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Established in Dubai in 1997, Emaar Properties (Emaar) is a powerful global brand name involved in real estate development.

The countrys plan to spend over USD 1 trillion on leisure projects provides huge opportunity for real estate developers.

Emaars two-pronged strategy geographic and business segmentation will further enhance its revenue growth.

On February 12, 2008, the company proposed a 20% cash dividend for the year 2007.

Over supply of property units in Dubai is expected to continue until 2010; this may negatively impacting the companys top-line.

Offsetting Emaars growth drivers against risk factors, we raise our 12-month price target to AED 18.27 from AED 16.60, while reiterating our OVERWEIGHT recommendation on the stock.

Emaar Properties (EMAAR.DFM)

Country: United Arab Emirates Exchange: Dubai Financial Market Sector: Construction & Real Estate; Service Local Ticker: EMAAR Reuters Code: EMAAR.DFM Investment Opinion: OVERWEIGHT Last traded Price: AED 12.15 (as on March 12, 2008) Fair Value: AED 18.27 Products & Services: Real estate investment, development and property management; health care; education; leisure; retail; hospitality; Financial services.

Current Market Price (AED) 12.15

YTD Stock Performance % -18.5%

Outstanding Shares (In million) 6,091.24

Market Cap (AED Million) 74,008.55

EPS (AED) 1.08 P/E 11.26

BVPS (AED) 6.00 P/B 2.03

DPS (AED) 0.20 Dividend Yield (%) 1.6

52-week High (AED) 15.85 52-week Low (AED) 9.75

Source: Dubai Financial Market, Zawya.com

Share Price MovementEMAAR vs. DFM

Background Established on June 23, 1997 as a public joint stock company, Emaar Properties is one of the worlds largest real estate companies. The company is primarily engaged in property investment and development, property management services, education, healthcare, retail and hospitality, as well as investment in financial service providers. Driven by its Vision 2010 to become one of the most valuable companies in the world, Emaar is formulating a new course of growth with a two-pronged strategy - geographical expansion and business segmentation. It has established operations in 17 markets to date. Listed on the Dubai Financial Market on March 26, 2000, Emaar is also a part of the Dow Jones Arabia Titans Index and S&P IFCG Extended Frontier 150 Index. The company is now looking to list shares worth USD 40 billion on the London Stock Exchange. Emaar has strengthened its product sale competencies, market reach and best practices through strategic acquisitions and joint ventures. In 2006, it acquired John Laing Homes, America's second largest privately held home builder, and Hamptons International, UK's premier realtor and property management consultant. It also formed a joint venture with the US-based Turner International to strengthen execution capabilities. In addition, it continues to diversify its presence into other sectors such as education, healthcare and hospitality. It acquired Singapore-based Raffles Campus, a premier education provider through its subsidiary Emaar Education. Emaar teamed up with Giorgio Armani and Accor Hotels to strengthen its presence in hospitality and will launch ten luxury Armani Hotels & Resorts world-wide and 100 Formula 1 budget hotels in India. Further, in October 2007, it entered into a joint venture with Tatweer's Bawadi to develop a USD 16 billion (AED 60 billion) project as part of Bawadi's massive hospitality development in Dubai land. In the same month, Emaar agreed to build four residential and leisure projects around Algiers worth USD 20 billion. Between 2001 and December 31, 2007, Emaar has handed over 21,000 residential units to customers. As of August 31, 2007, the companys land bank comprised 504.9 million square meters including the joint venture with Bawadi, but excluding Algeria. On July 10, 2007, Moody's Investors Service assigned Emaar a long-term foreign currency rating of 'A3', a long-term local currency rating of 'A3', with a Stable outlook. Standard & Poors assigned it an A-. On March 5, 2008, Emaar won the Mohammed Bin Rashid Al Maktoum Business Award (MRM Award), launched by the Dubai Chamber of Commerce & Industry in the Real Estate Development category. The MRM Real Estate Business Development Award recognized Emaar's outstanding achievements in project management and execution, adherence to delivery schedules, and working in association with government authorities for infrastructure development. Further, it was chosen as the Property Company of the Year' for the second consecutive year in 2007 at the Arabian Business Property Awards. It also won the Dubai Quality Award; the ISO 14001:2004 certification for its environment management processes; and the ISO 9001:2000 certification for quality management. It was also ranked in the Top 10 of Standard & Poor's (S&P's) IFCG Extended Frontier 150 Index for frontier equity markets covering constituents from 26 countries. For the year 2007, Emaar recorded a net profit of AED 6.58 billion compared to AED 6.37 billion in the previous year up 3.2%. Consequently, basic earnings per share (EPS) increased to AED 1.08 from AED 1.05. Board of Directors Emaars Board of Directors comprises eight members. H.E. Mohamed Ali Alabbar is the Chairman and of the company and Mr. Hussain Al Qemzi is the Vice Chairman. The rest of the board members are:

Name Designation

Mr. Ahmad Jamal Jawa Director

Mr. Salem Rashed Al Mohannadi Director

Mr. Mohammed Ibrahim Al Shaibani Director

Dr. Lowai Mohamed Belhoul Director

Mr. Majid Saif Al Ghurair Director

Mr. Ahmed Thani Al Matrooshi Director

Among the worlds largest real estate companies. Forays into various sectors. A number of corporate laurels. Chaired by H.E. Mohamed Ali Alabbar.

Major Shareholders and Affiliates Emaar is primarily a publicly held company with the majority stake of 68% held by the public. The balance 32% stake is with the Investment Corporation of Dubai. Foreign ownership is restricted to 49% of the share capital and is open to both GCC as well as foreign investors.

Shareholding Pattern

32%

68%

Investment Corporation of Dubai Public

Emaar, in turn enjoys holdings in a number of companies that operate across various sectors. These are:

SUBSIDIARIES / ASSOCIATES / AFFILIATES COUNTRY % SHARE

Arabian Ranches UAE 100.00%

Emaar Dubai UAE 100.00%

Emaar Education UAE 100.00%

Emaar Healthcare Group UAE 100.00%

Emaar Hospitality Group UAE 100.00%

Emaar Hotels and Resorts UAE 100.00%

Emaar International UAE 100.00%

Emaar International Jordan Jordan 100.00%

Emaar Investment Holding UAE 100.00%

Emaar Malls Group UAE 100.00%

Emaar Misr for Development Company Egypt 100.00%

Emaar Morocco Offshore Morocco 100.00%

Emaar Syria Syria 100.00%

Emaar Towers UAE 100.00%

Emirates Living UAE 100.00%

Hamptons International Holding United Kingdom 100.00%

WL Homes [John Laing Homes] United States 100.00%

A publicly held company.

Real Estate - the centerpiece of UAEs economy. Oversupply - the sectors bane. Plans to invest USD 1 trillion on leisure projects.

The Industry Scenario The UAEs real estate sector has become the centerpiece of the economy, driven by rising population, huge inflows of expatriates, and legal and financial deregulations by the government. According to the Ministry of Economy, the country posted real growth at 16% in 2007 over 9.4% in 2006, with gross domestic product (GDP) reaching AED 698 billion. The non-oil sector accounted for 65% of the total GDP, while oil contributed 35% in 2007. The economy is anticipated to grow by a further 6.6% this year. Simultaneously, a recent study, conducted by the Research Unit at Mashreq Bank, in conjunction with the Macroeconomic Research Centre, projected the countrys population to hit 6.88 million in 2011, as compared to 5.19 million in 2007. Dubai alone is anticipated to attract over 50% of the new expatriates. During 2007, the real estate sector contributed 8% to the countrys GDP with an investment of AED 25.8 billion. In addition, AED 23.1 billion (16% of total investment) was pumped into the development of infrastructure, including airport expansions, internal and external road networks, bridge and tunnel constructions and communications. According to the Ministry, real estate and construction are anticipated to be the key drivers of economic growth in 2008 as well. The sectors are predicted to grow by 24.4% and 21.6% respectively by 2010, thereby together contributing 23% to the countrys economy in comparison with 16% in 2006. As of now, oversupply of completed units is the biggest risk in the UAE. It is estimated that this problem will continue through 2010 in Dubai and beyond 2010 in Abu Dhabi. Assuming that the UAE maintains its existing currency peg for the next 12 months, research firm Al Mal Capital anticipates rental yield to decline over the next four years on the back of real estate price appreciation. Currently, the average rental yield in the UAE stands at 7.7%, which is higher than that of countries with similar income levels. By the end of 2008, the average price of residential property is expected to increase to AED 1,800 per square foot from AED 1,400 in 2007. Price appreciation is anticipated to be around 28% in 2008. However, it is forecast to slow down to 17% in 2009, as more supply is delivered. Dubai is the largest spender on leisure projects in the Middle East, followed by Saudi Arabia and Abu Dhabi. Real estate projects in Dubai are anticipated to reach USD 310 billion over the next decade, out of which USD 230 billion will be in the property sector. Across the region, more than USD 1 trillion is being pumped into the leisure sector. This forms a substantial proportion of the total investments of USD 3.63 trillion in tourism and transport in the region, encompassing hotels, aviation developments, cruise lines and supporting infrastructure. Several mega projects that are either planned or are already under way in Dubai include the Dubai Waterfront, Burj Dubai, Hydropolis, Old Town, Madinat Al Arab, and the Dubai Marina. However, a shortage of skilled labour is posing a threat to the sector as 160 projects stand delayed.

Dubai Population and Tourists/Visitors

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Positive government policies. Total assets surged 31.4%.

Inflation in the UAE is surging on the back of rising house rents and pricey imports, as the currency is pegged to the US dollar. It hit a 19-year high of 9.3% in 2006 and accelerated to 10.9% in 2007. In an effort to curb inflation, Dubai and Abu Dhabi reacted by capping rent increases to 5% from 7%. In addition, the ministry has set an inflation target of 5% in 2008. In order to control rising costs for building materials, on March 13, 2008, Dubai lifted customs duties on cement and steel. Taking the battle against inflation to the next stage, on March 10, 2008, the government set up a task force to study the possibility of de-pegging the countrys currency from dollar. Currently, the UAE has no unified property law governing foreign ownership of real estate. Each emirate has developed its own approach ranging from Fujairah, which does not allow foreign ownership of property, to Dubai, where foreign ownership of freehold interests in real property is allowed. According to the Dubai Property Law, non-nationals and companies are allowed to own only a free hold property or leasehold right over real property for a period of 10 to 99 years. Further, with the exception of certain public joint stock companies, which are listed on the DFM, a company with foreign shareholders is not considered as a UAE national for the purposes of owning property. Peer Analysis (as on 9M 2007) In AED 000 Emaar

Properties Union

Properties Deyaar

Development Aldar

Properties Revenue 12,537,184 2,024,106 214,923 146,837 Net profit 4,838,957 471,743 198,834 1,413,000 Total Assets 53,015,808 9,891,760 8,062,492 19,084,032 Total Equity 34,148,390 5,019,450 5,976,834 4,558,839 EPS 0.79 0.17 0.03 0.82 ROA 9.1% 4.8% 2.5% 7.4% ROE 14.2% 9.4% 3.3% 31.0%

Asset Structure At the end of 2007, Emaars total assets climbed 31.4% to AED 54.79 billion from AED 41.69 billion in 2006, on account of significant growth in development properties, and property, plant & equipment. Development properties soared 45.6% to AED 16.19 billion from AED 11.12, thereby accounting for 29.6% of total assets. During the year, the company transferred a plot of land worth AED 1.88 billion at Al Lusaily (UAE) to development properties from investment properties. Consequently, investment properties declined 19.2% to AED 5.64 billion. Capitalizing on high real estate demand, Emaar started the construction of several buildings as investment properties in anticipation of future demand. This investment, included under capital work in progress, amounted to AED 4.16 billion as against AED 2.37 billion, out of which AED 57.83 million was capitalized as cost of borrowings for the construction of these assets. Consequently, property, plant & equipment surged 77.6% to AED 7.43 billion from AED 4.18 billion. Simultaneously, Emaars investment in the Emaar MGF Land Limited (India) drove its investment in associates to AED 9.11 billion compared to AED 6.59 billion last year.

Assets Structure of Emaar

8.6%10.3%

29.6%

13.6%

16.6%

21.3%

Bank balances and cash Investment properties Development propertiesProperty, plant and equipment Investment in associates Other assets

Further in 2007, Emaars cash & bank balance more than doubled to AED 4.73 billion from AED 2.33 billion. Out of the total cash & bank balance, fixed deposits maturing after three months registered an over nine-fold growth to AED 2.59 billion. This indicates that the company is parking its cash in the form of interest earning fixed deposits which carry interest rate between 5.35% and 5.80% as against 5.60% and 5.75% in 2006. For the year, trade receivables increased 54.5% to AED 0.93 billion from AED 0.60 billion. Among the geographic segments, assets allocated to the domestic segment comprised 55.9% of total assets as against 44.1% apportioned to the others. Capital Structure For the year 2007, Emaars total equity increased by 21.8% to AED 37.19 billion from AED 30.54 billion in 2006. Of this, AED 0.65 billion belonged to minority interest holders, representing a 15.2% growth over last year. The companys reserve grew 12.4% to AED 16.49 billion, while retained earnings climbed 51% to AED 13.95 billion. The company came out with a 100% right issue in 2005. During 2007, 15.69 million shares were issued to those shareholders who had opted for the additional shares at a premium of AED 4 per share. These shareholders were given the option of paying for the rights in installments up to a maximum of four. Sharing the rewards of its performance among shareholders, on February 02, 2008, Emaar proposed to distribute 20% cash dividends for the year 2007.

Capital Structure of Emaar

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Recent Performance For 2007, Emaars net profit grew 3.2% to AED 6.58 billion from AED 6.37 billion, mainly driven by a growth in revenues. This resulted in earnings per share of AED 1.08 as against AED 1.05 in the earlier year. However, net profit margin declined to 37.4% from 45.5% on account of a 51.3% increase in selling & general administration expenses. Meanwhile, both return on equity (ROE) and return on assets (ROA) declined to 18% and 12% as against 21.3% and 15.3%, respectively, in 2006.

Recent Performance of Emaar

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Shareholders equity up AED 36.54 billion. Net profit grew 3.2% in 2007.

Changing gears from land sale to condominiums. A plethora of projects across the globe.

During the year, revenue surged 25.4% to AED 17.57 billion from AED 14.01 billion in 2006. The increase in revenue can be mainly attributed to the sale of condominiums, which climbed 69.3% to AED 8.67 billion, thereby accounting for 49.4% as compared to 36.6% of total revenues in the earlier year. During the second half of 2007, Emaar announced its intention to cease land sales on account of increased property development. Consequently, sale of land tumbled 50.7% to AED 1.50 billion. In addition, cost of revenues climbed 51.2% to AED 10.64 billion, as a result of which gross profit margin declined to 39.4% from 49.7%. However, we believe, Emaars strategy is a step in the right direction as this would enhance the companys profits in the long-term.

Segmental break-up of Revenues

0.001.002.003.004.005.006.007.008.009.00

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Sale of villas Sale of plots ofland

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For the year 2007, Emaars share of profits from associated companies registered an over three-fold growth to AED 0.40 billion from AED 0.13 billion. The company paid taxes amounting to AED 14.45 million as against AED 47.07 million, in relation to the groups operation in the USA and the UK. The decline in taxes can be mainly attributed to the reduction in the tax rate to 0.2% from 0.7% in 2006.

Emaars Sales Status

Sales Status (2007) Units Released (2007) Units Sold (2007)

Emaar - the Economic City (Saudi Arabia) 540 433

Jeddah Gate (Saudi Arabia) 190 91

Uptown Cairo and Marassi (Egypt) 1,367 925

The Eight Gate (Syria) 196 67

Tinja (Morocco) 129 112

Tuscan Valley (Turkey) 160 65

Emaar MGF (India) 1,309 763

Total 3,891 2,456 New Projects and Strategy In line with its international expansion strategy, Emaar is strengthening its presence across the world through acquisitions and ventures in prestigious projects, and substantial holdings in successful companies. On March 5, 2008, the company announced that it had entered a 50:50 joint venture with Cham Holding Company (Syria) to launch a new company - Emaar Cham - for the development of mix-use projects. The new company will have a capital of USD 100 million. In the same month, the company announced investment in a mega Kuwaiti project under the build, operate, transfer system - probably the Bubiyan Island project. On February 27, 2008, Emaar signed an agreement with Sham Holding Company to establish a joint project under the name Emaar-Sham Co. with a capital of USD 100 million. The new company will develop a number of housing compounds in several Syrian cities and launch several projects to organize the randomly-built areas in Damascus and the countryside. Earlier, on February 16, 2008, Emaar Turkey acquired 73,571 square meters of prime land in Istanbul for USD 400 million from Toprak Holding (Turkey). However, in February, Emaar MGF Land, a joint venture between Emaar and MGF Development of India, had to withdraw its USD1.64 billion IPO on account of under subscription.

Variegated interests from sports marketing to water management. Strategies toward Vision 2010.

On January 21, 2008, the company's subsidiary, Emaar Education, entered into a partnership with Stryx Sports Marketing SAE to establish the FCBEscola Dubai Soccer Academy, which will be run by coaches from FC Barcelona Football Club. In the same month, another subsidiary, Emaar Malls Group, forged a strategic alliance with SEGA Corporation (Japan) to develop and operate indoor theme parks in the company's malls across the Middle East and North Africa. Further, Emaar IGO issued a Letter of Acceptance to the joint venture between Arabtec Holding and Arabian Construction Company for a contract worth AED 152 million to carry out construction works on the Eighth Gate Development project (Syria) over a period of 20 months. Again in January, Emaar Middle East awarded contracts to two companies - Al Taafuf and the Saudi Building and Development Management Company - for the development of the water, waste management, drainage and electric supply infrastructure, and walk-ways throughout its Jeddah Gate project in Saudi Arabia. On December 11, 2007, Emaar entered into a joint venture with United Utilities (UK) to establish a new company, Emaar Utilities, to manage water resources and environmental affairs for the latters projects in Dubai. In the same month, Emaar Healthcare Group announced that it is in the process of initiating partnerships to construct 100 hospitals and 500 health centers. The new project is expected to generate revenues of USD 5 billion over the next 10 years. Again in December, Emaar Industries acquired a 52% stake in Caparol LLC, which plans to invest AED 400 million in acquiring majority stakes in up to four companies in the MENA region in the fields of oil and gas, healthcare, and construction by the end of 2008. Caparol also plans to construct a paint production factory that will double its current capacity to 15,000 - 20,000 tons p.a. The plant is expected to start production within 18 months. Simultaneously, Emaar-MGF, its Indian venture, entered into an MoU with Dubai Aerospace Enterprise (DAE) to tap the burgeoning airport up-gradation market in India. The firm plans to invest more than USD 12 billion in India over the next four to five years. In October 2007, Emaar announced its intention to build four residential and leisure projects around Algiers worth USD 20 billion. It is also considering boosting its investment in the country to USD 30 billion. On March 8, 2008, Emaar announced that it will open a limited sale of commercial space in Downtown Burj Dubai and Dubai Marina from March 10. In the same month, it also opened sales of a limited collection of unique villas and townhomes, located in the established neighborhoods of the Arabian Ranches and The Lakes, and the up-and-coming Umm Al Quwain Marina. Concurrently, it sold a limited collection of luxury waterfront serviced apartments at the 38-storey Dubai Marina Mall Hotel & Serviced Residences, and boutique offices at Marina Plaza. In line with its Vision 2010, Emaar aims to be the worlds most valuable company in the next couple of years. The company intends to cover projects worth AED 154 billion (USD 42 billion) over the next four years, of which international projects will account for AED 115 billion. Further, it plans to expand its education and health care operations into the Middle East and the Indian sub continent regions. In addition, it aims to earn 60% - 70% of revenue from international operations and to generate 15% of net profits (2% in 2007) from hotels and malls by 2010. The company is targeting a minimum Internal Rate of Return (IRR) of 15% on non-property development projects. Positives

Emaar Properties is a powerful brand name, with a size and scale of operations that allow it

to undertake giant projects. Its expansion and diversification into key markets and sectors helps the company to grab

prestigious projects and capture all-around growth. The countrys massive investment in the real estate sector provides abundant opportunity for

real estate developers. Negatives

Emaar is exposed to execution risks, which may result in delays and cancellations. The governments plan to de-peg the currency from dollar could raise the companys finance

cost.

Cost of Equity: 10.89% WACC: 10.05% Fair Value: AED 18.27 Investment Opinion: OVERWEIGHT

Valuation: Discounted Cash Flows We have used the Discounted Cash Flow (DCF) method to determine our fair value estimate. As inputs for our valuation, we have used the unlevered industry Beta for emerging markets Real estate development of 1.27. We have derived the equity premium by adding the historical premium of US equities over the risk-free rate and the country premium. We estimate a country premium of 0.90% using Moodys long-term country rating (Aa3 for UAE) and estimating a default spread for that rating, based upon the difference in yields for traded country bonds. As a proxy for the risk-free rate of interest, we have taken the yield on 10-year US treasury notes as the proxy for the risk-free rate of interest. At the time of this report, the 10-year US Treasury bond had a yield of 3.510%. Based on the inputs and the Capital Asset Pricing Model, we arrive at a Cost of Equity of 10.89%. Considering the long-term debts of Emaar, we arrive at the Weighted Average Cost of Capital (WACC) of 10.05%. Investment Opinion Powered by its Vision 2010, Emaar has developed a new growth strategy through a dual process of geographical expansion and diversifying business segmentation. Consequently, the company is developing new competencies in retail, hospitality, education, healthcare and finance. It is extending its expertise to international markets as well, by replicating the successful business model it has used in Dubai. Currently, the company has operations in 17 markets. With this, the company plans to cover projects worth AED 154 billion (USD 42 billion) over the next four years, of which AED 115 billion will account for international projects. In addition, it aims to earn 60% - 70% of its revenue from international operations and to generate 15% of net profits (2% in 2007) from hotels and malls by 2010. Further, the countrys massive investment worth USD 1 trillion on leisure projects provides abundant opportunity for the company to enhance its revenue base. However, Emaar operates in key US markets that have been directly affected by the sub prime market weakness, which in turn had an impact on its financials in 2007. In addition, it is exposed to project execution risk which could result in delays and cancellations. Further, the UAE governments plan to de-peg the countrys currency from the dollar could raise Emaars finance cost. However, the companys strategy of business diversification, coupled with its past record of successful project execution skills, would help it to maintain its strong track record in the coming years. In 2007, Emaars stock gained 22.1% versus the DFMs rise of 43.7%. From the beginning of 2008, the stock has lost 18.5% as against a dip of 1.9% in DFM. Considering the above factors, we revise our Fair Value per share upwards by 10.1% to AED 18.27 from AED 16.60 (as on May 01, 2007). The stock exhibits a 50.4% potential upside from its closing price of AED 12.15 (as on March 12, 2008). Therefore, we reiterate our earlier OVERWEIGHT investment opinion on Emaars stock. Condensed Projections (in AED 000) 2008E 2009E 2010E

Total assets 62,461,598 70,581,605 80,463,030

Revenue 21,711,314 27,081,250 33,606,789

Net profit 7,956,054 10,596,230 12,151,098

EPS (AED) 1.31 1.74 1.99

FINANCIAL STATEMENTS BALANCE SHEET As on

In AED '000 31 Dec 07 31 Dec 06 %Chg

Assets Bank balances and cash 4,726,616 2,329,278 102.9% Trade receivables 928,476 600,925 54.5% Other receivables, deposits and prepayments 2,705,232 2,089,211 29.5% Deposits from share capital of Emaar MGF 0 1,469,200 -100.0% Development properties 16,194,020 11,121,425 45.6% Securities 4,560,642 2,516,992 81.2% Loans to associates 537,829 851,847 -36.9% Investment in associates 9,107,297 6,594,214 38.1% Property, plant and equipment 7,433,222 4,184,559 77.6% Investment properties 5,635,573 6,970,508 -19.2% Goodwill 2,961,968 2,961,968 0.0% 54,790,875 41,690,127 31.4% LIABILITIES AND EQUITY LIABILITIES Trade and other payables 8,825,902 6,265,438 40.9% Interest bearing loans and borrowings 7,703,753 3,992,210 93.0% Retentions payable 1,054,560 875,827 20.4% Provision for employees' end-of-service benefits 18,394 11,992 53.4% 17,602,609 11,145,467 57.9% EQUITY Equity attributable to equity holders of the parent Company Share capital 6,091,239 6,075,553 0.3% Employees' performance share program -1,446 -2,927 -50.6% Reserves 16,494,778 14,669,084 12.4% Retained earnings 13,951,469 9,237,022 51.0% 36,536,040 29,978,732 21.9% Minority interest 652,226 565,928 15.2% TOTAL EQUITY 37,188,266 30,544,660 21.8% TOTAL LIABILITIES AND EQUITY 54,790,875 41,690,127 31.4%

INCOME STATEMENT For the period ended

In AED '000 31 Dec 07 31 Dec 06 %Chg

Revenue 17,565,895 14,005,502 25.4% Cost of Revenue -10,640,230 -7,039,372 51.2% GROSS PROFIT 6,925,665 6,966,130 -0.6% Other operating income 952,383 383,480 148.4% Gain on disposal of interest in subsidiary 0 4,854 -100.0% Selling, general & administrative expenses -2,118,590 -1,400,432 51.3% Other operating expenses -536,913 -207,048 159.3% Finance cost -153,895 -92,886 65.7% Finance income 395,916 367,259 7.8% Other income 683,899 253,340 170.0% Share of results from associated companies 402,347 128,110 214.1% PROFIT BEFORE TAX 6,550,812 6,402,807 2.3% Income tax expense -14,454 -47,068 -69.3% PROFIT FOR THE YEAR 6,536,358 6,355,739 2.8% Attributable to: Equity holders of the Parent 6,575,314 6,371,147 3.2% Minority interest -38,956 -15,408 152.8% 6,536,358 6,355,739 2.8% No. of Outstanding Shares (000) 6,091,239 6,075,553 EPS (AED) 1.08 1.05 2.9%

KEY RATIOS

31 Dec 07 31 Dec 06

Net profit margin 37.4% 45.5%

Shareholders Equity to Total Assets Ratio 66.7% 71.9%

Total Debt/Asset ratio 14.1% 9.6%

Asset turnover ratio (times) 0.36 0.38

EPS (AED) 1.08 1.05

ROE 18.0% 21.3%

ROA 12.0% 15.3%

OPINION RATINGS:

OVERWEIGHT

The stock is expected to perform better than the market index; investors may give the stock more weight in their portfolio, than its weight in the overall market

NEUTRAL

The stock is expected to perform in tandem with the market index; investors may give the stock the same weight in their portfolio as in the overall market.

UNDERWEIGHT

The Stock is not expected to perform in line with the market index; investors may give the stock less weight in their portfolio than its weight in the overall market.

DISCLAIMER: All reasonable care has been taken to ensure that the information contained herein is not misleading or untrue at the time of publication, but we make no representation as to its accuracy or completeness. All information is for the private use of the person to whom it is provided without any liability whatsoever on the part of TAIB Securities WLL, any associated company or the employees thereof. Nothing contained herein should be construed as an offer to buy or sell or a solicitation of an offer to buy or sell. The value of any investment may fall as well as rise. Past performance is no guide to the future. The rate of exchange between currencies may cause the value of the investment to increase or diminish. Consequently, investors may not get back the full value of their original investment

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