ANNUAL REPORT Palestine Development and Investment, Ltd. (PADICO HOLDING) ANNUAL REPORT 1 Tabel of Contents About PADICO Social Holding Responsibility Governance Financial Performance Investments Auditors’ Report and Consolidated and Projects Financial Statements 2 3 About Our Vision PADICO Holding PADICO Holding is dedicated to its role as an entrepreneur in the development of the Palestinian economy. In addition to attracting international investors to Palestine, our company prioritizes local investment projects across vital economic sectors, the creation of job opportunities, and launching creative economic initiatives in partnership with the public and private sectors. In its role as a national company, PADICO Holding remains dedicated to supporting the Code of Conduct and Ethics in all of its social and developmental activities, initiatives and projects. Palestine Development and Investment, Ltd. (PADICO Holding) was established in 1993 as a public shareholding company with limited liability, and listed in the Palestinian Exchange (PEX). The company has since been dedicated to contributing to the development and enhancement of the Palestinian economy, alongside both the public and private sectors by aiming its investments at vital economic sectors. Over the past 25 years, PADICO Holding has continued to achieve great strides in the Palestinian economy and prove its ability to engage large-scale investment projects, despite operating under challenging political and economic circumstances. The company boasts a Board of Directors flled with experts in their felds, which has contributed to the enhancement of the company’s vision and the development of a more fexible strategy in accordance with local, regional and international standards. Our Advantage and Strategy PADICO Holding is committed to fulflling its vision of supporting and enhancing the Palestinian economy through the creation of projects across a variety of vital sectors, including Telecommunications, Information Technology, Financial Services, Real Estate, Industrial Zones, Industry, Agriculture, Tourism, Infrastructure and Energy. The company’s strategy of diversifed investments has made PADICO Holding a model of “Since its establishment, PADICO Holding has played a major investment in Palestine; it has allowed for increased returns over the years, an enhancement role in pushing the development wheel in Palestine through the of resource development, and a reduction in investment risk. implementation of hundreds of developmental projects in vital sectors. The company is dedicated and will continue to dedicate its experience and unique expertise, which were acquired along the past decades to move forward with the implementation of more strategic projects to support the Palestinian economy.” 4 55 Milestones The Story Goes On 2011 2012 2014 2019 The Jericho Gate for Real Estate Development The St. George Hotel is opened in The Rabiyat al-Quds residential A solar energy project in Co. is established to carry out the largest Jerusalem. real estate project is launched. the Gaza Industrial Zone tourism and entertainment development project with a productive energy Listing Palestine Exchange (PEX) in Palestine. of 7.3 megawatts is shares. Issuance of first corporate bonds in Palestine established. with a nominal value of USD 85 million. The first five-star hotel in the Gaza Strip , Al-Mashtal Hotel, is opened. 2010 2006 2000 1999 1998 The Nakheel Palestine Company, one of the PADICO Holding acquires The first five-star hotel in Palestine, PADICO distributes The first cellular largest agricultural companies specializing the Jerusalem Jacir Palace, is opened in cash dividends for the communications company in Medjoul Dates, is established. Development and Bethlehem. first time. in Palestine (JAWWAL) is established. In partnership with other investors, the Investment Company The al-Mashtal Tourism Investment Palestine Power Generation Company (JEDICO) to be PADICO’s Company is established. (PPGC) is established in order to build the investment arm in the first power plant in the West Bank, powered Palestinian tourism sector. by gas with a productive energy of 400 megawatts. Start of PADICO Holding 1993 1994 1995 1996 1997 The Palestine Development The Palestine Real Estate Investment The Palestine The first industrial zone in The first trading session in the and Investment Company Company (PRICO) is established as Telecommunications Company Palestine is established in the Palestine Exchange (PEX) is Ltd. (PADICO Holding) is the first real estate investment (Paltel) is established as the first Gaza Strip as Palestine Industrial launched and PADICO shares established. company in Palestine. telecommunications company Estate Development & are listed. in Palestine. Management Company The Palestine Industrial Investment The largest livestock company (PIEDCO Gaza). Company (PIIC) is established. The Palestine Exchange (PEX) is in Palestine, the Palestine Poultry established. Company or “Aziza”, is established. 6 7 Excellence and Generosity 8 9 Main Indicators of 2019 Consolidated Shareholders’ Consolidated Total Equity Consolidated Revenues USD Profts USD Profts USD USD Assets USD 163 19 20 470 809 Million Million Million Million Million Growth in Growth in Consolidated Shareholders’ Book Value per Total Assets of the Shareholder’s Equity USD Share Group Companies Revenues Profts Growth in USD Consolidated USD 395 2.4 Profts Million 1.60 34% 25% Billion 29% 10 11 Chairman’s Letter 12 13 Chairman’s Letter On behalf of myself and the Board of Directors, I am In 2019 Paltel launched its data center project, the station will provide the required energy to operate the pleased to present to you the company’s annual report of largest project of its kind in Palestine, and the most factories at a reduced cost and create much needed 2019, which includes a summary of our achievements and modern in the local region. The project provides job opportunities in the Gaza Strip. principal fnancial results for the past year. data servers for both the private and public sectors. PADICO Holding is known for its vitality and ability PADICO Holding also opened the Paltel Group Despite the complex conditions under which the to adapt to its investment environment due to the Innovation Hub, “Fikra,” in 2019, which hosts emerging Palestinian economy has been operating, 2019 was a company’s belief in the concept of renewal. PADICO Palestinian innovators, initiatives and projects. year flled with various accomplishments for PADICO embodied its spirit of renewal by electing a new Board Holding. As the result of improved performance by our Additionally, in 2019, the Jericho Gate for Real Estate of Directors that combines great investment expertise subsidiaries and associates, PADICO Holding achieved and Development Co. launched the frst phase of of former board members, along with the innovative a 29% growth in profts this year. development and rehabilitation of infrastructure. The creativity of new members. I fully trust that the array of company also began its second and third phases of expertise and skills of our board members will help our We also made outstanding achievements during 2019, as development work, expected to be completed by the company make further qualitative leaps towards new Nakheel Palestine won the “Palestinian Exporter” award in end of 2020, to fulfll the increasing demand as a result achievements, that will not only satisfy our respected agriculture. Thanks to the company’s high-quality standards of the high standards and quality, and the company’s shareholders and community, but will also uphold the and its ability to compete internationally, Nakheel Palestine commitment to complete the project on time. high expectations of our company was recognized as a pioneer Palestinian trademark in the dates industry worldwide. In another outstanding Meanwhile, the Palestine Industrial Investment Our accomplishments over the past 25 years are what international achievement, the Jacir Palace Hotel received Company (PIEDCO) established a new company in motivate us to double our eforts towards achieving the Best Luxury Heritage Hotel World Wide Award of 2019 with the aim to develop an animal feed factory in more success. Our investment steps for the next 2019. This is not the frst time that PADICO Holding’s the southern district of the West Bank. The company phase are based on two main pillars: investing in the subsidiaries have won international awards, reinforcing the is expected to begin operations in 2021, and with the areas that most need support and resilience, especially internationally trusted quality of the products and services partnership of a local investor, has a capital of USD 8.2 Jerusalem and the Gaza Strip, while also investing provided by our projects in Palestine. million. Additionally, the Palestine Poultry Company, in large strategic projects of a rewarding return. “Aziza”, has completed the frst stage of its ideal Throughout our work, PADICO Holding will continue to We were also proud to see a noticeable improvement in cow-farm project with a capacity of 500 dairy cows. invest in Palestinian youth and provide them with the the performance of our tourism companies this year, as Moreover, the National Carton Industry Company necessary opportunities to achieve success. international tourism to Palestine soared in 2019. This started running a new production line of corrugated growth in tourism was refected in the performance of In conclusion, I thank our loyal shareholders for cardboard,