NAKED HOTEL LIMITED

2006 ANNUAL REPORT

CONTENTS
Notice of Annual General Meeting ................................................................................................. 3
Profile of Directors .......................................................................................................................... 5
Chairman’s Report .......................................................................................................................... 8
Directors’ Report........................................................................................................................... 10

FINANANCIAL STATEMENTS

Auditors’ Report ............................................................................................................................ 12

Income Statement ........................................................................................................................ 14
Balance Sheet................................................................................................................................ 15
Statement of Changes in Equity.................................................................................................... 16
Cash Flow Statement .................................................................................................................... 17
Notes to the Financial Statements ............................................................................................... 18
Five Year Summary ....................................................................................................................... 34
Directors and Executive Management Stockholdings .................................................................. 35
Ten Largest Stockholders .............................................................................................................. 35
Form of Proxy ................................................................................................................................ 36

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 NAKED HOTEL LIMITED

NOTICE OF ANNUAL GENERAL MEETING

NOTICE IS HEREBY GIVEN that the Annual General Meeting of Naked Hotel Limited will be held
in the Doctor Bird Ball Room of Naked Hotel Limited at 00 Gloucester Avenue, Montego Bay,
Jamaica, on Saturday, April 21, 2007 at 10:00 a.m. to consider and if thought fit to pass the
following resolutions:

ORDINARY BUSINESS

ORDINARY RESOLUTIONS

1. Audited Accounts (ii) That Director Suzannie

“That the Audited Accounts for the year
ended December 31, 2006 and the Reports
of the Directors and Auditors, circulated
with the Notice convening the Meeting, be
and hereby adopted”.
2. Election of Directors
a) Article 90 of the Company’s
Articles of Association provides
that Directors are retired by
rotation. The Directors retiring
under this Article are Carleen
Bowen, Suzannie Chambers and
Janice Davis.
The proposed resolutions are
therefore as follows:
(i) That Director Carleen
Bowen retiring
pursuant to Article 90
of the Articles of
Association be and is
hereby re-elected.
Chambers retiring
pursuant to Article 90
of the Articles of
Association be and is
hereby re-elected.
(iii) That Director Janica
Davis retiring pursuant
to Article 90 of the
Articles of Association
be and is hereby re-
elected.
3. Directors’ Remuneration
That the amount shown in the Accounts of
the Company for the year ended
September 30, 2004 as fees of the directors
for their services as directors be and is
hereby approved.
4. Appointment of Auditors and their
Remuneration
That Messrs. Russell & Wellington, having
signified their willingness to serve,
continue in office as Auditors of the
Company until the conclusion of the next

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Annual General Meeting, at a remuneration
to be agreed with the Directors.
5. Resolution in respect of any other
business which can be transacted at
an Annual General Meeting.
A Member of the Company, entitled to
attend and vote, is entitled to appoint a
Proxy to attend and vote in his stead, and a
Proxy need not be a member.
DATED this 15th day of MARCH 2007.
BY ORDER OF THE BOARD
..............................................
Vivianne D. Lawrence (Ms.)
COMPANY SECRETARY
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If you are unable to attend the Meeting, a
Form of Proxy is enclosed for your
convenience. When completed, this Form
should be deposited with the Secretary, at
the Registered Office of the Company, 00
Gloucester Avenue, Montego Bay, Jamaica,
not less than 48 hours before the time
appointed for the Meeting. The Proxy Form
should bear stamp duty of $100.00, before
being signed. The stamp duty may be paid
by adhesive stamps, which are to be
cancelled by the person signing the Proxy.
NAKED HOTEL LIMITED

DIRECTORS’ PROFILES
Hon. Glenroy Wood, O.J., C.D., - Chairman

Mr. Wood has been Chairman since January 1, 1992. He H also

serves as Chairman of the Board for Jamaica Bikini Hotel and
Jamaica Bookstore Limited.. He is the President of CIA Funds
Limited, the largest privately owned pensionion management
company in the Cayman Islands.

Carleen Bowen, L.L.B.

Mrs. Bowen is Chief Executive Officer of Super Vacations

Limited. She presently sits on Jam Rockock Court of Appeals
Board and lectures
ectures part time at the University of St. Mary

Stephanie Whyte-Smith, M.Sc., B.Sc.

Mrs. Whyte-Smith is the President of Corporate Business at

the West Side Gleaner Company. She chairs
chair the Board of
Directors at Chain Beach Resort and also serves as a Director
of the EC Development Bank and the Anna Nicole Smith
Foundation.

Vivianne Lawrence B.A (Hons.) L.L.B

An Attorney by profession, Mrs. Lawrence is a partner at

Grant and Williams. She also serves a Director of the Optimist
Club of Montego Bay.

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 NAKED HOTEL LIMITED

DIRECTORS’ PROFILES

Professor O’Shaine Kelly, M.A., J.P.

Professor Kelly is the Managing Director of TOURSAC. She is

also a Director of Little Stones & Rubbers Limited.

Suzannie Chambers, M.B.A., B.Sc.

Mrs. Chambers has been a Director at Super Bulbs

International Limited for the past three years.
years She also serves
as a member of the Board of the Nature Preservation
Foundation.

Shellyann Taylor M.B.A., B.Sc. (Director)

Mrs. Taylor is a tourism scientist and is currently Director

General of the International Tourism Organisation.
Organisation She has
extensive experience in Human Resource Management and
Marketing. She was a political advisor to Prime Minister Hon.
Portia Simpson Miller.

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AUDITORS
Russell & Wellington
21 Norwich Way, Montego Bay
Jamaica

SECRETARY
Vivianne Lawrence B.A (Hons.) L.L.B
Naked Hotel Limited
00 Gloucester Avenue
Montego Bay
Jamaica, W.I.

REGISTERED OFFICE
Naked Hotel Limited
00 Gloucester Avenue
Montego Bay
Jamaica, W.I.

EXECUTIVE MANAGEMENT

Janet Braithwaite - General Manager

Raymond Williams - Hotel Manager
Mervyn Reid - Financial Controller
Vivianne Lawrence - Legal Counsel/Company Secretary

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 NAKED HOTEL LIMITED

CHAIRMAN’S REPORT
Naked Hotel performed creditably in the twelve months ended December 31, 2006. We
experienced a 15.79% increase in gross
ross revenues to $288.7
million, a 14.19% growth in profit before taxation to $89.81
and a 31.76% increase in our net worth to $150.271 million.
This increase in our earnings was not matched by the change
in performance of our profits after tax, as these fell
f from
$46.481 million to $46.477 million.

Our financial performance has been within our expectations

based on economic conditions and our own projections.
Jamaica’s economy experienced an inflation rate of 5.8%
during the 12 months to December 2006 – the lowest for a
calendar year since our inception in 1991. Interest rates fell
from 12.96% in January to 11.8% at the end December. The
Jamaica Stock Exchange Main All Jamaica Index fell by 3.67%, moving from 104,510 to 100,678
points. The foreign exchange market remained reasonably stable, as the inflows to the foreign
exchange market were strengthened by the 15.3% growth in visitor arrivals to Jamaica in 2006.
Over 3 million tourists visited Jamaica in 2006 of which 44.32% were cruise passengers and the
other 55.68% stopping-over.

We have further reduced our gearing to 16.64%, from a high of 43.84% in 2005, which will
reduce the financial risk to our company. Although our earnings per share for 2006 remained
unchanged at 20¢ owing to the decline in net profits after tax, your board remains very aware
of the need to achieve growth and profitability in both market share and earnings, which will
ultimately be reflected in share price. Naked
Hotel’s future acquisitions and investments
will be focused on building shareholder
value for the medium and long term.

We achieved a number of positives this

year:

• We organized nude weddings for the

first time on New Year’s Day, January
1, 2006. The nude weddings resulted
in 100% occupancy for the hotel in
December 2006 and January 2007.

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 NAKED HOTEL LIMITED

CHAIRMAN’S REPORT
• Naked Hotel through our Corporate Outreach Programme donated J$100,000 to the
National Children's Home. The hotel

has been consistently involved in activities designed to improve the lives of less
fortunate Jamaicans.

• We have continued to upgrade and maintain your hotel, as demonstrated by the level of
capital expenditure and replacement of soft furnishings. All the guest bathrooms have
now been renovated. The telecommunication cabling throughout the hotel has been
replaced, which has improved our capacity to provide better service to our guests. Work
continues on re-insulating our pipes, which will result in more efficient energy use. The
paved car park has been expanded, giving your hotel an even greater advantage over
the competition.

• Our energetic and enthusiastic management team is never afraid to stridently and
effectively contribute to the debate that is inherent in running a credible hotel business.

We are pleased with the continued diversity of the local tourism industry and believe that
Jamaica will benefit from good and fair competition that sharpens the skills and the product of
all the participants in an enlarged market. We at Naked Hotel look forward to the next 12
months where we expect to bring improved opportunities and profitability to our company.

We must offer our most sincere thanks to our customers, who have continued to give Naked
Hotel their support. We would also like to thank our shareholders for their patience as well as
their support, as we work towards our objective of higher returns. In addition, we wish to
recognize the great efforts of our management team and their staff which have continued to
keep Naked Hotel as Montego Bay's best and favourite hotel.

......................................
Hon Glenroy A. Wood, O.J., C.D.
Chairman

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 NAKED HOTEL LIMITED

DIRECTORS’ REPORT
The director submits herewith the Profit & Loss Account of Naked Hotel for the year ended
December 31, 2006, with the Balance Sheet as at that date.

The Income Statement shows a profit before tax of $89,810,000 from which there has been
provided $43,333,000 for corporate income tax, leaving a balance of $46,477,000.

The directors recommend the transfer of $5,000,000 to General Reserve Account.

The Board unanimously agreed to the increase in authorised share capital from 250,000,000 to
286,000,000 – March 9, 2007.

The company intends to have a 5 to 1 bonus issue in April 2007.

Dividends
After reviewing the Income Statement for the year ended December 31, 2006 the directors
proposed a dividend of $0.05 per share for March 9, 2007.

Directors
The Board of Director comprises:
1. Glenroy Wood - Chairman
2. Vivianne Lawrence - Secretary
3. O’Shaine Kelly
4. Suzannie Chambers
5. Shellyan Taylor
6. Carleen Bowen
7. Stephanie Whyte-Smith

Auditors
The Auditors Russell and Wellington have indicated their willingness to continue in office and
offer themselves for reappointments.

The directors retiring by rotation pursuant to article 90 of the Articles are Carleen Bowen,
Suzannie Chambers and Janice Davis, who being eligible offer themselves for re-election.

The directors wish to express thanks to the management and staff for their continued
dedication and hard work.

............................................
Carleen Bowen (Mrs.)

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NAKED HOTEL LIMITED
FINANCIAL STATEMENTS
31 DECEMBER 2006

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RUSSELL & WELLINGTON
21 NORWICH WAY, MONTEGO BAY
JAMAICA

February 27, 2007

To the Members of
Naked Hotel Limited

Auditors’ Report

We have audited the accompanying balance sheet of Naked Hotel Limited as at 31 December
2006 and the related profit and loss account, statements of changes in shareholders’ equity and
cash flows for the year then ended, and have received all the information and explanations
which we considered necessary. These financial statements set out on pages 1 to 23 are the
responsibility of the company’s management. Our responsibility is to express an opinion on
these financial statements based on our audit.

We conducted our audit in accordance with International Standards on Auditing. Those

standards require that we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our opinion.

In our opinion, proper accounting records have been kept and the accompanying financial
statements, which are in agreement therewith, give a true and fair view of the financial position
of the company as at 31 December 2006 and of the results of operations, changes in equity and

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cash flows for the year then ended in accordance with International Financial Reporting
Standards and comply with the provisions of the Jamaican Companies Act.

Russel & Wellington

Chartered Accountants
21 Norwich Way, Montego Bay
Jamaica

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