charitable donations
and concerns are addressed. We abide by all Scholarship Program, financed and coordinated in Egypt totaling EGP 12.3 million ($ 2.2
legal environmental permits and conditions an exchange program with the University of million), primarily to public sector institutions for
issued or enforced by our clients and government Chicago and sponsored countless extracurricular building schools and qualified nongovernmental
agencies. educational programs and competitions. organization for social development projects.

We have educated our ‘superintendents’ and
‘crew’ employees to monitor environmental
threats. All employees in the field are responsible
for reporting environmental threats and taking
the necessary precautions to prevent harm to the
environment.
We undertake initiatives to promote greater
environmental responsibility and encourage
the development and implementation of
environmentally friendly technologies. We
seek specialist advice on environmental issues
to ensure a full understanding of emerging
environmental concerns and the development
and implementation of effective environmental
policies.
As part of our efforts to reduce our carbon
footprint, EBIC and EFC constructed a CO2
pipeline allowing EBIC to supply EFC with
the excess CO2 produced in the manufacture
of ammonia. During 2009, EBIC reduced its
carbon emissions by approximately 80 million
cubic meters, or the equivalent of eliminating
the greenhouse gas emissions of 1,529,637
passenger vehicles.
OCI Foundation
Formed in 2000, the OCI Foundation invests
company resources in educational programs that
improve the communities in which we operate.
Through the Onsi Sawiris Scholarship Program,
the OCI Foundation has provided scholarships
to 44 extraordinary Egyptian graduate and
undergraduate students. To date, we have sent
ten students to Harvard University, eight students
to the University of Pennsylvania, six students
to Stanford University and two students to the
University of Chicago.
The OCI Foundation sent four students to study
at the graduate business schools of Harvard,
Stanford and Northwestern University in 2009.
They too will have the opportunity to study in
fields that will enhance the economic prosperity
of Egypt.
Sawiris Foundation
The Sawiris Foundation for Social Development
works towards the improvement of society
by helping people to help themselves. It
seeks projects that are innovative, answer
socioeconomic needs, clearly demonstrate
We awarded a EGP 5 million ($ 898,505) grant
to the Egyptian Liver Care Society (ECLS),
which aims to provide affordable liver care for the
estimated 10 to 15% of the Egyptian population
affected by Hepatitis C. We also donated EGP
1 million ($ 179,598) to families whose income
was affected by pig culling in Egypt following the
H1N1 outbreak during the year.
We awarded EGP 100,000 ($ 17,970) to
the Corporate Social Responsibility Special
Competition of SIFE Egypt. SIFE Egypt is a global
organization active in 47 countries and 1,700
universities. They are a partnership between
business and higher education institutions
preparing the next generation of entrepreneurs
and business leaders to create a better world
for everyone. SIFE business students form teams
implementing projects to solve world problems,
concentrating on five main areas: market
economics, entrepreneurship, business ethics,
success skills, and financial literacy. The program
helps aspiring entrepreneurs, struggling business
owners, low-income families and children
experience success.

Orascom Construction Industries 45

Annual report 2009
 Cairo Metro

Kuraymat integrated solar combined cycle power plant Smart Village

Sidi Krir combined cycle power plant

GOVERNANCE

Overview
REVIEW
OPERATIONAL
GOVERNANCE
48 Board of Directors
50 Report of the Directors
52 Corporate governance
55 Management’s discussion and analysis of
financial condition and results of operations
60 Report of the Audit Committee of the
Board of Directors

STATEMENTS
FINANCIAL

Orascom Construction Industries 47

Annual report 2009
 Board of directors
NASSEF SAWIRIS CHAIRMAN AND CHIEF
EXECUTIVE OFFICER
Nassef Sawiris is the major shareholder,
Chairman and the Chief Executive Officer of
Orascom Construction Industries. Mr. Sawiris
joined Orascom in 1982 and became the Chief
Executive Officer of Orascom Construction
Industries in 1998. Mr. Sawiris is also one of
the largest shareholders in and a director on
the Board of Lafarge S.A., the world’s leading
building materials conglomerate. He is also a
director of the Dubai International Financial
Exchange (Nasdaq DIFC) and of NNS Holding, a
privately-owned investment group. Mr. Sawiris
holds a BA in Economics from the University of
Chicago, USA. He was born in 1961 and is an
Egyptian citizen.
ONSI SAWIRIS CHAIRMAN EMERITUS AND
NON-EXECUTIVE DIRECTOR
Onsi Sawiris was the founder and President of
Orascom Onsi Sawiris & Co, the original family
partnership involved in trading and contracting.
Mr. Sawiris was named as the Chairman of
Orascom Construction Industries upon its
incorporation in 1998. He is also Chairman of
Orascom Trading Co and serves on the Board
of Directors for Orascom Telecom Holding,
Orascom Hotels and Developments and Orascom
Technology Systems. In 2008, Mr. Sawiris was
made Commander in the Order of the Crown by
His Majesty King Albert II, King of Belgium, and
48 Orascom Construction Industries
Annual report 2009
has held L’Order de Léopold since 1998. Also in
2008, he was awarded the Swedish Royal Order
of the Polar Star in the presence of HRH Princess
Victoria of Sweden. Mr. Sawiris holds a BSc in
Engineering from Cairo University. He was born
in 1930 and is an Egyptian citizen.
SALMAN BUTT DIRECTOR
Salman Butt has held the position of Chief
Financial Officer since 2005. He is an
international banker with over 20 years of
banking experience. He was Head of Investment
Banking for the Samba Financial Group in Saudi
Arabia from 2003-2005. For 18 years prior to
this, he worked with Citibank in Pakistan, Hong
Kong, United Kingdom, Egypt and Saudi Arabia.
Mr. Butt holds an MBA from the University of
Texas at Austin, USA, and a BSc in Industrial
Engineering from the Middle East Technical
University, Ankara, Turkey. He was born in 1959
and is a citizen of Pakistan.
OSAMA BISHAI DIRECTOR
Osama Bishai has worked for Orascom since
1985 and has held the position of Managing
Director of Orascom Construction since 1998.
He played a key role in developing Orascom
Construction’s business, particularly in the oil and
gas sector, and has led the development of the
company’s investments in the fertilizer industry
in Egypt and Algeria. Mr. Bishai holds a BSc in
Structural Engineering from Cairo University and
a Construction Management Diploma from the
American University in Cairo. He was born in
1962 and is an Egyptian citizen.
KARIM CAMEL-TOUEG DIRECTOR
Karim Camel-Toueg joined Contrack International
in 1987, became Vice President in 1990 and
was appointed President in 1998. He is a Board
member of the United States Egypt Friendship
Society, one of the founding members of the
United States Bahrain Business Council and a
Board member and President of the Council
on Egyptian American Relations. Mr. Camel-
Toueg holds a BA in International Business
Administration from the American University in
Washington DC. He was born in 1960 and holds
American and Egyptian citizenships.
JÉRÔME GUIRAUD INDEPENDENT NON-
EXECUTIVE DIRECTOR
Jérôme Guiraud is the Chief Executive Officer
of NNS Capital Ltd, a London based company.
He is also a Board member of the French
cement group, Lafarge, and serves on its Audit
Committee. Prior to joining NNS Capital, he
held various managerial positions within the
Société Générale Group across Europe and the
Mediterranean including Managing Director of
NSGB (National Société Générale Bank) in Cairo
and Chairman of the Executive Board of Société
Générale Marocaine de Banques in Casablanca.
Mr. Guiraud holds an MBA from Le École des
Hautes Etudes Commerciales (HEC Paris). He was
born in 1961 and is a French citizen.

SAMI HADDAD INDEPENDENT NON-EXECUTIVE
DIRECTOR
Sami Haddad is the Chairman and Chief
Executive Officer of Byblos Invest Bank and
a Board member of Byblos Bank. He has
decades of experience in both the private and
public sectors, specifically in finance, politics
and academia. Mr. Haddad worked for the
International Finance Corporation, part of the
World Bank Group for more than 20 years in
a variety of positions including Director of the
Middle East and North Africa based in Cairo.
In 2005 he became Minister of Economy and
Trade in Lebanon, a position which he held
for three years. Mr. Haddad holds an MA in
Economics from the American University in
Beirut. He pursued his postgraduate studies as
the University of Wisconsin-Madison. Mr. Haddad
was born in 1950 and is a Lebanese citizen.
ALADDIN SABA Senior INDEPENDENT
NON-EXECUTIVE DIRECTOR
Aladdin Saba is the founder and Chief Executive
Officer of Beltone Financial, a financial services
firm headquartered in Cairo. Mr. Saba is a
founding member of the Egyptian Investment
Management Association and the Egyptian
Capital Markets Association. In addition to
several international funds, he serves on
the Board of Directors for several Egyptian
institutions, including the Egyptian Exchange
and the Central Bank of Egypt. Mr. Saba holds
an MBA from The Wharton School of Business
at the University of Pennsylvania, a Masters in
Biomedical Engineering from the University of
Pennsylvania and a BSc in Biomedical Engineering
Overview
REVIEW
OPERATIONAL
GOVERNANCE
STATEMENTS
FINANCIAL
from Cairo University. He was born in 1960 and
is an Egyptian citizen.
04 06
02 03 05
01
ARIF NAQVI INDEPENDENT NON-EXECUTIVE
DIRECTOR 09 10
08
Arif Naqvi is the founder and Group Chief 07
Executive Officer of Dubai based Abraaj Capital,
the largest private equity firm in the Middle
East, North Africa and South Asia. Previously he
worked with Arthur Andersen & Co, American 08 ONSI SAWIRIS
Express Bank, Saudi Arabia’s Olayan Group Chairman Emeritus and non-executive Director
and The Cupola Group, which he founded in
02 NASSEF SAWIRIS
1994. Mr. Naqvi is a member of the Young CHAIRMAN AND CHIEF EXECUTIVE OFFICER
Presidents’ Organization, where he was the
Emirates Chapter Chairman from 2002-03. 01 SALMAN BUTT DIRECTOR
He is a member of numerous think-tanks and
policy groups, including the WEF Arab Business 07 OSAMA BISHAI DIRECTOR
Council. Mr. Naqvi holds a Bachelors degree
from the London School of Economics. He was 04 KARIM CAMEL-TOUEG DIRECTOR
born in 1960 and is a citizen of Pakistan.
05 JÉRÔME GUIRAUD
Independent non-executive Director
HASSAN ABDALLA INDEPENDENT
NON-EXECUTIVE DIRECTOR 10 SAMI HADDAD
Hassan Abdalla is the Vice Chairman and Independent non-executive Director
Managing Director of the Arab African
International Bank, an international bank 06 ALADDIN SABA
based in Egypt. He is also a part-time faculty Senior Independent non-executive Director
member of Finance at the American University
in Cairo. Mr. Abdalla holds positions on the 09 ARIF NAQVI
INDEPENDENT non-executive Director
Board of Directors for the Central Bank of Egypt.
Additionally, Mr. Abdalla is a Board member of 03 HASSAN ABDALLA
both Telecom Egypt and the Coca-Cola Bottling Independent non-executive Director
Company of Egypt. Mr. Abdalla holds a BA
and MA in Business Administration from the
American University in Cairo. He was born in
1960 and is an Egyptian citizen. Orascom Construction Industries 49
Annual report 2009
GOVERNANCE
Report of the Directors
The Directors of Orascom Construction Industries (OCI) present their
Annual Report together with the audited consolidated financial statements
for the year ended 31 December 2009.
PRINCIPAL ACTIVITIES AND BUSINESS REVIEW
OCI is a leading construction contractor and fertilizer producer based in
Cairo, Egypt. OCI undertakes large industrial, commercial and infrastructure
construction projects for public and private customers, principally in North
Africa and the Middle East. OCI also produces nitrogen-based fertilizers in
Egypt for export to customers around the world.
OCI is one of Egypt’s largest corporations. OCI shares are listed on the
Egyptian Exchange (OCIC.CA/OCIC EY) and on the London Stock Exchange
(OCICq.L/ORSD LI) through a global depository receipts program.
A review of the group businesses, investing activities, financial performance
and future outlook is contained in the ‘letter to shareholders’ by the
Chairman and Chief Executive Officer on pages 2-3, and in ‘Management’s
Discussion and Analysis’ on pages 55-59.
RESULTS AND DIVIDENDS
The consolidated income statement is shown on page 65. Net income from
continued operations in 2009 was $ 434.3 million (EGP 2,550.2 million). In
2008, it was $735.3 million (EGP 3,998.8 million). The net income for 2008
was $ 984.9 million (EGP 5,443.7 million).
In March 2009, the Company paid dividends totaling $ 206.9 million (EGP
1,164.8 million), $ 1.00 per share (LE 5.62 per share). In September 2009,
the Company paid another dividend in the amount of $ 165.5 million (EGP
918.9 million), $ 0.80 per shares (EGP 4.44 per share).
The Board of Directors proposed payment of a dividend in 2010 amounting
to $ 206.9 million (EGP 1,135.9 million), $ 1.00 per share (EGP 5.49 per
share) based on 2009 results.
The dividend policy of the Company is to distribute profits, after deducting
the legal reserve and legally mandated employees share, in accordance
with the following criteria:
• There should be a dividend distribution every year, and periodical
dividends could be considered.
• There should be sufficient earnings to be retained for future operating
and expansion purposes.
• There should be sufficient cash to discharge liabilities before dividend
payments.
50 Orascom Construction Industries
Annual report 2009
CANCELLATION OF TREASURY SHARES
During 2008, the company had acquired 7,852,253 shares for a total
amount of $ 296.9 million (EGP 1,641.3 million) through a share buyback
program. The Board of Directors proposed the cancellation of these
shares and received approval from shareholders during an Annual General
Meeting held on 30 April 2009. The reduction of shares was recorded in
the commercial register on 28 October 2009.
SPLIT OF GLOBAL DEPOSITORY RECEIPTS (GDRs)
The Board of Directors proposed a split of the Company’s global depository
receipts (GDRs), including the 144A and Reg S GDRs, to reduce the ratio
of ordinary shares to GDRs from a ratio of 2:1 to become 1:1 through a
100% GDR split. This was approved by shareholders during an Annual
General Meeting held on 30 April 2009.
CORPORATE GOVERNANCE
The Company endeavors to observe and conducts its affairs in accordance
with the Egypt Code of Corporate Governance and international corporate
governance best practices. A summary of the Company’s corporate
governance practices is shown on pages 52-54.
CORPORATE SOCIAL RESPONSIBILITY
Information on the Company’s corporate social responsibility activities is
shown on pages 40-45.
SHAREHOLDERS
The shareholding structure as at 31 December 2009 was: Sawiris family
56%, Abraaj Capital 6% and public ownership 38%. The Company is
authorized to issue shares of up to 1% of the issued and paid in capital
to implement its employee share-based payment incentive program.
Information on this program is shown in note 27 to the consolidated
financial statements on page 96.
Directors
The Directors of the Company who served during 2009 are listed on pages
48-49. At an Ordinary General Meeting held on 23 December 2009,
shareholders accepted the resignation of Onsi Sawiris and approved the
appointment of Nassef Sawiris as the Chairman of the Board of Directors.
Mr. Onsi Sawiris will remain as a non-executive director. The Board
consists of ten directors, including six non-executives, five of which are
independent. A resolution to re-elect the Chairman and all members of the
Board for a further three year term will be proposed to shareholders at the
Annual General Meeting.
DIRECTORS’ INDEMNITIES
The Company grants an indemnity to all of its Directors to the extent
permitted by law. These indemnity amounts are uncapped in relation
to losses and liabilities which Directors may incur to third parties in the
course of acting as a Director of the Company, or in any office where such
duties are performed at the request of the Board, or as a result of their
appointment as Directors.
 Overview
REVIEW
OPERATIONAL
EMPLOYEES CHARITABLE DONATIONS
As the Company has operations in a number of countries with different Payments for charitable purposes made by the Group during the year
working environments, it has evolved a decentralised management ended 31 December 2009 amounted to EGP 6.2 million. The primary
structure, with employment policies designed to suit the needs of individual beneficiaries of these charitable donations were public sector institutions
businesses. However, each employing company is expected to comply with and qualified non-governmental organizations for social development
certain key principles in its design and practice of employment policy. These projects.
are:

• to provide an open, challenging and participative environment;
• to enable all employees to utilise their talents and skills to the full,
through appropriate encouragement, training and development;
• to communicate a full understanding of the objectives and
performance of the Group and the opportunities and challenges
facing it;
• to provide pay and other benefits which reflect good local practices
GOVERNANCE
AUDITOR
KPMG (Hazem Hassan) has expressed their willingness to continue as
auditors to the Company and a resolution to reappoint them and to
authorize the Directors to determine their remuneration will be proposed
at the Annual General Meeting.
ANNUAL GENERAL MEETING
The Annual General Meeting will be held at noon on 24 May 2010 at

STATEMENTS
FINANCIAL
and reward individual and collective performance; Nile City Tower, 2005A Cornish El Nil, Cairo, Egypt 11221.
• to ensure that all applicants receive equal treatment regardless of
age, origin, gender, disability, sexual orientation, marital status,
religion or belief; and Approved by the Board
• to ensure that all employees similarly receive equal treatment
and specifically in relation to training, development, and career Heba Iskander
progression. Board Secretary

Individual businesses use a variety of methods to communicate May 2010

key business goals and issues to employees and also consult and
involve their employees through local publications, briefing groups,
consultative meetings, training programmes and working groups to
assist the process of continuous improvement in the way they operate
and do business. Regular publications inform employees of major
business and technical achievements.

Orascom Construction Industries 51

Annual report 2009
GOVERNANCE
Corporate governance
Orascom Construction Industries is committed to the principles of good
corporate governance and has adopted corporate governance guidelines
in compliance with applicable laws and stock exchange regulations. The
Board of Directors (“Board”) believes that good corporate governance
practices align the interests of management, shareholders and other
stakeholders, thereby maximizing the profitability and long-term value of
the company for shareholders.
The Company is subject to the disclosure rules and the listing rules of the
Egyptian Exchange (“EGX”) as set forth in the Egyptian Capital Markets
Authority decree of 18 June 2002, as amended, under the supervision of
the Egyptian Financial Supervisory Authority (“EFSA”). The Company has
been in compliance with the corporate governance, financial reporting
and disclosure provisions of the EGX listing rules throughout the year
ended 31 December 2009. The US Securities and Exchange Commission
(“SEC”) approved the EGX, formerly known as the Cairo and Alexandria
Stock Exchanges, as a “designated offshore securities market” within the
meaning of rule 902(b) under regulation S of the US Securities Act of 1933
on 16 April 2003.
In August 2005, the Egypt Code of Corporate Governance (“the Egypt
Code”) was issued to describe the rules, regulations and procedures
that achieve the best protection of and balance between the interests of
corporate managers, shareholders and other stakeholders. Companies
listed on the EGX are encouraged to comply with the Egypt Code, however
the corporate governance guidelines of the Egypt Code are not mandatory
and are not legally binding.
The Global Depositary Receipts (GDR) of the Company are listed on the
London Stock Exchange (“LSE”) and the Company is therefore subject
to the rules of the LSE as well as the rules of the United Kingdom Listing
Authority (“UKLA”) and the Financial Services Authority (“FSA”). The
Company has been in compliance with its continuing obligations under the
UKLA listing rules throughout the year ended 31 December 2009.
In June 2008, the Financial Reporting Council issued a new edition of the
Combined Code on Corporate Governance (“the Code”) to apply for
reporting years beginning on or after 29 June 2008, and takes effect at
the same time as new FSA Corporate Governance Rules implementing
European requirements relating to audit committees and corporate
governance statements. UKLA listing rules require that companies
incorporated in the United Kingdom include in their annual report and
accounts an additional disclosure statement in relation to how the
company applies the principles in section 1 of the Code and an explanation
of any non-compliance. As an overseas company with a secondary listing
by the UKLA, the Company is not required to present this additional
disclosure statement.
The shares and global depositary receipts of the Company are not
registered under the US Securities Act of 1933 and the Company is not
subject to US securities laws or the rules and listing standards of the SEC or
the New York Stock Exchange (“NYSE”). In July 2002, the US Government
passed the Sarbanes-Oxley Act which has introduced a number of changes
to the corporate governance, disclosure and reporting requirements
52 Orascom Construction Industries
Annual report 2009
of US domestic and non-US registered issuers. The Sarbanes-Oxley Act
codifies the view that company management should be aware of material
information that is filed with regulatory authorities and released to
investors, and should be held accountable for the fairness, thoroughness
and accuracy of that information. In November 2003, the NYSE issued new
corporate governance rules for listed companies which were approved
by the SEC. The corporate governance standards contained in section
303A.00 of the NYSE listed company manual allow certain exemptions
for foreign private issuers and controlled companies. The Company is not
required to comply with the provisions of the Sarbanes-Oxley Act or the
NYSE corporate governance rules.
The Board continues to monitor developments in corporate governance
and the actions taken by regulators worldwide to improve financial
reporting and disclosure. The Board has reviewed the recent changes
in applicable securities laws and stock exchange regulations and has
concluded that the Company is in compliance with all of those provisions
which are currently in force. In addition, the Board has chosen to make the
following voluntary disclosure to assist shareholders in their evaluation of
the corporate governance practices of the Company.
BOARD OF DIRECTORS
At an Ordinary General Meeting held on 23 December 2009, shareholders
accepted the resignation of Onsi Sawiris and approved the appointment
of Nassef Sawiris as the Chairman of the Board of Directors. Mr. Nassef
Sawiris also serves as the Chief Executive Officer of the Company. Although
the Egypt Code and the Code recommend that the roles of chairman and
chief executive officer not be exercised by the same individual, the Board
believes that Nassef Sawiris will provide responsible leadership ensuring
that the Board is able to discharge its duties effectively. Mr. Onsi Sawiris
will remain as a non-executive director and will continue to chair the
Compensation committee and Nominating and Corporate Governance
committee.
The Board reviews the status of all the directors annually and determines
who is to be regarded as independent. The Board has adopted a definition
of “independent” which complies with the provisions set out in the
Egypt Code, the Code and Section 303A.02 of the NYSE listing rules. The
process and criteria used by the Board to determine the independence of
each director is detailed in the Corporate Governance Guidelines of the
Company. Aladdin Saba, Hassan Abdalla, Sami Haddad, Arif Naqvi, and
Jerome Guiraud are considered independent non-executive directors. The
Board, therefore, consists of ten directors, including six non-executives,
five of which are independent. The non-executive directors have elected
Aladdin Saba to serve as the Senior Independent Director and lead non-
management director.
The Board met eight times during the year. The Board has a formal
schedule of matters reserved to them for decision which includes approval
of the long-term strategic objectives and business plans of management,
major corporate transactions including significant capital allocations
and expenditures, and compensation of the chief executive officer and
executive officers of Company. The directors were given appropriate
documentation in advance of each board meeting. All directors have

had access to the services of the Company Secretary and have been
empowered to seek independent professional advice at the Company’s
expense. The non-executive directors are encouraged to meet privately in
regular executive sessions without management participation during the
year.
The Board maintains an orientation program for new directors. This
program includes briefings by senior management to familiarize the new
directors with the Company’s strategic plans, financial statements and key
policies and practices. The Board also maintains a continuing education
program for all directors to assist them in carrying out their duties and
responsibilities.
CORPORATE GOVERNANCE GUIDELINES
The Board has adopted Corporate Governance Guidelines (“Guidelines”)
to provide a framework for the effective governance of the Company
in an effort to enhance long-term shareholder value. The Guidelines
address several key governance issues and principles including board
responsibilities, director qualifications, director responsibilities, board
structure and operations, board committees, executive sessions, access to
management and independent advisors, director compensation, director
orientation and continuing education, management evaluation and
succession, board performance evaluation, and relations with shareholders.
The Guidelines are publicly available from the Company’s website www.
orascomci.com and a copy may be requested by shareholders from the
Company’s Investor Relations Officers. The Board believes the Guidelines
adopted generally comply with the provisions set out in the Egypt Code,
the Code and Section 303A.00 of the NYSE listing rules.
BOARD COMMITTEES
The Board has established three committees to assist it in discharging
its oversight responsibilities: Audit, Compensation, and Nominating and
Corporate Governance. The purpose and responsibilities of each committee
are described in their respective charters. Members of the committees
meet the independence and experience requirements to the extent
required under applicable securities laws and stock exchange regulations.
Committee members have access to the services of the company secretary
and have been empowered to seek independent professional advice at the
Company’s expense.
The Audit Committee consists of three independent non-executive
directors and is chaired by Aladdin Saba. The Board has determined that
all committee members have recent and relevant financial experience
and shall be regarded as financial experts. The Audit Committee met five
times during the year. the primary purpose of the Audit Committee is to
(a) to assist the Board in its oversight of (i) the integrity of the Company’s
financial statements, (ii) the Company’s compliance with legal and
regulatory requirements, (iii) the independent auditor’s qualifications and
independence, and (iv) the performance of the Company’s internal audit
function and independent auditors, and (b) to prepare and publish an
annual Committee report and such other reports to the extent required
under any applicable securities laws and stock exchange regulations. The
role and responsibilities of the Audit Committee are set out in written terms
of reference, the Audit Committee Charter, and includes the appointment,
Overview
REVIEW
OPERATIONAL
compensation and retention of the independent auditor, review of the
Company’s interim and annual financial statements with management and
the independent auditor, and review of the Company’s internal control and
risk management systems.
The Compensation Committee consists of three directors and is chaired
by Onsi Sawiris. The Compensation Committee met three times during the
GOVERNANCE
year. The primary purpose of the Compensation Committee is (a) to assist
the Board in its oversight of all matters relating to director and executive
officer compensation and (b) to prepare and publish an annual Committee
report on director and executive compensation and such other reports
to the extent required under any applicable securities laws and stock
exchange regulations. The role and responsibilities of the Compensation
Committee are set out in written terms of reference, the Compensation
Committee Charter, and includes the review, evaluation and approval of
STATEMENTS
FINANCIAL
director and executive officer compensation, incentive-compensation plans
and equity-based plans. In determining the compensation of the directors
and executive officers of the Company, the Compensation Committee
considers the Company’s performance and relative shareholder return,
the compensation level of directors and executive officers at comparable
companies, and the compensation of the directors and executive
officers in past years. No director is solely involved in deciding their own
compensation. Executive officers do not receive additional compensation
for their service as an executive director. Non-executive directors receive an
annual stipend and may participate in the share-based incentive program
of the Company.
The Nominating and Corporate Governance Committee consists
of three directors and is chaired by Onsi Sawiris. The nominating and
Corporate Governance Committee met three times during the year.
The primary purpose of the nominating and Corporate Governance
Committee is to assist the Board in (a) identifying individuals qualified to
become Board members and recommending to the Board the director
nominees for the next annual meeting of shareholders, (b) recommending
to the Board director nominees for each committee of the Board, (c)
developing and recommending to the Board a set of corporate governance
guidelines applicable to the Company, (d) overseeing the evaluation of
the Board and management, and (e) preparing and publishing an annual
Committee report on corporate governance and such other reports to the
extent required under any applicable securities laws and stock exchange
regulations. the role and responsibilities of the nominating and Corporate
Governance Committee are set out in written terms of reference, the
nominating and Corporate Governance Committee Charter, and includes
determining on an annual basis the independence of each director as
may be required under any applicable securities laws and stock exchange
regulations, the compliance of each director and executive officer with the
Company’s code of business conduct and ethics, and such other activities
as the Board may assign to the committee from time to time.
Orascom Construction Industries 53
Annual report 2009
GOVERNANCE
Corporate governance continued
INTERNAL CONTROL AND RISK MANAGEMENT
The Board confirms that there is an ongoing process for identifying,
evaluating and managing the significant risks faced by the Company, that
the process has been in place for the year under review and up to the date
of approval of the annual report and accounts, that the process is regularly
reviewed by the Board and accords with the guidance on internal control
contained in the Egypt Code and the Code.
The Company maintains a sound system of internal controls and
risk management which is embedded in its operations, is capable of
responding quickly to evolving risks to the business arising from factors
with the company and to changes in the business environment, and
includes procedures for reporting immediately to appropriate levels of
management any significant control weaknesses that are identified
together with corrective action being undertaken. The Company’s system
is designed to manage rather than eliminate the risk of failure to achieve
business objectives and can only provide reasonable and not absolute
assurance against material misstatement or loss.
The business of the Company is conducted by its employees, managers
and executive officers, under the direction of the Chief Executive Officer
and the oversight of the Board, to enhance the long-term value of the
Company for its shareholders, and to discharge its social responsibility. The
Board is elected by shareholders to oversee and counsel management.
The Board acknowledges that it is responsible for the Company’s system
of internal controls and for reviewing its effectiveness to safeguard
shareholders’ investment and the Company’s assets.
The Audit Committee of the Board reviews the Company’s internal
control and risk management systems, monitors the effectiveness of
the Company’s internal audit function, identifies matters in respect of
which it considers that action or improvement is needed, and makes
recommendations to the Board as to the steps to be taken.
The Audit Committee relies on periodic reports from the Company’s
executive officers, senior financial managers, internal audit staff, and
external auditors to obtain reasonable assurance that appropriate controls
are in place and functioning effectively.
The Chief Executive Officer (CEO) and the Chief Financial Officer (CFO) of
the Company are responsible for the day-to-day control of the Company’s
operations and for the design of internal control and risk management
systems. The CEO and CFO are responsible for the disclosure of all
significant deficiencies and materials weaknesses in the internal control
over financial reporting and any fraud, whether or not material, which
involves management to the Audit Committee and External Auditors.
These executive officers also are held responsible for the preparation and
integrity of the Company’s published financial statements which shall
fairly present in all material respects the financial condition and results of
operations of the Company.
CODE OF BUSINESS CONDUCT AND ETHICS
The Board has adopted a code of business conduct and ethics which
contains the policies that relate to the legal and ethical standards of
conduct that the directors, executive officers and employees of the
Company are expected to comply with while carrying out their duties and
54 Orascom Construction Industries
Annual report 2009
responsibilities on behalf of the Company. This code is intended to focus
the Board and management on areas of ethical risk, provide guidance to
personnel to help them recognize and deal with ethical issues, provide
mechanisms to report unethical conduct, and help to foster a culture of
honesty and accountability.
No code or policy can anticipate every situation that may arise. The
Company expects each director, executive officer and employee to act with
honesty and integrity, to exercise independent professional judgment and
to deter wrongdoing in the conduct of all duties and responsibilities on
behalf of the Company.
RELATIONS WITH SHAREHOLDERS
The Board believes that communication with shareholders, institutional
investors, the financial community, the media, and other third parties is
best handled by the Chief Executive Officer and designated management
representatives of the Company. The Company operates a structured
program of investor relations, based on formal announcements and
publications relating to significant events and financial results, in
compliance with applicable securities laws and stock exchange regulations.
To ensure fair disclosure to all stakeholders at the same time, the Company
refrains from disclosing any information specifically designated to financial
analysts, financial institutions or other parties before disclosing the
information to the market as a whole. Directors, executive officers and
employees are required to maintain the confidentiality of information
entrusted to them by the Company or its customers, except when
disclosure is authorized or legally mandated.
The Company has appointed Investor Relations Officers whose
responsibility is to provide information and answer queries of stock
exchange officials, shareholders and institutional investors. Information
about the Company including interim and full year financial results and
other major announcements is also published on the Company’s website
www.orascomci.com.
The Chairman of the Board, Chief Executive Officer, Senior Independent
Director and other authorized directors and investor relations personnel
maintain a dialogue with representatives of institutional and other
shareholders regarding long-term business strategies, financial performance
and corporate governance in order to establish a mutual understanding
of objectives. The annual general meeting also provides an opportunity
for individual shareholders to meet and communicate with the Board
to develop a better understanding of the Company’s operations and
prospects. All Directors are expected to attend the annual general meeting
absent exceptional cause. Shareholders who wish to communicate with
the Board may correspond in writing with the Senior Independent Director
at the principal office of the Company. The Senior Independent Director
will notify the Board or the chairperson of the relevant committee of the
Board regarding those matters that are appropriate for further action or
discussion.
GOING CONCERN
After making enquires, the directors have formed a judgment, at the time
of approving the accounts, that there is a reasonable expectation that the
Company has adequate resources to continue in operational existence for
the foreseeable future. For this reason, the directors continue to adopt the
going concern basis in preparing the accounts.
Management’s discussion and analysis of

Overview
financial condition and results of operations

The following discussion and analysis should be read in conjunction with
the audited consolidated financial statements of Orascom Construction
Industries (OCI) for the year ended 31 December 2009. These consolidated
financial statements have been prepared in accordance with Egyptian
Accounting Standards (EAS), which are identical to International Financial
Reporting Standards (IFRS), except in the two instances indicated on
page 57.
REVIEW
OPERATIONAL
OCI has two operating urea plants in Egypt (Egyptian Fertilizers Company
producing urea and Egypt Basic Industries Corporation producing
ammonia) and has investments in an ammonia and urea complex in Algeria
(Sorfert Algérie) and a urea plant in Nigeria (Notore Chemical Industries),
which are currently under construction. Selling prices of fertilizers showed
signs of recovery during the year resulting in a steadier distribution of
earnings. Profitability margins remained strong as production costs

OVERVIEW
OCI is a leading construction contractor and fertilizer producer based in
Cairo, Egypt. It undertakes large industrial, commercial and infrastructure
construction projects for public and private customers, principally in North
Africa and the Middle East. OCI also produces nitrogen-based fertilizers in
Egypt for export to customers around the world.
GOVERNANCE
remained low.
A substantial portion of the company’s consolidated revenue, operating
expenses and long-term debt is denominated in foreign currencies. As
such, OCI uses US Dollars as its functional currency. Significant changes
in the exchanges rates of operational currencies (US Dollars, Euro,
Egyptian Pounds, Algerian Dinars and Nigerian Naira) therefore can have
a material effect on the reported and actual financial performance of the

In 2009, we continued to develop our fertilizer group by entering
into several distribution joint ventures and studying new investment
opportunities. As a fertilizer producer, OCI will own and operate plants
located in Egypt, Algeria and Nigeria which will have an annual combined
production capacity of 4.8 million tons in 2012. At that time, we will
become ranked among the world’s top five producers of nitrogen based
fertilizers.
STATEMENTS
FINANCIAL
company. The company manages its foreign exchange cash flow risk on a
consolidated basis by matching its foreign currency-denominated liabilities
with continuing sources of foreign currencies.
The amounts of taxes payable remained favorable as the profit tax rate in
Egypt is 20%, and higher allowable depreciation rates allow the company
to defer taxes.

The company generates revenue from continued operations primarily

from its construction services and from the sale of fertilizers. The primary
expenses of the company include direct materials used in construction,
natural gas used for the production of fertilizers, raw materials, labor
and overheads. The major factors which have had, and are expected to
continue to have, a significant impact on the results of operations and
financial condition of the company are:

• The demand for construction services on large commercial, industrial

and infrastructure projects in the geographical markets served.
• Changes in global fertilizer supply and demand and its impact on the
selling price of our products.
• Foreign currency exchange rates.
• The amount of taxes payable.

Demand for construction services on large projects is affected by changes

in the general state of economic activity, foreign direct investment flows,
foreign aid flows and government investment incentives. The timing of
awards of major construction projects can result in significant fluctuations
in the company’s revenues and earnings between periods. During 2009, in
spite of the global economic conditions, the company continued to have
significant growth in the number and total value of projects undertaken
solely by OCI or with other partners in the form of joint ventures. The
backlog continues to grow, especially in the Middle East. OCI will focus on
accelerating the development of its construction operations and investment
in infrastructure projects.

Orascom Construction Industries 55

Annual report 2009
GOVERNANCE
Management’s discussion and analysis of
financial condition and results of operations
continued
FORWARD LOOKING STATEMENTS AND RISK
MANAGEMENT
We discuss expectations regarding future performance, events and
outcomes, such as our business outlook and objectives, in annual
and quarterly reports, press releases and other written and oral
communications. All such statements, except for historical and present
factual information, are “forward looking statements,” and are based
on financial data and our business plans available only as of the time the
statements are made, which may become out of date or incomplete. We
assume no obligation to update any forward looking statements as a
result of new information, future events or other factors. Forward looking
statements are inherently uncertain, and investors must recognize that
events could be significantly different from our expectations. Highlights of
our risk management are as follows:
ABILITY TO ACHIEVE BUSINESS PLANS
We are primarily a construction company and rely on continued demand
for our services. We are also producers of fertilizers and rely on distribution
of our products at favorable prices. To achieve business goals, we must
develop and provide services that appeal to our customers and sell at
competitive prices. Our continued success is dependent on the quality
and pricing of services and operations, and on our continued positive
reputation. This means we must be able to obtain and manage our
resources at competitive cost. Our success is also dependent on effective
marketing programs in an increasingly difficult environment and conditions.
Our ability to obtain and execute contracts will determine the extent
to which we are able to grow existing operations profitably, especially
with respect to the types of projects and geographic markets (including
developing markets) in which we have chosen to focus. There are high
levels of competitive activity in the environments in which we operate.
To address these challenges, we must respond to competitive factors,
including pricing and industry terms, and carefully select our partners. We
must manage each of these factors, as well as maintain mutually beneficial
relationships with our key customers, in order to effectively compete and
achieve our business plans. Since our goals include a growth component
tied to acquisitions, we must manage and integrate key acquisitions,
including achieving the cost and growth synergies in accordance with
stated goals.
COST PRESSURES
Our costs are subject to fluctuations, particularly due to changes in building
materials prices, raw materials, and cost of labor and foreign exchange.
Therefore, our success is dependent, in part, on our continued ability to
manage these fluctuations through pricing actions, cost savings, sourcing
decisions and sound contracting practices. We also must manage our debt
and currency exposure, especially in volatile countries. We need to maintain
key manufacturing and supply arrangements, including subcontracting and
sole supplier arrangements. We must implement, achieve and sustain cost
improvement plans, including our outsourcing projects and those related to
general overhead and workforce rationalization.
56 Orascom Construction Industries
Annual report 2009
GLOBAL ECONOMIC CONDITIONS
Economic changes, terrorist activity and political unrest may result in
business interruption, inflation, deflation or decreased demand for our
products. Our success will depend in part on our ability to manage
continued global political and/or economic uncertainty, especially in
our significant geographic markets, as well as any political or economic
disruption due to terrorist and other hostile activities.
Emerging countries were not immune from the credit crisis and economic
recession which began in the United States. It is almost impossible to assess
the implications of the current global crisis in the near and medium-term
which has resulted in volatile currencies, constraints on liquidity, credit and
access to capital, decreased demand for most goods and services, and
fluctuations in energy and resource prices. Banking systems in countries
around the world continue to face extreme difficulties and inevitably
regulators will respond by changing some of the rules of banking and
finance. Our business strategies will need to be adapted in order to
address the greater uncertainty and risk inherent in the current market
environment. The financial condition of our company may also be affected
by constraints on liquidity, tight credit and more difficult or expensive access
to capital, which in turn could likely impact business operations or result in
projects that cannot be pursued as planned.
REGULATORY ENVIRONMENT
Changes in laws, regulations and the related interpretations may alter
the environment in which we do business. This includes changes in
environmental, competitive and product-related laws, as well as changes
in accounting standards and taxation requirements. Accordingly, our ability
to manage regulatory, tax and legal matters (including product liability,
and project performance), and to resolve pending matters within current
estimates may impact on our results.
KEY MANUFACTURING FACILITIES
Our fertilizer operations are reliant on a limited number of key
manufacturing facilities that involve significant risks and hazards against
which we may not be fully insured. Our operations are also subject to
hazards inherent in the manufacturing, transportation, storage and
distribution of chemical fertilizers, including ammonia, which is highly toxic
and corrosive. We maintain property, business interruption and casualty
insurance policies to mitigate the financial impact of unforeseen events, but
we are not fully insured against all potential hazards and risks incident to
our business.

Principal accounting policies
In compliance with EAS, and IFRS, we adopt the following principal
accounting policies:
REVENUE RECOGNITION
Revenue from construction contracts is recognized in the statement of
income under the percentage of completion method of accounting. In
applying the percentage of completion method, the company does not
recognize the value of contract change orders until these have been
formally agreed to in writing with the customer, even if the actual work
requested is commenced prior to the execution of such written change
order.
CONSTRUCTION COSTS
Construction project costs include all direct material, equipment, labor,
subcontract and indirect costs related to contract performance, such as
indirect labor, maintenance, and applicable administrative costs. Materials,
labor and equipment provided by subcontractors or joint ventures are
included in revenues and costs when management believes that the
company is responsible for the ultimate acceptability of the project.
Changes in job performance, conditions, estimated profitability and final
contract settlements may result in revisions to costs and revenue and
are recognized in the period in which the facts requiring such revisions
become known. Provisions for estimated losses on incomplete contracts
are made in the period in which such losses are determined. Claims for
additional contract revenue are recognized when realization is assured and
the amount can reasonably be determined. Costs and estimated earnings
in excess of billings on incomplete contracts are presented as construction
projects in progress in the consolidated balance sheet.
CONSTRUCTION JOINT VENTURES
Construction projects, which are performed by joint ventures, are
accounted for under the proportionate consolidation method. Under
this method, the company’s separate financial statements include the
company’s pro rata interest in the assets, liabilities, revenues and expenses
of joint ventures through consolidation of these items on an item-by-item
basis in the financial statements of the company. Agreements concluded
between the company and the other partner in every joint venture stipulate
that each party should be jointly responsible for the activities of that
venture.
ACQUISITION OF SUBSIDIARIES
The company accounts for its investments in subsidiaries and associated
companies in accordance with the purchase method of accounting.
IMPACT OF INFLATION AND INTEREST RATE FLUCTUATIONS
During the year under review, the consolidated results of operations and
financial position of the company have not been materially affected by
inflation or interest rate fluctuations.
SEASONALITY
Major construction projects are not generally affected by seasonal demand
fluctuations. In addition, because of the generally warm and dry climate in
the areas of operations, the construction activity levels are not significantly
affected by weather conditions.
Overview
REVIEW
OPERATIONAL
DIFFERENCES BETWEEN EAS AND IFRS
“EAS 20” requires that, with some exceptions, all leases should be
accounted for as operating leases and therefore annual lease payments
by the lessee are charged to the income statement as rent expense. “IFRS
17” requires that leases which transfer substantially the benefits and risks
of ownership related to the leased properties from the lessor to the lessee
should be accounted for as finance leases and therefore recorded as assets
GOVERNANCE
of the lessee, with the lease obligations included as a liability in the balance
sheet.
Another difference between EAS and IFRS relates to accounting for the
employees share of profits. Egyptian law requires that 10% of distributable
profits are set aside for distribution to the employees, with a maximum of
one year’s total salaries. While EAS treats this as a charge to equity, IFRS
requires that such employee benefits are to be expensed as charges in the
STATEMENTS
FINANCIAL
income statement.
Results of operations
Revenue
Consolidated revenue from continuing operations increased by 3.0% to
$ 3,829.9 (EGP 21,312.8 million), as compared to $ 3,717.1 million (EGP
20,252.6 million) in 2008. This growth in consolidated revenue is primarily
attributable to increased revenue from the construction group on the back
of accelerated project completion rates in Egypt and Algeria. Moreover,
throughout the year the construction group backlog was consistently at
near record highs.
Revenue during the year was primarily from the following major contracts:
Orascom Construction projects in Egypt, Contrack projects in the Gulf
area, Cementech projects, and BESIX projects in Europe, Gulf area and
Africa. In 2009, OCI activities in Egypt contributed $ 1,349.1 million (EGP
7,507.2 million) to the consolidated revenue from continuing operations, as
compared to $ 1,265.2 million (EGP 6,893.3million) in 2008, representing
35.2% of the group’s revenue as compared to 34.0% in 2008.
In 2009, revenue from fertilizer operations was $ 479.3 million (EGP
2,667.1 million).
Gross profit
Gross profit from continuing operations decreased by 10.7% to $ 850.3
million (EGP 4,731.8 million), as compared to $ 972.7 million (EGP 5,300.2
million) in 2008. The gross profit percentage of revenue decreased to
22.1% in 2009, as compared to 25.1% in 2008, reflecting lower average
selling prices for ammonia and urea. Depreciation and amortization
expenses are a significant component of the cost of construction and
fertilizer operations. In 2009, depreciation and amortization expenses
increased by 39.2% to $ 182.8 million (EGP 1,017.2 million), as compared
to $ 134.1 million (EGP 730.5 million) in 2008.
Orascom Construction Industries 57
Annual report 2009
GOVERNANCE

Management’s discussion and analysis of

financial condition and results of operations
continued

Selling, general and administrative expenses Net income

Selling, general and administrative expenses increased by 17.5% to $
230.7 million (EGP 1,283.6 million), as compared to $ 200.6 million (EGP
1,092.8 million) in 2008. Selling, general and administrative expenses as a
percentage of revenue increased to 6.0% in 2009, as compared to 5.4%
in 2008.
As a result of the foregoing, the company’s consolidated net income for
the year decreased by 53.1% to $ 458.3 million (EGP 2,550.2 million) in
2009 (12.0% of revenue), as compared to $ million (EGP 5,433.7 million)
in 2008 (26.9% of revenue). 2008’s net income includes gain on sale from
investments of $ 263.1 million (EGP 1,444.9 million).

Operating profit Financial liquidity and condition

Profit from continuing operations of the company decreased by 16.3% The company and its subsidiaries have three principal sources of short term
to $ 611.7 million (EGP 3,404.2 million) in 2009, as compared to $ 747.0 liquidity: (i) existing cash and cash equivalents which at 31 December 2009
million (EGP 4,070.4 million) in 2008. The operating margin decreased to totaled $ 1,064.7 million (EGP 5,924.6 million), as compared to $ 1,712.9
15.9% for the year, as compared to 20.1% during 2008. The decrease was million (EGP 8,268.7 million) at 31 December 2008; (ii) cash generated
due principally to decreases in average selling prices for urea and ammonia. by operations; and (iii) short-term borrowings under credit facilities. For
long-term investments, the group has access to long-term financing from
Net finance income (cost) international financial institutions.
In 2009, the company’s net finance cost amounted to $ 83.0 million (EGP
462.0 million), as compared to net financing income of $ 92.2 million Cash is used to meet continuing operating obligations, investing activities,
(EGP 502.5 million) in 2008. Net finance income (cost) consists of interest payment of long and short-term debt, and for distribution of profit to
income, gain or loss on foreign exchange, and interest expense. Interest shareholders. The following table sets forth certain consolidated financial
income decreased by 80.2% to $ 24.1 million (EGP 134.1 million), in 2008 data concerning the liquidity and capital resources as at and for the periods
$ 124.2 million (EGP 676.9 million). Interest expense decreased by 5.5% indicated.
to $ 113.5 million (EGP 631.5 million), in 2008 $ 122.6 million (EGP 668.4
million).
Year ended Year ended
In 2009, the gain on foreign currency exchange decreased to $ 6.4 million 31 December 2009 31 December 2008
(EGP 35.4 million), in 2008, $ 90.7 million (EGP 494.0 million) primarily as a In millions EGP $ EGP $
result of 2008’s extraordinary foreign exchange gains due to the divestment
of the cement group to Lafarge. The exchange rates of LE 5.56 and LE 7.74 Cash and cash
were used to value the monetary assets and liabilities denominated in US equivalents
Dollars and Euro respectively as at 31 December 2009, as compared to LE Beginning of year 8,268.7 1,503.5 3,917.0 707.0
5.50 and LE 8.03 in 2008. End of year 5,924.6 1,080.2 8,268.7 1,503.5
Net increase (2,344.1) (423.2) 4,351.7 796.5
Income from investments
Income from investments increased to $ 17.8 million (EGP 99.3 million)
Net cash provided
from $ 0.3 million (EGP 1.8 million) in 2008 due to increased profits of by (used in)
companies accounted for by the equity method.
Operating activities 3,185.8 570.5 3,254.6 595.6
Investing activities (4,616.1) (829.5) 63,839.6 11,683.8
Income taxes
The company’s income tax expense on profit from continuing operations Financing activities (913.8) (164.2) (62,742.5) (11,482.9)
in 2009 amounted to $ 88.3 million (EGP 491.2 million), as compared Net provided (2,344.1) (423.2) 4,351.7 796.5
to $ 105.7 million (EGP 575.9 million) in 2008. These taxes, which
include current and deferred liabilities, are attributable to the continuing
construction activities and to taxes on EFC profit. The effective tax rate in Cash provided by continuing activities in 2009 was principally generated
2009 was 16.2%, as compared to 12.6% in 2008. The low effective rates from income from operations and from increases in receivables, inventories
are due primarily to the exemptions granted to the company’s foreign and construction in progress, which were reduced by increases in payables
subsidiaries. and in billings in excess of costs and estimated profits on incomplete
contracts.
Discontinued operations
There were no discontinued operations in 2009. Profit from discontinued Cash used in investing in continuing activities in 2009 was attributable
operations in 2008 amounted to $ 2.1 million (EGP 11.4 million). principally to the execution and commissioning of Egypt Basic Industries
Corporation and ongoing construction of Sorfert Algérie.

Cash provided by financing continuing activities in 2009 consisted

principally of bank borrowings to finance the investments and the capital
expenditures.

58 Orascom Construction Industries

Annual report 2009

Dividends
The declaration or payment of dividends by OCI is dependant in part
on OCI’s financial condition, results of operations, prospects, cash flow,
capital requirements and reserves, the level of dividends received from the
subsidiaries, and the effect of such dividend on OCI’s tax position. In March
2009, the Company paid dividends totaling $ 206.9 million (EGP 1,164.8
million), $ 1.00 per share (EGP 5.62 per share). In September 2009, the
Overview
REVIEW
OPERATIONAL
Future outlook
Management believes that the company is strategically positioned to
capitalize on the increased infrastructure spending in its core regional
markets in the Middle East and North Africa. Over the years, management
has vested significant time and effort in forging strategic partnerships with
industry leaders, investing in modern technologies, and developing the
company’s human resources. Management is confident that its competitive

Company paid another dividend in the amount of $ 165.5 million
(EGP 918.9 million), $ 0.80 per shares (EGP 4.44 per share).
Construction backlog
The company considers as “backlog” the revenues that the company
expects to receive under contracts that have been awarded and signed.
Backlog consists of uncompleted portions of engineering and construction
contracts, including the company’s proportionate share of construction
GOVERNANCE
advantage in both the construction and fertilizer businesses will allow the
company to sustain growth despite market volatility and continued global
macroeconomic challenges.
The company ended the year confident in the following growth catalysts:
• Historically high construction backlog valued at $ 6.65 billion, 60.1% of
which is infrastructure contracts with little risk of cancellation.

STATEMENTS
FINANCIAL
joint-venture contracts. • Increased government spending on infrastructure projects in the region
to stimulate their economies.
2009 2008 • Full contribution expected from the recent commissioning of our
In billions EGP $ % EGP $ % fertilizer plant of Egypt Basic Industries Corporation (EBIC).
• Strong cash position which could be deployed for investments or
Egypt 10.1 1.9 28 6.1 1.1 16 acquisitions in order to achieve the company’s strategy for the ensuing
Middle East 14.5 2.6 40 18.7 3.4 49 years. The company’s medium term core strategy is to continuously grow
its fertilizer business to become a top five global nitrogen based fertilizer
Africa 7.5 1.4 21 9.2 1.7 25
producer.
Europe 3.3 0.6 9 3.4 0.6 9
Asia 1.1 0.2 3 0.8 0.1 1
Total 36.5 6.7 100 38.2 6.9 100

At 31 December 2009, the construction group had unbilled work in

its consolidated backlog worth $ 6.65 billion (EGP 36.5 billion). The
construction group added $ 3.16 billion (EGP 17.3 billion) in new work
during the year due in part to additional work added by OCI Algeria, OCI
Egypt and the BESIX Group. Construction work backlog which will be
undertaken outside Egypt reached 72.2% at the end of the year. Of the
total backlog at year end, industrial construction work represents 14.5%,
commercial construction work 25.4%, and infrastructure work 60.1%.

Orascom Construction Industries 59

Annual report 2009
GOVERNANCE

Report of the Audit Committee

of the Board of Directors

The Audit Committee assists the Board in fulfilling its responsibilities for
general oversight of the integrity of the Company’s consolidated financial
statements, compliance with legal and regulatory requirements, the
independent auditors’ qualifications and independence, the performance
of the Company’s internal audit function and independent auditors, and
risk assessment and management. The Audit Committee manages the
Company’s relationship with its independent auditors (who report directly
to the Audit Committee). The Audit Committee acts under a written
charter adopted and approved by the Board, and has authority to obtain
advice and assistance from outside legal, accounting or other advisors as
the Audit Committee deems necessary to carry out its duties.

The Company’s management has responsibility for preparing the

consolidated financial statements and financial reporting process, including
the system of internal control. The Company’s independent auditors,
KPMG (Hazem Hassan), are responsible for expressing an opinion as to
whether those financial statements present fairly, in all material respects,
the financial position, results of operations and cash flows of the Company
in accordance with Egyptian Accounting Standards, which are not
materially different from International Financial Reporting Standards.

In this context, the Audit Committee hereby reports as follows:

1. The Audit Committee has reviewed and discussed the audited

consolidated financial statements for the year ended 31 December 2009
with the Company’s management.
2. The Audit Committee discussed with the Independent Auditors the
conduct of their audit in accordance with Egyptian Auditing Standards,
and compliance with legal and regulatory requirements.
3. The Audit Committee has received written confirmation of the
Independent Auditors’ independence.
4. Based on the review and discussions referred to above, the Audit
Committee recommended to the Board, and the Board has approved,
that the audited consolidated financial statements be included in the
2009 Annual Report for filing with the Egyptian Financial Supervisory
Authority.

Audit Committee

ALADDIN SABA
HASSAN ABDALLA
JÉRÔME GUIRAUD

60 Orascom Construction Industries

Annual report 2009
Financial statements

Overview
REVIEW
OPERATIONAL
GOVERNANCE
63 Auditor’s report
64 Director’s statement in respect of responsibility
for financial reporting
65 Consolidated income statement
66 Consolidated balance sheet
68 Consolidated statement of changes in equity
70 Consolidated cash flow statement

STATEMENTS
FINANCIAL
71 Notes to the consolidated financial statements
98 Selected financial data
102 Management and corporate information
103 Business segments and activities
104 Investor Relations and Shareholder information

Orascom Construction Industries 61

Annual report 2009
FINANCIAL STATEMENTS

62 Orascom Construction Industries

Annual report 2009
Auditor’s report
To The Shareholders of Orascom Construction
Industries Company (OCI) “Egyptian Joint Stock
Company”
We have audited the accompanying consolidated financial statements of
Orascom Construction Industries (OCI) “Egyptian Joint Stock Company”,
which comprise the consolidated balance sheet as at 31 December 2009,
the consolidated statements of income, changes in equity and cash flows
for the financial year then ended, and a summary of significant accounting
policies and other explanatory notes.
Management’s Responsibility for the Financial
Statements
These financial statements are the responsibility of Company’s
management. Management is responsible for the preparation and fair
presentation of these consolidated financial statements in accordance
with the Egyptian Accounting Standards and in the light of the
prevailing Egyptian laws, management 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; management responsibility
also includes selecting and applying appropriate accounting policies; and
making accounting estimates that are reasonable in the circumstances.
AUDITOR’S RESPONSIBILITY
Our responsibility is to express an opinion on these consolidated financial
statements based on our audit. We conducted our audit in accordance
with the Egyptian Standards on Auditing and in the light of the prevailing
Egyptian laws. Those standards require that we comply with ethical
requirements and plan and perform the audit to obtain reasonable
assurance whether the consolidated financial statements are free from
material misstatement.
An audit involves performing procedures to obtain audit evidence about
the amounts and disclosures in the financial statements. The procedures
selected depend on the auditor’s judgment, including the assessment of
the risks of material misstatement of the consolidated financial statements,
whether due to fraud or error. In making those risk assessments, the
Overview
REVIEW
OPERATIONAL
GOVERNANCE
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 in 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.
STATEMENTS
FINANCIAL
We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our audit opinion on the consolidated
financial statements.
OPINION
In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects the consolidated financial position of
the Company as of 31 December 2009, and of its financial performance
and its consolidated cash flows for the year then ended in accordance with
the Egyptian Accounting Standards and the Egyptian laws and regulations
relating to the preparation of these financial statements.
KPMG Hazem Hassan
PUBLIC ACCOUNTANTS & CONSULTANTS
Cairo, 14 April 2010
Orascom Construction Industries 63
Annual report 2009
FINANCIAL STATEMENTS

Directors’ statement in respect of

responsibility for financial reporting

The Directors are responsible for the preparation and integrity of the annual
report and the consolidated financial statements of Orascom Construction
Industries, in accordance with applicable laws and regulations.
Company law requires the Directors to prepare consolidated and company
financial statements for each year. The consolidated financial statements
have been prepared in accordance with Egyptian Accounting Standards,
which are not materially different from International Accounting Standards.
These consolidated the financial statements present fairly the financial
position and results of operations of the Group. As such, the consolidated
financial statements include certain amounts that are estimates based upon
currently available information and management judgment of current
conditions and circumstances. The directors are responsible also for the
other information included in the annual and interim reports and for their
accuracy and consistency with the consolidated financial statements.
The annual financial statements have been audited by the independent
accounting firm, KPMG (Hazem Hassan), which was given unrestricted
access to all financial records and recorded data, including minutes of all
the meetings of the Board of Directors and Committees of the Board.
The Audit Committee, which is composed of independent non-executive
directors, meets periodically with management, the internal auditors and
the independent auditors to review the manner in which these groups are
performing their responsibilities and to carry out the Audit Committee’s
oversight role with respect to auditing, internal controls and financial
reporting matters.
There are inherent limitations in the effectiveness of any system of internal
control, including the possibility of human error and the circumvention or
overriding of controls. Accordingly, even an effective internal control system
can provide only reasonable assurance with respect to financial statement
preparation. Furthermore, the effectiveness of an internal control system
may change over time.
Management assessed the Company’s internal control system in relation to
criteria for effective internal control over financial statement preparation.
Based upon that assessment, the directors believe that, as of 31 December
2009, its system of internal control over financial statement preparation
met those criteria.

The Company maintains a system of internal control over financial

reporting, which is intended to provide reasonable assurance to
the Company’s management and Board of Directors regarding the
preparation of the consolidated financial statements. The system includes
a documented organizational structure and division of responsibility,
established policies and procedures, and the careful selection and
development of staff. Internal auditors monitor the operation of the
internal control system and report findings and recommendations
to management and the Audit committee of the Board of Directors.
Corrective actions are taken to control deficiencies and other opportunities
for improving the system as they are identified.

64 Orascom Construction Industries

Annual report 2009
Consolidated income statement

Overview
yearS ended 31 December

REVIEW
OPERATIONAL
2009 2008
Notes EGP million EGP million

Continuing operations
Revenue 21,312.8 20,252.6
Cost (16,581.0) (14,952.4)

GOVERNANCE
Gross profit 4,731.8 5,300.2

Add (Less)
Other operating income (25) 167.5 64.1
Selling, general and administrative expenses (1,283.6) (1,092.8)
Provision for claims and impairment of debts (211.5) (201.1)
Operating profit 3,404.2 4,070.4

STATEMENTS
FINANCIAL
Interest income 134.1 676.9
Interest expense (631.5) (668.4)
Gain on foreign currency exchange 35.4 494.0
Net finance (cost ) income (462.0) 502.5
Investments income 99.3 1.8
Income before taxes 3,041.5 4,574.7
Income tax expense (26) (491.3) (575.9)
Net profit from continuing operations 2,550.2 3,998.8

Discontinued operations
Results from discontinued operations (net of tax) (6) – 11.4
Gain on sale of investment (6) – 1,433.5
Net profit from discontinued operations – 1,444.9
Net profit for the year 2,550.2 5,443.7
Attributable to:
Minority interest's share in net profit of the year 133.6 77.0
Equity holders of the Company 2,416.6 5,366.7

Net profit for the Year 2,550.2 5,443.7

Earnings per share (EGP) (28) 11.7 25.8

EPS from continuing operations (EGP) (28) 11.7 18.9

The accompanying notes form an integral part of the financial statements.

Orascom Construction Industries 65

Annual report 2009
FINANCIAL STATEMENTS

Consolidated balance sheet

yearS ended 31 December

2009 2008
Notes EGP million EGP million

ASSETS
Non-current assets
Property, plant and equipment (9) 14,990.9 9,912.3
Payments for purchase of investments (11) – 2,784.8
Intangible assets (12) 9,873.7 9,910.0
Investment in associated companies (13) 2,104.7 135.6
Investments available for sale 253.0 132.6
Deferred tax assets 38.1 36.0
Long-term receivables 247.4 255.2
Total non-current assets 27,507.8 23,166.5

Current assets
Inventories (14) 1,401.7 1,462.1
Marketable securities 211.4 163.2
Trade and other receivables (15) 9,749.9 8,236.2
Due from clients (16) 1,523.4 1,193.8
Cash on hand and at banks (17) 5,924.6 8,268.7
Assets held for sale 538.7 535.0
Total current assets 19,349.7 19,859.0
Total assets 46,857.5 43,025.5

The accompanying notes form an integral part of the financial statements.

66 Orascom Construction Industries

Annual report 2009
Consolidated balance sheet continued

Overview
yearS ended 31 December

REVIEW
OPERATIONAL
2009 2008
Notes EGP million EGP million

EQUITY
Shareholders' equity
Share capital (18) 1,034.6 1,073.9

GOVERNANCE
Reserves (19) 4,320.4 6,183.4
Retained earnings 8,835.9 6,484.3
Net profit for the year 2,416.6 5,366.7
Cumulative adjustment on translation of foreign companies (14.5) (85.7)
Own Shares (20) (200.2) (1,667.9)
Total shareholders' equity 16,392.8 17,354.7

Minority interest in subsidiary companies 750.2 226.7

STATEMENTS
FINANCIAL
Total equity 17,143.0 17,581.4

LIABILITIES
Non-current liabilities
Long-term loans (21) 11,219.3 7,754.1
Provisions (22) 1,913.3 1,891.4
Other long-term liabilities (23) 571.1 613.4
Deferred tax liabilities 581.7 506.6
Total non-current liabilities 14,285.4 10,765.5

Current liabilities
Bank overdraft and short-term loans (21) 2,266.1 3,670.6
Trade and other payables (24) 8,493.5 8,317.9
Due to clients (16) 3,658.8 1,599.7
Provisions (22) 650.1 633.7
Income taxes payable 360.6 456.7
Total current liabilities 15,429.1 14,678.6

Total liabilities 29,714.5 25,444.1

Total equity and liabilities 46,857.5 43,025.5

The accompanying notes form an integral part of the financial statements.

Nassef SAWIRIS salman butt

CHAIRMAN & CHIEF EXECUTIVE OFFICER CHIEF FINANCIAL OFFICER

Orascom Construction Industries 67

Annual report 2009
FINANCIAL STATEMENTS

Consolidated statement of changes in equity

year ended 31 December 2009

Other
Share capital Legal reserve reserves
Notes EGP million EGP million EGP million

Balance at 31/12/ 2007 1,010.0 505.0 1,774.6

Disposal of Egyptian Containers Handling Co
Chang to proportionate consolidation of a subsidiary
Capital increase at fair value 63.9 3,869.9
Net income for the year 2008
Hedge reserve (54.0)
Adjustments
Dividends to shareholders
Shares bought from company side and from OCI ESOP LIMITED
Gain from sale of own shares
Employees share of profits 2007
Changes in translation of foreign companies 87.9
Net change in minority interest in subsidiaries during the year

Balance at 31/12/ 2008 1,073.9 505.0 5,678.4

Transferred to legal reserve for 2008 31.9
Transferred to retained earnings
Net income for the year 2009
Hedge reserve (36.6)
Dividends to shareholders (29)
Employees share of profits 2008
Own shares bought during the year
Changes in translation of foreign companies
Foreign exchange reserve (156.5)
Own shares retired and other adjustments (39.3) (1,620.1)
Adjustments (including approximately EGP 96.2 million for shares based payment)
The increase in the share of ownership in a subsidiary (fully consolidated during the year) (81.7)
Minority interest in a subsidiary previously paid under investment in the subsidiary
Minority interest in a company acquired during the year
Dividends to minority
Balance at 31/12/2009 1,034.6 536.9 3,783.5

The accompanying notes form an integral part of the financial statements.

68 Orascom Construction Industries

Annual report 2009
 Overview
REVIEW
OPERATIONAL
Cumulative adjustment Total
Retained Net profit on translation of shareholders’ Minority Total
earnings for the year foreign companies Own shares equity interest equity
EGP million EGP million EGP million EGP million EGP million EGP million EGP million

69,640.0 11.8 (94.4) 72,847.0 1,048.8 73,895.8

GOVERNANCE
(232.8) (232.8)
(567.4) (567.4)
3,933.8 3,933.8
5,366.7 5,366.7 77.0 5,443.7
(54.0) (54.0)
(445.2) (445.2) (445.2)
(62,549.0) (62,549.0) (62,549.0)
(1,573.5) (1,573.5) (1,573.5)

STATEMENTS
FINANCIAL
18.0 18.0 18.0
(179.5) (179.5) (179.5)
(97.5) (9.6) (9.6)
(98.9) (98.9)

6,484.3 5,366.7 (85.7) (1,667.9) 17,354.7 226.7 17,581.4

(31.9)
5,334.8 (5,334.8)
2,416.6 2,416.6 133.6 2,550.2
(36.6) (36.6)
(2,083.7) (2,083.7) (2,083.7)
(172.9) (172.9) (2.1) (175.0)
(159.8) (159.8) (159.8)
71.2 71.2 71.2
(156.5) (156.5)
31.9 1,627.5 0.0 0.0
(281.2) (281.2) (281.2)
(477.3) (559.0) 270.4 (288.6)
128.8 128.8
6.9 6.9
(14.1) (14.1)
8,835.9 2,416.6 (14.5) (200.2) 16,392.8 750.2 17,143.0

Orascom Construction Industries 69

Annual report 2009
FINANCIAL STATEMENTS

Consolidated cash flow statement

yearS ended 31 December

2009 2008
Notes EGP million EGP million

Cash flows from operating activities

Net income attributable to equity holders 2,416.6 5,366.7
Adjustments to reconcile net income for the year to net cash provided by operating activities
Depreciation (9) 1,017.2 730.5
Increase in provisions for claims and impairment of debts 211.5 245.3
Interest expenses (income), net 497.4 (8.5)
Share of profit of associates and gain on sale of investments (99.3) (1.8)
Gain on sale of property, plant and equipment (25) (38.7) (15.0)
Gain on sale of investment in discontinued operations (6) – (1,433.5)
Gain on foreign currency exchange and other adjustments (35.4) (9.6)
Income tax expense (26) 491.3 575.9
Income from operating activities before changes in working capital 4,460.6 5,450.0
Provisions used (76.9) (69.9)
Change in inventories 114.8 (549.1)
Change in trade and other receivables (1,520.1) (2,593.9)
Change in due from clients (329.6) (427.8)
Change in assets held for sale (3.7) (142.9)
Change in trade and other payables (830.7) 887.4
Change in due to clients 2,059.1 692.3
Interest expenses paid (687.7) (668.4)
Net cash provided by operating activities 3,185.8 2,577.7

Cash flows from investing activities

Interest income collected 151.6 676.9
Proceeds from sale of property, plant and equipment 309.4 243.3
Proceeds from sale of the investment in Egyptian Containers Handling Co – 1,741.5
Proceeds from sale of investments in subsidiaries companies - Cement segment – 77,266.8
Payments for purchase of property, plant and equipment (5,038.0) (3,198.4)
Payments for purchase of intangible assets – (77.1)
Payments for purchase of investment and available for sale (39.1) (12,136.5)
Net cash (used in) provided by investing activities (4,616.1) 64,516.5

Cash flows from financing activities

Payment for own shares, net (159.8) (1,573.5)
Proceeds (Payment of) from bank overdraft and loans 1,134.3 (2,693.1)
Change in long-term liabilities 51.9 161.1
Change in minority interest (15.6) (21.8)
Cash dividends to shareholders (2,083.7) (62,549.0)
Proceeds from increase in share capital (at fair value) – 3,933.8
Net cash (used in) financing activities (1,072.9) (62,742.5)
Net (decrease) increase in cash and cash equivalents (2,503.2) 4,351.7
Cash on hand and at banks at the beginning of the year 8,268.7 3,917.0
Cash and cash equivalents translation differences & effect of the change in consolidation method of a
subsidiary 159.1 0.0
Cash on hand and at banks at the end of the year (17) 5,924.6 8,268.7
Blocked funds (17) (812.6) (598.1)
Cash and cash equivalents at the end of the year 5,112.0 7,670.6

The accompanying notes form an integral part of the financial statements.

70 Orascom Construction Industries
Annual report 2009
Notes to the consolidated financial statements

Overview
year ended 31 December

REVIEW
OPERATIONAL
1 General
Orascom Construction Industries Company has been recorded in the commercial register as an Egyptian Joint Stock Company on 30 March 1998
according to Law No. 159 for the year 1981. The Company’s articles of association were published in the companies Gazette issue No. 658 in April
1998.
Mr. Nassef Sawiris is the chairman of the Board of Directors .

GOVERNANCE
The Company’s purpose is contracting, manufacturing, supply and installation of machinery, equipment, tools, materials and supplies required
for construction activities, the undertaking of infrastructure works and the engineering and technical consultation required for projects being
implemented by the Company as well as importing necessary equipment and instruments. The Company’s purpose also includes import and
export activities, and leasing equipments.
Orascom Construction Industries Company — hereunder referred to as the “Company” or “OCI” — consolidated financial statements of the
Company comprise the Company and its subsidiaries (together referred to as the “Group”) and the Group’s interest in associates and jointly
controlled entities. The Group is involved primarily in construction and Fertilizer industries.

STATEMENTS
FINANCIAL
OCI owns directly the following consolidated subsidiaries:

Subsidiary 31/12/2009 31/12/2008

% of ownership % of ownership

OCI International Cyprus 100.0 100.0

OCI Finance Limited 100.0 100.0
Orascom Construction Industries Algeria 99.9 99.9
Orascom Construction Industries Nigeria 99.9 99.9
Orascom Industrial Investments 99.9 99.9
Orascom Construction Industries – Egypt 99.9 99.9
National Steel Fabrication 49.9 49.9
Egyptian Fertilizers Company* – 99.9
Orascom Roads Company 89.8 89.8
Suez Industrial Development Company 60.5 60.5
Sorfert Algeria Company 50.9 50.9
OCI BESIX 50.0 50.0
Alico Egypt 49.9 49.9
United Company for Paints and Chemicals** 49.9 49.9
Orascom Fertilizer Plant Maintenance Company 99.9 –
OCI Construction – Egypt 99.9 –
United Holding Company *** 27.2 –
OCI Tervi Skikda 50.0 –
Orasqualia 50.0 –
Bentini Orascom Construction 49.0 –

* The Egyptian Fertilizers Company was sold during the period to a wholly owned OCI subsidiary as discussed in Note no (8).
** During the year, the group obtained control after acquiring additional 6.5% of the share of United Company for Paints and Chemicals (UPC).
*** During the year, the group obtained control on the United Holding Company (UHC) as United Company of Paints and Chemicals paid
dividends to OCI by transferring 25.8% of its ownership interest in UHC shares to the company, plus 29.1% in UHC shares were acquired
during the year by Orascom Construction Industries – Egypt (a subsidiary).

Orascom Construction Industries 71

Annual report 2009
FINANCIAL STATEMENTS

Notes to the consolidated financial statements

continued

2 Basis of preparation
Statement of compliance
The consolidated financial statements include the financial statements for all subsidiaries that are controlled by Orascom Construction Industries
Company (“the Group”). The financial statements of the parent and its subsidiaries are prepared in accordance with Egyptian Accounting
Standards and applicable Egyptian laws and regulations.
The consolidated financial statements were authorized for issuance by the Board of Directors on 14 April 2010.
Basis of measurement
The consolidated financial statements have been prepared on the historical cost basis except for derivative financial instruments, financial
instruments at fair value through profit and loss, and available for sale financial assets, which are measured at fair values. The methods used to
measure fair values are discussed further in the notes below.
FUNCTIONAL AND REPORTING CURRENCIES
These Consolidated financial statements are presented in Egyptian Pound; the company’s board of directors changed the Company’s functional
currency to $ starting 1/10/2008. The change was made as the $ is now the currency that influences the revenues of the Company and its
financing.
The presentation currency remains the Egyptian Pound as the local regulations require the Company to maintain its share capital in Egyptian
Pound.
All the amounts presented to the nearest million Egyptian Pounds.
Use of estimates and judgments
The preparation of the financial statements requires management to make judgments, estimates and assumptions that affect the application
of accounting policies and the reported amounts of assets and liabilities, income and expenses during the financial periods/years. Actual results
may differ from these estimates. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are
recognized in the period in which the estimate is revised and in any future periods affected. In particular, information about significant areas of
estimation uncertainty and critical judgments in applying accounting policies that have the most significant effect on the amount recognized in the
financial statements are described in the following notes:
Note 16 Contract revenue
Information about assumptions and estimation uncertainties that have a significant risk resulting in a material adjustment within the next financial
year are included in the following notes:
Note (3.4) Property, Plant and Equipments
Note (3.10) Impairment
Note 22 Provisions
Note 26 Deferred tax
Note 27 Measurement of share–based payments
Note 30 Contingent liabilities
Note 33 Financial instruments risks

3 Significant accounting policies

The following accounting policies are applied constantly in the preparation of the consolidated financial statements and during all financial periods
in which the consolidated financial Statements are presented. The same accounting policies are also applied constantly in the subsidiaries’ and
associates’ financial statements.

72 Orascom Construction Industries

Annual report 2009
 Overview
REVIEW
OPERATIONAL
3.1 Basis of consolidation
Subsidiaries
Subsidiaries are entities controlled by the Group. Control exists when the Group has the power to govern the financial and operating policies of an
entity so as to obtain benefits from its activities. In assessing the extent of control, current and potential voting rights that presently are exercisable
are taken into consideration. The financial statements of subsidiaries are included in the consolidated financial statements from the date that
control commences until the date that control ceases. The accounting policies of the subsidiaries are modified where necessary to conform to the

GOVERNANCE
accounting policies of the Group.
Associates
Associates are those entities in which the Group has significant influence, but not control, over the financial and operating policies. Significant
influence exists when the Company owns 20% – 50% of the voting shares of any company. Associates are accounted for using the equity
method; but recorded initially at cost. The consolidated financial statements include the Group’s share of the income and expenses of equity
accounted investees, after adjustments to align the accounting policies with those of the Group, from the date that the significant influence
commences until the date that significant influence ceases.

STATEMENTS
FINANCIAL
Joint ventures
Joint ventures are those entities over whose activities the Group has joint control, established by the contractual agreements and requiring
unanimous consent for strategic financial and operating decisions. Joint ventures are accounted for using the proportionate consolidation method.
Transactions eliminated on consolidation
Intra–group balances, and any unrealised income and expenses arising from intra–group transactions, are eliminated in preparing the consolidated
financial statements. Unrealised gains arising from transactions with equity accounted investees are eliminated against the investment to the extent
of the Group’s interest in the investee. Unrealised losses are eliminated in the same way as unrealised gains, but only to the extent that there is no
evidence of impairment.

3.2 Foreign currency

Foreign currency transactions
Transactions in foreign currencies are translated to the respective functional currencies of Group entities at the exchange rates at the transaction
date. Monetary assets and liabilities denominated in foreign currencies, at the reporting date are retranslated to the functional currency at the
exchange rate at that date. Foreign currency differences arising on retranslation are recognized in profit or loss.
Foreign operations
The assets and liabilities of foreign operations are translated to US Dollars at exchange rates at the reporting date. The income and expenses of
foreign operations are translated to US Dollars at the exchange rates at the dates of transactions. Foreign currency differences are recognized
directly in equity.

3.3 Financial instruments

Non derivative financial instruments
Non–derivative financial instruments comprise cash and cash equivalents, investments in equity, trade and other receivables, loans and borrowings,
and trade and other payables. Short term debtors and creditors are recognized at their nominal value.
Non–derivative financial instruments are recognized initially at fair value, plus for instruments not at fair value through profit or loss, any directly
attributable transactions costs. After initial recognition the Non–derivative financial instruments are remeasured as discussed later.
Cash and cash equivalents
Cash and cash equivalents comprise cash balances, balances of banks current accounts, and time deposits with banks for less than three months.
Bank overdrafts that are repayable on demand and form an integral part of the Group’s cash management are included as a component of cash
and cash equivalents for the purpose of preparing the statement of cash flows.

Orascom Construction Industries 73

Annual report 2009
FINANCIAL STATEMENTS

Notes to the consolidated financial statements

continued

3.3 Financial instruments continued

Investment in associated companies
Investments in associated companies are recognized at cost and recorded by the equity method. In case of impairment, the carrying amount of the
investment is reduced and the impairment loss is charged to the consolidated income statement for the period.
When the Group’s share of losses exceeds its interest in an equity accounted investee, the carrying amount of that interest (including any long–
term investments) is reduced to nil and the recognition of further losses is discontinued except to the extent that the Group has an obligation or
has made payments on behalf of the investee.
Investments available for sale
The Group’s investments in equity securities, other than investment in associated companies, which are classified as available–for–sale, are recorded
initially at cost. Investments available–for–sale that are listed in a stock exchange are re–measured at fair values at the end of each reporting period;
and changes therein, other than impairment losses, are recognized in equity. When the investment is derecognized, the cumulative gain or loss in
equity is transferred to the consolidated income statement. Investments which are not listed at stock exchanges are re–measured at historical value
after reducing any impairment losses.
Investment in marketable securities
Investments held for trading or is designated as such are recorded initially at cost. After initial recognition, transaction costs are recognized in profit
or loss when incurred. These investments are re–measured at fair values (market values) at the end of each reporting period, and changes therein
are recognized in the consolidated income statement.
Derivative financial instruments
The Group is exposed to risks relating to currency exchange fluctuations, and to changes in interest rates. The Group does not use derivative
financial instruments for speculative purposes. Derivative financial instruments are recognized initially at fair value. Changes in the fair value of
hedging financial instruments are recognized directly in equity to the extent that the hedge is effective.
Financial assets are derecognized if the Group’s contractual rights to the cash flows from the financial assets expire or if the Group transfers the
financial asset to another party without retaining control or substantially all risks and rewards of the asset.
SHARE CAPITAL
Share capital is recorded at cost in shareholders’ equity.
Own shares
Repurchased shares of the Company are classified as own shares and are presented as a deduction from shareholders’ equity at their acquisition
cost. When own shares are sold or reissued subsequently, the amount received is recognized as an increase in equity net of surplus or deficit on the
transaction.

3.4 Property, plant and equipment

Recognition and measurement
Items of property, plant and equipment are measured at cost less accumulated depreciation and accumulated impairment losses at the reporting
date (see note 3.10). Cost includes expenditure that is directly attributable to the acquisition of the asset. The cost of self constructed assets include
material, direct labor and other cost incurred to bring the asset ready to its intended use, as well as any expected cost to remove the asset at the
end of its useful lives and restore the site to its original condition.
When parts of property, plant and equipment have different useful lives, they are accounted for as separate items (major components) of property,
plant and equipment.
Gain and loss on disposal
Gain and loss on disposal of property, plant and equipment, resulting from the difference between the proceeds of disposal and the net book
values, are recognized net within “other operating income (expense)” in the consolidated income statement.
Subsequent costs
The cost of replacing part of an item of property, plant and equipment is recognized in the carrying amount of the item if it is probable that the
future economic benefits embodied within the part will flow to the Group and its cost can be measured reliably. The carrying amount of the
replaced part is derecognized. The costs of day to day servicing of property, plant and equipment are recognized in the consolidated income
statement as incurred.

74 Orascom Construction Industries

Annual report 2009
 Overview
REVIEW
OPERATIONAL
Projects under construction
Expenditures incurred on purchasing and constructing Property, Plant and equipments are initially recorded in projects under construction until
the asset is completed and becomes ready for use. Upon the completion of the assets, all related costs are transferred to fixed assets in the
consolidated balance sheet . No depreciation is charged until the project is completed and transferred to Property, Plant and Equipments. Projects
under construction are measured at cost less accumulated impairment losses (see note 3.10).
Depreciation

GOVERNANCE
Depreciation is recognized in profit or loss on a straight line basis over the estimated useful lives of each part of property plant and equipment.
Assets leased to third parties are depreciated over the shorter of the lease term and their useful lives. The estimated useful lives for the current and
comparative years/periods are as follows:

Type of Asset Years

Buildings 2 – 50

STATEMENTS
FINANCIAL
Machinery and equipment 1.1 – 25
Furniture and office equipment 1.4 – 16
Vehicles 1.4 – 20
Information systems 2–7
Tools and supplies 1.5 – 10

Depreciation methods, useful lives and residual values are reviewed at each reporting date for the group.
Leased assets
Agreements for assets leased from third parties are accounted for as operating leases in accordance with Egyptian Accounting Standards. Rent
payable on operating leases is charged in the income statement on a straight line basis over the term of the lease.
Borrowing costs capitalization
Interest and commissions on credit facilities and loans that are directly attributable to the acquisition, construction or production of qualifying assets
are capitalized as part of the cost of those assets till the date of availability for use. All borrowing costs that do not meet the capitalization criteria
are recognized as expense in the consolidated income statement as incurred.

3.5 Intangible assets

Goodwill
Goodwill arises on the acquisition of subsidiaries, associates and joint ventures. Goodwill represents the excess of the cost of acquisition over the
Group’s interest in the net fair value of identifiable assets, liabilities and contingent liabilities of the entity acquired. Goodwill is recorded at cost less
any accumulated impairment losses. When the excess is negative, it is recognized in the consolidated income statement. In respect of accounting
for investment in associated companies, the carrying amount of goodwill is included in the carrying amount of the investment and the impairment
of goodwill isn’t reversed later.

3.6 Other intangible assets

Other intangible assets that are acquired by the Group, which have finite useful lives, are measured at cost less accumulated amortisation and
accumulated impairment losses. Costs incurred subsequent to acquisition are capitalised when there is sufficient evidence of future benefit from
the acquisition; other costs are expensed in the income statement as incurred. Amortisation is recognized in the income statement on a straight
line basis over the estimated useful lives, other than goodwill, from the date they are available for use.

Orascom Construction Industries 75

Annual report 2009
FINANCIAL STATEMENTS

Notes to the consolidated financial statements

continued

3.7 Inventories
Inventories are measured at the lower of cost and net realisable value. An inventory of raw materials, spare parts and supplies cost are based on
weighted average principle or the first–in–first–out method, and includes expenditure incurred in acquiring the inventories and bringing them to
their existing location and condition. In case of manufactured inventories and work in progress, cost includes an appropriate share of production
overheads based on normal operating capacity. Net realisable value is the estimated selling price in the ordinary course of business, less the
estimated costs of completion and selling expenses.

3.8 Construction contracts

Construction project costs (due from clients) are costs of completed work but not billed to clients awaiting approval and expected to be collected
in accordance with the contract. Construction project costs include all direct costs, such as materials, supplies, equipment depreciation and labor,
as well as indirect costs of the Group such as indirect labor and maintenance. Construction project costs also include general and administrative
expenses directly related to these projects. Provisions for estimated losses on incomplete contracts are made in the period in which such losses are
determined.
The excess of construction project costs and estimated profits over billings is recognized as (due from clients) under current assets in the
consolidated balance sheet. Billings in excess of cost of estimated earnings on incomplete contracts are recognized as (due to clients) under current
liabilities.

3.9 Assets held for sale

Properties held for sale that are expected to be principally recovered through the sale rather than through the continuing use are classified as
assets held for sale. Immediately before classification as held for sale, the assets are re–measured in accordance with the Group accounting
policies. Thereafter, generally the assets are measured at the lower of their carrying amount and fair value less cost to sell. Impairment loss on
initial recognition as held for sale are allocated at first to goodwill and the balance proportionately to other assets and liabilities, except inventories,
financial assets, deferred tax assets, and assets related to employee pensions. Subsequent impairment losses are charged to the income statement.
Subsequent gains are not credited in the income statement to the extent that the gain is in excess of cumulative impairment losses.

3.10 Impairment of assets

Financial assets
A financial asset is assessed at each reporting date to determine whether there is any objective evidence that it is impaired. A financial asset is
considered to be impaired if objective evidence indicates that one or more events have had a negative effect on the estimated future cash flows of
that asset.
An impairment loss in respect of a financial asset measured at amortised cost is calculated as the difference between its carrying amount, and the
present value of the estimated future cash flows discounted at the original effective interest rate.
Individually significant financial assets are tested for impairment on an individual basis. The remaining financial assets are assessed collectively in
groups that share similar credit risk characteristics.
All impairment losses are recognized in profit or loss. Any cumulative loss in respect of an available–for–sale financial asset recognized previously in
equity is transferred to profit or loss.
An impairment loss is reversed if the reversal can be related objectively to an event occurring after the impairment loss was recognized.

76 Orascom Construction Industries

Annual report 2009
 Overview
REVIEW
OPERATIONAL
Non-financials assets
The carrying amounts of non–financial assets of the Group, except inventories, assets held for sale and deferred tax assets and assets resulted from
construction contracts, are reviewed at the date of the financial statements to ascertain whether there is an event or changes in circumstances
indicating that the carrying amount of an asset exceeds its recoverable amount. When such an indicator exists, the recoverable amount of the
asset is estimated. The recoverable amounts of goodwill, and other intangible assets with indefinite useful life or not yet available for use, are
estimated each financial period. The recoverable amount of an asset or cash generating unit is the greater of its value in use and its fair value less
cost to sell. The impairment calculated as the difference between the carrying amounts and estimated recoverable amount, discounted by the

GOVERNANCE
effective interest rate.
A cash generating unit is the smallest identifiable asset group that generates cash flows that largely are independent from other assets and groups.
Impairment losses are recognized in respect of cash–generating units are allocated first to reduce the carrying amount of any goodwill allocated to
the units and then to reduce the carrying amount of other assets in the unit on a pro rata basis.
Impairment losses in respect of goodwill are not reversed. Impairment losses in respect of other intangible assets in prior periods are assessed at
each reporting date for any indications that the loss has decreased or no longer exist. An impairment loss is reversed if there has been a change

STATEMENTS
FINANCIAL
in the estimates used to determine the recoverable amount. An impairment loss is reversed only to the extent that the asset’s carrying amount
does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss had been
recognized.

3.11 Fair values

Certain accounting policies and financial statement presentation require determination of fair values of financial and non financial assets and
liabilities. The fair values are determined for the purposes of recognition or measurement as follows; and in the respective notes to the consolidated
financial statements.
PROPERTY, PLANT AND EQUIPMENT
The fair value of property, plant and equipment recognized as a result of a business combination is based on market values. The market value of
property is the estimated amount for which a property could be exchanged on the date of valuation between a willing buyer and a willing seller in
an arm’s length transaction.
Intangible assets
Fair values of intangible assets are determined according to future cash flows deducted and expected from using those assets or from its disposal.
Inventories
The fair values of inventory acquired in a business combination is determined based on its estimated selling price in the ordinary course of business
less the estimated cost of completion and sale, and a reasonable profit margin based on the effort required to complete and sell the inventory.
Investments in securities
The fair value of financial assets at fair value through profit or loss, investments and available–for–sale financial assets is determined by reference to
their quoted bid price at the reporting date.
Trade and other receivables
Fair values of customer accounts receivable and other debit balances are their present values of future cash flows discounted at the reporting date.
Financial instruments
Fair values non–derivatives for financial instruments traded in an active market are their current market values. Where an active market does not
exist, estimates may be used based on present value or other analytical techniques.
Derivatives
The fair value of forward exchange is based on their listed market price or if not available the difference between the contractual forward price and
the current forward price for the residual maturity of the contract.
The fair value of interest rates swaps is based on broker quotes tested for reasonableness by discounting estimated future cash flows using market
interest rates for similar instrument at the measurement date.
Share-based payments
Fair values of share–based payments are determined by using specialised valuation models.

Orascom Construction Industries 77

Annual report 2009
FINANCIAL STATEMENTS

Notes to the consolidated financial statements

continued

3.12 Provisions
A provision is recognized if as a result of past event the Group has a present legal or constructive obligation that can be estimated reliably and it is
probable that an outflow of economic benefits will be required to settle the obligation. Management reviews the provisions at the balance sheet
date and makes adjustments to the provisions, if necessary, to reflect the best estimate.

3.13 Revenue
Construction contracts
As soon as the outcome of the construction contract is estimated reliably, contract revenues and expenses are recognized in profit or loss in
proportion to the stage of completion of the contract. Contract revenue includes the initial amount agreed in the contract plus any variations in
contract work, claims and incentive payments to the extent that is probable that they will result in revenue and can be measured reliably.
The stage of completion is assessed by reference to the proportion that contract costs incurred bears to estimated total contract cost (cost–to–cost
method). When the outcome of a construction contract can not be estimated reliably, contract revenue is recognized only to the extent of contract
costs incurred that are likely to be recoverable. An expected loss on contract is recognized immediately in profit or loss.
Construction in progress costs include all direct costs, such as materials, supplies, equipment depreciation and labor, as well as indirect costs of
the projects such as indirect labor and maintenance. Construction project costs also include general and administrative expenses directly related to
these projects. Provisions for estimated losses on incomplete contracts are made in the period in which such losses are determined.
The excess of construction in progress costs and estimated profits over billings is recognized as (due from clients) under current assets in the
consolidated balance sheet. Billings in excess of cost of estimated earnings on incomplete contracts are recognized as (due to clients) under current
liabilities.
Goods sold
Revenue from sale of goods is measured at the fair value of the consideration received or receivable, net of returns and allowances, trade discounts
and volume rebates. Revenue is recognized when the significant risks and rewards of ownership have been transferred to the buyer, recovery of
the consideration is probable, the associated costs and possible return of goods can be estimated reliably, and there is no continuing management
involvement with the goods. Transfers usually occur when the products are received by the customer; however for some international shipments
transfer occurs upon loading the goods onto the relevant carrier.
Rental income
Rental income is recognized in the profit or loss on a straight line basis over the term of the lease.

3.14 Financing cost and income

Interest expense and income
Interest expense and income are recognized in the consolidated income statements using the effective interest rate method.
Investment income
Dividends from investments are recognized when the Group is entitled to such income.
Foreign exchange differences
Differences on foreign exchange are presented net in the consolidated income statements.

78 Orascom Construction Industries

Annual report 2009
 Overview
REVIEW
OPERATIONAL
3.15 EMPLOYEES’ BENEFITS
Company’s contribution in social insurance and pension plans
Payments to defined contribution schemes are expensed as they become due. For defined benefit pension plans adopted the benefit obligation is
determined using the Projected Unit Credit Method, with actuarial valuations being carried out at each consolidated balance sheet date. Actuarial
gains and losses are recognized in profit and loss in full in the period in which they occur.

GOVERNANCE
Share-based payment transactions
The grant date fair value of options granted to employees is recognized as an employee expense, over a period in which the employees become
unconditionally entitled to the options. The amount recognized as expense (in wages and salaries at profit and loss) is adjusted to reflect the actual
number of share options that vest.

3.16 Income tax

Income tax comprises current and deferred tax payable on taxable income. Income tax expense is recognized in profit or loss to the extent that it

STATEMENTS
FINANCIAL
relates to items recognized directly in equity, in which case it is recognized in equity.
Current tax expense is the expected tax payable on taxable income for the period, using the prevailing tax rates or substantively enacted at the
reporting date, and any adjustment in tax payable in respect of previous years.
Deferred tax expense is recognized using the balance sheet method, providing for temporary differences between the carrying amounts of assets
and liabilities for financial reporting purposes and the amounts used for taxation purposes. Deferred tax is not recognized for the following
temporary differences: the initial recognition of goodwill and differences relating to investments in subsidiaries and jointly controlled entities to the
extent that they probably will not reverse in the foreseeable future. Deferred tax is measured at the tax rates that are expected to be applied to the
temporary differences when they reverse, based on the laws that have been enacted or substantively enacted at the reporting date.
A deferred tax asset is recognized only to the extent that it is probable that future taxable profits will be available against which temporary
difference can be utilised. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that
the related tax benefit will be realised.

3.17 Earnings per share

The Group presents earnings per share (EPS), which is calculated by dividing the profit or loss attributable to ordinary shareholders of the Company
by the weighted average number of ordinary shares outstanding during the year

3.18 Discontinued operations

A discontinued operation represents a separate major line of business or geographical area of operations or a subsidiary acquired exclusively with
a view to resale. Discontinued operations are presented in a single amount in the consolidated income statement upon disposal or when the
operation meets the criteria to be classified as held for sale. The consolidated income statement is presented as if the discontinued operations
occurred at the beginning of the comparative period.

3.19 Segment reporting

A segment is a distinguishable component of the Group that is engaged either in providing related products or services (business segment), or
in providing products or services within a particular economic environment (geographic segment), which is subject to risks and rewards that are
different from those of other segments. The Group primary format for segment reporting is based on business segment.

Orascom Construction Industries 79

Annual report 2009
FINANCIAL STATEMENTS

Notes to the consolidated financial statements

continued

4 Financial risk management

Overview
The Group is exposed to risks in respect of credit, liquidity, currency, and interest rates (market risk). The Groups’ management assesses and
analyses these risks, and implements the policies and necessary controls to manage these risks. Policies and procedures have been established to
determine, analyse and control its risks and periodical follow up and reviews are carried out in accordance with operations and changes in market
conditions. These controls continue to be developed through training, development and administrative procedures that allow the employees to
better understand their roles and responsibilities. The Audit Committee of the Board ensures that management complies with the risk control
policies and procedures, and that the framework for risk management is effective.
Credit risk
Credit risk is the probability of financial loss from the inability of counterparty to meet contractual obligations related to a financial transaction or
instrument. Credit risk includes receivable, debtors, cash, due from related parties and investments.
Customer RISK
Customer risk, or counterparty risk, is risk of loss from their inability to pay their debts. To limit this risk, the Group provides credit only to
government entities, associated companies, and a large number of credit–worthy private sector customers.
Liquidity risk
Liquidity risk is the risk that arises when the maturity of assets and liabilities does not match or when the Group is unable to liquidate its assets with
values that approximate their fair values to meet the Group’s liabilities. While an unmatched position may enhance profitability, it can also increase
the risk of losses. To manage the liquidity risk, the Group’s management aims to have sufficient amounts of cash, available finance and credit
facilities to discharge the liabilities when due and minimizes potential losses. Without taking into consideration any unusual effects that can not be
predicted such as natural disasters.
Market risk
Market risk is the risk that changes in market prices, such as foreign exchange rates and interest rates that will affect the Group’s income or
the value of its holding of financial instruments. The objective of market risk management is to manage and control market risk exposure with
acceptable parameters, while optimising the return.
Currency risk
The Company is exposed to currency risk on construction revenues, construction cost, loans and bonds that are denominated in a currency other
than the respective functional currencies of Company primarily in Egyptian Pounds and Euros. The Group manages this risk by monitoring the
exchange rates fluctuations on a continuous basis, by matching its liabilities in foreign currencies with its source of funds in foreign currencies and
by currency SWAP agreements with financial institutions.
Interest rate risk
Interest rate risk is the risk that the value of financial instruments will fluctuate due to changes in market interest rates. The Group is exposed to
interest rate risk in relation to its interest–bearing assets, liabilities and borrowings.

80 Orascom Construction Industries

Annual report 2009
 Overview
REVIEW
OPERATIONAL
5 GROUP SEGMENT REPORTING
The Group primary format for segment reporting is based on business segment. The secondary format is geographical segments. The risk and
returns of the Group’s operations are primarily determined by different products and services that the Group produces or provides rather than the
geographical location of the Group’s operations. This is reflected by the Group organisational structure and financial reporting system.
The Group had two segments of operations, construction and fertilizer.

GOVERNANCE
Operating segments Construction Fertilizer Elimination Consolidated
EGP million EGP million EGP million EGP million

Revenue
December 2009 External revenue 18,645.7 2,667.1 – 21,312.8
December 2009 Intra–group revenue 293.5 (293.5) –

STATEMENTS
FINANCIAL
Total December 2009 18,939.2 2,667.1 (293.5) 21,312.8
December 2008 External revenue 16,741.4 3,511.2 20,252.6
December 2008 Intra–group revenue 112.9 (112.9) –
Total December 2008 16,854.3 3,511.2 (112.9) 20,252.6

Operating profit
December 2009 1,994.5 1,409.7 – 3,404.2
December 2008 1,538.4 2,532.0 – 4,070.4
Depreciation
December 2009 702.4 314.7 – 1,017.1
December 2008 486.4 244.1 – 730.5
Capital expenditures
December 2009 1,695.9 4,731.1 – 6,427.0
December 2008 1,910.2 1,050.9 – 2,961.1
Total assets
December 2009 38,079.5 8,778.0 – 46,857.5
December 2008 38,657.6 4,367.9 – 43,025.5
Total liabilities
December 2009 23,641.7 6,072.8 – 29,714.5
December 2008 23,180.1 2,264.0 – 25,444.1

Geographical segments Egypt Africa Asia Europe and other Consolidated

EGP million EGP million EGP million EGP million EGP million

Revenues excluding
intra-Group revenues
December 2009 7,507.2 981.8 2,792.2 10,031.6 21,312.8
December 2008 6,893.3 852.5 1,971.9 10,534.9 20,252.6
Total assets
December 2009 28,859.5 3,987.6 3,695.4 10,315.0 46,857.5
December 2008 27,777.9 1,451.2 4,628.1 9,168.3 43,025.5
Capital expenditures
December 2009 2,790.1 3,088.8 31.0 517.1 6,427.0
December 2008 1,012.4 1,036.7 287.4 624.6 2,961.1

Orascom Construction Industries 81

Annual report 2009
FINANCIAL STATEMENTS

Notes to the consolidated financial statements

continued

6 Discontinued Operations
The Egyptian Container Handling Company
The Company’s Board of Directors initially decided on 1 November 2007 to sell the entire investment in the Egyptian Containers Handling
Company to an international company operating in the field of port management, subject to approval by local governing bodies. The sale value is
EGP 2 billion which were made on 18 February 2008 and the sale price collected on 19 February 2008.
The results of discontinued operations during the comparative financial year ended 31 December 2008, and the net assets of ECHCO operations
are as follows:

Results of discontinued operations December 2008

EGP million

Revenue 48.0
Cost of sales (17.6)
Gross profit 30.4
Other (expenses) (5.1)
Net Operating Profit 25.3
Minority interest share in net profit (13.9)
Shareholders’ share in net profit of discontinued operations 11.4

Cash flows provided by (used in) discontinued operations –ECHCO December 2008
EGP million

Net cash flows (used in) operating activities (248.2)

Net cash flows (used in) investing activities (41.6)
Net cash flows provided by financing activities 304.6
Net cash flow 14.8

Determining the profits on sale of discontinued operations – ECHCO

The net profits from the sale of the Egyptian Container Handling Company amounting to EGP 1.4 billion were determined as follows:

December 2008
EGP million

Total value for sale 2,044.2

The cost of investment & expenses of the sale (434.3)
Net profit realized from the sale shown in the unconsolidated financial statements 1,609.9
Less:
Retained earnings at the beginning of the period (Net assets) (157.0)
Net income for the period available to shareholders till the date of the sale (11.4)
Goodwill eliminated balance (8.0)
Net profit realized from the investment sale in the consolidated financial statements 1,433.5

82 Orascom Construction Industries

Annual report 2009
 Overview
REVIEW
OPERATIONAL
7 Joint ventures
A summary of the Group’s share in the assets, liabilities, revenues, and expenses in the Joint Ventures relating to the construction
activities – according to percentage of participation are as follows:

2009 2008

GOVERNANCE
EGP million EGP million

Share in net assets

Assets 2,090.5 1,011.3
Liabilities (1,793.4) (932.6)
Company's share in net assets 297.1 78.7

STATEMENTS
FINANCIAL
2009 2008
EGP million EGP million

Share in net operating results

Revenue 2,384.2 1,873.2
Cost (2,138.9) (1,720.6)
Company’s share in net profit 245.3 152.6

Orascom Construction Industries 83

Annual report 2009
FINANCIAL STATEMENTS

Notes to the consolidated financial statements

continued

8 ACQUISITION OF EGYPTIAN FERTILIZERS COMPANY

On 21 February 2008, the Company acquired 99.9% of the shares of the Egyptian Fertilizers Company. The goodwill was calculated as the
difference between the cost of acquisition and the book value of net assets acquired as follows:

Pre-acquisition Fair value Recognized values

carrying amounts adjustments on acquisition
Notes EGP million EGP million EGP million

Property, plant and equipment 2,972.6 1,404.5 4,377.1

Other intangible assets 1,528.9 – 1,528.9
Investments 193.4 – 193.4
Trade and other receivables 437.5 – 437.5
Inventories 178.7 – 178.7
Cash at banks and on hand 687.2 – 687.2
Trade and other payables (1,596.4) – (1,596.4)
Long–term liabilities (2,435.2) (269.7) (2,704.9)
Net identifiable assets and liabilities 1,966.7 1,134.8 3,101.5

Profits from sale of the share of a subsidiary in Egyptian Fertilizer Company 944.0
Goodwill on acquisition (12) 8,247.2
Total cost of acquisition 12,292.7

Cash acquired at acquisition date (687.2)

Profits from sale of the share of a subsidiary in Egyptian Fertilizer Company (944.0)
Net cash outflow at acquisition 10,661.5

On 23 June 2009, Orascom Construction Industries signed an agreement with Orascom Fertilizer Plant Maintenance Company (a wholly owned
subsidiary) to sell its whole investment of the Egyptian Fertilizers Company through the sale of 319.9 k shares presenting its investment in 99.99%
of the share capital of the Egyptian Fertilizers Company as part of the group restructuring.
The sale price was $ 3,468.8 million (equal to EGP 19,399.6 million) resulting in an increase in the carrying amount of investment amounted to
$ 1,232.8 million (equal to EGP 6,894.9 million), the transaction effect was eliminated in the consolidated financial statements at 31 December
2009 .

84 Orascom Construction Industries

Annual report 2009
 Overview
REVIEW
OPERATIONAL
9 Property, plant and equipment

Buildings Machinery Furniture

and and and office Information Tools and
Land construction equipment equipment Vehicles systems supplies Total

GOVERNANCE
Cost
Balance at 1/1/2009 310.9 992.3 7,136.1 139.6 373.7 88.2 94.3 9,135.1
Additions during the year 46.8 321.6 4,336.2 47.0 124.4 20.4 78.8 4,975.2
Effect of fully consolidating a subsidiary 19.0 19.6 31.4 5.8 9.7 6.9 0.4 92.8
Transfers / Adjustments (35.6) 5.6 (42.0) 1.2 (4.3) 37.6 2.9 (34.6)
Disposals during the year (1.4) (86.3) (287.7) (16.7) (41.0) (4.5) (4.6) (442.2)
Balance at 31/12/2009 339.7 1,252.8 11,174.0 176.9 462.5 148.6 171.8 13,726.3

STATEMENTS
FINANCIAL
Accumulated depreciation
Balance at 1/1/2009 4.0 262.0 1,514.0 70.2 150.5 46.7 27.1 2,074.5
Depreciation for the year – 56.6 832.6 25.1 61.8 13.4 27.7 1,017.2
Effect of fully consolidating a subsidiary – 2.8 11.0 1.9 1.7 4.0 0.1 21.5
Transfers / Adjustments 1.1 31.7 15.3 1.4 21.8 14.6 2.1 88.0
Disposals accumulated depreciation – (14.3) (119.4) (8.6) (25.2) (1.4) (2.6) (171.5)
Balance at 31/12/2009 5.1 338.8 2,253.5 90.0 210.6 77.3 54.4 3,029.7

Net book value at 31/12/2009 334.6 914.0 8,920.5 86.9 251.9 71.3 117.4 10,696.6

Net book value at 31/12/2008 306.9 730.3 5,622.1 69.4 223.2 41.5 67.2 7,060.6

31/12/2009 31/12/2008
EGP million EGP million

Fixed assets 10,696.6 7,060.6

Projects under construction 4,294.3 2,851.7
Total 14,990.9 9,912.3

Projects under construction includes machinery and equipment under installation amounted to EGP 3,792.6 million belong to Sorfert Algeria.

Property, plant and equipment include the following assets which have been acquired under finance lease transactions:
Accumulated
Cost depreciation Net
31/12/09 31/12/09 31/12/09
EGP million EGP million EGP million

Machinery and equipment 103.9 (36.3) 67.6

Vehicles 9.2 (5.5) 3.7
Buildings 68.8 (16.0) 52.8
Total 181.9 (57.8) 124.1

Orascom Construction Industries 85

Annual report 2009
FINANCIAL STATEMENTS

Notes to the consolidated financial statements

continued

10 LEASED ASSETS
OCI and other subsidiaries leased equipment from others. The rental value of the leased assets amounted to EGP 95.8 million to be paid over
periods ranging from 36 to 108 months in annual rent that approximates EGP 63.4 million. The sales value of these leased assets at the end of the
term of the contracts amounted to EGP 15.9 million.

11 Payments for purchase of investments

These items which amounted to EGP 2,784.8 million at the comparative year ended 31 December 2008 represents payments by the Group for
acquiring existing companies or establishing new companies (Subsidiaries or associates) located in Egypt and United States of America.

12 Other intangible assets

2009 2008
EGP million EGP million

Goodwill* 9,871.2 9,907.4

Other 2.5 2.6
Total 9,873.7 9,910.0

* As discussed in Note (8), the major balance of goodwill relates to Egyptian Fertilizers Company.

13 Investment in associated companies

2009 2008
% Country EGP million EGP million

United Company for Paints and Chemicals* 49.9 Egypt – 68.1

National Pipes Company 40.0 Egypt 35.9 28.9
BESIX Group investments Belgium 22.5 25.0
Ospraie super fertilizer blocker LLC U.S.A 709.5 –
Ospraie super trade blocker LLC U.S.A 1,222.7 –
Egyptian Gypsum Company Egypt 99.9 –
Others 14.2 13.6
Total 2,104.7 135.6

* The United Company for Paints and Chemicals was fully consolidated during the year as it was controlled by the group as discussed in Note (1).

86 Orascom Construction Industries

Annual report 2009
 Overview
REVIEW
OPERATIONAL
14 Inventories

2009 2008
EGP million EGP million

GOVERNANCE
Raw and packing materials 931.4 1,013.2
Spare parts and fuel 230.2 234.8
Work in progress 132.0 67.4
Finished goods 41.6 82.9
Developed land for sale 66.5 63.8
Total 1,401.7 1,462.1

STATEMENTS
FINANCIAL
15 Trade and other receivables

2009 2008
EGP million EGP million

Receivables – current accounts and notes receivables 6,512.1 4,877.9

Debtors and other debit balances 3,116.0 3,343.8
Due from related parties (Note 32) 121.8 14.5
Total 9,749.9 8,236.2

The impairment in trade and other receivables in the amount of EGP 171.7 million is netted from trade and other receivables in the consolidated
financial statements (2008, EGP 101.1 million).
The debtors and other debit balances as of 31 December 2009 include advance payments and debit balances for suppliers and subcontractors
amounting to EGP 366.9 million and letter of guarantee margin amounting to EGP 123.1 million (2008, EGP 607.6 million and EGP 111.1 million
respectively).

16 Construction contracts in progress

The billing status of construction contracts in progress at 31 December 2009 is as follows:
2009 2008
EGP million EGP million

Costs incurred on incomplete contracts 35,702.4 23,304.7

Estimated earnings 2,381.4 2,143.5
38,083.8 25,448.2
Less: billings to date (40,219.2) (25,854.1)
Balance (2,135.4) (405.9)

Presented in the consolidated balance sheet as follows:

Due from clients – current asset 1,523.4 1,193.8
Due to clients – current liability (3,658.8) (1,599.7)
Balance (2,135.4) (405.9)

In determining the revenue and costs to be recognized each period for work to be carried out on construction contracts, estimates are made to the
final outcome on each contract. Management continually reviews these estimates and makes adjustments and provisions where necessary.
Orascom Construction Industries 87
Annual report 2009
FINANCIAL STATEMENTS

Notes to the consolidated financial statements

continued

17 Cash on hand and at banks

2009 2008
EGP million EGP million

Cash on hand 5.5 7.3

Banks: current accounts 3,419.6 3,349.6
Banks: time deposits* 2,499.5 4,911.8
Total 5,924.6 8,268.7

*  Banks – time deposits include blocked deposits of EGP 812.6 million held as collateral against letters of guarantee and loans of OCI and its
subsidiaries (2008, EGP 598.1 million).

18 Share capital
Authorized capital
The Company’s authorized capital is EGP 5.0 billion.
Issued and paid in capital
As at 31 December 2007, the Company’s issued and fully–paid capital is EGP 1,009,979,185 divided into 201,995,837 common shares at a par
value of EGP 5 each.
On 15 March 2008, the extraordinary general assembly of the Company approved to issue 12,774,877 ordinary shares at the fair value of
EGP 3,933,767,875 at EGP 307.93 per share (after deducting the cash dividend to the shareholders for the financial year ended 31 December
2007 amounting to EGP 300 per share in two installments). The total value of the issued shares of $ 715.5 million fully allocated to Abraj
Capital. The Company’s shareholders relinquished the priority right to subscribe in the increase of the share capital based on the approval of
the general assembly referred to above. On 23 April 2008, the Capital Market Authority approved this increase. The fair value of the allocated
shares represents the par value of shares increase of EGP 63,874,385 at EGP 5 per share, and the balance of EGP 3,869,893,490, representing
the difference between the fair value of the shares and the par value of such shares (premium) of EGP 302.93, was included in the calculation of
reserves in the shareholders’ equity. On 29 April 2008, this increase was recorded in the commercial register of the Company.
As a result, the Company’s issued and paid share capital is EGP 1,073,853,570 divided into 214,770,714 shares at the par value per share of
EGP 5.
On 30 April 2009, the extraordinary general assembly meeting of the Company approved to reduce the Company’s share capital from EGP
1,073,853,570 to EGP 1,034,592,305 (Equivalent to $ 189,870,168) as of 31 December 2009, fully paid and divided into 206,918,461 common
shares, and the difference amounted to EGP 39,261,265 (Equivalent to $ 7,094,904) which represents the par value of 7,852,253 own share. The
mentioned reduction was recorded in the commercial register on 28 October 2009.
OCI’s shares listed in the Egyptian Stock Exchange since March 1999. In September 2002, the Company listed part of its shares (71.4%) on the
London Stock Exchange in the form of Global Depository Receipts (GDRs), each represents two shares. The Bank of New York was appointed to
act as the depository bank.

88 Orascom Construction Industries

Annual report 2009
 Overview
REVIEW
OPERATIONAL
19 Reserves
Legal reserve
According to the Company’s articles of incorporation, 5% of annual net income is set aside as a legal reserve. Setting aside this percentage stops
when the total accumulated reserve reaches 50% of the Company’s issued capital. If the reserve falls below the defined level (50% of the issued
share capital), then the company is required to resume settling aside 5% of the annual profit until it reaches 50% of the issued share capital. This
reserve is used to increase the Company’s issued capital or to cover the Company’s losses. The legal reserve amounted to EGP 536 .9 million

GOVERNANCE
($ 98.3 million) at 31 December 2009.
Other reserves
According to the Company’s articles of incorporation, the General Assembly can establish and use other reserves from annual net income upon a
recommendation by the Board of Directors. The reserve is used according to a decision from the ordinary general assembly based on a proposal
of the Board of Directors of the company. On 30 April 2009, the Extraordinary General Assembly meeting of the Company approved to deduct
from the company’s issued and paid in capital the par value of the retired own share and difference between its acquisition cost and its par value
amounted to EGP 1,588.2 million ($ 290.8) from the other reserves under the final approval of the General Assembly.

STATEMENTS
FINANCIAL
A summary of other reserves balances as of 31 December 2009 as follows:

2009 2008
EGP million EGP million

Legal reserve 536.9 505.0

Special reserve 5,685.3 5,685.3
Capital decrease (retired own shares) and adjustments (1,620.1) –
Hedge reserve (213.0) (94.7)
Foreign exchange reserve (68.7) 87.8
Total 4,320.4 6,183.4

Special reserve includes the additional paid in capital from issuance of stock amounted to EGP 1,815.4 million and EGP 3,869.9 million in the years
2006 and 2008 respectively.

20 Own shares
On 30 April 2009, the Extraordinary General Assembly meeting of the company approved the board of directors decision to deduct from the
Company’s issued and paid in capital EGP 39.3 million which represents the par value of 7,852,253 own shares at the said date. Such reduction
was recorded in the commercial register on 28 October 2009 after executing the required procedures and getting the necessary approval to record
the said reduction from the concerned authorities.
The own shares balance include 1,052,074 shares acquired by OCI ESOP Limited (a subsidiary) under Employees Share based option.
The net cost of acquisition of shares and GDRs of OCI for the share based payments is as follows:

2009 2008

Number of shares (including 256,416 GDRs) 1,052,074 1,632,483

Average cost of acquiring the shares (In million of EGP) 200.2 269.1
Average cost per share (EGP) 190.3 164.9
Market value (In million of EGP) 262.7 227.7
Price per share (EGP) 294.7 140.4
Price per GDR (EGP) 295.7 275.0

On 30 April 2009, the Company’s extraordinary general assembly meeting approved the splitting of its’ (GDRs) to become equivalent to one local
share instead of two local shares.
Orascom Construction Industries 89
Annual report 2009
FINANCIAL STATEMENTS

Notes to the consolidated financial statements

continued
21 Loans
The Company and some of its subsidiaries obtained loans and bank facilities from various lending institutions.
As of 31 December 2009, the outstanding balances which included in current and non-current liabilities were as follows:

Company responsible
for loan Lending institution Interest rate

Orascom Construction Syndication loans 1.5% over LIBOR semi-annually for the non-current portion & monthly or
Industries (Misr Bank - Others) quarterly or semi-annually for the short portion and 0.20% administrative
commission annually.

Syndication loans 1% over LIBOR semi- annually and 0.10% administrative commission annually
(NSGB bank - Others)

Short term loan ( CIB ) 1.75% over the Egyptian Central bank interest rate

Different banks - 10.6% on the LE portion and 2.1 % over LIBOR annually for the US$ portion
overdraft and bank facilities

Orascom Construction Different banks - overdraft Variable

Industries Egypt

Besix Group Different banks - Variable

overdraft and bank facilities

Different banks - loans Variable

Orascom Construction Different banks - overdraft Average 7% Variable

Industries Algeria

Contrack international Different banks - overdraft Variable %3.95

Contrack W.L.L Abu Dhabi Bank Variable

National Steel Fabrication Barclays Bank 13% fixed (L.E.) + 2% ($)for the highest monthly debit balance

Arab Bank 11.75%fixed +0.75% for the highest monthly debit balance

Arab African Bank Egyptian Central bank interest rate+2% over LIBOR paid monthly +0.1% for
the highest monthly debit balance

Bank of Alexandria 13.5%fixed +0.1% for the highest monthly debit balance

Alico Egypt Different banks- overdraft Variable

United Holding Company Different banks- overdraft Variable

EFC Arab African Bank 1.25% over Corridor Egyptian Central bank lending price paid monthly, 0.2%
annual admin expenses paid quarterly, also 0.3% Letter of credit commission
for the period and 0.2% commissions of letter of guarantee for the period.

BNP Paribas Egypt 11.25% compound interest rate for Egyptian pounds, 1.5% annually over the
monthly LIBOR price for the foreign currencies and 0.25% commissions for
the highest monthly debit balance. In the event of default in payment when
due, 1% default interest added montly to the principal from its due date till
the actual payment date .

Sorfert Algeria SPA Syndication loan Interest rate is fixed during the construction period to 5.95% per annum after
(Algeria External Bank - Others) this period and it will be referred to Algerian bank interest rate plus rate of
1.95% per annum,0.25% arrangement fees and 0.5% commitment fees

EBIC Syndicated bank facility Libor plus predetermined margin by loan agreement plus percentage
(different banks) calculated by loan agent according to the agreement

Export-import bank of USA - 0.175% over Libor semi annually, commitment fees 0.5% of the remaining
credit facility facility balance, finance charge 10.32% paid in advance

Total 31/12/2009

Total 31/12/2008
90 Orascom Construction Industries
Annual report 2009
 Overview
REVIEW
OPERATIONAL
Outstanding amount Long-term portion Short-term portion
31/12/09 31/12/09 31/12/09
EGP million EGP million EGP million Collateral guarantee given

1,972.8 1,380.9 591.9 The company will not reduce its ownership interest and the aggregate
value of the secured assets should not exceed 10% of the groups' total
assets and loan covenants

5,175.1 5,175.1 Promissory notes guarantee and loan covenants

GOVERNANCE
218.9 218.9 Promissory notes and blocked deposits

295.8 295.8 Promissory notes

77.7 77.7

STATEMENTS
FINANCIAL
179.3 179.3 Commercial lien on the company's assets and shares in amount of Euro
40.5 million

642.4 531.8 110.6

36.9 36.9 Promissory notes guarantee

54.8 54.8 Loan guarantee by OCI

6.7 6.7

38.6 38.6 Promissory notes for the full amount of the loan

14.0 14.0 Promissory notes for the full amountof the loan

26.3 26.3 Promissory notes for the full amountof the loan

1.0 1.0 Promissory notes for the full amountof the loan

0.9 0.9 Financial guarantee by OCI for total facility equal to EGP 35 million

0.1 0.1

142.7 142.7 Loan guarantee by OCI

24.9 24.9 Promissory notes guarantee amounted EGP 60 million and all the deposits
and current accounts in the bank and its branches

2,453.1 2,332.7 120.4 Blocking certain bank accounts and promise of first degree mortgage of
the project assets, ban for any disposal or decrease of the company share
without recourse to the lender, and loan covenants

934.3 791.5 142.8 Mortgaged tangible assets & intangible assets of EBIC to HSBC

1,189.1 1,007.3 181.8 Mortgaged tangible assets & intangible assets of EBIC to HSBC

13,485.4 11,219.3 2,266.1

11,424.7 7,754.1 3,670.6

Orascom Construction Industries 91
Annual report 2009
FINANCIAL STATEMENTS

Notes to the consolidated financial statements

continued

22 Provisions

2009 2008
EGP million EGP million

Balance at the beginning of the year 2,525.1 2,307.1

Additions during the year 162.5 194.4
Increase in the provision result of the acquisition/ full consolidation of a subsidiary 1.3 44.2
Provision no longer required (34.0) –
Used during the year (76.9) (69.9)
Foreign exchange effect and adjustments (14.6) 49.3
Balance at end of the year 2,563.4 2,525.1

Presented in the balance sheet as follow:

Short–term provisions 650.1 633.7
Long–term provisions 1,913.3 1,891.4
Balance at end of the year 2,563.4 2,525.1

23 Other long-term liabilities

2009 2008
EGP million EGP million

Loans to subsidiaries from minority 6.2 157.5

Others* 564.9 455.9
Total 571.1 613.4

* Others include an amount of EGP 256.5 million represents retentions payable belong to suppliers and sub–contractors of Sorfert Algeria
Company.

24 Trade and other payables

2009 2008
EGP million EGP million

Suppliers and subcontractors and notes payable 3,051.5 3,439.3

Clients– Advance payments 2,930.7 3,361.3
Creditors and other credit balances 2,397.4 1,496.8
Due to related parties (Note 32) 113.9 20.5
Total 8,493.5 8,317.9

92 Orascom Construction Industries

Annual report 2009
 Overview
REVIEW
OPERATIONAL
25 Other operating income

2009 2008
EGP million EGP million

GOVERNANCE
Gain on sale of property, plant and equipment 38.7 15.0
Other income 205.7 109.9
Other expenses (76.9) (60.8)
167.5 64.1

26 Income taxes

STATEMENTS
FINANCIAL
Income tax expense on continuing operations recognized in the consolidated income statement as follows:

2009 2008
EGP million EGP million

Current tax expense 360.6 456.7

Deferred tax (revenue) expense 130.7 119.2
491.3 575.9

The statutory and effective tax rates are as follows:

2009 2008
EGP million EGP million

Income from continuing operation for the period before tax 3,041.5 4,574.7
Statutory corporation tax rate 20% 20%
Income tax at statutory corporation tax rate 608.3 914.9
Effective tax rate 11.9% 10.0%

Orascom Construction Industries 93

Annual report 2009
FINANCIAL STATEMENTS

Notes to the consolidated financial statements

continued

27 Share-based payments
OCI has a plan to provide some of its employees with stock options on its shares. According to this plan, OCI ESOP Limited might purchase OCI
shares from the stock market. This purchase is financed by a loan guaranteed by OCI. The exercise price of the options granted to employees is
equal to the fair market value of the shares on the date of grant. When the options vest, the employee has the right to exercise the options by
payment of the full option price. Payment may be by cash, OCI shares owned for at least six months, delivery of an employee promissory note
bearing interest and secured by a pledge of the OCI shares purchased by the note, or consideration received from OCI ESOP under a cashless
exercise program implemented in connection with the plan. Payments received from employees for options exercised are used by OCI ESOP
Limited to repay the outstanding loan due to OCI or to finance the purchase of other options.
On 27 December 2006, the Shareholders approved at an Extraordinary General Assembly to issue shares at nominal value with a ceiling of 1% of
the current issued shares, in order to meet any of the Company’s obligations under share–based payments relating to the incentive programs for
employees and managers, subject to the approval of the regulatory authorities.
On 1 December 2009, the Company’s board of directors proposed to issue at nominal value with a ceiling of 1% of the current issued share capital
to finance share–based payments relating to incentive programs for employees and managers and decided to invite the extraordinary general
assembly to renew its decision dated 27 December 2006, regarding issuance of shares in connection with the above mentioned matter.

Number of Average per Average per

shares subject to share exercise share market
option price price
Share option activities Shares EGP EGP

Balance at 31 December 2002 257,731 20.18 23.16

Options granted 2003 250,000 10.46 11.36
Options exercised 2003 (257,731) 20.18 –

Balance at 31 December 2003 250,000 10.46 72.51

Options granted 2004 617,808 36.50 36.02
Options exercised 2004 – – –

Balance at 31 December 2004 867,808 29.00 72.54

Options granted 2005 1,161,708 80.41 81.58
Options exercised 2005 – – –

Balance at 31 December 2005 2,029,516 58.43 218.67

Options granted 2006 701,261 224.82 273.6
Options exercised 2006 – – –

Balance at 31 December 2006 2,730,777 101.16 275.90

Options granted 2007 687,594 274.68 273.6
Options exercised 2007 (1,030,368) 52.59 –
Options exercised December 2007 (307,700) 200.43 –

Balance at 31 December 2007 2,080,303 167.88 572.2

Options granted 2008 628,319 397.99 397.99
Options exercised 2008 (306,272) 96.09 –
Options granted from previous years 563,502 238.92 238.92
Options exercised from previous years (559,044) 173.5 –

Balance at 31 December 2008 2,406,808 252.42 140.37

Options granted 2009 1,448,369 128.93 128.93
Options exercised 2009 (471,772) 115.75 –
Balance at 31 December 2009 3,383,405 218.61 249.68

The fair value of services received in return for share options granted are measured by reference to the fair value of share options granted.

94 Orascom Construction Industries

Annual report 2009
 Overview
REVIEW
OPERATIONAL
28 Earnings per share
Earnings per share are calculated by dividing the net income available for shareholders as dividends, after deducting the employees’ share of
profits, by the weighted average number of shares outstanding during the year as follows:

2009 2008

GOVERNANCE
EGP million EGP million

Net income available for distribution 2,416.6 5,366.7

Less:
Employees share of subsidiaries’ profits – (0.4)
2,416.6 5,366.3

STATEMENTS
FINANCIAL
Income from discontinued operations – (1,444.9)

2,416.6 3,921.4

Millions of shares Millions of shares

Common shares at 1 January 207.7 202.0

Weighted average number of shares issued during the year (0.7) 8.6
207.0 210.6
Less:
Weighted average number of treasury stock during the year (1.1) (2.8)
Adjusted weighted average number of shares outstanding during the year (in million share) 205.9 207.8
Earnings per share (EGP) 11.74 25.82

Earnings per share from continuing operations (EGP) 11.74 18.87

29 Dividends
On 15 March 2009, the Company’s Board of Directors decided the second installment of dividends amounted to $ 1 per share for an aggregate
amount of EGP 1,164.8 million from the retained earning balance at 31 December 2007. The Company’s Ordinary General Assembly Meeting
dated 30 August 2008 approved to distribute the remaining balance of retained earnings balance at 31 December 2007 on one or more
installments; the Company’s Board of Directors was delegated in determining the amount and the timing of each payments. The first installment
amounted to EGP 1 176.6 million was distributed on September 2008.
The Company’s board of directors agreed at 9 September 2009 on dividends (First installment) to the Company’s share holders, the dividends
amounted $ 0.80 per share with an aggregate total of EGP 918.9 million from the remaining balance of retained earnings balance at 31
December 2008. The board was authorized by the ordinary general assembly’s decision held at 30 April 2009 to distribute future cash dividends
(one installment or more) with a maximum of EGP 4.1 billion and the general assembly delegated the board of directors in determining the
amount and the timing of each payment, accordingly the total amount of dividends during the year is EGP 2,083.7 million.
The Company’s Board of Directors at 17 March 2010 decided a dividends (second installment) to the Company’s shareholders, the dividends
amounted $1 per share for an aggregate amount EGP 1,135.9 million from the retained earnings balance at 31 December 2008. The amount was
actually distributed at end of March 2010.

Orascom Construction Industries 95

Annual report 2009
FINANCIAL STATEMENTS

Notes to the consolidated financial statements

continued

30 Contingent liabilities
Guarantees
Letters of guarantee issued by banks for OCI and its subsidiaries in favor of others as at 31 December 2009 amounted to EGP 9.6 billion and the
covered portion paid amounted to EGP 124.5 millions (31 December 2008, EGP 8.3 billion and the covered portion paid amounted to EGP 98.6
millions).
Outstanding letters of credit as at 31 December 2009 (uncovered portion) amounted to EGP 377.1 million (31 December 2008, EGP 219.6
million).
At 30 June 2009, OCI guarantees loans provided to a subsidiary amounting to $ 224.9 million which was fully paid before 30 July 2009, however
the Company has the right to use these loans limits till 2010 and therefore the covenants of these loans are still valid; that the subsidiary has
undertaken not to sell, lease, lend or transfer any assets except within the Group, and is committed not to merge, divest, or discontinue any of its
operations.
Guarantees under the agreement with Lafarge
The agreement with Lafarge for the sale of the cement business in 2007 states that the parties ensure that each group company and member of
OCI’s Group are to be released from all guarantees and indemnities they have given to another group company or member of OCI’s Group as the
case may be.
Litigation
In the normal course of business, the Group entities and joint ventures are involved in some arbitration or court cases as defenders or claimants.
These litigations are carefully monitored by the entities management and legal counsels, and are regularly assessed with due consideration for
possible insurance coverage and recourse rights on third parties. Provisions are made if required and regularly updated.
The major portion of the business of the Company’s US subsidiary involves contracting with departments and agencies of the US Government.
Such contracts are subject to audit and possible adjustment by the respective agencies. The USAID Agency has investigated the nature of the
relationship and performance of a contract with an Egyptian Joint Venture of which the company has 40% share. The USAID Agency have filed
a suit against all partners of the Joint Venture contending that it is entitled to refund $ 332 million from the partners representing all the contract
funds paid for these projects plus damages and civil penalties. Management has strong substantive reasons to oppose the allegations raised by
Agency. The Company management also believes that the ultimate resolution of any such claims and counter claims will not have a significant
impact on reported results of operations, consolidated balance sheet and cash flows.
In September 2006, a court judgment in the amount of Euro 1.2 million (EGP 9.2 million) has been pronounced against one of the jointly–
controlled companies and its manager relating to a construction project almost 11 years earlier in an African country where the company is
currently less active. An appeal has been made against the judgment, and a provision has been recognized to an extent consistent with the
external legal counsel’s opinion.
The company made arbitration to settle matters of dispute with the owner of one of its projects which embodying the date handing over the
project and the delaying penalties that the owner demand amounted EGP 61.4 million. The Company requires indemnifies for the unjustified
liquidation by the client of letters of guarantee which amounted EGP 129 million, also the client’s refusal to pay price differences of imported
supplies which amounted EGP 8.150 million and $ 2.397 million, in addition to the client’s failure to meet the contracted obligation to pay 50% of
completed work value in US Dollars which amounted EGP 3.4 per $.
The Company and its legal department believe that the Company has enough documents and justification to support its position and reserve its
rights and, therefore, collecting the total amount due from the client amounted to EGP 212.8 million at 31 December 2009 with no obligation to
pay any delay penalties. Based on that, the company does not form any provisions in its financial statements to meet neither the amount due from
the client nor the delay penalties, which demanded by the client waiting for the final result for arbitration.
One of the Company’s subsidiaries receives invoices for a raw material that differs to the price designated in the supply agreement. The subsidiary
charges its production cost according to the supply agreement price.

96 Orascom Construction Industries

Annual report 2009
 Overview
REVIEW
OPERATIONAL
31 Commitments
At 31 December 2009, capital commitments of the Group for purchasing fixed assets amounted to approximately EGP 1.6 billion and for
investments in securities EGP 7.1 million.

32 Related parties transactions

GOVERNANCE
The intra–group transactions, balances and unrealized profits or losses have been eliminated. Balances as at 31 December 2008 for non–
consolidated companies and joint ventures are reported in the consolidated balance sheet as due from affiliated companies and due to affiliated
companies, and included in trade and other receivables (Note 15) and trade and other payables (Note 24). The transactions with related parties
represents construction works carried out to related parties which amounted to EGP 38.3 million, and these related parties carried out construction
works to the company which amounted to EGP 131.9 millions during the period.

33 Contingent liabilities

STATEMENTS
FINANCIAL
Credit risk
As at 31 December 2009, the total financial assets of the Group, which are the maximum limit for the credit risk, amounted to EGP 10.4 billion.
Currency risk
As at 31 December 2009, the total transactions in foreign currencies, which were the maximum limit for the currency risk, amounted to Japanese
Yen 216 millions.
A company of the Group has concluded several agreements for forward as follows:

Received Paid
Average Conversion rate
Value Currency Value Currency per contract Fair value at

120,000,000 Euro 176,225,000 US Dollar 1.4685 1.5047

2,265,330 US Dollar 216,000,000 Yen 95.35 97.63

Interest rate risk

Total financial commitments at variable rates are EGP 13.9 billion.
A company of the Group has concluded several agreements for interest swap contracts in the amounts of $ 125.9 million and $ 225.7 million for a
commercial facility and an Ex–IM Bank facility, respectively. The fixed interest rates ranged 5.8975% to 5.9525% for the commercial portion of the
Ex–IM Bank loans and the floating rates were 5.4050% to 5.4225% over LIBOR, on both facilities.
Liquidity risk
The total contractual liabilities of the Group, which were the maximum limit for the liquidity risk, amounted to EGP 25.5 billion.

Orascom Construction Industries 97

Annual report 2009
FINANCIAL STATEMENTS

Selected financial data

years ended 31 December

Supplementary financial information in Egyptian Pounds

The selected consolidated financial data for the five years ended 31 December 2009 has been extracted without material adjustment from the consolidated
financial statements of the Company. The selected data should be read in conjunction with the consolidated financial statements and the notes thereto
reported upon by KPMG Hazem Hassan, the Company’s auditor.

31/12/05 31/12/06 31/12/07 31/12/08 31/12/09

Income Statement Data EGP '000 EGP '000 EGP '000 EGP '000 EGP '000

Construction revenue 9,070,808 13,147,511 13,481,740 16,600,680 18,254,695

Fertilizer revenue – – – 3,511,199 2,667,038
Cement revenue 3,295,247 4,948,099 – – –
Concessions / materials revenue – – – 651,744 897,257
Elimination of intra-group revenue (999,461) (1,620,411) – (511,069) (506,232)
Total revenue 11,366,594 16,475,199 13,481,740 20,252,554 21,312,759

Cost of services and goods sold

Construction cost 7,836,426 10,836,670 (11,172,459) (14,143,009) (15,269,552)
Fertilizer cost – – – (807,397) (1,062,983)
Cement cost 1,585,456 2,288,961 – – –
Concessions / materials cost – – – (513,080) (754,734)
Elimination of intra-group cost (1,020,566) (1,616,518) – 511,069 506,232
Total cost of services and goods sold 8,401,316 11,509,113 (11,172,459) (14,952,417) (16,581,038)

Selling, general and admin expenses 719,723 1,149,458 (849,056) (1,293,923) (1,495,036)

Income from operations 2,245,555 3,816,628 1,460,225 4,006,214 3,236,685

Other income and expenses

Interest income 61,983 106,356 323,242 676,936 134,090
Foreign exchange gain (loss) (73,089) 210,085 44,920 493,951 35,400
Income from investments (5,414) 13,762 129,041 1,083 99,300
Gain (loss) on sale of investments 27,678 51,846 – – –
Net change in market value of investments 100,082 21,050 – – –
Other income 20,366 72,991 116,004 64,117 167,527
Interest expense (392,285) (567,080) (604,885) (668,431) (631,484)
Gain (loss) on sale of equipment 35,279 5,475 – – –
Negative goodwill amortization 312,968 – – – –
Profit on intra-Group construction (29,283) (181,126) – – –
Net other income (expense) 58,285 (266,641) 8,322 567,656 (195,167)

Income before taxes 2,303,840 3,549,987 1,468,547 4,574,591 3,041,518

Provision for income taxes (114,443) (136,378) (82,036) (575,841) (491,300)

Results from discontinued operations – – 2,511,048 11,382 –
Gain on sale of cement group – – 62,274,782 1,433,457 –
Minority interest (489,167) (742,891) (151,367) (76,894) (133,618)
Net income 1,700,230 2,670,718 66,020,974 5,366,695 2,416,600

Per share information

Earnings per share 1 8.65 12.93 327.70 25.80 11.74
Cash dividend per share 2 1.89 5.50 5.50 310.50 10.02

98 Orascom Construction Industries

Annual report 2009
 Overview
REVIEW
OPERATIONAL
31/12/05 31/12/06 31/12/07 31/12/08 31/12/09
Balance Sheet Data EGP '000 EGP '000 EGP '000 EGP '000 EGP '000

Cash and cash equivalents 2,168,316 2,738,067 3,917,025 8,268,710 5,924,600

Accounts receivable – customers (net) 1,678,902 3,196,684 765,992 8,236,229 9,749,900

GOVERNANCE
Total current assets 8,182,779 11,008,340 89,739,810 19,858,932 19,349,700
Property, plant and equipment (net) 6,672,420 9,104,053 1,883,788 7,060,618 10,696,600
Assets under construction 2,134,916 6,441,241 1,589,625 2,851,668 4,294,300
Total assets 17,610,360 28,616,330 94,951,996 43,025,494 46,857,500
Short-term debt 1,343,855 2,987,693 10,647,706 3,670,552 2,266,100
Accounts payable 3,353,496 5,868,789 907,399 8,317,906 8,493,500
Total current liabilities 5,245,180 9,865,069 17,349,754 14,678,641 15,429,100

STATEMENTS
FINANCIAL
Total long-term liabilities 6,135,671 7,591,153 3,706,422 10,765,669 14,285,400
Minority interest 1,965,285 2,488,380 1,048,773 226,736 750,200
Total shareholders’ equity 4,264,224 8,671,728 72,847,047 17,354,448 16,392,800
Total shareholders’ equity and liabilities 15,645,075 26,127,950 94,951,996 43,025,494 46,857,500

Other Data
Return on sales 3 14.96% 16.21% 10.28% 19.70% 11.34%
Return on equity 4 46.53% 41.29% 90.84% 33.00% 14.32%
Current ratio 5 1.56 1.12 5.17 1.35 1.25
Net debt to equity ratio 6 0.85 0.70 0.11 0.20 0.40

1 Net income available for shareholder dividends, after deducting the employees’ profit share, divided by the
weighted average number of shares outstanding during the period.
2 Total cash dividend paid for each year divided by current number of shares of 205,866,287.
3 Net income as a percentage of sales.
4 Net income as a percentage of average total shareholders’ equity.
5 Current assets to current liabilities.
6 Net debt to internal finance (shareholders’ equity plus minority interests).

Orascom Construction Industries 99

Annual report 2009
FINANCIAL STATEMENTS

Selected financial data continued

years ended 31 December

Supplementary financial information IN US DOLLARS

The selected consolidated financial data for the five years ended 31 December 2009 has been extracted without material adjustment from the consolidated
financial statements of the Company. The selected data should be read in conjunction with the consolidated financial statements and the notes thereto
reported upon by KPMG Hazem Hassan, the Company’s auditor.

31/12/05 31/12/06 31/12/07 31/12/08 31/12/09

Income Statement Data $ ‘000 $ ‘000 $ ‘000 $ ‘000 $ ‘000

Construction revenue 1,558,558 2,286,524 2,381,596 3,046,835 3,280,387

Fertilizer revenue – – – 644,434 479,269
Cement revenue 566,194 860,539 – – –
Concessions / materials revenue – – – 199,619 161,238
Elimination of intra-group revenue (171,729) (281,811) – (93,800) (90,970)
Total revenue 1,953,023 2,865,252 2,381,596 3,797,088 3,829,924

Cost of services and goods sold

Construction cost 1,346,465 1,884,638 (1,973,654) (2,595,762) (2,743,953)
Fertilizer revenue – – – (148,187) (191,019)
Cement cost 272,415 398,080 – – –
Concessions / materials cost – – – (94,169) (135,627)
Elimination of intra-group cost (175,355) (281,134) – 93,800 90,970
Total cost of services and goods sold 1,443,525 2,001,584 (1,973,654) (2,744,318) (2,979,629)

Selling, general and admin expenses 123,664 199,906 (149,989) (237,482) (268,660)

Income from operations 385,834 663,761 257,953 735,288 581,635

Other income and expenses

Interest income 10,650 18,497 57,102 124,243 24,093
Foreign exchange gain (loss) (12,558) 36,537 7,935 90,658 6,356
Income from investments (930) 2,393 22,796 331 17,837
Gain (loss) on sale of investments 4,756 9,017 – – –
Net change in market value of investments 17,196 3,661 – – –
Other income 3,499 12,694 20,492 11,768 30,105
Interest expense (67,403) (98,623) (106,855) (122,682) (113,478)
Gain (loss) on sale of equipment 6,062 952 – – –
Negative goodwill amortization 53,775 – – – –
Profit on intra-Group construction (5,031) (31,500) – – –
Net other income (expense) 10,016 (46,372) 1,470 104,318 (35,087)

Income before taxes 395,850 617,389 259,423 839,606 546,548

Provision for income taxes (19,664) (23,718) (14,492) (105,688) (88,287)

Results from discontinued operations – – 443,585 2,089 –
Gain on sale of cement group – – 11,001,057 263,092 –
Minority interest (84,049) (129,198) (26,739) (14,113) (24,011)
Net income 292,137 464,473 11,662,834 984,986 434,250

Per share information

Earnings per share 1 1.49 2.25 57.89 4.70 2.11
Cash dividend per share 2 0.32 0.96 0.97 57.00 1.80

100 Orascom Construction Industries

Annual report 2009
 Overview
REVIEW
OPERATIONAL
31/12/05 31/12/06 31/12/07 31/12/08 31/12/09
Balance Sheet Data $ ‘000 $ ‘000 $ ‘000 $ ‘000 $ ‘000

Cash and cash equivalents 376,444 478,683 706,534 1,503,456 1,080,208

Accounts receivable – customers (net) 291,476 558,861 138,166 1,497,551 1,777,661

GOVERNANCE
Total current assets 1,420,621 1,924,535 16,186,834 3,610,846 3,527,954
Property, plant and equipment (net) 1,158,406 1,591,618 339,789 1,283,795 1,950,185
Assets under construction 370,645 1,126,091 286,729 518,504 783,026
Total assets 3,057,354 5,002,855 17,126,983 7,823,102 8,543,293
Short-term debt 233,308 522,324 1,920,583 667,397 413,163
Accounts payable 582,204 1,026,012 163,672 1,512,402 1,548,590
Total current liabilities 910,622 1,724,663 3,129,465 2,668,941 2,813,115

STATEMENTS
FINANCIAL
Total long-term liabilities 1,065,221 1,327,125 668,547 1,957,466 2,604,604
Minority interest 341,195 435,031 189,173 41,226 136,772
Total shareholders’ equity 740,317 1,516,036 13,139,799 3,155,469 2,988,802
Total shareholders’ equity and liabilities 2,716,159 4,567,824 17,126,983 7,823,102 8,543,293

Other Data
Return on sales 3 14.96% 16.21% 10.28% 19.70% 11.34%
Return on equity 4 47.02% 41.17% 90.84% 33.00% 14.32%
Current ratio 5 1.56 1.12 5.17 1.35 1.25
Net debt to equity ratio 6 0.85 0.70 0.11 0.20 0.40
Foreign exchange rate (EGP = $ 1) 5.75 5.72 5.54 5.50 5.48
Foreign exchange rate (EGP = $ 1) PL 5.82 5.75 5.66 5.45 5.56

1 Net income available for shareholder dividends, after deducting the employees’ profit share, divided by the
weighted average number of shares outstanding during the period.
2 Total cash dividend paid for each year divided by current number of shares of 205,866,287.
3 Net income as a percentage of sales.
4 Net income as a percentage of average total shareholders’ equity.
5 Current assets to current liabilities.
6 Net debt to internal finance (shareholders’ equity plus minority interests).

Orascom Construction Industries 101

Annual report 2009
Additional information

MANAGEMENT AND CORPORATE INFORMATION

Board of Directors Corporate Officers Construction Group

Onsi Sawiris Nassef Sawiris Osama Bishai
Chairman Emeritus Chief Executive Officer Managing Director
Orascom Construction
Nassef Sawiris Salman Butt
Chairman Chief Financial Officer SHERIF TANTAWY
Chief Financial Officer
Salman Butt Nicolas Estay Construction Group
Director Executive Vice President – Europe
Johan Beerlandt
Osama Bishai Kevin Struve Chief Executive Officer
Director Strategic Planning Director BESIX Group

Karim Camel-Toueg Dalia Khorshid Karim Camel-Toueg

Director Corporate Treasurer President
Contrack
ARIF NAQVI Fady Kiama
Independent Non-Executive Director Corporate Controller John baracat
Managing Director
SAMI HADDAD Hassan Badrawi NSF
Independent Non-Executive Director Director
Business Development & Investments HESHAM ABDEL SAMIE
Aladdin Saba* Director, Subsidiaries
Senior Independent Non-Executive Director Hussein Marei (Alico, UHC, UPC, NPC, SCIB)
General Counsel
HASSAN ABDALLA*
Independent Non-Executive Director Heba Iskander Fertilizer GROUP
Corporate Development Director
JÉRÔME GUIRAUD* HOSSAM KHATTAB
Independent Non-Executive Director Managing Director
Egyptian Fertilizers Company
* Members of the Audit Committee.
Amr Hassaballah
Managing Director
Egypt Basic Industries Corporation

102 Orascom Construction Industries

Annual report 2009
business segments & activities

Overview
REVIEW
OPERATIONAL
CONSTRUCTION GROUP Fertilizer GROUP
ORASCOM CONSTRUCTION (100%) EGYPTIAN FERTILIZERS COMPANY (100%)
Regional engineering, procurement and construction services Granular urea manufacturer, Egypt

BESIX GROUP (50%) EGYPT BASIC INDUSTRIES CORPORATION (60%)

GOVERNANCE
Global engineering, procurement and construction services Ammonia manufacturer, Egypt

CONTRACK (100%) SORFERT ALGÉRIE (51%)

Regional engineering, procurement and construction services Ammonia and granular urea manufacturer, Algeria

NOTORE CHEMICAL INDUSTRIES (24%)

CONSTRUCTION MATERIALS Granular urea manufacturer, Nigeria

NATIONAL STEEL FABRICATION (100%) EGYPTIAN FERTILIZER TRADING (100%)

STATEMENTS
FINANCIAL
Steel cutting, bending, welding, and painting services Fertilizer trading

ALICO EGYPT (50%) Gavilon (18.1%)

Building facade, curtain walling, and window systems Grain and fertilizer trading, USA

UNITED HOLDING COMPANY (56.5%)

Holding company with investments in:
- EGYPTIAN GYPSUM COMPANY (50%)
Building plasters manufacturer
- BASF (50%)
Construction chemicals manufacturer
- A-BUILD EGYPT (50.1%)
Waterproofing contractor

UNITED PAINTS & CHEMICALS (56.5%)

Cement based, ready mix mortars

NATIONAL PIPE COMPANY (40%)

Concrete pipe manufacturer

SCIB CHEMICAL (15%)

Paints and building chemicals manufacturer

PROPERTY MANAGEMENT
SUEZ INDUSTRIAL DEVELOPMENT COMPANY (60.5%)
Industrial park developer and operator

CONTRACK FM (100%)
Facilities management company

Orascom Construction Industries 103

Annual report 2009
Additional information
Investor Relations AND Shareholder Information
Investor Relations
Omar Darwazah
Investor Relations Manager
omar.darwazah@orascomci.com
ERIka Wakid
Investor Relations Officer
erika.wakid@orascomci.com
Telephone: 00 202 2461 1036
00 202 2461 0727
00 202 2461 0917
Fax: 00 202 2461 9409
104 Orascom Construction Industries
Annual report 2009
Shareholder Information
Corporate Office
Nile City Towers
2005A Corniche El Nil
Cairo, Egypt 11221
Tel: +20 22 461 1111
Fax: +20 22 461 9400
www.orascomci.com
Full Listing: The Egyptian Exchange
Reuters / Bloomberg: OCIC.CA / OCIC EY
GDRs Listed: London Stock Exchange
Reuters / Bloomberg: OCICq.L / ORSD LI
Overview
Orascom Construction Industries is
a leading international construction
01 2009 highlights
02 Letter to shareholders
04 The business

Operational review
contractor and fertilizer producer based
06 Construction in Cairo, Egypt. We are one of the
region’s largest corporations with projects
08 Construction group
10 Orascom Construction
14 BESIX Group
18 Contrack
20 Construction materials and investments across Europe, the
Middle East and North Africa.
22 National Steel Fabrication
24 Alico Egypt
25 United Holding Company
25 United Paints and Chemicals
25 National Pipe Company
25 SCIB Chemical We aspire to be a company that our
26 Property management
28 Contrack FM
29 Suez Industrial Development Company
clients are proud to work with and
30 fertilizer Manufacture
32 Fertilizer group
our employees are proud to work for,
34 Egyptian Fertilizers Company
36 Egypt Basic Industries Corporation a company committed to delivering
quality work and products, safely and
38 Notore Chemical Industries
38 Sorfert Algérie
38 Gavilon
40 Corporate & Social Responsibility
42 OCI’s internal community
on schedule, and a company with an
44 OCI’s greater community
open mind ready to embrace new
opportunities and driven to deliver
Governance

48 Board of Directors
50 Report of the Directors
52 Corporate governance
55 Management’s discussion and analysis
exceptional value.
of financial condition and results of operations
60 Report of the Audit Committee of the
Board of Directors

Financial statements

63 Auditor’s report
64 Director’s statement in respect of
responsibility for financial reporting
65 Consolidated income statement
66 Consolidated balance sheet
68 Consolidated statement of changes in equity
70 Consolidated cash flow statement
71 Notes to the consolidated financial statements
98 Selected financial data
102 Management and corporate information
103 Business segments and activities
104 Investor Relations and Shareholder information

Designed by dmicreative www.dmicreative.com

Printed by Park Communications on FSC certified paper. Park is a CarbonNeutral® company and its Environmental Management
System is certified to ISO14001:2004.
100% of the electricity used is generated from renewable sources, 100% of the inks used are vegetable oil based, 95% of press
chemicals are recycled for further use and on average 99% of any waste associated with this production will be recycled.
This document is printed on Hello Silk and Colourplan. The pulp of Hello Silk is bleached using a mixture of Totally Chlorine Free (TCF)
and Elemental Chlorine Free (ECF) processes. Both Hello Silk and Colourplan are made using virgin fibre sourced from FSC certified
forests, both can be disposed of by recycling, incineration for energy recovery or are biodegradable.
 Annual Report 2009

Orascom Construction Industries

Orascom Construction Industries
Nile City Towers
2005A Corniche El Nil
Cairo, Egypt 11221

Tel: +20 22 461 1111

Fax: +20 22 461 9400

www.orascomci.com

Annual report 2009

Invest
Grow
HARVEST